Degree of Regulation: Charitable gift annuities are exempt from insurance regulation under General Statutes of North Carolina Section 58-3-6. To qualify for the exemption, the charity must have been in continuous operation for at least 3 years and have a minimum of $100,000 in unrestricted cash, cash equivalents or publicly traded securities, exclusive of the assets contributed by the donor for the annuity agreement.

Notification/Contact with State Regulators: A charity is required to provide notice to the Commissioner of Insurance within 90 days of the issuance of its first gift annuity. The notice must be signed by an officer or director of the institution, identify the institution, and certify that the institution is a public charity or an educational institution and that its annuities are issued in compliance with the applicable provisions of this section. Upon request, a charity must make a copy of its Form 990 or 990-EZ available to the Insurance Commissioner.

Disclosure Language Required: A charity must include specific disclosure language in each gift annuity agreement. In addition, a copy of the organization’s Form 990 or corresponding substitute information as authorized by the Commissioner must be made available to the prospective annuitant at the time of the initial solicitation of the contribution, and updated information shall be made available when the agreement is executed.

Suggested Language for State Disclosure Wording: “This annuity is not issued by an insurance company, is not subject to regulation by the State of North Carolina, and is not protected or otherwise guaranteed by any government agency or insurance guaranty fund.”

Further Details: For failure to comply after a notice and demand is sent by the insurance department, a fine of up to $1,000 per annuity agreement may be imposed.

Links to State Regulations Pages: Click here for the notification format to be used with the NC Insurance Department.

Contact:

Theresa N. Shackelford
Supervisor, Life & Health Division
1201 Mail Service Center
Raleigh, NC 27699-1201
Phone: (919) 733-5060 Ext. 351