As filed with the Securities and Exchange Commission on March 12, 1999
1933 Act Registration No. 333-xxxxx
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Registration Statement
on
FORM S-6
FOR REGISTRATION
Under the
SECURITIES ACT OF 1933
OF SECURITIES OF UNIT INVESTMENT TRUSTS
REGISTERED ON FORM N-8B-2
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LLANY Separate Account S for Flexible Premium Variable Life Insurance
(Exact Name of Registrant)
Lincoln Life & Annuity Company of New York
(Name of Depositor)
120 Madison Street, Suite 1700, Syracuse, NY 13202
(Address of Depositor's Principal Executive Offices)
Depositor's Telephone Number, including Area Code
(888) 223-1860
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Robert O. Sheppard, Esquire Copy to:
Lincoln Life & Annuity Company of New York George Gingold, Esquire
120 Madison Street, Suite 1700 197 King Philip Drive
Syracuse, NY 13202 West Hartford, CT 06117-1409
(Name and Address of Agent for Service)
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Approximate date of proposed public offering:
As soon as practicable after the effective date of the registration statement.
Indefinite Number of Units of Interest in Variable Life Insurance Contracts
(Title of Securities Being Registered)
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The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
shall determine.
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Cross Reference Sheet
(Reconciliation and Tie)
Required by Instruction 4 to Form S-6
Item of Form N-8B-2 Location in Prospectus
- ------------------- -----------------------
1 Cover Page; Highlights
2 Cover Page
3 *
4 Distribution of Policies
5 LLANY, the Separate Account and the General Account
6(a) LLANY, the Separate Account and the General Account
6(b) *
9 Legal Matters
10(a)-(c) Right to Examine the Policy; Surrenders; Accumulation Unit Value; Reports to Policyowners
10(d) Policy Loans; Partial Surrenders; Allocation of Premiums
10(e) Reinstatement of a Lapsed Policy
10(f) Right to Instruct Voting of Fund Shares
10(g)-(h) *
10(i) Premium Payments; Allocations and Transfers; Death Benefit; Policy Values; Settlement Options
11 Separate Account-Funds
12 Separate Account-Funds
13 Charges and Fees
14 Policy Rights
15 Premium Payments; Allocations and Transfers
16 Separate Account-Funds
17 Partial Surrenders
18 Separate Account-Funds
19 Reports to Policyowners
20 *
21 Policy Loans
22 *
23 The Company
24 Age; Incontestability; Suicide
25 The Company
26 Fund Participation Agreements
27 The Variable Account
28 Directors and Officers of LLANY
29 The Company
30 *
31 *
32 *
33 *
34 *
Item of Form N-8B-2 Location in Prospectus
- --------------------- -----------------------
35 *
37 *
38 Distribution of Policies
39 Distribution of Policies
40 *
41(a) Distribution of Policies
42 *
43 *
44 Separate Account-Funds; Premium Payments
45 *
46 Partial Surrenders
47 The Variable Account; Partial Surrenders, Allocations and Transfers
48 *
49 *
50 The Variable Account
51 Highlights; Premium Payments
52 LLANY, the Separate Account and the General Account
53 Tax Matters
54 *
55 *
- ---------------
* Not Applicable
Lincoln Life & Annuity Company of New York
LLANY Separate Account S for Flexible Premium Variable Life Insurance--
Prospectus Dated XXXXX
Home Office Location: Administrator Mailing Address:
120 Madison Street Personal Service Center MVLI
Suite 1700 350 Church Street
Syracuse, NY 13202 Hartford, CT 06103-1106
(888) 223-1860 (800) 552-9898
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This Prospectus describes a flexible premium variable life insurance contract
(the "Policy") offered by Lincoln Life & Annuity Company of New York. The Policy
is available only in New York.
