NORTH CAROLINA

State Law (effective 11-1-98), under House Bill 926 (new Sections 58-3-5 and 58-3-6 of Chapter 58 of the North Carolina General Statutes) appears to provide a "conditional exemption" (editor's words) from regulation for charitable organizations (described in section 501(c)(3) or section 170(c) of the IRC), or for "educational Institutions" (public or private colleges, universities and community colleges) from the North Carolina Attorney General's opinion that only charities that qualify as "insurance companies" may issue gift annuities in North Carolina.

Charity has been in continuous operation for at least 3 years and has "a minimum of $100,000 in unrestricted cash, cash equivalents or publicly traded securities, exclusive of the assets contributed by the donor for the annuity agreement."

A charitable gift annuity agreement issued after 11/1/98 must contain the following wording: "This annuity is not issued by an insurance company, is not subject to regulation by the State of North Carolina, and is not protected or otherwise guaranteed by any government agency or insurance guaranty fund."

A public [501(c)(3) or Section 170(c)] charity or an educational institution that issues charitable gift annuity agreements shall notify the North Carolina Department of Insurance of their participation by 1/1/1999 or within 90 days of their issuing its first annuity, whichever date is later.

The notice shall be signed by an officer or director of the institution, identify the institution, and certify that the institution is a public charity or an educational institution and that its annuities are issued in compliance with the applicable provisions of this section.

Charity must make available to the Insurance Commissioner, upon request, a copy of its Form 990 or 990-EZ. A copy of Form 990 or corresponding "substitute information" as authorized by the Commissioner shall be made available to the prospective annuitant at the time of the initial solicitation of the contribution and updated information shall be made available at the time of the execution of the agreement.

The North Carolina Insurance Department may enforce performance of the requirements of this section by notifying the institution and demanding that it comply. The Insurance Department may fine an educational institution up to $1,000 per agreement for failure to comply after notice and demand from the Commissioner.

The Department of Insurance shall study the use of charitable gift annuities and the need for additional solvency requirement or regulations. The Department shall report its finding to the North Carolina General Assembly no later than 4/1/1999.

Above information is partly paraphrased. See North Carolina General Statutes (Sections 58-3-5 and 58-3-6, revised 11/1/98) for exact wording and full details.

Click here for the one page Notification Form to be used with the NC Insurance Dept.

This Page Last Updated March 10, 2005.