§ 2517 - Charitable gift annuities - Vermont Statutes

§ 2517. Charitable gift annuities

(a) As used in this section:

(1) "Annuity obligation" means the present value of the charity's payment obligation to the donor as calculated by the Internal Revenue Code actuarial tables.

(2) "Charitable gift annuity" means an annuity described in sections 501(m)(5) and 514(c)(5) of the Internal Revenue Code of 1986, 26 U.S.C. §§ 501(m)(5) and 514(c)(5).

(3) "Charitable organization" means an entity described either in section 501(c)(3) or 170(c) of the Internal Revenue Code of 1986, 26 U.S.C. § 501(c)(3) or § 170(c).

(4) "Qualified charitable organization" means a charitable organization which:

(A) has a minimum of $300,000.00 in unrestricted cash, cash equivalents, or publicly-traded securities, in addition to the assets necessary to fund the charity's outstanding annuity obligations; 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.

(b) Charitable gift annuities may be issued and maintained only by a qualified charitable organization.

(c) Notice to donor. When entering into an agreement for a charitable gift annuity, the charitable organization shall disclose to the donor in writing in the annuity agreement, in print no smaller than that used in the annuity agreement generally, that a charitable gift annuity is not insurance under the laws of this state, and is not subject to regulation as insurance by the department of banking, insurance, securities, and health care administration, or protected by an insurance guaranty association. The following information shall also be similarly disclosed:

(1) the intervals at which payment is to be made;

(2) when payments are scheduled to begin; and

(3) the amount of each payment.

(d) Effect of failure to provide notice. The failure of a charitable organization to comply with the notice requirements imposed under subsection (c) of this section does not prevent a charitable gift annuity that otherwise meets the requirements of this section from constituting a valid charitable gift annuity. The attorney general may enforce the performance of the requirements of subsection (c) by sending a letter by certified mail, return receipt requested, demanding that the charitable organization comply with the requirements of subsection (c). A charitable organization that fails to comply with subsection (c) shall be subject to a civil penalty not to exceed $1,000.00 for each noncomplying agreement, up to a maximum total penalty of $10,000.00. (Added 2001, No. 37, § 2.)