Pennsylvania Annuity Guaranty Coverage: Six Questions, Answered From the Statute

If you live in Pennsylvania and your annuity came from an insurer licensed here, yes. PLHIGA protects individuals who live in Pennsylvania at the time a court determines their member insurer insolvent, and every insurer licensed to write life, health, or annuity business in the state must belong to the association as a condition of doing business, per PLHIGA’s FAQ (palifega.org/FAQ, accessed August 15, 2026). Beneficiaries, payees, and assignees of a covered Pennsylvania resident are protected even if they live elsewhere, per PLHIGA’s Notice of Protection, effective November 3, 2020 (palifega.org/AdditionalInfo, accessed August 15, 2026). The same notice limits the promise: only the portions of a contract the insurer guarantees are covered, and no final coverage determination is made until an insolvency actually happens.

$250,000. That’s the ceiling. Pennsylvania covers up to $250,000 in the present value of individual “annuity benefits, including net cash surrender and net cash withdrawal values,” per 40 P.S. § 991.1703(c), effective November 3, 2020, as posted on palifega.org (accessed August 15, 2026) — and PLHIGA’s own FAQ coverage table lists the identical $250,000 figure (palifega.org/FAQ, accessed August 15, 2026).

Some third-party sites list Pennsylvania at $300,000, and the association’s site holds the paper trail on that number. An older Act Summary still hosted at palifega.org (accessed August 15, 2026) says the association “will pay up to $300,000 in annuity benefits, or $100,000 in net cash surrender or withdrawal benefits,” while the same site’s Additional Info page labels its current statute and summary “effective November 3, 2020” — and those current documents say $250,000. Separately, $300,000 survives in current law as the aggregate cap: the association won’t pay more than $300,000 in total per individual per insolvency across life, annuity, and most health coverage combined, with health benefit plans excepted at $500,000, per 40 P.S. § 991.1703(c)(1)(ii)(E) (palifega.org, accessed August 15, 2026). Structured settlement annuities get $250,000 per payee, and unallocated group annuity contracts get $5,000,000 per contract owner or $250,000 per participant in a governmental 401, 403(b), or 457 plan, per the same statute section.

Only after a court acts. PLHIGA activates only after a court determines that a member insurer is insolvent and directs its liquidation, per the association’s FAQ (palifega.org/FAQ, accessed August 15, 2026). Rehabilitation isn’t liquidation. During the run-up, courts may reduce or suspend benefit payments, and PLHIGA’s FAQ warns you may wait many months before the association is activated, though receivers may make case-by-case exceptions for documented hardship, applied for in writing — the FAQ’s examples are grave ones: a terminal diagnosis, unpayable medical debt, a bankruptcy already at the door — per the same FAQ.

The exclusions are specific. Per PLHIGA’s Notice of Protection, effective November 3, 2020 (palifega.org/AdditionalInfo, accessed August 15, 2026): any portion of a contract the insurer doesn’t guarantee, such as the separate-account value of a variable annuity; contracts issued by insurers not licensed in Pennsylvania when the contract was written; self-funded employer plans; fraternal benefit society certificates; interest rate yields exceeding a statutory average rate; dividends and experience credits; reinsurance without an assumption certificate; and most unallocated annuity contracts. A fixed MYGA’s guaranteed value sits inside the covered category, per the FAQ’s description of covered individual annuity contracts (palifega.org/FAQ, accessed August 15, 2026) — but any credited interest above that statutory average-rate test doesn’t.

Your new state takes over. The association that covers you is decided by where you reside on the day a court orders liquidation, not by where the purchase happened, per PLHIGA’s FAQ (palifega.org/FAQ, accessed August 15, 2026). The limit rides along with the change: your coverage becomes the new state’s limits, not Pennsylvania’s, and if the failed insurer wasn’t licensed in your new state, the FAQ says the association of the insurer’s home state covers you in most cases.

40 P.S. § 991.1717, effective November 3, 2020, prohibits any insurer, agent, or affiliate from using the association’s existence for sales, solicitation, or inducement to purchase, per the statute copy on palifega.org (accessed August 15, 2026). PLHIGA’s FAQ also says the association is not a substitute for selecting a well-managed, financially stable insurer. This page uses the coverage only to explain the post-failure statutory process.

Pennsylvania’s $250,000 annuity limit applies per insured in each insolvency, per PLHIGA’s Notice of Protection (palifega.org/AdditionalInfo, accessed August 15, 2026). The $300,000 aggregate caps what one person recovers from one failed insurer across every covered policy type combined, per 40 P.S. §991.1703(c) (accessed August 15, 2026), so life and annuity claims at that insurer share one ceiling. A different insurer’s failure would be a separate insolvency. This explains how claims are aggregated, not how someone should structure a purchase or choose an insurer.

Three points resisted confirmation. Whether insolvencies dated before November 3, 2020 fall under the old $300,000 annuity limit turns on the applicability section of Act 113 of 2020, which we did not review. No PLHIGA page we accessed on August 15, 2026 states a typical months-to-payment figure for past Pennsylvania liquidations. And the annual assessment cap on member insurers isn’t stated on the association pages we reviewed.