SOUTH DAKOTA

(Section 58-1-16 effective 7-01-2001. Section 58-1-17 effective 1994)

South Dakota Title 58-1-16 and 17 of the South Dakota State Insurance Law governs charitable gift annuities issued by charities to South Dakota residents. Until 7-1-2001, ONLY South Dakota charities were exempt from regulation of charitable gift annuities. As of 7-1-01, "foreign" charitable corporations can issue qualified charitable gift annuities to South Dakota residents.

Charities must QUALIFY FOR EXEMPTION from regulation as an insurance company by having been in continuous operation for at least ten (10) years, and have at least $500,000 in unrestricted cash, cash equivalents or publicly traded securities, exclusive of the assets funding the annuity agreement as of the date of the annuity agreement.

Charity must be qualified to do business in South Dakota, must be exempt from Taxation under Section 501(c)(3) of the Internal Revenue Code as a charitable organization and regularly file a copy of Federal Form 990 in the Office of the South Dakota Attorney General or is exempt from taxation under Section 501(c)(3) of the Internal Revenue Code as a religious organization or is exempt as a publicly owned or privately endowed educational institution under the terms outlined in the South Dakota law.

DISCLOSURE IN AGREEMENT and PROMOTIONAL LITERATURE: The state requires Disclosure Language wording to be placed in BOTH charity's "promotional literature" AND its gift annuity agreement, in ten (10) point BOLD type (or larger) as follows:

"Charitable gift annuities are not regulated by and are not under the jurisdiction of the South Dakota division of insurance."

NO Notification: The charity is NOT required to notify the State of South Dakota that it qualifies for the exemption from regulation, but does have to comply with disclosure qualifications and must otherwise qualify as to minimum period of continuous operation (now ten years) and minimum unrestricted assets on hand, etc. or provisions for commercial insurance companies apply.

This page last updated July 1, 2001.