The policy features:
o flexible Premium Payments
o a choice of one of three death benefit options
o a choice of underlying investment options
This prospectus is intended to describe the variable options used to fund this
Policy through the Separate Account. The variable funding options (collectively,
the "Funds") currently available through the Separate Account are:
American Century Variable Products Group, Inc.
o American Century VP Income & Growth Fund
o American Century VP International Fund
American Variable Insurance Series
o AVIS Global Growth Fund-Class 2
o AVIS Growth Fund-Class 2
Baron Capital Funds Trust
o Baron Capital Asset Fund
BT Insurance Funds Trust
o BT EAFE(R) Equity Index Fund
o BT Equity 500 Index Fund
o BT Small Cap Index Fund
Delaware Group Premium Fund, Inc.
o Delaware Group Delchester Series
o Delaware Group Devon Series
o Delaware Group International Series
o Delaware Group REIT Series
o Delaware Group Small Cap Value Series
Fidelity Variable Insurance Products Fund
o Fidelity VIP Growth Portfolio-Service Class
Fidelity Variable Insurance Products Fund II
o Fidelity VIP II Asset Manager Portfolio-Service Class
o Fidelity VIP II Contrafund Portfolio-Service Class
Janus Aspen Series
o Janus Aggressive Growth Portfolio
o Janus Balanced Portfolio
o Janus Worldwide Growth Portfolio
Lincoln National Funds
o LN Bond Fund, Inc.
o LN Capital Appreciation Fund, Inc.
o LN Equity-Income Fund, Inc.
o LN Money Market Fund, Inc.
o LN Social Awareness Fund, Inc.
MFS(R) Variable Insurance Trust
o MFS Research Series
o MFS Total Return Series
o MFS Utilities Series
o MFS Value Series
Neuberger & Berman Advisers Management Trust
o N&B AMT Mid-Cap Growth Portfolio
o N&B AMT Partners Portfolio
OCC Accumulation Trust
o OCC Trust Managed Portfolio
OppenheimerFunds
o Oppenheimer Growth and Income Fund
Templeton Variable Products Series Fund
o Templeton Asset Allocation Fund-Class 2
o Templeton International Fund-Class 2
o Templeton Stock Fund-Class 2
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THIS PROSPECTUS IS VALID ONLY WHEN ACCOMPANIED BY THE CURRENT PROSPECTUSES OF
THE FUNDS AVAILABLE AS INVESTMENT OPTIONS THROUGH THE SEPARATE ACCOUNT UNDER THE
POLICY OFFERED BY THIS PROSPECTUS. ALL PROSPECTUSES SHOULD BE READ CAREFULLY TO
UNDERSTAND THE POLICY AND RETAINED FOR FUTURE REFERENCE.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Table of Contents
HIGHLIGHTS .............................................. 3
A Flexible Premium Variable Life Insurance Policy ...... 3
Initial Choices to be Made ............................. 3
Level, Varying or Increasing Death Benefit ............. 3
Amount of Premium Payment .............................. 4
Selection of Funding Vehicles .......................... 4
Charges and Fees ....................................... 5
Policy Loans, Withdrawals and Surrenders ............... 6
Changes in Specified Amount ............................ 6
LLANY, THE SEPARATE ACCOUNT AND THE GENERAL
ACCOUNT ................................................. 6
BUYING VARIABLE LIFE INSURANCE .......................... 8
ALLOCATION OF PREMIUMS .................................. 9
Fixed Account .......................................... 9
Separate Account-Funds ................................. 10
Mixed and Shared Funding ............................... 15
Fund Participation Agreements .......................... 15
CHARGES & FEES .......................................... 15
Premium Load ........................................... 15
Premium Load Refund .................................... 16
Calculation of the Premium Load Refund Amount .......... 16
Premium Tax Charge ..................................... 16
Charges and Fees Assessed Against the Total
Account Value ......................................... 16
Charges and Fees Associated with the Variable
Funding Options ....................................... 17
Charges Assessed Against the Underlying Funds .......... 18
Reduction of Charges ................................... 18
POLICY CHOICES .......................................... 19
Premium Payments ..................................... 19
Life Insurance Qualification ......................... 20
Death Benefit Options ................................ 21
Allocations and Transfers to Funding Options ......... 21
POLICY VALUES ........................................... 22
Total Account Value .................................. 22
Accumulation Unit Value .............................. 23
Maturity Value ....................................... 23
Surrender Value ...................................... 23
POLICY RIGHTS ........................................... 23
