Regulation of Charitable Gift Annuities
Degree of Regulation:
Issuance of charitable gift annuities is regulated under Code of Alabama Section 8-6-10(8).
- Gift annuity-specific registration - file application with state Securities Commissioner.
- Reserve fund - required.
- Annual reporting - required.
Actions Required for Exemption:
A detailed application must be submitted to the Securities Commissioner prior to issuance of any gift annuity in the state. Charities that have issued gift annuities without having first obtained an exemption must provide information on the circumstances surrounding such issuance. A Uniform Application for Securities Industry Registration of Transfer (Form U-4) must be filed by those who market gift annuities or sign the annuity agreement on behalf of the charity. A Uniform Consent to Service of Process (Form U-2) appoints the Alabama Secretary of State as agent for service of process.
Application Filing Fees
1. Form U4 - $60 fee per agent soliciting funds on behalf of charity
2. Form U2 - no fee
Disclosure and Agreement Content Requirements:
Disclosure language is required in the annuity agreement as follows:
"This charitable gift annuity is offered pursuant to a claim of exemption from registration under Section 37(h) [Section 8-6-10, Code of Alabama, 1975] of the Alabama Securities Act and Section 3(a)(4) of the Securities Act of 1933. A registration statement relating to this annuity has not been filed with the Alabama Securities Commission or with the United States Securities and Exchange Commission. Neither the Alabama Securities Commission nor the United States Securities and Exchange Commission has passed upon the value of this charitable gift annuity or approved or disapproved of its offering, or passed upon the adequacy or accuracy of this agreement. Any representation to the contrary is unlawful."
Other Required Disclosures
In addition to the required document language, the donor must be given (and must acknowledge receipt by signing) a detailed disclosure that must contain certain specific information, including the following language:
"The payments made under a charitable gift annuity are backed by the full faith and credit of the organization and are not insured or guaranteed by an insurance company or backed in any way by the State of Alabama."
A charity must maintain a gift annuity reserve fund, segregated from other assets of the organization, but there are no specific investment restrictions imposed on the fund.
Annual Reporting: Deadline for Submission
Alabama requires annual filings submitted to the Securities Commission. These filings include a submission of the charity’s recent financial statements. Deadlines: FY + 60 for filing audited financial; by 12/31 for renewal of “agents” registered w/ Form U-4
Annual Filing Fee - $60 for each Form U-4 renewal
Links to State Regulations Pages:
Insurance Department Contact Information:
Lisa M. Tolar and Bene Kyles
Securities Registration Manager
Licensing and Registration
Alabama Securities Commission
401 Adams Avenue, Suite 280
Montgomery, AL 36130
Phone: (334) 242-2984, Toll Free: (800) 222-1253
Fax: (334) 242-0240