20-119

20-119. Charitable gift annuities; audited
financial statements; disclosure statement; commissions prohibited;
definitions

A. On the day a charitable organization enters into an agreement for a charitable
gift annuity, the charitable organization shall have:

1. A minimum of three hundred thousand dollars in unrestricted cash, cash
equivalents or publicly traded securities, exclusive of assets funding the charitable
gift annuity agreement.

2. 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.

3. Had an annual audit of its operations conducted by an independent certified
public accountant for the past two fiscal years.

B. Any person offering a charitable gift annuity in this state shall provide the
following information in writing to a prospective donor before entering into an agreement
for a charitable gift annuity or receiving any transfer of cash or property from the
donor:

1. The name and address of the charitable organization offering the charitable gift
annuity to the donor.

2. A description of the charitable organization offering the charitable gift
annuity, including its state of organization, its date of organization and its current
operations.

3. A statement that the charitable organization will make additional financial
information, including its most current audited and interim financial statements,
available to the donor on request. This statement shall be conspicuous and printed in at
least ten point bold-faced type.

4. A disclosure that the charitable gift annuity is not insurance under the laws of
this state, is not subject to regulation by the director and is not protected by any
state guaranty fund.

5. A disclosure that this state and the department have not approved or disapproved
of the charitable gift annuity being offered and have not determined whether any of the
information provided to the donor is truthful or complete.

C. If any agreement between a charitable organization and a donor for a charitable
gift annuity is entered in violation of this section, the donor may bring an action in a
court of competent jurisdiction to recover the amount of the consideration paid for the
charitable gift annuity, with interest, taxable court costs and reasonable attorney fees,
less the amount of any income received from ownership of the charitable gift annuity, on
tender of the charitable gift annuity or the agreement for it. Any such action shall be
brought within two years of the date the donor discovered or reasonably should have
discovered that the charitable gift annuity transaction did not comply with this section.

D. In connection with the solicitation or negotiation of a charitable gift annuity,
a person shall not directly or indirectly pay or accept a commission, fee or other form
of compensation contingent on the donation or amount of the charitable gift annuity.
This subsection does not prohibit or restrict a charitable organization from paying the
regular compensation owed to its employees or the distribution of monies for authorized
charitable purposes.

E. For the purposes of this section:

1. "Charitable gift annuity" means a transfer of cash or other property by a donor
to a charitable organization in return for an annuity that is payable over one or two
lives under which the actuarial value of the annuity is less than the value of the cash
or other property transferred and the difference in value is a charitable deduction for
federal tax purposes.

2. "Charitable organization" means an entity that is described in section 501(c)(3)
or 170(c) of the internal revenue code of 1986.