|
|
|
A BILL TO BE ENTITLED
|
|
AN ACT
|
|
relating to the sale of certain annuities. |
|
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
|
SECTION 1. Section 102.001, Insurance Code, is amended by |
|
amending Subdivision (1) and adding Subdivision (3) to read as |
|
follows: |
|
(1) "Charitable gift annuity" means an annuity: |
|
(A) that is payable over the lives of one or two |
|
individuals; |
|
(B) that is made in return for the transfer of |
|
cash or other property to a charitable organization or qualified |
|
educational organization; and |
|
(C) the actuarial value of which is less than the |
|
value of the cash or other property transferred, with the |
|
difference in those values being a charitable deduction for federal |
|
tax purposes. |
|
(3) "Qualified educational organization" means an |
|
issuer of a charitable gift annuity that is: |
|
(A) an institution of higher education as defined |
|
by Section 61.003, Education Code; |
|
(B) a private or independent institution of |
|
higher education as defined by Section 61.003, Education Code; or |
|
(C) a foundation designated in writing by an |
|
institution described by Paragraph (A) or (B) to issue charitable |
|
gift annuities for the benefit of the institution. |
|
SECTION 2. Section 102.002, Insurance Code, is amended to |
|
read as follows: |
|
Sec. 102.002. QUALIFIED CHARITABLE GIFT ANNUITY. (a) A |
|
charitable gift annuity is a qualified charitable gift annuity for |
|
purposes of this chapter if it was issued before September 1, 1995, |
|
or if it is: |
|
(1) described by Section 501(m)(5), Internal Revenue |
|
Code of 1986; and |
|
(2) issued by a charitable organization that on the |
|
date of the annuity agreement: |
|
(A) has, exclusive of the assets funding the |
|
annuity agreement, a minimum of $300,000 [$100,000] in unrestricted |
|
cash, cash equivalents, or publicly traded securities; and |
|
(B) has 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. |
|
(b) A charitable gift annuity is a qualified charitable gift |
|
annuity if it is issued by a qualified educational organization |
|
that, on the date of the annuity agreement: |
|
(1) has, exclusive of the assets funding the annuity |
|
agreement, a minimum of $300,000 in unrestricted cash, cash |
|
equivalents, or publicly traded securities; and |
|
(2) has been in continuous operation for at least |
|
three years or is a successor or affiliate of an institution or |
|
foundation described by Section 102.001(3) that has been in |
|
continuous operation for at least three years. |
|
SECTION 3. Subchapter C, Chapter 102, Insurance Code, is |
|
amended by amending Section 102.102 and adding Section 102.105 to |
|
read as follows: |
|
Sec. 102.102. NOTICE AND APPROVAL OF QUALIFIED STATUS OF |
|
CHARITABLE ORGANIZATION [TO DEPARTMENT]. (a) Not later than the |
|
60th day before the date on which a charitable organization sells |
|
the organization's first qualified charitable gift annuity, the [A] |
|
charitable organization [that issues qualified charitable gift
|
|
annuities] shall: |
|
(1) notify the department's annuities division in |
|
writing of the organization's intention to issue a charitable gift |
|
annuity; and |
|
(2) request in writing the department's approval of |
|
the organization as a qualified charitable organization under this |
|
chapter [not later than the date on which the organization enters
|
|
into the organization's first qualified charitable gift annuity
|
|
agreement]. |
|
(b) The notice required by this section must: |
|
(1) be signed by an officer or director of the |
|
organization; |
|
(2) identify the organization; [and] |
|
(3) certify that: |
|
(A) the organization is a charitable |
|
organization; and |
|
(B) the annuities issued by the organization are |
|
[qualified] charitable gift annuities; and |
|
(4) be submitted in a form and manner adopted by the |
|
commissioner by rule under Subsection (c). |
|
(c) The commissioner may adopt rules that establish the form |
|
and manner of information that a charitable organization must [may
|
|
not be required to] submit to request approval under this section |
|
[additional information except to determine appropriate penalties
|
|
under Section 102.104]. |
|
(d) On receipt of notice and request for approval under this |
|
section, the department may: |
|
(1) approve a request for a charitable organization to |
|
issue charitable gift annuities; or |
|
(2) disapprove a request and notify the issuer in |
|
writing of the grounds for the disapproval in sufficient detail to |
|
allow remediation. |
|
(e) A request under Subsection (b) is considered approved if |
|
the commissioner does not act on the request on or before the 60th |
|
day after the date the department received the request. |
|
(f) The department may withdraw the approval of a request |
|
for qualified status of a charitable organization if the |
|
organization no longer satisfies the requirements for approval. |
|
The department shall notify the organization in writing of the |
