If a consumer buys a New York annuity while living out of state, then moves to New York before the issuer fails, the New York guaranty fund should back the guaranteed contract benefits.

The New York State Insurance Department Office of General Counsel comes to that conclusion in OGC Opinion Number 08-11-03.

A member of the public asked office officials the following question about the Life Insurance Company Guaranty Corp. of New York:

“Would the Guaranty Corporation provide protection if a New York domiciled life insurance company, which issued the inquirer an annuity while he was a resident of another state, were to become insolvent while the inquirer is a resident of New York?”

The guaranty corporation would provide protection, officials write in the opinion.

Under New York law, the guaranty corporation provides protection “for those individuals who were residents of New York either at the time of issuance of the insurance policy or annuity contract, or when the insurer becomes insolvent,” officials write.

“However,” officials write, “the Guaranty Corporation would protect only those benefits that are contractually guaranteed.”

The lifetime benefits payouts offered by the issuer would not be insured by any state guaranty associations, officials write.

In another opinion, OGC Opinion Number 08-11-08, officials hold that a trust, corporation or partnership that owns a life insurance policy covering an individual insured who is not chronically or terminally ill can sell the policy to a third party.

“This transaction however, is not a viatical settlement because the insured does not have a catastrophic or life-threatening illness,” officials write.