As a generally rule the laws of the state that you reside in when the insurance company become insolvent are the ones that are followed. In particular in the company isn't licensed to sell insurance in the state that you reside in you are out of luck, so obviously leaving the country hoses you. .
Hmm.. looking at FAQ of the site posted by Brewer (thanks), seems like above is half true... i.e. looks like originating state picks up the tab - or am I misreading the following? Also, I guess this does not answer move-out-of-country case directly, but might have the same rules... more reading required.
"Coverage will be provided by the guaranty association in your state of residence, even if the policy was purchased in another state.
Policyholders who reside in states where the insolvent insurer was not licensed are covered, in most cases, by the guaranty association of the company’s domiciliary state."
Now, I am still unclear on what's covered. From reading the site, I get the impression that either (a) policy can be transferred to another insurance company, or (b) it will be paid out up to the 100k/300k limits. Now, in case of SPIA policy where the single premium was already paid and presumably used up by the failed insurance company, I can't imagine why another company would take on the obligation to pay out the rest of SPIA. What benefit would they get from this? So, I don't understand why (a) would ever happen for SPIA. For case (b), those limits seem to suggest to me that the income stream will not be protected - only the inflation-reduced "cash-value" of annuity. What is "cash value" of SPIA? Original premium? In any case, whatever it is, I assume 100k check will not buy nearly as much of an income stream in 30 years.
P.S. Found this (scary?) statistic on that website: Since their creation, state guaranty associations have:
- Provided protection to more than 2.3 million policyholders
- Guaranteed more than $21.2 billion in coverage benefits
- Contributed more than $5.2 billion to ensure that policyholders received their benefits