HAWAII

7-6-2004: Hawaii's gift annuity statue was recently amended and signed into law on July 6, 2004, with both the addition of new requirements and modifications of existing ones. A holdover requirement is that a charity must have conducted business continuously in the state for at least ten years. However, the net worth requirement in the state has been reduced from $5 million, to $200,000 in cash, cash equivalents, or publicly traded securities. The required segregated reserve fund is now to hold an amount calculated in accordance with an actuarial methodology, plus a surplus that is the GREATER of $100,000 or ten percents of the calculated reserve. (Note: Reserve assets cannot be used to meet the net worth requirement.) Investment of reserves is to be in accordance with a prudent investor standard. Specific disclosure language must now be prominently included on the FIRST page of the annuity agreement. For text of Senate Bill (SB3049), click here.

Charitable Gift Annuities regulated by State Code Section 431:I-204.

Permit issued/regulated by State Insurance Department.

Annual reporting is required.

Reserve Fund is required.

Specific Disclosure Language (see paragraph *c1A* in SB 3049 Bill below) on FIRST page of gift annuity agreement.

Invest and manage the CGA Fund assets as would a "prudent investor."

Charity must be in continuous operation for 10 years (in Hawaii) before it can issue a gift annuity agreement to a Hawaiian resident.

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.

This page last updated September 24, 2004.