(a) Life insurance is insurance on human lives and insurance appertaining thereto or connected therewith.
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Terms Used In Hawaii Revised Statutes 431:1-204
- Annuity: A periodic (usually annual) payment of a fixed sum of money for either the life of the recipient or for a fixed number of years. A series of payments under a contract from an insurance company, a trust company, or an individual. Annuity payments are made at regular intervals over a period of more than one full year.
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Charity: An agency, institution, or organization in existence and operating for the benefit of an indefinite number of persons and conducted for educational, religious, scientific, medical, or other beneficent purposes.
- Contract: A legal written agreement that becomes binding when signed.
- Donor: The person who makes a gift.
- Fiduciary: A trustee, executor, or administrator.
- Gift: A voluntary transfer or conveyance of property without consideration, or for less than full and adequate consideration based on fair market value.
- Settlement: Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims.
A nonprofit educational foundation or nonprofit organization issuing charitable gift annuities shall:
(1) Meet the following requirements:
(A) The foundation or organization shall have conducted business in the form of program services or fundraising activities in the State continuously for at least ten years;
(B) The foundation or organization shall maintain a net worth in the State of not less than $200,000 in cash, cash equivalents, or publicly traded securities, exclusive of the assets funding any annuity; and
(C) The foundation or organization shall have filed an annual statement that certifies compliance with this subsection, on forms that may be prescribed by the department of the attorney general. Each foundation or organization shall file its annual statement with the attorney general on or before March 15 of each year;
(2) Maintain segregated assets in a financial institution equal to at least the sum of the reserves on its outstanding charitable gift annuity agreements, calculated in accordance with mortality tables 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 distinct funds independent of all other funds and shall not be applied toward the payment of the debts and obligations of the foundation or organization, other than with respect to the annuity agreements. The segregated assets shall not be considered in determining whether the foundation or organization meets the net worth requirement of paragraph (1)(B). In determining the fund reserves, a deduction shall be made, and no surplus shall be required, for all or any portion of an annuity risk that is lawfully reinsured by an authorized insurer;
(3) Invest and manage assets as would a prudent investor, taking into account the purposes, terms, and distribution requirements 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 a charitable gift annuity agreement that the agreement is not insurance under the laws of the State, is not subject to regulation by the insurance division, and is not protected by any state guaranty fund.
Upon the failure of a nonprofit educational foundation or nonprofit organization to comply with any of the requirements of paragraphs (1) to (4), a charitable gift annuity agreement issued by the foundation or organization shall be deemed life insurance and subject to the provisions 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 an organization that has been granted tax exempt status as a charitable organization by the Internal Revenue Service pursuant to section 501(c)(3) of the Internal Revenue Code of 1986, as amended.
