§431:1-204  Life insurance defined. (a)  Life insurance is insurance on human lives and insurance appertainingthereto or connected therewith.

(b)  For the purposes of this code, thetransacting of life insurance includes contracting to provide additionalbenefits in the event of death or dismemberment by accident or accidentalmeans, or in the case of total and permanent disability of the insured, furtherincludes effecting optional modes of settlement of proceeds.

(c)  For the purposes of this code, thetransacting of life insurance includes the granting of annuities and endowmentbenefits, except for annuities that are provided under a charitable giftannuity agreement with a donor and issued by a nonprofit educational foundationor a nonprofit organization that has met the requirements of paragraphs (1) to(4).

A nonprofit educational foundation or nonprofitorganization issuing charitable gift annuities shall:

(1)  Meet the following requirements:

(A)  The foundation or organization shall haveconducted business in the form of program services or fundraising activities inthe State continuously for at least ten years;

(B)  The foundation or organization shallmaintain a net worth in the State of not less than $200,000 in cash, cashequivalents, or publicly traded securities, exclusive of the assets funding anyannuity; and

(C)  The foundation or organization shall havefiled an annual statement that certifies compliance with this subsection, onforms that may be prescribed by the department of the attorney general.  Eachfoundation or organization shall file its annual statement with the attorneygeneral on or before March 15 of each year;

(2)  Maintain segregated assets in a financialinstitution equal to at least the sum of the reserves on its outstandingcharitable gift annuity agreements, calculated in accordance with mortalitytables and discount rates to be determined by the commissioner of insurance,and a surplus of ten per cent of the reserves or the amount of $100,000,whichever is higher.  The assets shall be segregated as separate and distinctfunds independent of all other funds and shall not be applied toward thepayment of the debts and obligations of the foundation or organization, otherthan with respect to the annuity agreements.  The segregated assets shall notbe considered in determining whether the foundation or organization meets thenet worth requirement of paragraph (1)(B).  In determining the fund reserves, adeduction shall be made, and no surplus shall be required, for all or anyportion of an annuity risk that is lawfully reinsured by an authorized insurer;

(3)  Invest and manage assets as would a prudentinvestor, taking into account the purposes, terms, and distributionrequirements expressed in its governing instrument.  To satisfy this standard,the fiduciary shall exercise reasonable care, skill, and caution; and

(4)  Prominently state on the first page of acharitable gift annuity agreement that the agreement is not insurance under thelaws of the State, is not subject to regulation by the insurance division, andis not protected by any state guaranty fund.

Upon the failure of a nonprofit educationalfoundation or nonprofit organization to comply with any of the requirements ofparagraphs (1) to (4), a charitable gift annuity agreement issued by thefoundation or organization shall be deemed life insurance and subject to theprovisions of this code governing life insurance.

For the purposes of this subsection:

"Charitable gift annuity agreement"means a contract under which an individual transfers property to a charity,conditioned upon the right to receive a specific sum of money for life.

"Nonprofit organization" means anorganization that has been granted tax exempt status as a charitableorganization by the Internal Revenue Service pursuant to section 501(c)(3) ofthe Internal Revenue Code of 1986, as amended. [L 1987, c 347, pt of §2; am L1989, c 91, §1; am L 1994, c 127, §1; am L 2004, c 172, §1; am L 2005, c 136,§1]