CHAPTER 102. CHARITABLE GIFT ANNUITIES - Texas Statutes

INSURANCE CODE

TITLE 2. TEXAS DEPARTMENT OF INSURANCE

SUBTITLE B. DISCIPLINE AND ENFORCEMENT

CHAPTER 102. CHARITABLE GIFT ANNUITIES

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 102.001. DEFINITIONS. In this chapter:

(1) "Charitable gift annuity" means an annuity:

(A) that is payable over the lives of one or two individuals;

(B) that is made in return for the transfer of cash or other

property to a charitable organization; and

(C) the actuarial value of which is less than the value of the

cash or other property transferred, with the difference in those

values being a charitable deduction for federal tax purposes.

(2) "Charitable organization" means an entity described by:

(A) Section 501(c)(3), Internal Revenue Code of 1986; or

(B) Section 170(c), Internal Revenue Code of 1986.

Added by Acts 1999, 76th Leg., ch. 101, Sec. 1, eff. Sept. 1,

1999.

Sec. 102.002. QUALIFIED CHARITABLE GIFT ANNUITY. A charitable

gift annuity is a qualified charitable gift annuity for purposes

of this chapter if it was issued before September 1, 1995, or if

it is:

(1) described by Section 501(m)(5), Internal Revenue Code of

1986; and

(2) issued by a charitable organization that on the date of the

annuity agreement:

(A) has, exclusive of the assets funding the annuity agreement,

a minimum of $100,000 in unrestricted cash, cash equivalents, or

publicly traded securities; and

(B) has been in continuous operation for at least three years or

is a successor or affiliate of a charitable organization that has

been in continuous operation for at least three years.

Added by Acts 1999, 76th Leg., ch. 101, Sec. 1, eff. Sept. 1,

1999.

SUBCHAPTER B. ISSUANCE OF CHARITABLE GIFT ANNUITY

Sec. 102.051. NOT INSURANCE; EFFECT OF CERTAIN LAWS. The

issuance of a qualified charitable gift annuity:

(1) does not constitute engaging in the business of insurance in

this state;

(2) does not violate Section 15.05 or 17.46, Business &

Commerce Code; and

(3) is not an unconscionable action or course of action for

purposes of Section 17.50(a)(3), Business & Commerce Code.

Added by Acts 1999, 76th Leg., ch. 101, Sec. 1, eff. Sept. 1,

1999.

SUBCHAPTER C. NOTICE

Sec. 102.101. NOTICE TO DONOR. (a) A charitable organization

that issues a qualified charitable gift annuity shall give to the

donor, at the time an agreement for a qualified charitable gift

annuity is entered into, written notice that the annuity is not:

(1) insurance under the laws of this state;

(2) subject to regulation by the department; and

(3) protected by a guaranty association affiliated with the

department.

(b) The notice must be in a separate paragraph of the annuity

agreement in a print size at least as large as the print size

generally used in the agreement.

Added by Acts 1999, 76th Leg., ch. 101, Sec. 1, eff. Sept. 1,

1999.

Sec. 102.102. NOTICE TO DEPARTMENT. (a) A charitable

organization that issues qualified charitable gift annuities

shall notify the department's annuities division in writing not

later than the date on which the organization enters into the

organization's first qualified charitable gift annuity agreement.

(b) The notice required by this section must:

(1) be signed by an officer or director of the organization;

(2) identify the organization; and

(3) certify that:

(A) the organization is a charitable organization; and

(B) the annuities issued by the organization are qualified

charitable gift annuities.

(c) The charitable organization may not be required to submit

additional information except to determine appropriate penalties

under Section 102.104.

Added by Acts 1999, 76th Leg., ch. 101, Sec. 1, eff. Sept. 1,

1999.

Sec. 102.103. EFFECT ON ANNUITY OF FAILURE TO PROVIDE NOTICE. A

charitable gift annuity that otherwise meets the requirements of

Section 102.002 is a qualified charitable gift annuity without

regard to whether the charitable organization that issues the

annuity complies with the notice requirements of this subchapter.

Added by Acts 1999, 76th Leg., ch. 101, Sec. 1, eff. Sept. 1,

1999.

Sec. 102.104. ENFORCEMENT OF NOTICE REQUIREMENTS. (a) The

commissioner may enforce the notice requirements of this

subchapter by sending by certified mail, return receipt

requested, a letter demanding that the charitable organization

comply with the notice requirements.

(b) The department may fine the charitable organization in an

amount not to exceed $1,000 for each qualified charitable gift

annuity agreement issued by the organization until the time the

organization complies with this subchapter.

Added by Acts 1999, 76th Leg., ch. 101, Sec. 1, eff. Sept. 1,

1999.

SUBCHAPTER D. EFFECT OF CHARITABLE GIFT ANNUITY IN LITIGATION AND

CERTAIN OTHER PROCEEDINGS

Sec. 102.151. IMMUNITY. Any person or entity involved in the

issuance of a qualified charitable gift annuity shall have

immunity from suit, including both a defense to liability and the

right not to bear the cost, burden, and risk of discovery and

trial, as to any claim brought by or on behalf of the donor or

the donor's heirs or distributees alleging that the issuance of a

charitable gift annuity constitutes engaging in the business of

insurance in this state. An interlocutory appeal may be taken if

a court denies or otherwise fails to grant a motion for summary

judgment that is based on an assertion of the immunity provided

in this section.

Added by Acts 2001, 77th Leg., ch. 1420, Sec. 11.015(a), eff.

Sept. 1, 2001.

Sec. 102.152. TREATMENT OF ANNUITY AS CHARITABLE GIFT ANNUITY;

ESTOPPEL. In any litigation or other proceeding brought by or on

behalf of a donor or the donor's heirs or distributees, an

annuity that the donor has treated as a charitable gift annuity

in a filing with the United States Internal Revenue Service shall

be considered to be a charitable gift annuity issued by a

charitable organization, as described by Subchapters A and B and

Section 101.053(b).

Added by Acts 2001, 77th Leg., ch. 1420, Sec. 11.015(a), eff.

Sept. 1, 2001.