OGC Op. No. 09-07-02
The Office of General Counsel issued the following opinion on July 15, 2009, representing the position of the New York State Insurance Department.
Re: Charitable Contributions
ELANY submitted a letter to the Department dated July 14, 2009, which proposed modifications to the parameters set forth in the Insurance Department's Office of General Counsel ("OGC") Opinion No. 07-06-06 (June 7, 2007). In that opinion, OGC concluded that consistent with N.Y. Ins. Law
1. ELANY will make no charitable contributions whatsoever, except to an organization providing humanitarian aid in the wake of a natural disaster or terrorist act, or to an organization established by the insurance industry for charitable works.
2. ELANY will limit total contributions to any given charitable organization to $1,000 in any calendar year.
3. ELANY will limit its aggregate charitable contributions to $15,000 in any calendar year.
4. ELANY will itemize each charitable contribution made during the year under review in the annual audited statement that ELANY files with the Department, and will specify the organization to whom the contribution was made, the date of the contribution, the amount of the contribution, and the nature and purpose of the gift.
5. ELANY's Board of Directors will approve each donation, irrespective of the amount.
In its July 14, 2009 letter, ELANY asked that the cap on contributions to any given charitable organization be raised from $1,000 to $15,000. ELANY also sought to increase the aggregate limit in any calendar year from $15,000 to $50,000, and asserted that $50,000 constitutes less than 1% of ELANY’s total annual revenues. ELANY noted that the aggregate limit actually is comprised of two $25,000 sub-limits: one for contributions to organizations established by the insurance industry for charitable works, and the other for donations to organizations providing humanitarian aid in the wake of a natural disaster or terrorist act. ELANY asserted that contributions along the latter lines “are less likely to be made year to year and would be reserved only for extraordinary circumstances.” In all other respects, ELANY reported, it will continue to abide by the parameters sets forth in the June 7, 2007 OGC opinion.
In light of the fact that ELANY does not expect that it will make contributions even totaling $50,000 in any given year except in “extraordinary circumstances,” in view of its representation that $50,000 constitutes less than 1% of ELANY's total annual revenues, and provided that ELANY continues to strictly adhere to the parameters set forth in the June 7, 2007 opinion in all other respects, the Department has no objection to the modifications that ELANY proposed.
For further information you may contact Deputy Superintendent and General Counsel Robert H. Easton at the New York City office.