Section 408-B:5 Coverage and Limitations.
I. This chapter shall provide coverage for the policies and contracts specified in paragraph II:
(a) To persons who, regardless of where they reside (except for nonresident certificate holders under group policies or contracts), are the beneficiaries, assignees, or payees of the persons covered under subparagraph (b); and
(b) To persons who are owners of or certificate holders under such policies or, in the case of unallocated annuity contracts, to the persons who are the contract holders; and who
(1) Are residents, or
(2) Are not residents, but only under all of the following conditions:
(A) The insurers which issued the policies or contracts are domiciled in this state;
(B) The insurers never held a license or certificate of authority in the states in which the persons reside;
(C) The states have associations similar to the association created by this chapter; and
(D) Such persons are not eligible for coverage by these associations.
II. (a) This chapter shall provide coverage to the persons specified in paragraph I for direct, non-group life, health, annuity, and supplemental policies or contracts, for certificates under direct group policies and contracts, and for unallocated annuity contracts issued by member insurers, except as limited by this chapter. Annuity contracts and certificates under group annuity contracts include, but are not limited to, guaranteed investment contracts, deposit administration contracts, unallocated funding agreements, allocated funding agreements, structured settlement agreements, lottery contracts, and any immediate or deferred annuity contracts.
(b) This chapter shall not provide coverage for:
(1) Any portion of a policy or contract not guaranteed by the insurer, or under which the risk is borne by the policy or contract holder;
(2) Any policy or contract of reinsurance, unless assumption certificates have been issued;
(3) Any portion of a policy or contract to the extent that the rate of interest on which it is based:
(A) Averaged over the period of 4 years prior to the date on which the association becomes obligated with respect to the policy or contract, exceeds a rate of interest determined by subtracting 2 percentage points from Moody's Corporate Bond Yield Average averaged for that same 4-year period or for such lesser period if the policy or contract was issued less than 4 years before the Association became obligated; and
(B) On and after the date on which the association becomes obligated with respect to the policy or contract, exceeds the rate of interest determined by subtracting 3 percentage points from Moody's Corporate Bond Yield Average as most recently available;
(4) Any plan or program of an employer, association, or similar entity to provide life, health, or annuity benefits to its employees or members to the extent that the plan or program is self-funded or uninsured, including, but not limited to, benefits payable by an employer, association, or similar entity under:
(A) A multiple-employer welfare arrangement as defined in 29 U.S.C. section 1144;
(B) A minimum premium group insurance plan;
(C) A stop-loss group insurance plan; or
(D) An administrative services only contract;
(5) Any portion of a policy or contract to the extent that it provides dividends or experience rating credits, or provides that any fees or allowances be paid to any person, including the policy or contract holder, in connection with the service to or administration of the policy or contract;
(6) Any policy or contract issued in this state by a member insurer at a time when it was not licensed or did not have a certificate of authority to issue the policy or contract in this state;
(7) Any unallocated annuity contract issued to an employee benefit plan protected under the federal Pension Benefit Guaranty Corporation;
(8) Any portion of any unallocated annuity contract which is not issued to or in connection with a specific employee, union, or association of natural persons benefit plan or a government lottery; and
(9) Any portion of a policy or contract to the extent that the assessments required by RSA 408-B:9 with respect to the policy or contract are preempted by federal or state law.
III. The benefits for which the association may become liable shall in no event exceed the lesser of:
(a) The contractual obligations for which the insurer is liable or would have been liable if it were not an impaired or insolvent insurer, or
(b) (1) 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) $100,000 in health insurance benefits, including any net cash surrender and net cash withdrawal values;
(C) $100,000 in the present value of annuity benefits, including net cash surrender and net cash withdrawal values;
(2) With respect to each individual participating in a governmental retirement plan established under Section 401, 403(b) or 457 of the U.S. Internal Revenue Code covered by an unallocated annuity contract or the beneficiaries of each such individual if deceased, in the aggregate, $100,000 in present value annuity benefits, including net cash surrender and net cash withdrawal values;
(3) With respect to each payee covered by an annuity contract issued by an insurer to provide benefits pursuant to a structured settlement agreement, or beneficiary of each payee if deceased, $100,000 in present value annuity benefits, in the aggregate, including net cash surrender and net cash withdrawal values;
Provided, however, that in no event shall the association be liable to expend more than $300,000 in the aggregate with respect to any one individual under subparagraphs (b)(1), (2) and (3):
(4) With respect to any one contract holder covered by any unallocated annuity contract not included in subparagraph (b)(2), $5,000,000 in benefits, irrespective of the number of such contracts held by that contract holder.
Source. 1995, 305:1, eff. Jan. 1, 1996.