|
grounds for the withdrawal of approval in sufficient detail to |
|
allow remediation. |
|
(g) A proceeding under this chapter for the disapproval or |
|
withdrawal of approval is a contested case under Chapter 2001, |
|
Government Code. |
|
Sec. 102.105. NOTICE OF QUALIFIED EDUCATIONAL ORGANIZATION |
|
STATUS. (a) Not later than the 60th day before the date on which a |
|
qualified educational organization sells the organization's first |
|
qualified charitable gift annuity, the organization shall: |
|
(1) notify the department's annuities division in |
|
writing of the organization's intention to issue a charitable gift |
|
annuity; and |
|
(2) request in writing the department's acknowledgment |
|
of the organization as a qualified educational organization under |
|
this chapter. |
|
(b) The notice required by this section must: |
|
(1) be signed by an officer or director of the |
|
organization; |
|
(2) identify the organization; and |
|
(3) certify that: |
|
(A) the organization is an institution of higher |
|
education or a private or independent institution of higher |
|
education as defined by Section 61.003, Education Code, or a |
|
foundation designated by the institution as described by Section |
|
102.001(3); and |
|
(B) the annuities issued by the organization are |
|
charitable gift annuities. |
|
(c) On receipt of notice and request for acknowledgment |
|
under this section, the department shall acknowledge that the |
|
organization may issue a charitable gift annuity. |
|
SECTION 4. Section 102.152, Insurance Code, is amended to |
|
read as follows: |
|
Sec. 102.152. TREATMENT OF ANNUITY AS CHARITABLE GIFT |
|
ANNUITY; ESTOPPEL. In any litigation or other proceeding brought |
|
by or on behalf of a donor or the donor's heirs or distributees, an |
|
annuity that the donor has treated as a charitable gift annuity in a |
|
filing with the United States Internal Revenue Service shall be |
|
considered to be a qualified charitable gift annuity issued by a |
|
charitable organization or a qualified educational organization, |
|
as described by Subchapters A and B and Section 101.053(b). |
|
SECTION 5. Section 1107.006, Insurance Code, is amended to |
|
read as follows: |
|
Sec. 1107.006. MATURITY DATE. [(a)] In determining the |
|
value of benefits under Sections 1107.102, 1107.103, and 1107.104, |
|
[and subject to Subsection (b), if an annuity contract permits an
|
|
election to have annuity payments begin on optional maturity
|
|
dates,] the maturity date is [considered to be] the latest date on |
|
which an election is permitted by the contract, but[.
|
|
[(b) A maturity date determined under this section may] not |
|
[be] later than the later of: |
|
(1) the next anniversary of the annuity contract that |
|
follows the annuitant's 70th birthday; or |
|
(2) the 10th anniversary of the contract. |
|
SECTION 6. Section 1115.102, Insurance Code, is amended by |
|
adding Subsections (c) and (d) to read as follows: |
|
(c) In addition to any other remedy available for a |
|
violation of this chapter, if the commissioner finds a pattern or |
|
practice of unsuitable sales of annuities, or such a pattern or |
|
practice is reasonably expected, because of the compensation |
|
offered by an insurer for the sale of annuities, the commissioner |
|
may, after notice and hearing, order the insurer to cease and desist |
|
or modify the compensation offered. |
|
(d) An order issued under Subsection (c) may not include a |
|
regular salaried officer or employee of a licensed insurer, a |
|
jointly managed affiliate of a licensed insurer, or a licensed |
|
insurance agent if the officer or employee does not receive a |
|
commission or other compensation for the services of the officer or |
|
employee that is directly dependent on the amount of business done. |
|
SECTION 7. Sections 2 and 3 of this Act apply only to an |
|
annuity that is delivered or issued for delivery on or after January |
|
1, 2010. An annuity that is delivered or issued for delivery before |
|
January 1, 2010, is governed by the law as it existed immediately |
|
before the effective date of this Act, and that law is continued in |
|
effect for that purpose. |
|
SECTION 8. Section 1107.006, Insurance Code, as amended by |
|
this Act, applies only to an annuity that is delivered or issued for |
|
delivery on or after June 1, 2010. An annuity that is delivered or |
|
issued for delivery before June 1, 2010, is governed by the law as |
|
it existed immediately before the effective date of this Act, and |
|
that law is continued in effect for that purpose. |
|
SECTION 9. Section 1115.102, Insurance Code, as amended by |
|
this Act, applies only to conduct that occurs on or after the |
|
effective date of this Act. Conduct that occurs before the |
|
effective date of this Act is covered by the law in effect when the |
|
conduct occurred, and the former law is continued in effect for that |
|
purpose. |
|
SECTION 10. This Act takes effect September 1, 2009. |