Regulation of Charitable Gift Annuities
Degree of Regulation:
Issuance of charitable gift annuities is regulated under Chapter 403-E of New Hampshire Revised Statutes Annotated.
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 the successor or affiliate of an organization in operation for that period of time)
- have at least $300,000 in unrestricted cash, cash equivalents or publicly traded securities, not counting the assets transferred for the annuity gift
- provide notice to the New Hampshire Department of Justice
- maintain gift annuity reserves, invested in accordance with the prudent investor standard
- submit an annual filing to the state
- be registered as a charitable organization with the New Hampshire Department of Justice (unless exempt from such registration)
- offer annuity rates that do not exceed the rates suggested by the ACGA at the time the annuity is issued
Actions Required for Exemption:
A charity must file notice with the Charitable Trusts Unit of the New Hampshire Attorney General's Office. The notice must be signed by an officer or director of the charity and must identify the organization, certify that the organization is a charitable organization, and state that annuities issued shall be qualified charitable gift annuities as defined in RSA 403-E:1,V.
Disclosure and Agreement Language Requirements:
A disclosure statement must appear on page one of the gift annuity agreement, in a separate paragraph, using print no smaller than that generally used in rest of agreement.
Suggested Language for State Disclosure: “A charitable gift annuity is not insurance under the laws of New Hampshire and is not subject to regulation by the insurance department or protected by an insurance guaranty association.”
The charity must also disclose the following in the agreement:
- the value of property being transferred;
- the amount of annuity being paid;
- the manner in which and the intervals at which payments are to be made; and
- the date payments are to begin.
A charity must retain 100% of the contributions received for its New Hampshire gift annuities, increased by earnings and decreased by annuity payments and properly allocated expenses. Such contributions must be invested in accordance with the general standards of prudent investment (RSA 564-A:3-b).
A charity must annually certify that it is issuing only qualified charitable gift annuities. The certification is done using a prescribed form.
The certification is due four months and 15 days after the end of each calendar or fiscal year.
Enforcement may be made by demand letter sent via certified mail. Failure to comply with the terms of the law shall permit the Director to assess a fine of up to $1,000 for each annuity issued until the charity complies.
Links to State Regulations Pages:
New Hampshire Department of Justice
Charitable Trusts Unit
33 Capitol Street
Concord, NH 03301