STATE REGULATIONS REPORT
of the
STATE REGULATIONS COMMITTEE
of the
AMERICAN COUNCIL ON GIFT ANNUITIES
SUMMARY OF CHARITABLE GIFT ANNUITY (CGA) STATE REGULATIONS
As of August 18, 2003
While every effort is made to provide accurate data, using third party volunteers, neither the persons named in this document nor the American Council on Gift Annuities guarantees the accuracy of the data presented here.
The user of this information is solely responsible for determining and verifying the accuracy of the data presented here and how it is used by the reader. This information is provided solely as a resource.
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Click on the links below to go directly to that section, or scroll the old-fashion way.
Summary Listing
IA - CGAs are Regulated
IB - CGAs are Regulated
II - Conditional Exemption from Regulation
III - Blanket Statutory Exemption from CGA Regulation
IV - State Law is silent on definition and regulation of CGAs
V - Summary of recent Gift Annuity regulatory changes by year
VI - Possible Changes Pending in State Legislatures
VII - Required Reserve Mortality Tables 
VIII - Summary of State Regs and Contacts
IX - State Regulations Committee
Summary Listing
| I |
-
|
CGAs are REGULATED. Permit issued/regulated by State Insurance Dept. |
(10) |
|
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AR CA* HI MD* NJ NY* ND* OR* WA* WI
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| II |
-
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State Law provides for CONDITIONAL EXEMPTION from regulation of CGAs |
(26) |
|
|
AL* AK* AZ* CO* CT* FL* GA* IA* ID* IL KS MN MO* MS* MT* NC* NH* NM* NV* OK* PA* SD* TN* TX* VA* VT*
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| III |
-
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State Law grants BLANKET EXEMPTION from regulation of CGAs. |
(9) |
|
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IN KY LA MA ME MI NE SC UT
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| IV |
-
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State Law does NOT specifically address CGAs in its state insurance/securities laws. |
(6) |
|
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DE DC OH RI WV WY
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|
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Total |
(51) |
Notes:
| * |
-
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29 states require State Specific Disclosure Statement in annuity agreements |
| All |
-
|
Federal Law (Public Law 104-62) also requires charity to supply a Gift Annuity Disclosure Statement to all annuitants in Fund and to all prospective donors prior to their making their FIRST annuity gift (Effective 3-7-96). This is separate from state mandated disclosure language required in gift annuity agreements of some (presently 29) states. |
(Back to Top)
IA - CGAs are Regulated (10 States) (Permits/Certificates of Authority are Required)
|
State
|
Years in Operation
|
Board
Resolution
|
Disclosure
Statement
|
Reserve
Required
|
Annual
Filing (f)
|
Investment
Limitations
|
State Code
Section Nos.
|
| AR |
5 |
Yes |
|
Yes (d,k) |
Yes |
Less strict |
23-63-20 |
| CA |
10 |
Yes |
(5) (7) |
Yes (e) |
Yes |
Strict |
11520-11524 |
| HI |
10 (a) |
No |
|
Yes |
Yes |
|
431: I - 204 |
| MD |
10 (b) |
No |
Yes |
Yes |
Yes |
Less Strict |
487 |
| NJ |
10 |
Yes |
(4) |
Yes (d,k) |
Yes (h) |
Strict |
17B:17-13.1 |
| NY |
10 |
Yes |
(1) (2) (4) (6) (7) |
Yes (d) |
Yes (g) |
Most Strict |
1110 |
| ND |
|
No |
(1) (5) |
Yes |
Yes (m) |
|
26.1-34.1 |
| OR |
20 (c) |
No |
Yes (1) (2) |
Yes |
Yes |
|
731.704-724 |
| WA |
3 |
No |
(1)(2)(3)(5) |
Yes |
Yes |
|
48.38 |
| WI |
10 |
No |
(1) |
Yes (d,k) |
