Text: HF00400 Text: HF00402 Text: HF00400 - HF00499 Text: HF Index Bills and Amendments: General Index Bill History: General Index
PAG LIN 1 1 Section 1. Section 507B.3, unnumbered paragraph 1, Code 1 2 2001, is amended to read as follows: 1 3NoA person shall not engage in this state in any trade 1 4 practice which is defined in this chapter as, or determined 1 5 pursuant to section 507B.6of this chapterto be, an unfair 1 6 method of competition, or an unfair or deceptive act or 1 7 practice in the business of insurance. The issuance of a 1 8 qualified charitable gift annuity as provided in chapter 508F 1 9 does not constitute a trade practice in violation of this 1 10 chapter. 1 11 Sec. 2. NEW SECTION. 508F.1 DEFINITIONS. 1 12 As used in this chapter, unless the context clearly 1 13 indicates otherwise: 1 14 1. "Charitable gift annuity" means a transfer of property 1 15 by a donor to a charitable organization in return for an 1 16 annuity payable over one or two lives, if the actuarial value 1 17 of the annuity is less than the value of the property 1 18 transferred and the difference in value constitutes a 1 19 charitable deduction for federal tax purposes. 1 20 2. "Charitable organization" means an entity described by 1 21 any of the following: 1 22 a. Section 501(c)(3) of the Internal Revenue Code. 1 23 b. Section 170(c) of the Internal Revenue Code. 1 24 3. "Commissioner" means the commissioner of insurance. 1 25 4. "Internal Revenue Code" means the Internal Revenue Code 1 26 of 1986 as designated by the Tax Reform Act of 1986, as 1 27 amended to a date designated by rules adopted by the 1 28 commissioner. 1 29 5. "Property" means anything of value that is subject to 1 30 ownership, and includes but is not limited to property 1 31 classified as real, personal, mixed, tangible or intangible, 1 32 or any present or future interest in such property. 1 33 6. "Qualified charitable gift annuity" means a charitable 1 34 gift annuity that is described by section 501(m)(5) or 1 35 514(c)(5) of the Internal Revenue Code, if all of the 2 1 following apply: 2 2 a. The annuity agreement is issued by a charitable 2 3 organization. 2 4 b. On the date that the annuity agreement is issued, the 2 5 charitable organization has a minimum value of the lesser of 2 6 three hundred thousand dollars or five times the face amount 2 7 of total outstanding annuities in unrestricted cash, cash 2 8 equivalents, or publicly traded securities. However, the 2 9 total outstanding annuities as provided in this paragraph do 2 10 not include assets funding the annuity agreement. 2 11 c. The charitable organization has been in continuous 2 12 operation for at least three years or is a successor or 2 13 affiliate of a charitable organization that has been in 2 14 continuous operation for at least three years. 2 15 Sec. 3. NEW SECTION. 508F.2 QUALIFIED CHARITABLE GIFT 2 16 ANNUITY IS NOT INSURANCE. 2 17 1. The issuance of a qualified charitable gift annuity 2 18 does not constitute engaging in the business of insurance in 2 19 this state. 2 20 2. A charitable gift annuity that meets the requirements 2 21 of a qualified charitable gift annuity shall be deemed to be a 2 22 qualified charitable gift annuity for purposes of this 2 23 chapter, regardless of whether the charitable gift annuity was 2 24 issued prior to the effective date of this Act. The issuance 2 25 of that charitable gift annuity shall not be construed as 2 26 engaging in the business of insurance in this state. 2 27 Sec. 4. NEW SECTION. 508F.3 ANNUITY AGREEMENT – NOTICE 2 28 TO DONOR. 2 29 An agreement for a qualified charitable gift annuity 2 30 executed by a charitable organization and a donor shall be in 2 31 writing. The annuity agreement shall include a notice stating 2 32 that a qualified charitable gift annuity is not insurance 2 33 under the laws of this state and is not subject to regulation 2 34 by the commissioner or protected by an insurance guaranty fund 2 35 or an insurance guaranty association. The notice required by 3 1 this section shall be in a separate paragraph and in a type 3 2 size no smaller than that generally used in the annuity 3 3 agreement. 3 4 Sec. 5. NEW SECTION. 508F.4 NOTICE FILED WITH THE 3 5 COMMISSIONER. 3 6 1. A charitable organization that issues qualified 3 7 charitable gift annuities in this state on and after the 3 8 effective date of this Act shall file a notice with the 3 9 commissioner in writing not later than the date on which it 3 10 executes the organization's first qualified charitable annuity 3 11 agreement. All of the following shall apply: 3 12 a. The notice must be signed by an officer or director of 3 13 the charitable organization. 3 14 b. The notice must identify the name and address of the 3 15 charitable organization. 3 16 c. The notice must include a copy of the determination 3 17 letter issued by the internal revenue service. 3 18 d. The notice must certify that the charitable 3 19 organization is a bona fide charitable organization and that 3 20 the annuities issued by the charitable organization are 3 21 qualified charitable gift annuities. 