CALIFORNIA

Charitable Gift Annuities regulated by State Code Section 11520-11524.

Permit issued/regulated by State Insurance Department.

Board resolution is required. Click here for suggested sample Resolution.

Annual filing of CGA Fund activity is required using CA forms within 120 days of end of fiscal year.

Strict investment limitations for California Annuity Reserve Account ONLY. (See New Law below.)

Reserve required for California annuitants only. CA annuities must be in SEPARATE Trust Account.

State specific disclosure statement is required showing "Reasonably Commensurate Value" (RCV) (a specific actuarially calculated dollar amount for each gift, listed in body of each agreement, not as an addendum). Permit will not be issued unless RCV is placed in each agreement in force at time of filing for Permit (Certificate of Authority).

Charity must maintain separate segregated Reserve Account just for California Annuitants, and California investment rules must be followed only for assets in that account. No withdrawals from that account permitted without permission of California Department of Insurance, unless due to termination of annuity agreement for which reserve was established.

Each annuity agreement must show ...

1) Value of property transferred. 2) Annual amount of annuity to be paid to annuitant(s). 3) The manner in which, and intervals at which such annuity is to be paid. 4) The age in years, at (nearest birthday, actuarial age) at or nearest the the agreement (gift) date of person(s) whose life annuity is to be paid.

Charity must be in continuous operation for 10 years before it can issue a gift annuity agreement.

01-01-2004: For NEW California Gift Annuity Fees Schedule, Click here

Fees: Permit Application Filing Fee is $3,599, and a Fee of $61 for out-of-state charities that need to designate an “in-state (CA) agent” for “service of process”. Other fees include $117 for annual renewal of the permit, and $60 for EACH new California agreement, (to be filed with CA Insurance Dept. quarterly) with discounts for more than ten (10) agreements. Actual copy of agreement no longer need be sent.

8-30-2004: New legislation - CA Senate Bill (SB1088) was signed into law on 8-30-2004, allowing CALIFORNIA Gift Annuity Fund *Reserve Account* assets to be invested up to 50% in equities (an increase from 10%), effective on 01-01-2005. For text of Senate Bill (SB1088), click here. And for a fuller explanation of SB1088 and suggestions for your possible implementation, click here. (Note: These two 'click here' links require Adobe Reader.)

Starting 1-01-2005, the method for calculating the Reasonable Commensurate Value (RCV) that must be in each CA CGA agreement, changes. For info on the changes, click here.

All promotion pieces for CGAs in CA, must now bear a *disclosure statement*. For a copy of the wording and four other documents that the CA Insurance Dept. has sent to some charities, click here.

01-01-2006: Disclosure Language Required: Beginning January 1, 2006, the following disclosure language is required in the annuity agreement, in at least 12 point, boldface type and on the same page and in proximity to the donor’s signature:

"Annuities are subject to regulation by the State of California. Payments under this agreement, however, are not protected or otherwise guaranteed by any government agency or the California Life and Health Insurance Guarantee Association."

Links to CA State Regulations Pages:

1) For copy of CA statute (11520-11524): Go to:
http://www.leginfo.ca.gov/cgi-bin/displaycode?section=ins&group=11001-12000&file=11520-11524 …or…go to: www.leginfo.ca.gov, then click on *California Law*, then *Insurance Code*, and then do a search for *11520*.

2) For Text of 2005 CA legislation (SB 271) that becomes effective 1-1-2006, Click here… or … go to: www.leginfo.ca.gov/bilinfo.html. Input *SB 271* in search box, click *Search*, Click on *SB 271 - Scott*, then click on either *HTML* or *PDF* under *Chaptered 9-22-05* heading.

3) Annual report forms:
www.insurance.ca.gov/0200-industry/0300-insurers/0100-applications/grants-annuities-notices-forms.cfm

4) For Permit Filing Forms and Instructions, Click here.

Federal law (Public Law 104-62) also requires charity to supply a Gift Annuity Disclosure Statement to all annuitants in the Fund and to all prospective donors prior to making their first annuity gift. Click here.

This page last updated January 3, 2006.