Yes (i) |
Less Strict |
615.03 - .15 |
Notes:
|
(a)
|
-
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Charity must have $5 million in assets in Hawaii. |
|
(b)
|
-
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In MD, charity must have "physical presence" in state (excluding fund raising). Periodic seminars in homes of MD residents would qualify. |
|
(c)
|
-
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In OR and if non-profit is a certain type of charity (See OR Permit Application paperwork for categories that qualify). OR now allows both Immediate and Deferred Payment Gift Annuities as of 12-01-95. |
|
(d)
|
-
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Rules apply to Reserves for all annuitants in all states (the entire Reserve Account). |
|
(e)
|
-
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For CA annuitants only: California wants separate Trust Account for CA annuities. For "foreign" (outside of CA) charities, trust account for CA annuitants may be outside of California. Law changed 1994, effective 1-1-98. |
|
(f)
|
-
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Charity report activity of annuity fund within 60-90 days of the end of calendar or fiscal year (varies by state). NY is 60 days. In most other states, Annual Report is due in 90 days. |
|
(g)
|
-
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Charity to report fund activity by March 1 for Calendar Year report. |
|
(h)
|
-
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Charity to report fund activity by April 1 for Calendar Year report. |
|
(i)
|
-
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In TN annual report due 90 days after close of fiscal year and annual filing fee of $100 due by March each year. |
|
(k)
|
- |
Charity may elect to segregate funds for this state in separate account within segregated Annuity Fund and follow this state's investment rules only for this separate account. |
|
(m)
|
- |
ND annual report includes submission of audited financial statements. |
|
(1)
|
-
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Age of annuitant(s) must be shown in agreement. |
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(2)
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-
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Agreements must be sequentially numbered (show in upper right corner). [Suggested for all gift annuity agreements.] |
|
(3)
|
-
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Corrective action required if age or sex if annuitant is wrong. |
|
(4)
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-
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NY Insurance Law: Prohibits real estate to be accepted for a gift annuity.
NJ Insurance Dept.: Does not allow charity to invest in or hold real estate in Gift Annuity Fund. |
|
(5)
|
-
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Reasonable Commensurate Value must be shown in body of agreement (same size type as agreement). |
|
(6)
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-
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Contract is governed by the laws of the state of residence of annuitants; except that NY law will prevail if that state has laws less restrictive than NY. (Consider adding similar wording to all agreements where domicile of charity and state of residence of annuitant(s) both claim jurisdiction, that the most restrictive rules will govern the administration of the gift annuity agreement.) |
|
(7)
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-
