In response to concerns over the adequacy of reserves held by some charitable gift annuity programs, the New York State Insurance Department issued a notice imposing additional requirements for such reserves. Specifically, the notice requires that charitable organizations take the following actions in addition to meeting the surplus requirements of New York Insurance Law Section 1110 (i.e. the section of the law allowing the New York Superintendent to issue a special permit to make annuity agreements with donors to any duly organized charitable organization):

  1. Prepare and file an Actuarial Opinion and Memorandum based on asset analysis per 11 NYCRR 95 (Regulation 126); or
  2. As an alternative to (1), the minimum reserve held must be at least 115% of the reserve calculated using the method required by New York Insurance Law Section 4217 and 11 NYCRR 99 (Regulation 151) per Section 95.11(Regulation 126).

The New York Insurance Department believes that either of these additional steps will address concerns over reserve adequacy as articulated in the notice.

A copy of the notice is available here.