2023 New York Laws › ISC - Insurance › Article 11 - Licensing of Insurers › 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.