_______________________________________________
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.
Passed the House March 9, 2002.
Passed the Senate March 2, 2002.
Approved by the Governor
April 2, 2002.
Filed
in Office of Secretary of State April 2, 2002.
