Insurance company defaults are governed by state law. The laws are, however, broadly similar in most states. Annuity contracts are protected against insurance company insolvency up to a specific dollar limit, often $100,000, but as high as $500,000 in New York New Jersey [https://web.archive.org/web/20071124050135/http://www.njlifega.org/faq.cfm?id=427, and the state of Washington [https://web.archive.org/web/20071215055153/http://www.walifega.org/faq.cfm?id=679]. California is the only state that has a limit less than 100%; the limit is 80% up to $300,000. This protection is not insurance and is not provided by a government agency. It is provided by an entity called the state guaranty association. When an insolvency occurs, the guaranty association steps in to protect annuity holders, and decides what to do on a case-by-case basis. Sometimes the contracts will be taken over and fulfilled by a solvent insurance company.