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Catalina Structured Funding

State Annuity Rules Lookup

Best Interest standards, guaranty association caps, state premium tax, free-look periods, and state regulator contacts for all 50 states plus the District of Columbia. Select your state to see the rules that apply to your annuity.

Last updated:

Who this lookup is for

This page is built for inherited annuity holders (annuities passed to you as a beneficiary) and post-settlement non-qualified annuity purchasers (annuities you bought with after-tax money, often after receiving a settlement). The Best Interest standards, guaranty caps, free-look periods, and premium tax rates here apply to non-qualified deferred annuities. If your payments come from a structured settlement annuity awarded for a personal physical injury claim, the framework that matters for selling those payments is the state Structured Settlement Protection Act, not the rules on this page. Each state card links to the corresponding SSPA page for that purpose.

51 jurisdictions covered: all 50 states + DC.

California

Adopted NAIC 2020 Best InterestStatute

Best Interest / Annuity Suitability

Authority
Cal. Ins. Code § 10509.9 (annuity suitability framework)
Notes
California's annuity rules predate and operate alongside the NAIC 2020 revisions.

Guaranty Association (insurer-insolvency protection)

Association
California Life and Health Insurance Guarantee Association (CLHIGA)
Individual annuity cap
$250,000
Aggregate per life
$300,000

State Income Tax on Annuity Distributions

California imposes a state personal income tax. The taxable portion of annuity distributions (under the LIFO rule for non-qualified deferred annuities) is generally subject to California state tax in addition to federal tax. California also applies a 2.5% state early-withdrawal penalty on annuity distributions stacking with the federal 10% under Cal. Rev. & Tax. Code § 17085(c)(1).

State Premium Tax on Annuities

Rate
2.35%
Citation
Cal. Rev. & Tax. Code § 12202
Qualified plans
Subject to tax
Notes
Tax paid by the insurer on the front end, not directly by the buyer.

Premium tax is paid by the insurer on the front end (at purchase), not directly by the annuity buyer. It can be relevant if you are evaluating an inherited contract's history or considering replacement.

Free-Look Period

Senior extension
30 days for buyers age 60 or older
Citation
Cal. Ins. Code § 10127.10

California-Distinctive Features

  • 2.5% state early-withdrawal penalty stacks with federal 10% (Cal. Rev. & Tax. Code § 17085(c)(1))
  • 30-day senior free-look for buyers age 60+
  • 2.35% state premium tax on annuities

State Insurance Regulator

Agency
California Department of Insurance
Phone
800-927-4357
Website
https://www.insurance.ca.gov/

Have a structured settlement annuity instead?

If your annuity payments come from a personal physical injury settlement, your tax treatment is different (and generally tax-free under IRC § 104(a)(2)). The SSPA framework for California is at Cal. Ins. Code §§ 10134-10139.5 (most detailed SSPA in the country: 6 court findings, 15 best-interest factors, 12 prohibited provisions, $1,500 buyer-funded IPA). See our detailed California structured settlement page for the full SSPA framework, court findings, transfer timeline, and our local court experience.

Considering selling your California annuity? Call CSF for a free quote against your specific contract.

(800) 317-3769

This content is for educational purposes only and does not constitute financial advice. Consult a qualified financial advisor before making financial decisions.

What Each Section Tells You

Best Interest / Annuity Suitability

The Best Interest standard governs how an insurance producer must behave when recommending an annuity to you. Under the NAIC Model #275 (2020 revisions), the producer must act in your best interest at the time of recommendation. That includes a care obligation, a disclosure obligation, a conflict-of-interest obligation, and a documentation obligation. As of 2026, 49 jurisdictions have adopted some version of this standard. The state card shows whether your state adopted the 2020 revisions, the statute or admin rule that implements it, and the effective date. Iowa was the first state to adopt; the Nth-state number shows where each state landed in the adoption sequence.

Guaranty Association Coverage

Every state has a life and health insurance guaranty association that backstops policyholders if an insurance company becomes insolvent. The state card shows the association name, the individual annuity coverage cap, the aggregate per-life cap if separately stated, and (where it applies) a separate structured settlement annuity cap. Coverage is per insurer; if you own annuities with two different insurers, each is covered separately up to the cap. The association is a state-mandated industry mechanism, not a federal guarantee.

