N.Y. Insurance Law § 1110: Charitable annuity societies exempt; special permits

§ 1110. Charitable annuity societies exempt; special permits. (a) The

superintendent may, in his or her discretion, issue a special permit to

make annuity agreements with donors to any duly organized domestic or

foreign non-stock corporation or association conducted without profit

and engaged in active operation for at least ten years prior thereto

solely in bona fide charitable, religious, missionary, educational or

philanthropic activities. The permit shall authorize such corporation or

association to receive gifts of cash and other property conditioned

upon, or in return for, its agreement to pay an annuity to the donor, or

his or her nominee, and to make and carry out such annuity agreement.

Every such corporation or association shall, before making such

agreement, file with the superintendent copies of its forms of

agreements with annuitants and a schedule of its maximum annuity rates,

which shall be computed so as to return to it upon the annuitant's death

a residue at least equal to one-half the original gift or other

consideration for such annuity. The maximum annuity rates may be unisex

in nature and shall be computed on the basis of currently applicable

mortality tables for calculating the reserves for individual annuities

pursuant to section four thousand two hundred seventeen of this chapter.

The yield of the ten year treasury bond plus two percent as of April

thirtieth, rounded to the nearest 0.25%, shall be used to calculate the

maximum annuity rates to become effective as of July first of the same

year and the ten year treasury bond yield plus two percent as of October

thirty-first, rounded to the nearest 0.25%, shall be used to calculate

the maximum annuity rates to become effective as of January first of the

following year. No other factors shall be used to calculate the maximum

annuity rates.

(b) Every such domestic corporation or association shall maintain

admitted assets at least equal to the greater of (i) the sum of its

reserves on its outstanding agreements, calculated in accordance with

section four thousand two hundred seventeen of this chapter, and a

surplus of ten per centum of such reserves, or (ii) the amount of one

hundred thousand dollars. In determining such reserves a deduction shall

be made for all or any portion of an annuity risk which is reinsured by

a life insurance company authorized to do business in this state. The

required admitted assets shall be invested in accordance with the

prudent investor standard as defined in section 11-2.3 of the estates,

powers and trusts law and shall not be subject to the investment

limitations set forth in this chapter. Such assets shall be segregated

as separate and distinct funds, independent of all other funds of such

corporation or association, and shall not be applied to pay its debts

and obligations or for any purpose except the aforesaid annuity

benefits.

(c) No such corporation or association organized under the laws of

another state shall be permitted to make such annuity agreements in this

state unless it complies with all requirements of this section imposed

upon like domestic corporations or associations.

(d) No such corporation or association shall make or issue in this

state any annuity contract before obtaining a permit issued in

accordance with the provisions of this section except that if its

requisite reserve on its outstanding annuity agreements computed in

accordance with section four thousand two hundred seventeen of this

chapter does not exceed the amount of one million dollars, it may make

gift annuity agreements in this state and shall be exempted from

securing a permit provided it maintains the reserve required by section

four thousand two hundred seventeen of this chapter and a surplus of at

least twenty-five per centum of such reserve. If the superintendent

finds, after notice and hearing, that any such corporation or

association, having such a permit, has failed to comply with the

requirements of this section, the superintendent may revoke or suspend

such permit or order it to cease making new annuity contracts until it

complies. The superintendent may, in the superintendent's discretion,

either dispense with the requirement of annual statements by such

corporations or associations or accept a sworn statement by two or more

of its principal officers, in such form as will satisfy the

superintendent that the requirements of this section are being complied

with.

(e) Except as provided in this section every such corporation or

association shall be exempt from the provisions of this chapter, other

than articles one, two, three, twenty-five and seventy-four of this

chapter.

(f) The superintendent may, in the superintendent's discretion,

examine any such corporation or association that is exempt from

obtaining a permit pursuant to subsection (d) of this section.