Regulation of Charitable Gift Annuities
Degree of Regulation:
Issuance of charitable gift annuities is regulated under Section 627.481 of the Florida Statutes.
A charity must have been in continuous operation for at least five years. A segregated reserve fund is required.
- Years of operation – five years continuous operation.
- Reserve fund – segregated reserve fund required.
- Annual reporting – sworn statement required.
- Rates must be calculated to provide 50% of the residuum to charity (ACGA Rates satisfy this)
Actions Required for Exemption:
Notification to the State Insurance Department is to be made by the date on which a charity enters into its first annuity in the state.
Disclosure and Agreement Content Requirements:
A charity is required to include a notice to donor in the annuity agreement.
Suggested Language for State Disclosure:
"This annuity is not issued by an insurance company, is subject only to limited regulation by the State of Florida and is not protected or otherwise guaranteed by any government agency."
Agreements for annuities issued by Florida state institutions of higher learning shall include this additional disclosure:
"This agreement is the entire contract between the parties, with rights and responsibilities of each party to the other as set forth herein. The donor or annuitant shall not have recourse against any assets of the state other than any funds or assets donated by, or funds derived from any assets donated by, the donor as set forth herein."
The segregated fund must maintain assets at least equal to the sum of the reserves on its outstanding annuity agreements plus a surplus of 10%. The reserve amount is to be calculated following assumptions set forth in Sec. 627.481(2)(a)1.b. . A deduction in reserves may be made for any portion of the annuity risk that is reinsured by an authorized insurer.
Investment of the segregated reserve fund is limited to no more than 50% equities (including mutual funds) and no more than 10% may be invested in any one stock or fund. A charity incorporated outside of Florida must invest the reserves for its Florida annuities in accordance with Florida’s investment restrictions. At its option, a charity may create a segregated reserve fund just for its Florida annuities. Otherwise, if the Florida reserves are held within a larger “all states” reserve fund, the Florida portion of the reserves must meet the specific investment restrictions.
Annual Reporting: Deadline for Submission
In lieu of a detailed annual report on the reserve fund, a Sworn Statement is to be filed with the Office of Insurance Regulation. Additionally, the Department of Consumer Services shall annually provide a renewal statement to each organization by mail at least sixty (60) days before the renewal date, which is the required filing date.
Failure to comply with any of the statutory requirements may result in issuance of a cease and desist order.
Links to State Regulations Pages:
Insurance Department Contact Information:
Office of Insurance Regulation
Bureau of Specialty Insurers
200 East Gaines Street
Tallahassee, FL 32399-0331
Phone: (850) 413-3144
Florida Department of Agriculture and Consumer Services
Solicitation of Contributions
P.O. Box 6700
Tallahassee, FL 32399-6700
(800) 435-7352 Calling from Florida
(850) 488-2221 Calling from outside of Florida
Florida Department of State
New Filing Section, Division of Corporations
PO Box 6327
Tallahassee, FL 32341
2661 Executive Center Circle
Tallahassee, FL 32301