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Each gift annuity agreement shall state (1) value of property transferred, (2) amount of annuity to be paid (3) manner in which and intervals payment to be made, (4) age and sex of person(s) to receive payments for life, (5) reasonable value of benefits created on date of agreement, and (6) date payments are to begin. |
(Back to Top)
IB - CGAs are Regulated
| State |
Minimum Reserve Required |
Reserves Reduced by Reinsurance |
Initial Filing |
Annual Filing |
Per New Agreement |
| AR |
$ 100,000 |
Yes |
|
|
|
| CA |
|
Yes |
$ 3,272 |
$ 101 |
$ 66 (10) |
| HI |
|
|
|
|
|
| MD |
$ 100,000 |
Yes |
|
|
|
| NJ |
$ 100,000 ( 7 ) |
Yes |
|
|
|
| NY |
$ 100,000 ( 8 ) |
( 9 ) |
|
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| ND |
|
|
$ 100 |
|
|
| OR |
$ 100,000 |
|
|
|
|
| WA |
$ 100,000 |
|
$ 25 |
$ 25 |
$ 5 |
| WI |
$ 100,000 |
Yes |
$ 200 |
$ 50 |
|
Notes:
|
All
|
-
|
Special Permit/Certificate of Authority needed by charity and issued by state's Department of Insurance. Annual Report of Activity of Gift Annuity Fund to be filed with all states (except for ND). Charity must file its Gift Annuity Rates and Forms of Gift Annuity Agreements with the State and keep state informed of any changes. |
|
(7)
|
-
|
$100,000 plus actuarially calculated Reserve for all gifts, including 10% Excess Reserve. |
|
(8)
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-
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NY Law requires charity to file for Permit once Required Reserve (including 10% Excess) totals $500,000 or more. Charity will not receive permit until actuarially calculated reserve account exceeds $500,000 (about $800,000 in total face value of all annuities in force). Minimum Reserve to be maintained is $100,000. (Minimum Reserve account size changed from $80,000 to $500,000, becoming law on 9/20/2000 when Senate Bill #5740 was signed by Governor Pataki, making it the new Chapter 431 of the Laws of 2000.) |
|
(9)
|
-
|
Charity may reinsure any annuity gift over the Required Reserve of $100,000, but only by using a "treaty" (negotiated) agreement with an insurance company licensed in NY. |
|
(10)
|
-
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Fee per agreement for first 10 new agreements per quarter. Additional new agreements per quarter are discounted in stages down to $30 each for more than 40 new agreements. Charity must submit copies of new agreements to CA Insurance Dept. CA Insurance Dept. has authority from CA Legislature to increase all CGA fees by up to 10% a year without obtaining Legislature's approval. Be sure to check with CA Insurance Dept. concerning current fee schedule before you file. |
II - Conditional Exemption from Regulation Exemption automatic except for note (k).
|
State
|
Years in
Operation
|
Disclosure in
Agreement (r)
|
Notes
|
Notice to
State
|
Available
Assets
|
Date Rules
In Effect
|
|
AL
|
|
Yes
|
(r10)
|
Yes ( i )
|
|
4-9-97
|
|
AK
|
3
|
Yes (q)
|
|
Yes (r5)
|
$300,000
|
10-01-01
|
|
AZ
|
|
Yes
|
|
|
|
4-09-97 (o)
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CO
|
3
|
Yes
|
|
|
|
|
|
CT
|
3
|
Yes |
(r1) |
Yes (k) |
$300,000 |
10-01-99 |
|
FL
|
5
|
Yes
|
(r-4)
|
Yes (k)
|
|
5-15-96 (n)
|
| GA |
3 |
Yes |
10-1-00 (r7) |
Yes (k) |
$300,000 |
7-01-2000 |
|
IA
|
3
|
Yes (q)
|
|
Yes (r5)
|
$300,000
|
7-01-01
|
|
ID
|
3
|
Yes (q)
|
|
Yes (k)
|
$ 100,000
|
|
|
IL
|
20 (j)
|
Yes
|
(r2)
|
|
$2 Million (j)
|
|
|
KS
|
|
Yes
|
|
Yes (i)
|
|
7-07-95 (p)
|
|
MN
|
3
|
Yes
|
10-1-99 (r5)
|
Yes (i)
|
$ 300,000
|
1996
|
|
MO
|
3
|
Yes
|
|
Yes (k)
|
$ 100,000
|
8-28-01
|
| MS |
3 |
Yes (q) |
|
Yes (r5) |
$300,000 |
7-01-01 |
|
MT
|
3
|
Yes (q) (i)
|
(r1) (r4)
|
Yes (k)
|
$300,000 (r9)
|
4-24-03
|
| NC |
|
Yes |
|
Yes (k) |
$ 100,000 |
11-01-98 |
|
NH
|
3 |
Yes (i) |
(r1) (r7) (r3) |
Yes(k) |
$300,000 |
5-28-99 |
|
