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SUBSTITUTE HOUSE BILL 2160
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AS AMENDED BY THE SENATE
Passed Legislature - 2002 Regular Session
State of Washington 57th Legislature 2002
Regular Session
By
Read first time 01/25/2002. Referred to Committee
on .
Regulating charitable
gift annuity businesses.
AN ACT Relating to the
separate reserve fund maintained by a charitable gift annuity business; and
amending RCW 48.38.020.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF
WASHINGTON:
Sec. 1. RCW 48.38.020 and 1998 c
284 s 2 are each amended to read as follows:
(1) Upon granting to
such insurer or institution under RCW 48.38.010 a certificate of exemption to
conduct a charitable gift annuity business, the insurance commissioner shall
require it to establish and maintain a separate reserve fund adequate to meet
the future payments under its charitable gift annuity contracts.
(2) The assets of the separate
reserve fund:
(a) Shall be held
legally and physically segregated from the other assets of the certificate of
exemption holder;
(b) Shall be invested
in the same manner that persons of reasonable prudence, discretion, and
intelligence exercise in the management of a like enterprise, not in regard to
speculating but in regard to the permanent disposition of their funds,
considering the probable income as well as the probable safety of their
capital. Investments shall be of sufficient value, liquidity, and diversity to
assure the insurer or institution's ability to meet its outstanding
obligations; and
(c) Shall not be liable
for any debts of the insurer or institution holding a certificate of exemption
under this chapter, other than those incurred pursuant to the issuance of
charitable gift annuities.
(3) The amount of the
separate reserve fund shall be:
(a) For contracts
issued prior to July 1, 1998, not less than an amount computed in accordance
with the standard of valuation based on the 1971 individual annuity mortality
table with six percent interest for single premium immediate annuity contracts
and four percent interest for all other individual annuity contracts;
(b) For contracts
issued on or after July 1, 1998, in an amount not less than the aggregate
reserves calculated according to the standards set forth in RCW 48.74.030 for
other annuities with no cash settlement options;
(c) Plus a surplus of
ten percent of the combined amounts under (a) and (b) of this subsection.
(4) The general assets
of the insurer or institution holding a certificate of exemption under this
chapter shall be liable for the payment of annuities to the extent that the
separate reserve fund is inadequate.
(5) For any failure on
its part to establish and maintain the separate reserve fund, the insurance
commissioner shall revoke its certificate of exemption.
(6) If an
institution holding a certificate of exemption under RCW 48.38.010 has
purchased a single premium life annuity that pays the entire amount stipulated
in the gift annuity agreement or agreements from an insurer (a) holding a
certificate of authority under chapter 48.05 RCW, (b) licensed in the state in
which the institution has its principle office, and (c) licensed in the state
in which the single premium life annuity is issued, then in determining the
minimum reserve fund that must be maintained under this section, a deduction
shall be allowed from the minimum reserve fund in an amount not exceeding the
reserve fund amount required for the annuity or annuities for which the single
premium life annuity is purchased, subject to the following conditions:
(i) The institution
has filed with the commissioner a copy of the single premium life annuity
purchased and specifying which charitable gift annuity or annuities are being
insured; and
(ii)
The institution has entered into a written agreement with the annuitant and the
insurer issuing the single premium life annuity providing that if for any
reason the institution is unable to continue making the annuity payments
required by its annuity agreements, the annuitants shall receive payments
directly from the insurer and the insurer shall be credited with all of these
direct payments in the accounts between the insurer and the institution.
