Two unallocated annuity obligations exist with an insolvent member insurer: one funds a governmental retirement plan participant's benefits, and one is held by a non-governmental unallocated annuity contract holder. Under G.S. 58-62-21(d)(3),(4), which pairing of guaranty limits is correct?

Why A is correct

Under G.S. 58-62-21(d)(3),(4), a governmental plan participant in a state, county, city, or other public retirement plan (including tax-deferred plans such as 401, 403(b), and 457 arrangements) is protected up to $300,000 in present value of annuity benefits, while any other unallocated annuity contract holder is protected up to $5,000,000 regardless of the number of contracts. The governmental/non-governmental distinction therefore changes the applicable cap by more than an order of magnitude.

Why the other options are wrong

• B) This reverses the two limits; the higher $5,000,000 cap belongs to non-governmental unallocated annuity contract holders.
• C) Only the governmental plan participant is capped at $300,000; other unallocated contract holders receive up to $5,000,000.
• D) $1,000,000 is the structured settlement limit under G.S. 58-62-21(d)(5) and applies to neither unallocated annuity category here.

Memory hook

Public plans get three hundred grand; private contract holders get five million.

Why B is correct

Under G.S. 58-62-21(d)(3) and (d)(4), a participant in a governmental retirement plan (such as a 401(k), 403(b), or 457 plan) is protected up to $300,000 in present value of annuity benefits, including net cash surrender and withdrawal values, while any other unallocated annuity contract holder is protected up to $5,000,000 regardless of the number of contracts. The statute deliberately separates governmental plan participants from other large institutional contract holders.

Why the other options are wrong

• A) The $5,000,000 limit belongs only to non-governmental unallocated annuity contract holders; governmental plan participants are capped at $300,000.
• C) The $300,000 figure is the governmental-plan-participant cap and applies to the person, not per contract, and other holders get far more.
• D) One million dollars is the structured settlement limit; unallocated annuity limits are set by holder type, not per contract.

Memory hook

Government folks get three hundred grand; everyone else unallocated gets five million.

Why C is correct

Under G.S. 58-62-21(d)(3) and (d)(4), a participant in a governmental retirement plan (such as 401(k), 403(b), or 457 plans) is protected up to $300,000 in present value of annuity benefits, while any other unallocated annuity contract holder is protected up to $5,000,000 regardless of the number of contracts. The higher non-governmental figure reflects the large pooled contracts purchased in the commercial annuity market.

Why the other options are wrong

• A) The two tiers are reversed; governmental plan participants get the $300,000 limit.
• B) These figures blend the structured-settlement and health-plan limits into the wrong slots.
• D) A flat $300,000 for everyone ignores the $5,000,000 tier for other unallocated annuity contract holders.

Memory hook

Government gets less, others get millions — 300 for the state, 5M for the rest.

Why A is correct

Under G.S. 58-62-21(d)(3), a participant in a governmental retirement plan (such as a 401(k), 403(b), or 457 plan) is protected up to $300,000 in present value of unallocated annuity benefits, including net cash surrender and withdrawal values. Under G.S. 58-62-21(d)(4), any OTHER unallocated annuity contract holder is protected up to $5,000,000, regardless of the number of contracts. The two caps never cross between plan types.

Why the other options are wrong

• B) Applying $5,000,000 to the governmental plan participant ignores the separate $300,000 cap for governmental retirement plans in G.S. 58-62-21(d)(3).
• C) Applying $300,000 to the private contract holder ignores the $5,000,000 cap for non-governmental unallocated annuity contract holders in G.S. 58-62-21(d)(4).
• D) $1,000,000 is the structured settlement limit per payee under G.S. 58-62-21(d)(5); it does not apply to unallocated annuities, and the two limits here are $300,000 and $5,000,000.

Memory hook

Government gets 300 grand; everyone else unallocated gets 5 million.

Why D is correct

Under G.S. 58-62-21(d)(3),(4), a governmental plan participant (such as a 401(k), 403(b), or 457 plan participant) is limited to $300,000 in present value annuity benefits, while any other unallocated annuity contract holder is covered up to $5,000,000, regardless of the number of contracts.

Why the other options are wrong

• A) The two figures are reversed; governmental participants receive the lower limit.
• B) $1,000,000 is the structured settlement limit under G.S. 58-62-21(d)(5), not the unallocated annuity limit.
• C) The two categories carry different limits, so a single $500,000 figure for both is incorrect.

Memory hook

Government plan $300k; other unallocated annuities $5M.