Partial Surrenders ................................... 23
Reinstatement of a Lapsed Policy ..................... 24
Policy Loans ......................................... 24
Policy Changes ....................................... 25
Right to Examine the Policy .......................... 25
DEATH BENEFIT ........................................... 26
POLICY SETTLEMENT ....................................... 26
Settlement Options ................................... 26
TERM INSURANCE RIDER .................................... 28
THE COMPANY ............................................. 29
Directors and Officers of LLANY ...................... 29
ADDITIONAL INFORMATION .................................. 31
Reports to Policyowners .............................. 31
Right to Instruct Voting of Fund Shares .............. 31
Disregard of Voting Instructions ..................... 31
State Regulation ..................................... 32
Legal Matters ........................................ 32
The Registration Statement ........................... 32
Distribution of the Policies ......................... 32
Records and Accounts ................................. 32
Independent Auditors ................................. 33
Preparing for Year 2000 .............................. 33
TAX MATTERS ............................................. 34
General .............................................. 34
Federal Tax Status of the Company .................... 34
Life Insurance Qualification ......................... 34
General Rules ........................................ 35
Modified Endowment Contracts ......................... 35
Diversification Standards ............................ 36
Investor Control ..................................... 36
Other Tax Considerations ............................. 37
MISCELLANEOUS POLICY PROVISIONS ......................... 38
Payment of Benefits .................................. 38
Age .................................................. 38
Incontestability ..................................... 38
Suicide .............................................. 38
Coverage Beyond Maturity ............................. 39
Nonparticipation ..................................... 39
Appendix A --
Illustrations of Death Benefits, Total Account Values
and Surrender Values ................................... 40
Appendix B --
Corridor Percentages .................................... 54
Financial Statements of the Separate Account ............ S-1
Financial Statements of the Company ..................... F-1
2
HIGHLIGHTS
A Flexible Premium Variable Life Insurance Policy
This Prospectus describes a flexible premium variable life insurance contract
(the "Policy") offered by Lincoln Life & Annuity Company of New York ("LLANY",
the "Company", "we", "us", "our") through LLANY Separate Account S for Flexible
Premium Variable Life Insurance (the "Separate Account" or "Account S"). (Page
references are to this Prospectus unless otherwise stated.)
The Policy is available for purchase by corporations or groups where individuals
share a common employer or affiliation with a group or sponsoring employer. The
Policy may be useful in: funding non-qualified executive deferred compensation;
funding salary continuation programs; funding death benefit liabilities or cash
flow obligations for executive retirement plans. The Policy should not be
considered for employer pension or profit sharing programs.
Each Policy features:
o a choice of one of three death benefit options (see page 21);
o flexible premium payments (see page 9); and
o a choice of underlying investment options (see page 10).
Review the financial objectives you wish to achieve and discuss them with a
qualified financial counselor before you buy a variable life insurance policy.
This type of Policy may, or may not, be suitable for your purpose. The value of
your Policy and, under one option, the death benefit amount depends on the
investment results of the funding options you select.
Initial Choices to be Made
The Policyowner (the "Owner" or "you") is the person named in the "Policy
Specifications" who has all of the Policy ownership rights. If no Owner is
named, the Insured (the person whose life is insured under the Policy) will be
the Owner of the Policy. You, as the Owner must make important choices when
you buy a Policy:
o the amount of premium to pay;
o either the level, varying or increasing Death Benefit Option, and the Premium
Accumulation Rate you would like, if you choose Death Benefit Option 3;
o the amount of each Net Premium Payment. The balance of each Premium Payment
that remains after certain charges are deducted from it, to be placed in
each of the funding options selected.
