Under North Carolina guaranty association law, unallocated annuity contracts are protected as follows:

Why B is correct

Under G.S. 58-62-21(d)(3),(4), participants in governmental retirement plans (such as defined benefit plans or 401/403(b)/457 arrangements) are protected up to $300,000 in present value of annuity benefits for unallocated annuities, while any other unallocated annuity contract holder is protected up to $5,000,000 regardless of the number of contracts. The distinction reflects the different nature of governmental plan funding.

Why the other options are wrong

• A is wrong because the limit for other unallocated annuity contract holders is $5,000,000; $1,000,000 is the structured settlement limit.
• C is wrong because $500,000 is the health benefit plan limit, not the governmental plan participant limit for unallocated annuities.
• D is wrong because the two figures are reversed; governmental plan participants get $300,000 and other contract holders get $5,000,000.

Memory hook

Unallocated annuities: government plans $300k, everyone else $5M.

Why B is correct

Under G.S. 58-62-21(d)(3) and (4), a participant in a governmental retirement plan is protected up to $300,000 in present value annuity benefits, while any other unallocated annuity contract holder is protected up to $5,000,000 regardless of the number of contracts. The $1,000,000 figure is reserved for structured settlements under G.S. 58-62-21(d)(5).

Why the other options are wrong

• A) $1,000,000 is the structured settlement limit, not the limit for other unallocated annuity contract holders.
• C) $500,000 is the health benefit plan limit under G.S. 58-62-21(d)(2a) and does not appear in the unallocated annuity tiers.
• D) Governmental plan participants are capped at $300,000, not $1,000,000.

Memory hook

Government plan $300k; everyone else unallocated gets $5M.