Exemption from regulation for certain annuities and providing a penalty. (FE)

What it does

Summary by the Legislative Reference Bureau, the Legislature's nonpartisan drafting office. It's their wording, not ours.

An annuity is an insurance contract under which the insurer agrees to pay the person covered under the annuity (annuitant) periodic payments, starting immediately or at a future date, for a set period of time or an indefinite period of time, such as for the remainder of the annuitant's life. Annuities and their sale are regulated by the office of the commissioner of insurance (OCI). This bill exempts from all regulation by OCI a qualified charitable gift annuity, which is defined in the bill as an annuity: 1) that is established under a transaction that is treated, for federal income tax purposes, partly as a charitable contribution and partly as an investment in an annuity contract, and 2) for which the obligation to pay is not an "acquisition indebtedness" under a provision in the Internal Revenue Code. To meet the second criterion just described, an annuity must be the sole consideration issued in exchange for property, if the value of the annuity is less than 90 percent of the value of the property; must be payable over the life of one or two individuals in being at the time the annuity is issued; and must be payable under a contract that does not guarantee a minimum amount, or specify a maximum amount, of payments and that does not provide for an adjustment in the amount of the annuity payments by reference to the income received from the transferred, or any other, property.

The bill requires that an agreement for a qualified charitable gift annuity contain a disclosure statement that the annuity is not insurance, is not subject to regulation by the commissioner of insurance (commissioner), and is not protected by an insurance guaranty fund or association. The bill requires a charitable organization that issues qualified charitable gift annuities to provide written notice that satisfies specified requirements to the commissioner no later than the date on which it executes its first qualified charitable gift annuity agreement after the enactment of the bill. If a charitable organization does not comply with the requirements under the bill, the commissioner may send the charitable organization a letter demanding compliance and may order a charitable organization that does not comply within 45 days after receiving such a demand letter to pay a forfeiture of up to $1,000 for each qualified charitable gift annuity issued out of compliance.

Who's behind it

4 senators are its authors⁠. All 4 are Republicans.

5 more lawmakers signed on in support⁠.

What it would cost

State agencies filed a cost estimate. Each opens as a PDF from the Legislature.

• Fiscal Estimate From OCI

Versions and amendments

Every text the Legislature printed for this bill, including proposed changes. Each opens on the Legislature's site.

• Amendment Histories
• LC Amendment Memo