Regulation of Charitable Gift Annuities
Degree of Regulation:
Issuance of charitable gift annuities is regulated under General Statutes of North Carolina Section 58-3-6.
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 the successor or affiliate of an organization in operation for that period of time)
- have at least $100,000 in unrestricted cash, cash equivalents or publicly traded securities, exclusive of the assets contributed by the donor for the annuity agreement.
- provide notice to the Department of Insurance
Actions Required for Exemption:
A charity must file notice with the North Carolina Department of Insurance within 90 days of the issuance of its first gift annuity in the state. 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 and Agreement Content Requirements:
A charity must include specific disclosure language in each gift annuity agreement.
Suggested Language for State Disclosure: “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.”
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.
Enforcement may be made by a notice and demand letter. For failure to comply after such notice, a fine of up to $1,000 per annuity agreement may be imposed.
Links to State Regulations Pages:
Cara Shackelford Senior Policy and Rate Analyst
Life & Health Division
North Carolina Department of Insurance
1201 Mail Services Center
Raleigh, NC 27699-1201