context otherwise requires:

1. "Charitable-gift annuity" means an annuity payable over one or

two lives issued by a charitable organization in return for a transfer of

money or property by the donor, if the actuarial value of the annuity is

less than the value of the money or property transferred and a deduction

as a charitable contribution is allowable for purposes of federal taxes.

2. "Charitable organization" means an artificial person described as

such in Section 501(c)(3) of the Internal Revenue Code of 1986, 26

U.S.C. § 501(c)(3), or Section 170(c) of the Internal Revenue Code of

1986, 26 U.S.C. § 170(c).

3. "Qualified charitable-gift annuity" means a charitable-gift

annuity described in Section 501(m)(5) of the Internal Revenue Code of

1986, 26 U.S.C. § 501(m)(5), and Section 514(c)(5) of the Internal

Revenue Code of 1986, 26 U.S.C. § 514(c)(5), which is issued by a

charitable organization that on the date of issuance:

(a) Owns at least $300,000 worth of money, cash equivalents or

publicly traded securities, exclusive of the amount transferred to it in

return for the annuity; and

(b) Has operated continuously for at least 3 years or is a successor or

affiliate of a charitable organization that has operated continuously for

at least 3 years.

The term does not include an annuity for which any person is paid

compensation that is contingent upon the issuance of the annuity or

based upon the value of the annuity other than a payment for

reinsurance to an insurer licensed to issue insurance in this state.

constitute transacting insurance in this state. A charitable-gift annuity

issued before October 1, 1999, is a qualified charitable-gift annuity for

the purposes of sections 2 to 6, inclusive, of this act.

the charitable organization shall disclose in writing to the donor that the

annuity is not insurance under the laws of this state, is not subject to

regulation by the commissioner and is not protected by an insurance

guaranty association. The disclosure must be made in a separate

paragraph and may not be in a size of type smaller than used generally in

the agreement.

charitable-gift annuities shall notify the commissioner in writing on or

before December 30, 1999, or the expiration of 90 days after it first

enters into an agreement to issue a qualified charitable-gift annuity,

whichever is later. The notice must:

(a) Be signed by an officer or director of the organization;

(b) Identify the organization; and

(c) Certify that the organization is a charitable organization and that

the annuities are qualified charitable-gift annuities.

2. Unless the commissioner demands information to determine the

amount of a penalty under section 6 of this act, the organization need

submit no other information.

requirements of section 4 or 5 of this act for disclosure or notice, or both,

does not disqualify an annuity that otherwise constitutes a qualified

charitable-gift annuity.

receipt requested, that the organization comply with those requirements,

and may impose a fine of not more than $1,000 for each charitable-gift

annuity issued before compliance is complete.

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