American Council on Gift Annuities

Regulation of Charitable Gift Annuities

Degree of Regulation:

Issuance of charitable gift annuities is regulated under Wisconsin State Code Sections 615.03. through 615.15.

In order to issue gift annuities in the state, a charity must meet the following regulatory requirements:

• have been in continuous operation for at least 10 years.
• obtain a certificate of authority from the Office of Commissioner of Insurance
• maintain gift annuity reserves, invested in accordance with the prudent investor standard
• submit an annual filing to the state

Actions Required for Exemption:

A charity must apply to the Wisconsin Office of the Commissioner of Insurance for a certificate of authority prior to issuance of any gift annuity in the state.

There is a $200 filing fee ($100 due at the time of application and $100 due at the time the certificate is granted.)

Disclosure and Agreement Content Requirements:

Although no specific disclosure language is mandated by Wisconsin law or regulations, the Office of the Commissioner of Insurance recommends inclusion of such language.  The wording should be placed in a separate paragraph, in type no smaller than that used in the agreement generally.

Suggested Language for State Disclosure: “This qualified charitable Gift Annuity is insurance under the laws of the State of Wisconsin and [Name of Charity], as its issuer, is subject to regulation by Wisconsin's Office of the Commissioner of Insurance with respect to its gift annuity program. However, this qualified charitable gift annuity is not protected by the Wisconsin Insurance Security Fund or any other insurance guaranty association. All of the unrestricted assets of [Name of Charity] stand behind this promise to pay.”

Reserve Requirements:

The segregated fund must maintain assets at least equal to the sum of a charity’s reserves on its outstanding gift annuity agreements plus a surplus of the greater of: (i) $100,000; or (ii) 10% of its reserves.  The reserves are to be calculated in accordance with prescribed mortality tables and discount rates. A deduction in reserves may be made for any portion of the annuity risk that is reinsured by an authorized insurer.

Assets in the reserve fund are to be invested in accordance with the prudent investor standard, under Chapter 881 (Trust Fund Investments).  Note:  Prior to the passage of 2009 Wisconsin Act 33, which was effective August 4, 2009, Wisconsin imposed specific restrictions on the investment of gift annuity reserves.

Annual Reporting:

An annual report on the segregated reserve fund is due by March 1 each year after a certificate of authority is obtained.  A verification by an actuary of the reserve calculation must accompany the report.

There is a $50 annual renewal fee.

Compliance/Enforcement:

Enforcement may be made through summary order, resulting in a revocation of the permit. 

Links to State Regulations Pages:

Wisconsin State Code Sections 615.03-.15

Application for Certificate of Authority Instructions

Wisconsin Insurance Department Contact Information:

Tim Vande Hey
Bureau of Financial Analysis and Examinations
Office of the Commissioner of Insurance
P.O. Box 7873
Madison, WI 53707-7873
(608) 267-5297
(800) 236-8517
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Regulation of Charitable Gift Annuities

Degree of Regulation:

Issuance of charitable gift annuities is regulated under West Virginia Code Section 33-13B-1-6.

In order to issue gift annuities in the state, a charity must meet the following regulatory requirements:

• have been in continuous operation for at least three years (or be a successor or affiliate of a charitable organization that has been in continuous operation for three years).
• have a minimum of $300,000 in unrestricted cash, cash equivalents, or publicly-traded securities, exclusive of the assets funding the annuity agreements
• provide notice to the Office of the Insurance Commissioner

Actions Required for Exemption:

A charity must file notice with the Office of the Insurance Commissioner by the date on which the charity enters into its first charitable gift annuity agreement in the state. The notice must identify the organization, be signed by an officer or director and certify that the organization is a charitable organization issuing a qualified gift annuity.

Disclosure and Agreement Content Requirements:

Specific disclosure language must be included in each gift annuity agreement, in a separate paragraph and in a type size no smaller than that used in the rest of the agreement.

Suggested Language for State Disclosure:  “A qualified charitable gift annuity is not insurance under the laws of West Virginia, is not subject to regulation by the West Virginia Insurance Commissioner, and is not protected by the West Virginia life and health insurance guaranty association established in article 26A, chapter 33 of the West Virginia Code or by any other guaranty association established by the West Virginia Code.”

Reserve Requirements:

None

Annual Reporting:

None

Compliance/Enforcement:

Failure to comply with the terms of the law shall permit the Commissioner to assess, after notice and hearing, a fine of up to $1,000 for each annuity issued until the charity does comply.

