Opinion ID: 1238858
Heading Depth: 3
Heading Rank: 2

Heading: Implied statutory language shows the Oklahoma Legislature intended to exclude unallocated annuity contracts from coverage.

Text: The 1985 Model Act and other states' statutes which provide for coverage of unallocated annuity contracts, including GICs, provide a maximum liability exposure for the Guaranty Association. Ark.Stat. § 21.79.025(3) (1995) ($5,000,000 limit); Cal. Insurance Code § 1067.02(c)(2)(C) (1995) ($5,000,000 limit); Conn.Gen.Stat. § 38a-860(c)(2)(C) (1995) ($5,000,000 limit); Del.Code.Ann.Tit. 18 § 4403(c)(2)(c) (1995) ($1,000,000 limit); Ga.Code Ann. § 33-38-7(9) (1996) ($5,000,000 limit); Ill.Rev.Stat. ch. 215, para. 5/531.03(3)(b)(iii) (1996) ($5,000,000 limit); Ind.Code § 27-8-8-5 (1996) (($5,000,000); Mich.Comp.Laws § 500.7704(4)(d) (1996) ($5,000,000 limit); Minn.Stat. § 61B.19(4)(6) (1996) ($7,500,000 limit); Miss.Code Ann. § 83-23-205(3)(b)(iii) (1995) ($5,000,000 limit); Mont.Code Ann. § 33-10-224(2)(c) (1995) ($5,000,000 limit); N.H.Rev.Stat.Ann. § 408-B:5(III)(b)(4) (1995) ($5,000,000 limit); N.C.Gen.Stat. § 58-62-21 (1995) ($5,000,000 limit); N.D.Cent.Code § 26.1-38.1-01(4)(d) (1995) ($5,000,000 limit); Ohio Rev.Code Ann. § 3956.04(C)(2)(c) (1996) ($1,000,000 limit); Or.Rev.Stat. § 734.810(10) (1995) ($5,000,000 limit); 40 Pa.Stat. § 991.1703(c)(1)(ii)(C) ($5,000,000 limit); R.I.Gen.Laws § 27-34.3-3(C)(2)(d) (1995) ($5,000,000 limit); Tex.Ins. Code Ann. Art 21.28-D, § 5(3)(B) (1996) ($5,000,000 limit); Utah Code Ann. § 31A-28-103(2)(c)(iii) (1996) ($5,000,000 limit); Vt. Stat.Ann.Tit. 8, § 4158(8)(B)(iii) ($1,000,000 limit); Wash.Rev.Code § 48.32A.020(3)(b) (1995) ($5,000,000 limit). In section 3(b)(2)(B), the 1985 Model Act recommends the following: Provided, however, that in no event shall the Association be liable to expend more than the $300,000 in the aggregate with respect to any one life under subsection (a), (b), and (c) above: (B) with respect to any one contract holder, $5,000,000 in unallocated annuity contract benefits, irrespective of the number of such contracts held by the contract holder. Oklahoma's statute does not provide this limitation. Because the Oklahoma Legislature categorically excepted unallocated annuity contracts (including GICs) from coverage, it did not need to provide a limitation for the Guaranty Association's liability for such contracts. See Okla.Stat. tit. 36, § 2025(C) (1991). The Oklahoma Legislature also rejected the 1985 Model Act's provision establishing a fund for unallocated annuity contracts. Section 6(a) of the 1985 Model Act provides for four funds: (1) a life insurance account, (2) a health insurance account, (3) an annuity account, excluding unallocated annuity contracts, and (4) an unallocated annuity contract account. Likewise, the states that include coverage for unallocated annuity contracts provide for a separate account. Because Oklahoma rejected coverage for unallocated annuity contracts, the 1991 Act provides for only three of the four accounts recommended by the 1985 Model Act. Those are: (1) a health insurance account, (2) a life insurance account, and (3) an annuity account. In fact, the Oklahoma Legislature rejected all the 1985 Model Act's provisions which would include unallocated annuity contracts in the coverage of the 1991 Act. Oklahoma also rejected the 1985 Model Act provision that the Guaranty Act should be liberally construed. 1985 Model Act, § 4. Rather, the Oklahoma Legislature opted for a provision that the 1991 Act should be strictly construed. Okla.Stat. tit. 36, § 2025(D) (1991). (The liability of the Association is strictly limited by the express terms of such covered policies and contracts and by the provisions of this act....) This change from the Model Act points out that the Oklahoma Legislature did not intend to provide coverage beyond that which is specifically set out in the 1991 Act.