Life Insurers: Filing Guidance

Guidance Date: 12/14/2023

Amendment To Insurance Law Section 1110 Regarding Maximum Charitable Gift Annuity Income Rates

With the enactment of Section 103.5 of 11 NYCRR 103 (Insurance Regulation 213), charitable gift annuity valuation interest rates for issues on or after 1/1/2020 were set on a quarterly basis, which in turn caused the maximum allowable charitable gift annuity income rates to be set on a quarterly basis as well. Industry trade groups and charities themselves noted quarterly rate changes to be computationally cumbersome given the modest resources of the charities.

To address this issue, Section 1110 (a) of New York Insurance Law was amended 10/26/2023 with an effective date of 1/23/2024. With the amendment, the calculation of maximum allowable charitable gift income rates is based on semiannual interest rates instead of quarterly interest rates. In addition to the change in interest rates, the amendment allows the use of unisex mortality in the calculation of the gift income rates. For issue dates on or after 1/23/2024, the semiannual income rates are applicable. For issues on or after 1/1/2020 and before 1/23/2024, the quarterly income rates are applicable. The income rates can be located on the Department website.

Please note, the amendment does not affect the valuation interest rates used for calculating charitable gift annuity reserves, it only affects the maximum allowable gift annuity income rates. Mortality and valuation interest rate reserve standards for charitable gift annuities are still governed by Section 4217 of the New York Insurance Law. Specifically, valuation interest rates used for reserve calculations continue to be set quarterly.

Questions concerning this guidance should be directed via [email protected].