Level, Varying or Increasing Death Benefit
We pay the Death Benefit to the Beneficiary(ies) when the Insured dies. Before
we pay the Beneficiary(ies), any outstanding loan account balances or
outstanding amounts due are subtracted from the Death Benefit. The Death Benefit
payable is calculated as of the date the Insured died. We will pay the Death
Benefit in one lump sum or under one of the annuity settlement options.
3
If you choose Death Benefit Option 1 which usually provides a level Death
Benefit, the Death Benefit will be the greater of:
o the Specified Amount, or Target Face Amount if the Term Insurance Rider is in
effect; or
o the Applicable Percentage of the Total Account Value. (The Total Account
Value is the total of the balances in the Fixed Account and the Variable
Account minus any outstanding Loan Account amounts).
If you choose Death Benefit Option 2 which usually provides a varying Death
Benefit, the Death Benefit will be the greater of:
o the Specified Amount plus the Total Account Value; or
o the Applicable Percentage of the Total Account Value.
If you choose Death Benefit Option 3 which usually provides an increasing Death
Benefit, the Death Benefit will be the greater of:
o the Specified Amount plus the Accumulated Premium(s) which have accumulated
at the Premium Accumulation Rate; or
o the Target Face Amount if a Term Insurance Rider is in effect; or
o the Applicable Percentage of the Total Account Value that will not be in
excess of the total Death Benefit paid under Option 2. Option 3 must be
selected at the time of issue.
You may use the value of your Policy to pay the premiums due and continue the
Policy in force if sufficient values are available for Premium Payments. Be
careful; if the investment options you choose do not do as well as you expect,
there may not be enough value to continue the Policy in force without more
Premium Payments. Charges against Policy values for the cost of insurance
increase as the Insured gets older.
See page 21 for more details on Death Benefit options.
If you borrow against your Policy or surrender a portion of your Policy, the
Loan Account balance and any surrendered amount will reduce the Initial Death
Benefit.
Amount of Premium Payment
Premium Payments may be changed within the limits described on page 19. If the
Policy lapses because your monthly deduction is larger than the Net Accumulation
Value, you may reinstate the Policy. See page 24.
You will have 10 days to review the Policy upon receiving it to make sure that
it meets your needs. This is called the "Right to Examine Period". During this
time period, your Initial Premium Payment will be allocated to the LN Money
Market Fund, Inc. and will be allocated to the Sub-Accounts or the Fixed Account
on the day after the "Right to Examine Period". If you then decide you do not
want the Policy, you will receive a refund. See page 26.
Selection of Funding Vehicles
This Prospectus focuses on the Separate Account investment information that
makes up the "variable" part of the contract. If you put money into the variable
funding options, you take all the investment risk on that money. This means that
if the
4
mutual fund(s) you select go up in value, the value of your Policy, net of
charges and expenses, also goes up. If they lose value, so does your Policy.
Each Fund has its own investment objective. You should review each Fund's
prospectus before making your decision.
You must choose the Fund(s) (Sub-Account(s)) in which you want to place each Net
Premium Payment. These Sub-Accounts make up the Separate Account. Each Sub-
Account invests in shares of a certain Fund. A Separate Sub-Account is not
guaranteed and will increase or decrease in value according to the particular
Fund's investment performance. See page 10.
You may also choose to place the Net Premium Payment or part of it into the
Fixed Account. Net Premium Payments put into the Fixed Account:
o become part of the Company's General Account;
o do not share the investment experience of the Separate Account; and
o have a guaranteed minimum interest rate of 4.0% per year.
For additional information on the Fixed Account, see page 10 and the Policy
itself.
