In late June, I reported that the Executive Committee of the National Association of Insurance Commissioners (NAIC) referred to the model gift annuity regulatory act back to the "A" Committee with instructions to:
- address some remaining issues with respect to that model act and
- consider drafting a model exemption statute that could be circulated to the states along with the model regulatory act.
Therese Vaughn, Chair of the "A" Committee reconstituted the Annuities Working Group and appointed Mike Battle of the New Mexico Insurance Department as Chair. Mike had previously worked on the model act and is very familiar with all of the issues.
Last week the Annuities Working Group met by conference call, and I participated in the call on behalf of the American Council on Gift Annuities. During the call, the Annuities Working Group agreed to the following:
Prepare a new draft of the model regulatory act that incorporates two changes.
- Allow a charity when computing the required reserves for any state to use the method prescribed in its state of domicile. (We had previously requested a uniform method of computing reserves to eliminate the necessity of multiple actuarial reports for charities operating nationwide.)
- Make clear that gift annuities are not covered by any Guaranty Association in case of default. (We had assumed this to be the case.
Prepare a draft of a model exemption statute. It appears that this draft will be similar to the model exemption act we had previously proposed to Mrs. Vaughn.
The Annuities Working Group did not take final action on either of these two matters but rather authorized preparation of drafts to be acted on September 15 in New York. If they are approved by the Annuities Working Group, they will go to the "A" Committee then in December to the NAIC Executive Committee and plenary. Assuming they are approved at each step, they should be ready for circulation to the states early next year (1999).
Website Editor's Note: This communication was written and posted to the List Serv "Gift-PL" on 8-31-98. We understand the Annuities Working Group and the Annuities "A" Committee approved the drafts of the "Charitable Gift Annuities Model Act" (draft dated 9-15-98) and the "Charitable Gift Annuities Exemption Model Act" (draft dated 8-28-98), both of which are found on this website and may be printed out for review and use. Of course, the NAIC Executive Committee and the Plenary Meeting in mid December could further edit these drafts before final passage.
While the desired results are not yet assured, so far, this matter is developing as we wished, and the NAIC has been very cooperative and receptive to comments from the charitable community. If, as we now expect, both model regulatory and model exemption acts are circulated to the states, we should pursue these actions:
- Encourage the now exempt states to retain the current statute;
- Encourage silent and regulated states to adopt the Model Exemption statute; (and)
- In those cases where states choose to have a more full-blown regulation, support the new Model Regulatory Act.
We will keep you advised of developments.
Submitted by Frank Minton
State Regulations Committee American Council on Gift Annuities
E-mail: PlanGiv@aol.com
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