Close Close
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards

Retirement Planning > Retirement Investing > Annuity Investing

Empire State Eyes Charity Annuity Reserves

Your article was successfully shared with the contacts you provided.

The New York State Insurance Department is beefing up charitable gift annuity reserve requirements.

A charity that sponsors a program must either file an actuarial opinion supporting the adequacy of program assets, or else hold reserves equal to at least 115% of the reserves that Section 4217 of the New York Insurance Law would require an insurer with a comparable annuity program to hold, officials write in a new notice.

New York officials report in the notice that they have concerns about the adequacy of reserves being held by some charitable gift annuity programs.

The mortality rates used in annuity program calculations “are not conservative and do not make a provision for adverse deviations in experience,” officials write.

Officials also question whether the maximum valuation interest rates specified in the annuity law are conservative enough.

In addition, “many organizations have a high degree of [asset liability mismatch] risk and are holding a high concentration of assets with substantial volatility and/or credit risk,” officials write. “However, reserves are not being held for potential declines in asset values.”


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.