NM
|
3 |
Yes |
|
Yes(k) |
$300,000 |
7-01-99 |
| NV |
3 |
Yes |
12-31-99 (r5) |
Yes(k) |
$300,000 |
10-01-99 |
|
OK
|
3 |
Yes |
(r1) |
Yes (k) |
$100,000 |
7-21-98 |
|
PA
|
3
|
Yes (l) |
(r4) |
(No)
|
$ 100,000
|
12-16-96
|
|
SD
|
10
|
Yes (m)
|
|
(No)
|
$ 500,000
|
7-01-01
|
|
TN
|
3
|
Yes (q)
|
|
Yes (r5)
|
$1 Million (r8)
|
6-12-01
|
|
TX
|
3
|
Yes
|
|
Yes (k)
|
$ 100,000
|
9-01-95
|
|
VA
|
3
|
Yes
|
|
(No)
|
$ 100,000
|
3-31-96
|
|
VT
|
|
Yes (q)
|
|
Yes (r5)
|
$300,000
|
7-01-01
|
|
( i )
|
- |
Exemption granted by state's Securities Department. |
|
( j )
|
- |
Requirements are waived if annuity agreements are reinsured. |
|
( k )
|
- |
Contact states for forms and instructions (see following pages). Notice must be filed concurrent (winthin 90 days) with writing first annuity (11 states or more). |
|
( l )
|
- |
Charity must also comply with PA charitable solicitation law. Requires addition of 3/4 page of extra wording in Agreement, including date of incorporation and name of officer from whom annuitant can obtain charity's financial data. Donor must sign agreement. |
|
( m )
|
- |
Exemption applies to both South Dakota and "foreign"corporation charities. Charity must supply copies of annuity marketing materials. |
|
( n )
|
- |
FL no longer issues permits. Annual Report of Annuity Fund activity is required after initial notice is given to Florida Insurance Dept. |
|
( o )
|
- |
Exempt only if state mandated wording placed in agreement. See Arizona Statute Section 20-119 and 20-103. |
|
( p )
|
- |
Exempt if KS Securities Laws Section 17-1261 and 17-1262 are met. |
|
( q )
|
- |
Provision is in State Law for fine of $1,000 per agreement for non-compliance. |
|
( r )
|
- |
The agreement must be signed by donor and charity. May become a universal requirement among all states with advent of possible passage of Model Act. Donor must sign Disclosure Statement. May be handled by including Disclosure Statement in agreement and having donor sign the annuity agreement. |
| (r1) |
- |
Provision in state law for fine of $1,000 per gift agreement until charity complies with all aspects of state law. |
|
(r2)
|
- |
Provision in state law for fine of $10,000 until charity complies with all aspects of state law. |
|
(r3)
|
- |
Charity may issue gift annuity agreements at annuity rates no higher than those suggested by ACGA (American Council on Gift Annuities). |
|
(r4)
|
- |
Reserve Fund is required. |
|
(r5)
|
- |
Notice to Commissioner by date shown or 90 days of issuing 1st annuity. |
|
(r7)
|
- |
Notice to Commissioner by date shown or date of issue of 1st annuity. |
|
(r8)
|
- |
Minimum $300,000 if charity is TN institution of higher education. |
|
(r9)
|
-
|
Minimum $300,000 net worth OR $100,000 in unrestricted cash or securities. |
|
(r10)
|
-
|
See Alabama State page under "State Regulations" for details, instructions and forms. |
III - Blanket Statutory Exemption from CGA Regulation (9 states)
|
IN, KY, LA, MA, ME (s ), MI (u), NE (t), SC (s), UT. |
Notes:
| (s) |
- |
Must have been in continuous operation for five (5) years. |
| (t) |
- |
Must have been in continuous operation for three (3) years.
Sect. 59-1801 to 1803, NE Law. (Effective 3-26-96.) |
| (u) |
- |
Exemptions are administrative and not statutory. |
IV - State Law is silent on definition and regulation of CGAs (6 states)
Notes:
| If state law does NOT define a "charitable gift annuity" and either specifically exempt it from regulation or describe how it is to be regulated, the state regulators would be hard pressed to prove that rules for "commercial" annuities also apply. Some states take the position that gift annuities are the same as commercial annuities, and claim jurisdiction over charity.
