State annuity protection

Wyoming Annuity Guaranty Protection: $250,000 Limit Explained

Wyoming limits qualifying annuity benefits to $250,000 in present value for one life. A separate $500,000 combined-benefit ceiling can matter when the same member-insurer failure also involves another covered category.

Wyoming annuity protection at a glance

Annuity benefit limit
$250,000
Present value of qualifying annuity benefits under chapter 42
Overall benefit cap
$500,000
For a single life in one member-company failure, Wyoming’s qualifying benefit categories share a $500,000 combined maximum.
Who provides protection
Wyoming Life and Health Insurance Guaranty Association
Wyoming’s association may use discretionary remedies while a member is impaired and must perform the duties assigned by chapter 42 after an insolvency determination.
Insurer requirement
Member insurer
The failed carrier and the relevant obligation must fall within chapter 42 membership and coverage.

How the $250,000 limit works

The annuity category stops at $250,000 in present value; the distinct $500,000 amount is a combined ceiling rather than extra annuity coverage.

Qualifying contracts connected to the same life share $250,000 at the affected Wyoming member company.

Failure of a different member company starts a new calculation using the claimant facts applicable to that proceeding.

For a single life in one member-company failure, Wyoming’s qualifying benefit categories share a $500,000 combined maximum.

  • Wyoming assigns an original qualifying structured-settlement recipient a distinct $250,000 present-value amount; transferred or factored payment rights are excluded.

A $300,000 annuity example

Assume one life has a qualifying $300,000 fixed annuity at the failed Wyoming member company and no other covered benefit there.

Annuity value

$300,000

Potential protection

$250,000

Possible receivership claim

$50,000

The annuity category recognizes $250,000; the higher combined maximum does not convert the remaining $50,000 into extra annuity protection.

The visual keeps the annuity amount distinct from the combined-benefit maximum and assumes all threshold conditions are met.

Which annuities are covered?

  • Fixed annuity

    Generally covered

    A fixed annuity can qualify when chapter 42 covers its claimant, issuing member, contract, and enforceable promises.

  • Fixed indexed annuity (FIA)

    Generally covered

    For an FIA strategy posting index credits at intervals longer than a year, Wyoming performs the statutory calculation for that strategy on the applicable impairment or insolvency date; the value produced is then nonforfeitable.

  • Multi-year guaranteed annuity (MYGA)

    Generally covered

    A MYGA enters the $250,000 annuity category after interest above the statute’s Moody’s-based thresholds is removed.

  • Variable annuity

    Guaranteed portions may be covered

    Variable separate-account exposure borne by the holder remains outside the association obligation.

  • Registered index-linked annuity (RILA)

    Contract-specific

    A RILA is divided between enforceable insurer guarantees and market or index exposure carried by the owner; only the guaranteed portion can enter coverage.

  • Unallocated annuity contract

    Limited situations

    Most unallocated contracts fall outside Wyoming coverage. A promise made directly to a natural person is removed from that classification to the extent guaranteed.

Who may qualify?

  • Residence is measured on the first court order declaring the member impaired or insolvent, even when liquidation follows later.
  • The ordinary annuity amount is measured for one life; an original qualifying structured-settlement recipient receives a distinct $250,000 category.
  • Wyoming’s nonresident exception requires a Wyoming-domiciled failed carrier, a comparable association in the claimant’s residence state, and home-state ineligibility caused by missing licensure for that insurer or health maintenance organization.
  • Coverage in the claimant’s residence jurisdiction is considered before Wyoming’s limited domestic-carrier exception.
  • The failed carrier and the relevant obligation must fall within chapter 42 membership and coverage.

What is not covered?

  • Most unallocated annuity contracts remain outside chapter 42, subject to the direct individual-guarantee distinction.
  • An annuity issued by a qualifying nonprofit insurer exclusively for a nonprofit educational institution or its personnel is expressly excluded.
  • A transferred or factored structured-settlement payment right is excluded even though an original qualifying payee can have a separate benefit line.
  • Nonguaranteed value, owner-borne investment exposure, and interest above the statutory benchmark are not protected.
  • Advertising, misrepresentation, extra-contractual, punitive, penalty, consequential, bad-faith, and side-agreement claims cannot expand the written covered obligation.
  • Duplicate recovery and amounts payable through another guaranty mechanism are subject to statutory coordination.

What happens after an insurer fails?

  1. 1

    A court determines impairment or insolvency

    The first court order fixes residence and eligibility; it can occur before a later liquidation order.

  2. 2

    The association separates covered obligations

    The claimant, covered life, contract class, written guarantees, and any structured-settlement or unallocated-contract rule are identified.

  3. 3

    Impairment or insolvency duties apply

    During impairment the association may use chapter 42 remedies; after insolvency it must perform the statutory duties.

  4. 4

    The covered amount and remedy are completed

    The annuity amount, structured-settlement amount, exclusions, and $500,000 combined-benefit maximum are applied before the remaining estate claim is identified.

How the guaranty system is financed

Class A assessments pay administrative and legal expenses; Class B assessments fund the association’s obligations for an impaired or insolvent member.

Assessment allocation
Member insurers
For an affected account, Class B shares ordinarily use the member’s three-year mean covered Wyoming premium, with the measuring window ending before the carrier failure year. Section 26-42-107(g)(ii) adds a special comparison when one calendar year includes calls tied to failures from different years: the greatest of the applicable three-year premium averages controls.
Annual assessment cap
Defined by state law
For each Wyoming account, a calendar-year Class B assessment is ordinarily limited to 2% of the carrier’s average covered premium across the three-year lookback; the measuring window ends immediately before the carrier’s impairment or insolvency year. A special comparison applies if that year’s calls involve failures dated to different calendar years: § 26-42-107(g)(ii) selects the greatest of the applicable three-year averages.
Premium-tax treatment
State-specific rule
Wyoming permits 10% of a qualifying assessment to offset premium-tax liability in each of the ten years after payment, subject to the statutory adjustments in § 26-42-111.
Benefit categories, combined maximum, and assessments
The $250,000 annuity amount and distinct $250,000 structured-settlement amount sit under the neutral $500,000 combined-benefit maximum. Member funding uses a three-year premium base, a 2% account cap with the statutory different-failure-year adjustment, and a ten-year tax-offset schedule.

What to know before buying

  • Chapter 42 responds after a carrier failure; its eligibility rules and exclusions are not product-selection guidance.
  • Wyoming prohibits sales promotion based on guaranty protection and requires the statutory notice described by § 26-42-116.

How state protection differs from FDIC insurance

  • What it covers
    State protection: The Wyoming association resolves covered life-and-health insurer obligations.
    FDIC: The FDIC resolves covered deposits at failed banks.
  • What system stands behind it
    State protection: Member insurers finance the chapter 42 response.
    FDIC: Insured banks finance the federal deposit-insurance response.
  • Coverage-limit basis
    State protection: A $250,000 annuity amount sits within a $500,000 per-life aggregate.
    FDIC: The federal amount turns on depositor identity, insured bank and ownership capacity.
  • Whether it applies to annuities
    State protection: A qualifying Wyoming annuity may receive state-association protection.
    FDIC: The annuity does not receive FDIC insurance.

Sources and last verified

Last verified: September 17, 2026