Report Title:

Charitable Annuity; Nonprofit Organization

Description:

Allows local charities to raise funds through the issuance of gift annuities by repealing the requirement that a nonprofit organization authorized to issue annuities have a net worth of $5,000,000, requiring such organizations to maintain a segregated reserve fund sufficient for the payment of annuities attributable to the fund that is otherwise inaccessible to the organization and creditors, and subjecting annuity financing and investments to regulation by the Insurance Commissioner.

THE SENATE

S.B. NO.

3049

TWENTY-SECOND LEGISLATURE, 2004

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

relating to charitable annuities.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. Section 431:1-204, Hawaii Revised Statutes, is amended to read as follows:

"431:1-204 Life insurance defined. (a) Life insurance is insurance on human lives and insurance appertaining thereto or connected therewith.

(b) For the purposes of this code, the transacting of life insurance includes [the]:

(1) The granting of annuities and endowment benefits, except for annuities which are provided by a nonprofit organization or a nonprofit educational foundation for a public educational institution under a charitable gift annuity agreement with a donor; [additional] provided that the financing of the annuities that are excepted in this paragraph shall be subject to regulation under part III of article 2, and the investment of annuity funds shall be subject to article 6 of this chapter;

(2) Additional benefits in event of death or dismemberment by accident or accidental means; [additional]

(3) Additional benefits in event of total and permanent disability of the insured; and [optional]

(4) Optional modes of settlement of proceeds.

For purposes of this [section, "charitable] subsection:

"Charitable gift annuity agreement" means a contract under which an individual transfers property to a charity, conditioned upon the right to receive a specific sum of money for life.

[For the purposes of this section, a "nonprofit] "Nonprofit organization" means an organization that meets all of the following requirements:

(1) Has been granted tax exempt status as a charitable organization by the Internal Revenue Service pursuant to section 501(c)(3) of the Internal Revenue Code of 1986, as amended;

(2) Has conducted business in the State continuously for at least ten years;

[(3) Has a net worth in the State of not less than $5,000,000;

(4)] (3) Maintains a separate [annuity fund with at least one-half of the value of the annuity;], segregated reserve fund that is sufficient for the payment of annuities attributed to the fund and is otherwise unavailable to the organization and its creditors; and

[(5)] (4) Has filed a statement on forms that may be prescribed by the department of commerce and consumer affairs [which] that certify compliance with this section; provided that the statement shall be filed on an annual basis in accordance with rules adopted by the department of commerce and consumer affairs."

SECTION 2. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 3. This Act shall take effect upon its approval.

INTRODUCED BY:

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