Links to State Regulations Pages:

West Virginia Code Section 33-13B-1-6

West Virginia Insurance Department Contact Information:

Christy Dunlap
Office Assistant
Office of the Insurance Commissioner
Financial Conditions Division
PO Box 50540
Charleston, WV 25305-0540
(304) 558-2100

Regulation of Charitable Gift Annuities

Degree of Regulation:

Issuance of charitable gift annuities is regulated under Revised Code of Washington Chapter 48.38.

In order to issue gift annuities in the state, a charity must meet the following regulatory requirements:

• have been in continuous operation for three years
• have $500,000 in unrestricted net assets
• obtain a certificate of exemption from the Office of Insurance Commissioner.
• maintain gift annuity reserves, invested in accordance with the prudent investor standard
• submit an annual filing to the state
• register as a charitable organization with the Washington Secretary of State (unless exempt from such registration)

Actions Required for Exemption:

Application for a certificate of exemption is to be made to the Washington State Insurance Department prior to issuance of any gift annuity in the state.

There is an application fee of $25.

Disclosure and Agreement Content Requirements:

The annuity agreement must include the following:

• The value of the property to be transferred
• The amount of the periodic annuity benefits to be paid
• The manner in which and the intervals at which payment is to be made
• The age of the annuitant (date of birth is sufficient)
  The reasonable commensurate value. (IRS present value is acceptable)
• A misstatement of age provision (providing for corrective action if the age of the annuitant is wrong)
• Washington law must govern the agreement
• The donor must sign the agreement or an application form that is attached to the agreement
• Sequential numbering in the upper right corner
• Form number in the lower left corner

Reserve Requirements:

The segregated fund must maintain assets at least equal to the sum of a charity’s reserves on its outstanding gift annuity agreements, plus a 10% surplus. The reserves are to be calculated in accordance with prescribed mortality tables and discount rates. A deduction in reserves may be made for any portion of the annuity risk that is reinsured by an authorized life insurance company licensed in both the charity’s state of domicile and the state of issuance.The segregated reserve fund must be invested in the same manner expected by persons of reasonable prudence.

Annual Reporting:

An annual report of the reserve fund is due 60 days after the end of a charity's fiscal year, and must include a certification by an actuary.  A charity must also file annually a copy of its audited financial statement within 120 days of its fiscal year end (unless it has requested and received an extension) and a copy of Form 990 (if applicable) within 15 days of having filed it with the IRS.

The annual report fee, due by March 1 for all registered charities, is $25, plus $5 for each newly issued Washington annuity.

Compliance/Enforcement:

Failure to comply with any of the statutory requirements may result in the suspension or revocation of the certificate of exemption or a fine of up to $10,000.  Late filing of the annual report form will generally result in a fine of $500.00.   A charity that issues a gift annuity without first obtaining a permit will be assessed a fine, with the amount influenced by the number of annuities, the number of years over which they were issued, and how recent the issuance.

Links to State Regulations:

Code of Washington Sec. 48.38
Annual Report Information

Washington Insurance Department Contact Information:

For Registration: Susan Baker or Gayle Pasero, CPCU
Office of the Insurance Commissioner
P.O. Box 40259
Olympia, WA 98504-0259
Susan - (360) 725-7232 or Gayle - (360) 725-7210
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For Financial Filings:  Steve Drutz (Senior Financial Analyst)
Office of the Insurance Commissioner
P.O. Box 40259
Olympia, WA 98504-0259
(360) 725-7205
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Regulation of Charitable Gift Annuities

Degree of Regulation:

Issuance of charitable gift annuities is regulated under Sections 38.2-106.1 and 38.2-3113.2 of the Code of Virginia.

In order to issue gift annuities in the state, a charity must meet the following regulatory requirements:

• have been in continuous operation for at least three years
• have at least $100,000 in cash, cash equivalents, or publicly-traded securities, not including the assets contributed for annuities

Actions Required for Exemption:

None

Disclosure and Agreement Content Requirements:

Specific disclosure language must be included in each gift annuity agreement.

Suggested Language for State Disclosure: “This charitable gift annuity is not insurance under the laws of the Commonwealth of Virginia and is neither subject to regulation by the Insurance Commission nor protected by the Virginia Life, Accident and Sickness Insurance Guaranty Association.”

Reserve Requirements:

None

Annual Reporting:

None

Compliance/Enforcement:

None specifically stated.

Links to State Regulations Pages:

Sections 38.2-106.1 and 38.2-3113.2 of the Code of Virginia