(a) The benefits that the Arkansas Life and Health Insurance Guaranty Association may become obligated to cover shall in no event exceed the lesser of:

(1) The contractual obligations for which the insurer is liable or would have been liable if it were not an impaired insurer or insolvent insurer; or

(2) (A) With respect to any one (1) life, regardless of the number of policies or contracts:

(i) Three hundred thousand dollars ($300,000) in life insurance death benefits or net cash surrender and net cash withdrawal values for life insurance;

(ii) Five hundred thousand dollars ($500,000) in accident and health insurance benefits, including any net cash surrender and net cash withdrawal values, provided coverage for disability insurance benefits and long term care insurance benefits shall not exceed three hundred thousand dollars ($300,000);

(iii) Three hundred thousand dollars ($300,000) in the present value of annuity benefits, including net cash surrender and net cash withdrawal values;

(B) With respect to each individual participating in a governmental retirement benefit plan established under section 401(k), section 403(b), or section 457 of the Internal Revenue Code covered by an unallocated annuity contract or the beneficiaries of each such individual if deceased, in the aggregate three hundred thousand dollars ($300,000) in present value annuity benefits, including net cash surrender and net cash withdrawal values;

(C) With respect to each payee of a structured settlement annuity or beneficiary or beneficiaries of the payee if deceased, three hundred thousand dollars ($300,000) in present value annuity benefits, in the aggregate, including net cash surrender and net cash withdrawal values, if any.

(b)

(1) Provided, however, that in no event shall the Arkansas Life and Health Insurance Guaranty Association be obligated to cover more than (i) three hundred thousand dollars ($300,000) in benefits in the aggregate with respect to any one (1) life under § 23-96-106, § 23-96-107, and this section except with respect to benefits for basic hospital, medical, and surgical insurance and major medical insurance under subdivision (a)(2)(A)(ii) of this section, in which case the aggregate liability of the Arkansas Life and Health Insurance Guaranty Association shall not exceed five hundred thousand dollars ($500,000) with respect to any one (1) individual, or (ii) with respect to one (1) owner of multiple nongroup policies of life insurance, whether the policy owner is an individual, firm, corporation, or other person, and whether the persons insured are officers, managers, employees, or other persons, more than one million dollars ($1,000,000) in benefits, regardless of the number of policies and contracts held by the owner;

(2) With respect to either (i) one (1) contract owner provided coverage under § 23-96-107(b)(2); or (ii) one (1) plan sponsor whose plans own directly or in trust one (1) or more unallocated annuity contracts not included in subdivision (a)(2)(B) of this section, one million dollars ($1,000,000) in benefits, irrespective of the number of contracts with respect to the contract owner or plan sponsor. However, in the case where one (1) or more unallocated annuity contracts are covered contracts under this chapter and are owned by a trust or other entity for the benefit of two (2) or more plan sponsors, coverage shall be afforded by the Arkansas Life and Health Insurance Guaranty Association if the largest interest in the trust or entity owning the contract or contracts is held by a plan sponsor whose principal place of business is in this state, and in no event shall the Arkansas Life and Health Insurance Guaranty Association be obligated to cover more than one million dollars ($1,000,000) in benefits with respect to all of these unallocated contracts.

(3) The limitations set forth in this subsection are limitations on the benefits for which the Arkansas Life and Health Insurance Guaranty Association is obligated before taking into account either its subrogation and assignment rights or the extent to which those benefits could be provided out of the assets of the impaired insurer or insolvent insurer attributable to covered policies. The costs of the Arkansas Life and Health Insurance Guaranty Association's obligations under this chapter may be met by the use of assets attributable to covered policies or reimbursed to the Arkansas Life and Health Insurance Guaranty Association pursuant to its subrogation and assignment rights.

(4) In performing its obligations to provide coverage under § 23-96-111, the Arkansas Life and Health Insurance Guaranty Association shall not be required to guarantee, assume, reinsure, or perform, or cause to be guaranteed, assumed, reinsured, or performed, the contractual obligations of the insolvent insurer or impaired insurer under a covered policy or covered contract that do not materially affect the economic values or economic benefits of the covered policy or covered contract.

