Degree of Regulation: Charitable gift annuities are exempt from insurance regulation under Revised Code of Washington Chapter 48.38. To qualify for exemption, a charity must be in continuous operation for three years and maintain $500,000 in unrestricted net assets. A segregated reserve fund is required.

Notification/Contact with State Regulators: 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.

Disclosure Language Required: None.

Further Details: The required segregated reserve fund must be invested in the same manner expected by persons of reasonable prudence. An annual report of the reserve fund is due March 1, and must include a certification by an actuary. A charity must also file annually a copy of its audited financial statement and a copy of Form 990 (if applicable).

The annuity agreement must include at least the following information:

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

There is an application fee of $25. The annual renewal fee is also $25, plus $5 for each newly issued Washington annuity. The state will fine a charity for writing charitable gift annuities without a permit. Fines include $25 for each year the charity has accepted charitable gift annuities without a permit, $5 for each CGA gift agreement, plus a penalty component that has ranged from $100 to a few thousand dollars.

Links to State Regulations:

Code of Washington Sec. 48.38, click here.

Annual Report Information, click here.

Washington Insurance Department Contact Information:

Kristofer Graap or Gayle Pasero, CPCU
Office of the Insurance Commissioner
P.O. Box 40259
Olympia, WA 98504-0259
Kris - (360) 725-7206 or Gayle - (360) 725-7210
KrisG@oic.wa.gov or GayleP@oic.wa.gov