State Income Tax

State tax treatment is a binary signal here. Nine states have no personal income tax at all (Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, Wyoming). The other 41 states plus DC tax annuity distributions, though several offer partial exemptions for retirement income. The card flags whether your state imposes state tax on annuity earnings. Use the annuity tax calculator for the federal calculation under IRC § 72.

State Premium Tax

Eight states impose a state premium tax on annuity considerations at purchase. The tax is paid by the insurer to the state, not directly by the buyer, but it's usually reflected in the product economics. For inherited annuities, the premium tax was paid years ago and is a sunk cost. For post-settlement non-qualified purchases, knowing your state's premium tax can help you compare offers. The state card shows the rate, the statute citation, and whether qualified plans are exempt.

Free-Look Period

Free-look rules give a buyer a window to cancel a new annuity contract and get a full refund. Most states require 10 days; many extend to 20 or 30 days for replacement contracts, and a handful add a senior extension for buyers over age 60 or 65. Free-look applies at purchase; existing contracts are past the window. The card shows the standard, replacement, and senior periods with the statute citation.

Distinctive Features

Some states have state-specific quirks that matter when evaluating an annuity contract or planning a sale: a state-specific replacement rule, a discount-rate cap on structured settlement transfers, an unusual registration requirement for licensed buyers, or pending litigation on the Best Interest standard. The card surfaces these where they exist.

State Insurance Regulator

The state insurance department handles complaints, license verification, and consumer questions about annuities and insurance products. Each card includes the agency name, the main and consumer-services phone numbers, and the website. If you have a dispute with an insurer or a producer, this is the first stop.

Structured Settlement Cross-Reference

If your annuity is a structured settlement annuity from a personal physical injury claim, the SSPA framework applies, not the rules above. Each state card includes the SSPA citation and links to our detailed state SSPA page for that jurisdiction. The SSPA pages cover court findings, transfer timeline, IPA disclosures (where applicable), discount-rate caps, and our court experience in that jurisdiction.

What This Page Does Not Cover

  • Federal taxation of annuity distributions. Use the annuity tax calculator or our sell or cash out an annuity guide. Federal IRC § 72 governs the LIFO rule for withdrawals and the exclusion ratio for annuitized payments.
  • Specific insurer claims-paying ratings. A.M. Best, Moody's, S&P, and Fitch rate individual insurers. The guaranty association cap is your backstop if your insurer fails; the rating tells you the likelihood of that.
  • Federal Best Interest standards. The SEC Regulation Best Interest (Reg BI) and the DOL fiduciary rule apply to certain federal-registered advisors. The state Best Interest standards on this page apply to state-licensed insurance producers selling annuities.
  • State-specific qualified plan rules. If your annuity is held inside a 401(k), IRA, or other qualified plan, ERISA and federal tax rules dominate; state insurance rules apply only to the underlying contract.

If You Are Considering Selling Your Annuity Payments

CSF buys future annuity payments from inherited annuity holders and post-settlement non-qualified annuity owners. We quote a lump sum against your specific contract. For structured settlement annuities, the SSPA framework applies and the sale must go through court approval. For non-qualified deferred annuities, the sale is generally a direct contract assignment governed by your state's insurance law and the insurer's assignment provisions. Call to talk through your specific situation, or see our guide to selling or cashing out an annuity for the full framework.

