33-10-224. Extent of liability. (1) The benefits for which the association may become liable may not exceed the lesser of:
     (a) the contractual obligations of the impaired or insolvent insurer for which the insurer becomes or would have become liable if it were not an impaired or insolvent insurer; or
     (b) (i) except as provided in subsection (2), with respect to any one life, regardless of the number of policies or contracts:
     (A) $300,000 in life insurance death benefits, but not more than $100,000 in net cash surrender and net cash withdrawal values for life insurance;
     (B) in health insurance benefits:
     (I) $500,000 for basic hospital, medical, and surgical insurance or major medical insurance as defined in the covered policy or contract;
     (II) $300,000 for disability insurance as defined in the covered policy or contract;
     (III) $100,000, including any net cash surrender and net cash withdrawal values, for coverages not included in (1)(b)(i)(B)(I) and (1)(b)(i)(B)(II);
     (C) $100,000 in the present value of annuity benefits, including net cash surrender and net cash withdrawal values;
     (ii) with respect to each individual participating in a governmental retirement plan established under section 401, 403(b), or 457 of the Internal Revenue Code and covered by an unallocated annuity contract or with respect to the beneficiaries of each individual, if deceased, in the aggregate, $100,000 in present value annuity benefits, including net cash surrender and net cash withdrawal values;
     (iii) with respect to any one contract owner covered by any unallocated annuity contract not included in subsection (1)(b)(ii), $5 million in benefits, irrespective of the number of contracts held by that contract owner;
     (iv) with respect to each payee of a structured settlement annuity or beneficiary of the payee if the payee is deceased, $100,000 in present value annuity benefits, in the aggregate, including net cash surrender and net cash withdrawal values, if any;
     (v) with respect to either one contract owner provided coverage under 33-10-201(6) or one plan sponsor whose plans own directly or in trust one or more unallocated annuity contracts not included in subsection (1)(b)(ii), $5 million in benefits, irrespective of the number of contracts held by the contract owner or plan sponsor. If one or more unallocated annuity contracts are covered contracts under this part and are owned by a trust or other entity for the benefit of two or more plan sponsors, coverage must be afforded by the association if the largest interest in the trust or entity owning the contract or contracts is held by a plan sponsor whose principal place of business is in this state, and in any event, the association is not obligated to cover more than $5 million in benefits with respect to all these unallocated contracts.
     (2) The association is not obligated to cover more than:
     (a) an aggregate of $300,000 in benefits with respect to any one life under subsections (1)(b)(i), (1)(b)(ii), and (1)(b)(iii), except with respect to benefits for basic hospital, medical, and surgical insurance and major medical insurance under subsection (1)(b)(i), in which case the aggregate liability of the association may not exceed $500,000 with respect to any one individual; and
     (b) with respect to one owner of multiple nongroup policies of life insurance, whether the policyowner is an individual, firm, corporation, or other person and whether the persons insured are officers, managers, employees, or other persons, $5 million in benefits, regardless of the number of policies and contracts held by the owner.
     (3) The limitations set forth in this section are limitations on the benefits for which the association is obligated before taking into account either its subrogation and assignment rights or the extent to which those benefits could be provided out of the assets of the impaired or insolvent insurer attributable to covered policies. The costs of the association's obligations under this part may be met by the use of assets attributable to covered policies or reimbursed to the association pursuant to its subrogation and assignment rights.
     (4) In performing its obligations to provide coverage under this part, the association is not required to guarantee, assume, reinsure, or perform or cause to be guaranteed, assumed, reinsured, or performed the contractual obligations of the impaired or insolvent insurer under a covered policy or contract that do not materially affect the economic values or economic benefits of the covered policy or contract.

     History: En. 40-5808 by Sec. 8, Ch. 245, L. 1974; R.C.M. 1947, 40-5808(10); amd. Sec. 6, Ch. 576, L. 1987; amd. Sec. 62, Ch. 596, L. 1993; amd. Sec. 17, Ch. 195, L. 2003.