3 22 2. The charitable organization is not required to submit 3 23 additional information, unless the information is to be used 3 24 to determine appropriate penalties that may be applicable 3 25 under section 508F.5. 3 26 Sec. 6. NEW SECTION. 508F.5 FAILURE TO COMPLY WITH 3 27 REQUIREMENTS. 3 28 1. The failure of a charitable organization to comply with 3 29 the requirements of sections 508F.3 and 508F.4 does not 3 30 prevent a charitable gift annuity that otherwise meets the 3 31 requirements of this chapter from constituting a qualified 3 32 charitable gift annuity. 3 33 2. The commissioner shall enforce performance of the 3 34 requirements of sections 508F.3 and 508F.4. The commissioner 3 35 may do any of the following: 4 1 a. Send a letter by restricted certified mail to the 4 2 charitable organization demanding that the charitable 4 3 organization comply with this chapter. 4 4 b. Establish and impose civil penalties on the charitable 4 5 organization in an amount not to exceed one thousand dollars 4 6 for each qualified charitable gift annuity issued until the 4 7 charitable organization complies with the requirements of this 4 8 chapter. 4 9 Sec. 7. NEW SECTION. 508F.6 PENALTIES. 4 10 The commissioner may determine, after hearing, that the 4 11 issuance of an annuity is not in compliance with this chapter 4 12 and that the entity issuing the annuity is subject to the 4 13 provisions and penalties of chapters 507A and 507B. 4 14 Sec. 8. NEW SECTION. 508F.7 NOT UNFAIR OR DECEPTIVE 4 15 TRADE PRACTICE. 4 16 The issuance of a qualified charitable gift annuity does 4 17 not constitute a violation of chapter 507B. 4 18 Sec. 9. NEW SECTION. 508F.8 RULES. 4 19 The commissioner may adopt rules pursuant to chapter 17A 4 20 necessary to administer and enforce this chapter. 4 21 Sec. 10. NOTICE FILING REQUIREMENTS – DEADLINE. 4 22 Notwithstanding section 508F.4 as enacted in this Act, a 4 23 charitable organization that issues qualified charitable gift 4 24 annuities in this state on and after the effective date of 4 25 this Act shall have ninety days following the effective date 4 26 of this Act to file a notice with the commissioner as 4 27 otherwise provided in section 508F.4. 4 28 EXPLANATION 4 29 This bill regulates charitable gift annuities. A 4 30 charitable gift annuity is a transfer of property by a donor 4 31 to a charitable organization in return for an annuity payable 4 32 over one or two lives. Specifically, the bill provides for a 4 33 qualified charitable organization which is issued by a 4 34 charitable organization and further defined in the federal 4 35 Internal Revenue Code. The bill provides that a qualified 5 1 charitable organization must have a minimum value of either 5 2 $300,000 or five times the face amount of the total 5 3 outstanding annuities in unrestricted cash, cash equivalents, 5 4 or publicly traded securities. 5 5 The bill provides that the issuance of a qualified 5 6 charitable gift annuity does not constitute engaging in the 5 7 business of insurance in this state. The bill provides that 5 8 this also applies to qualified charitable gift annuities 5 9 issued before the effective date of the bill. 5 10 The bill provides that an agreement for a qualified 5 11 charitable gift annuity executed by a charitable organization 5 12 and a donor must be in writing. The annuity agreement must 5 13 include a notice to donors stating that a qualified charitable 5 14 gift annuity is not insurance under the laws of this state and 5 15 is not subject to regulation by the insurance commissioner or 5 16 protected by an insurance guaranty fund or association. 5 17 The bill provides that a charitable organization that 5 18 issues a qualified charitable gift annuity must file a notice 5 19 with the commissioner stating information regarding the 5 20 information and its status as a charitable organization. 5 21 The bill provides that a failure to comply with the new 5 22 Code chapter's requirements does not prevent a charitable gift 5 23 annuity from constituting a qualified charitable gift annuity. 5 24 The bill provides that the commissioner may send a letter to 5 25 the organization demanding compliance with the Code chapter 5 26 requirements or establish and impose civil penalties of not 5 27 more than $1,000 for each qualified charitable gift annuity 5 28 issued until the charitable organization complies with the 5 29 requirements. 5 30 The bill provides that the commissioner may determine that 5 31 the issuance of an annuity does not comply with the chapter's 5 32 requirements, and that the entity issuing the annuity is 5 33 subject to the penalties of Code chapters 507A and 507B. 5 34 The bill provides that the issuance of a qualified 5 35 charitable gift annuity does not constitute violation of Code 6 1 chapter 507B regulating unfair or deceptive practices in the 6 2 insurance industry. 6 3 LSB 1039HV 79 6 4 da/pj/5
Text: HF00400 Text: HF00402 Text: HF00400 - HF00499 Text: HF Index Bills and Amendments: General Index Bill History: General Index
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