Frequently Asked Questions

What is the NAIC Annuity Suitability Best Interest standard?
The NAIC Model #275, revised in 2020, requires producers selling annuities to act in the best interest of the consumer at the time of recommendation. It imposes four obligations on the producer: a care obligation (recommend only suitable products), a disclosure obligation (provide consumer information up front), a conflict-of-interest obligation (identify and avoid material conflicts), and a documentation obligation (keep records of suitability analysis). As of 2026, 49 jurisdictions have adopted some version of this revised standard. New York operates under its separate pre-2020 framework (11 NYCRR 224, Regulation 187). DC still operates under the pre-2020 suitability framework (DCMR Ch. 26-A84). Iowa was the first state to adopt the 2020 revisions.
What does the state guaranty association cap actually cover?
State life and health insurance guaranty associations protect annuity owners if the issuing insurance company becomes insolvent. Each state's association covers residents of that state up to a statutory cap. Coverage typically includes the present value of annuity benefits up to $250,000 for most states, though several states cap at $100,000 ($300,000 in New York and some others), and structured settlement annuities often get a higher cap ($300,000 to $500,000). Coverage applies per insurer, per life, in aggregate across all annuity contracts you hold with that insurer. The association acts as a backstop, not a federal guarantee, and there is no FDIC-like insurance for annuities. Coverage rules and caps differ enough state-to-state that this distinction matters when comparing offers from different insurers.
Which states have no state income tax on annuity distributions?
Nine states have no state personal income tax at all: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. Residents of these states owe only federal tax on annuity distributions (under the LIFO rule for non-qualified deferred annuities, or via the exclusion ratio for annuitized payments). The other 41 states plus DC tax annuity earnings to varying degrees. A handful of states offer partial exemptions for retirement income or for older taxpayers, but those exemptions usually apply to qualified plan distributions, not non-qualified annuities. State of residence at the time of the distribution generally controls.
Why does state premium tax matter to me as the annuity owner?
Premium tax is paid by the insurance company to the state on the gross consideration when an annuity is purchased, not directly by the annuity buyer. The eight states that impose annuity premium tax (California, Florida, Maine, Nevada, South Dakota, West Virginia historically, Wyoming, and a few others depending on plan type) typically charge between 0.5 percent and 2.5 percent. Insurers usually pass the tax through in the contract pricing, so the annuity you buy in a premium-tax state may earn slightly less than the same contract in a no-premium-tax state. For inherited annuity holders, premium tax is a one-time historical cost already absorbed by the contract; you cannot recover it. For post-settlement non-qualified purchasers, it's worth comparing premium tax exposure across the state where you buy and the state where the issuer is licensed.
What is a free-look period, and does it matter for an existing annuity?
A free-look period is a window after delivery of a new annuity contract during which the buyer can cancel and get a full refund. Most states require at least 10 days; many require 20 to 30 days for replacement contracts (where you are using one annuity's value to fund a new one). Some states extend the period for senior buyers (typically age 60 or 65 and older). Free-look rules apply at purchase, not to existing contracts. If you inherited the annuity or purchased it years ago, the free-look window is long since closed. The information is included on this page because it matters if you are considering replacing an annuity or if you are reviewing a recent purchase.
I have a structured settlement annuity, not a regular annuity. Does this page apply to me?
Mostly no. Structured settlement annuities from personal physical injury or sickness claims are tax-free under IRC § 104(a)(2) and are subject to a separate state-level statutory framework called the Structured Settlement Protection Act (SSPA). The SSPA framework requires court approval for any sale of future payments and imposes its own state-specific rules on disclosures, cooling-off periods, court findings, and licensed buyer requirements. Each state card on this page links to the corresponding SSPA page so you can see your state's structured settlement framework. The Best Interest standard, guaranty caps, and free-look periods on this page generally apply to non-qualified deferred annuities (including inherited annuities and post-settlement non-qualified purchases), not to structured settlement annuities.
Where does this data come from?
The Best Interest adoption status, statute and admin-rule citations, and effective dates are sourced from each state's official insurance department website, the ACLI annuity Best Interest tracker, the NAIC State Legislative Brief on Annuity Suitability and Best Interest Model (August 2025), and the InsureLink ACLI tracker. Guaranty association caps come from the National Organization of Life and Health Insurance Guaranty Associations (NOLHGA) and each state's individual guaranty association. SSPA citations are verified against the current state statute, not historical industry summaries. Premium tax rates are verified against state Revenue or Insurance Department primary sources. Regulator helpline numbers are from each state insurance department's consumer services page. Updated 2026-05-10.

Considering Selling Your Annuity Payments?

CSF buys future payments from inherited annuities and post-settlement non-qualified annuities. We quote against your specific contract. If you have a structured settlement annuity instead, we handle the court-approved transfer under your state's SSPA.

Get My Free Quoteor call(800) 317-3769