The ACGA has been in continuous discussions with the New York State regulators on a variety of issues related to gift annuities and rates. During a recent discussion, the subject of using IRA QCDs to fund charitable gift annuities came up as a topic.

New York is taking the position that any charity registered with the state to issue charitable gift annuities to NY residents, should submit updated annuity agreements for approval by New York, prior to completing any charitable annuities funded with an IRA QCD.  The Filing Guidance for Charitable Gift Annuity Forms Funded with IRA Distributions is posted. The guidance can be accessed through this link: https://www.dfs.ny.gov/apps_and_licensing/life_insurers/charann_IRA_Distributions

As noted in the guidance, to expedite filings, charities are encouraged to submit the CGA contract forms electronically to the email address provided in the guidance ([email protected]). The availability of this email box is not limited to CGAs funded with IRAs. It may be used for any filing of contract forms made after a charity has its permit or exemption. The initial filing of contract forms would still be made with the permit application package through the normal process.

In cases where charities have registered with agencies in other states (e.g., Washington, California) that require approval and submission of gift annuity agreements, charities should also submit updated agreement templates for approval. These updated agreements should include the following components to assure compliance with the new law:

(1) State that the gift annuity contract is not assignable.
(2) Remove an assignability of the contract to anyone other than the donor/annuitant.
(3) Be certain to remove assignment to the charity.
(4) Recommend removal of a right to revoke the annuity interest.

Charities should consult with their independent counsel when registering with the regulated states where gift annuities are offered. Counsel should approve the gift annuity contracts to be submitted to those states where applicable. A summary of state requirements, including states that require submission of contracts for approval, can be found on the ACGA website here. Additional information on these requirements are available to ACGA members.