Are variable life insurance policies and variable annuity contracts covered by the Guaranty Association Act?
The terms and coverage of variable insurance products are very diverse and, as a result, it is difficult to make general statements about Guaranty Association coverage of variable insurance products without reviewing a specific policy or contract. The Guaranty Association Act provides that the Guaranty Association Act shall not apply to any portion of any policy or contract not guaranteed by the insurer or under which the risk is borne by the policy or contract holder. In addition, the Guaranty Association Act does not apply to the portion of a policy or contract that provides for interest or other changes in value to be determined by the use of an index or other external reference stated in the policy or contract that has not been credited to the policy or contract as of the date Guaranty Association coverage begins. Therefore, as a general rule, the Guaranty Association Act covers the portion of a variable life insurance policy or variable annuity contract that is guaranteed by the s
