Oregon Statutes 731.038 – Application of Insurance Code to charitable organizations that issue charitable gift annuities
(1) As used in this section:
Terms Used In Oregon Statutes 731.038
- Annuity: A periodic (usually annual) payment of a fixed sum of money for either the life of the recipient or for a fixed number of years. A series of payments under a contract from an insurance company, a trust company, or an individual. Annuity payments are made at regular intervals over a period of more than one full year.
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Donor: The person who makes a gift.
- Gift: A voluntary transfer or conveyance of property without consideration, or for less than full and adequate consideration based on fair market value.
- Interest rate: The amount paid by a borrower to a lender in exchange for the use of the lender's money for a certain period of time. Interest is paid on loans or on debt instruments, such as notes or bonds, either at regular intervals or as part of a lump sum payment when the issue matures. Source: OCC
(a) ‘Charitable gift annuity‘ has the meaning given that term in section 501(m)(5) of the Internal Revenue Code, as amended and in effect on January 1, 2006.
(b) ‘Charitable organization’ means an organization to which contributions may be made that are charitable contributions under section 170(c) of the Internal Revenue Code, as amended and in effect on January 1, 2006.
(2) The Insurance Code does not apply to a charitable organization that issues charitable gift annuities if, on the date that the charitable organization issues the charitable gift annuity, the charitable organization:
(a) Has a minimum of $300,000 in net assets as shown by an annual audited financial statement prepared by an independent certified public accountant and kept on file by the charitable organization;
(b) Except as provided in subsection (3) of this section, has been in continuous operation for at least five years or is a successor to or an affiliate of a charitable organization that has been in continuous operation for at least five years; and
(c) Maintains a separate and distinct trust fund as a reserve fund adequate to meet the future payments under all outstanding annuity agreements. The amount in the reserve fund must be an amount no less than an amount computed on the basis of the transfers to which it relates in accordance with the standard of valuation based on current mortality tables and interest rate recommended by a national organization organized for the purpose of providing educational and other services to American charities regarding gift annuities and other forms of planned gifts. The reserve fund may include one or more single premium annuities that pay the entire amount of one or more charitable gift annuities issued by the charitable organization if each single premium annuity is issued by an authorized insurer that is also authorized to transact insurance in the state in which the charitable organization has its principal office and in the state in which the single premium annuity is issued.
(3) The Insurance Code does not apply to an educational institution or nonprofit corporation that issued a charitable gift annuity before January 1, 2006, under a certificate of authority issued under ORS § 731.704 (repealed in 2005).
(4) When a charitable organization that is subject to subsection (2) of this section enters into an agreement for a charitable gift annuity, the charitable organization shall disclose in writing to the donor that the charitable gift annuity is not issued by an insurance company, is not subject to regulation by the State of Oregon and is not protected by an insurance guaranty association.
(5) A charitable organization that is not subject to subsection (2) of this section must hold a certificate of authority to issue charitable gift annuities. [2005 c.31 § 2]
731.038 was added to and made a part of the Insurance Code by legislative action but was not added to ORS Chapter 731 or any series therein. See Preface to Oregon Revised Statutes for further explanation.