For clarification, see draft of Commercial Annuity Disclosure Bill found on the NAIC Draft Law page, which exempts Charitable Gift Annuities from regulation as (commercial) annuities. This suggested (Commercial) Annuity Disclosure draft was approved by the NAIC (National Association of Insurance Commissioners) at its December, 1998 meeting and was sent to all 50 states and DC in early 1999 for passage by their state legislatures, hopefully in 1-4 years following that.
|
V - Summary of recent Gift Annuity regulatory changes by year
| 1995 |
- |
CO IL MD OR TX |
| 1996 |
- |
FL MN MO NE PA VA |
| 1997 |
- |
AZ IA |
| 1998 |
- |
CA NC ND OK |
| 1999 |
- |
CT NH NM NV
Note: All 4 states have passed the NAIC Model Exemption Act. |
| 2000 |
- |
GA (1), TN (2), NY (3)
Note: (1) NAIC Model Exemption Act. (2) Permit Law (effective 6/19/2000). (3) Required Reserves, after which Permit is required raised to $500,000 effective 9/20/2000. |
|
2001
|
- |
AK (1), IA, MS, MO (2), NY (4), SD, TN (3), VT.
Note: All - NAIC Model Exemption Act, effective 7-1-01 (except AK, MO, NY & TN). Effective dates: (1) 10-01-01, (2) 8-28-01, (3) 6-12-01, (4) New investment rules effective 11-1-2001. |
| 2002 |
- |
None |
| 2003 |
0 |
MT (1)
(1) Effective Date: 4-24-03 |
VI - Possible Changes Pending in State Legislatures (as of 07/01/2001)
|
ND
|
- |
Presently issues Permits (as of 4-20-98), but is reviewing status in light of the Philanthropy Protection Act of 1995 (Public Law 104-62). |
(Back to Top)
VII - Required Reserve Mortality Tables - FL, NJ, NY, OR, WA, WI
Some states have mandated that with gifts issued on or after a certain date, the Annuity 2000 Table must be used to calculate the Required Reserve for their state's annual Required Reserve Report, that will report how many dollars you have in your Fund to guaranty the payments for which you are contracted. Prior to that date, you use the 1983a Mortality Table.
|
State
|
1983a Table
Agreements issued
Before
|
Annuity 2000 Table
Agreements Issued
On or after
|
|
FL
|
07-01-1998
|
07-01-1998
|
|
NJ
|
01-01-2001
|
01-01-2001
|
|
NY
|
01-01-2000
|
01-01-2000
|
|
OR
|
01-01-2001
|
01-01-2001
|
|
WA
|
07-01-1998
|
07-01-1998
|
|
WI
|
01-01-1999
|
01-01-1999
|
VIII - Summary of State Regs and Contacts
State Regulations of Charitable Gift Annuities (as of 8-18-2003)
|
State
|
Contact State for
Permit / Notice
|
Disclosure
Wording
|
Effective
Date of Law
|
State Contacts
|
|
Contact Name
|
Phone Number
|
|
AL
|
Notice
|
Yes
|
4/9/1997 |
Rena Davis |
334-242-2984 |
| AK |
Notice
|
Yes |
10/1/2001 |
Janice Stamper |
907-269-7905 |
| AR |
Permit |
No
|
|
John Shields |
501-371-2766 |
| AZ |
|
Yes |
4/9/1997 |
|
|
| CA |
Permit |
Yes |
|
Carol Harmon |
415-538-4420 |
| CO |
No
|
Yes |
1995 |
|
|
| CT |
Notice
|
Yes |
1/1/2000 |
Nancy Monahan |
860-297-3804 |
| DE |
|
|
[ Silent State ]
|
|
|
| DC |
|
|
[ Silent State ]
|
|
|
| FL |
Notice
|
Yes |
5/15/1996 |
Terry Reynolds |
850-413-2430 |
| GA |
Notice
|
Yes |
7/1/2000 |
Kimberly Raper |
404-657-9205 |
|
HI
|
Permit |
| | | |