(c)

(1) Any person receiving benefits under this chapter shall be deemed to have assigned the rights under, and any causes of action against any person for losses arising under, resulting from or otherwise relating to, the covered policy or covered contract to the Arkansas Life and Health Insurance Guaranty Association to the extent of the benefits received because of this chapter, whether the benefits are payments of or on account of contractual obligations, continuation of coverage, or provision of substitute or alternative coverages. The Arkansas Life and Health Insurance Guaranty Association may require an assignment to it of such rights and cause of action by any payee, policy owner or contract owner, beneficiary, insured, or annuitant as a condition precedent to the receipt of any right or benefits conferred by this chapter upon such person.

(2) The subrogation rights of the Arkansas Life and Health Insurance Guaranty Association under this subsection shall have the same priority against the assets of the impaired insurer or insolvent insurer as that possessed by the person entitled to receive benefits under this chapter.

(3) In addition to subdivisions (c)(1) and (2) of this section, the Arkansas Life and Health Insurance Guaranty Association shall have all common law rights of subrogation and any other equitable or legal remedy that would have been available to the impaired insurer or insolvent insurer or owner, beneficiary, or payee of a policy or contract with respect to such policy or contracts.

(4) If the preceding provisions of this subsection are invalid or ineffective with respect to any person or claim for any reason, the amount payable by the Arkansas Life and Health Insurance Guaranty Association with respect to the related covered obligations shall be reduced by the amount realized by any other person with respect to the person or claim that is attributable to the policies, or portion thereof, covered by the Arkansas Life and Health Insurance Guaranty Association.

(5) If the Arkansas Life and Health Insurance Guaranty Association has provided benefits with respect to a covered obligation and a person recovers amounts as to which the Arkansas Life and Health Insurance Guaranty Association has rights as described in subdivisions (c)(1)-(4) of this section, the person shall pay to the Arkansas Life and Health Insurance Guaranty Association the portion of the recovery attributable to the policies, or portion thereof, covered by the Arkansas Life and Health Insurance Guaranty Association.

(d)

(1) For the purpose of carrying out its obligations under this chapter, the Arkansas Life and Health Insurance Guaranty Association shall be deemed to be a creditor of the impaired insurer or insolvent insurer to the extent of assets attributable to covered policies reduced by any amounts to which the Arkansas Life and Health Insurance Guaranty Association is entitled as subrogee pursuant to subsection (c) of this section. Assets of the impaired insurer or insolvent insurer attributable to covered policies shall be used to continue all covered policies and pay all contractual obligations of the impaired insurer or insolvent insurer as required by this chapter.

(2) "Assets attributable to covered policies", as used in this subsection, are that proportion of the assets which the reserves that should have been established for such policies bear to the reserves that should have been established for all policies of insurance written by the impaired insurer or insolvent insurer.

(e) As a creditor of the impaired insurer or insolvent insurer as established in subsection (d) of this section and consistent with § 23-68-126, the Arkansas Life and Health Insurance Guaranty Association and other similar associations shall be entitled to receive a disbursement of assets out of the marshaled assets, from time to time as the assets become available, to reimburse it, as a credit against contractual obligations under this chapter. If the liquidator has not, within one hundred twenty (120) days of a final determination of insolvency of an insurer by the receivership court, made an application to the court for the approval of a proposal to disburse assets out of marshaled assets to guaranty associations having obligations because of the insolvency, then the Arkansas Life and Health Insurance Guaranty Association shall be entitled to make application to the receivership court for approval of its own proposal to disburse these assets.

(f) It is the intent of the General Assembly that the coverage provided through the Arkansas Life and Health Insurance Guaranty Association for any annuity contract executed pursuant to § 11-9-210 shall be the lesser of the contractual obligations of the insurer or one hundred thousand dollars ($100,000) in the present value of annuity benefits including net cash surrender and net cash withdrawal values as provided in subsection (a) of this section.

(g) It is the intent of the General Assembly that coverage provided by the Arkansas Life and Health Insurance Guaranty Association for annuity contracts executed pursuant to § 11-9-210 shall not be affected by the fact that the annuity payments are sent to the Workers' Compensation Commission for distribution to the claimants and beneficiaries, and that any funds provided by the Arkansas Life and Health Insurance Guaranty Association for payment to claimants or beneficiaries for whom annuity contracts are executed under § 11-9-210 shall be sent to the commission for distribution to claimants or beneficiaries.