Charges and Fees
We deduct a premium load from each premium payment. (See page 16) Currently, the
premium load is:
Policy Year(s)
1 10.5%
2-5 7.5%
6-7 3.5%
8+ 1.5%
If you fully surrender your Policy within 24 months after Date of Issue, you may
receive partial credit for premium loads deducted from your Policy. (See page
17).
For these purposes, an increase in Specified Amount is treated as a newly issued
policy.
Monthly deductions are made for administrative expenses (see page 16) and for
charges for the Cost of Insurance and for any Policy riders. The monthly
Administrative Expense deduction is currently $6, and will never exceed $10.
Daily deductions are subtracted from the assets of Separate Account S for
mortality and expense risk. Currently, that charge is at an annual rate of:
Policy Year(s)
1-10 0.70%
11+ 0.35%
The Company reserves the right to increase the mortality and expense risk charge
but it will never exceed 1.25% annually during Policy Years 1-10 and 0.90%
annually during Policy Years 11 and thereafter. (See page 17).
Each Fund has its own management fee charge, also deducted daily. Investment
results for the Funds you choose will be affected by the fund management charges
5
and other fund expenses. The table on pages 18 - 19 shows you the current
charges and expenses.
Before the Maturity Date you may make transfers between funding options. The
Company allows twelve transfers each Policy Year; beyond twelve, a $25 charge
may apply. Within 45 days after each Policy Anniversary, you may also transfer
to the Separate Account the greater of:
o 20% of the greatest amount held in the Fixed Account Value during the prior 5
years; or
o $1000.
See page 22.
There are no Surrender Charges for your Policy.
Policy Loans, Withdrawals and Surrenders
You may borrow, within described limits, against the Policy. You may surrender
your Policy in full or withdraw part of its value. Upon the maturity of your
Policy, you may select one of the annuity settlement options or, prior to
maturity, you may apply the value of your Policy, minus surrender charges and
loan account amounts, to one of the annuity settlement options.
Interest will accrue at an annual rate which will be the greater of:
o The monthly average (Moody's Investors Service, Inc. Composite Yield on
Corporate Bonds) for the calendar month which ends two months prior to the
Policy Anniversary month; or
o 5.0%.
Interest will be credited on the Loan Account Value at an annual rate that is
the interest charged on the loan minus a rate not to exceed 0.90%. The minimum
interest credited will be no less than 4.0% annually.
Changes in Specified Amount
You may decrease or increase the Specified Amount. Increases may require
evidence of insurability. Currently, the minimum Specified Amount is $100,000.
Such changes will affect other aspects of your Policy.
LLANY, THE SEPARATE ACCOUNT AND
THE GENERAL ACCOUNT
LLANY is a life insurance company chartered under New York law on June 6, 1996.
Wholly-owned by The Lincoln National Life Insurance Company ("Lincoln Life") and
in turn by Lincoln National Corporation ("LNC"), a publicly held Indiana
insurance holding company incorporated in 1968, it is licensed to sell life
insurance policies and annuity contracts in New York. Its principal office is at
120 Madison Street, Suite 1700, Syracuse, NY 13202. LLANY, Lincoln Life, LNC and
their affiliates comprise the "Lincoln Financial Group" which provides a variety
of wealth accumulation and protection products and services.
Account S a "separate account" of the Company established on March 2, 1999, was
established to segregate assets attributable to the variable portion of certain
life insurance policies from other assets of the Company. Under New York law,
the
6
assets of Account S attributable to the Policies, through the property of
LLANY, are not chargeable with liabilities of any other business of LLANY and
are available first to satisfy LLANY's obligations under the Policies. Account S
income, gains, and losses are credited to or charged against Account S without
regard to other income, gains, or losses of LLANY. The values and investment
performance of Account S are not guaranteed. Account S is registered with the
Securities and Exchange Commission ("Commission") as a "unit investment trust"
under the Investment Company Act of 1940, as amended ("1940 Act") and meets the
1940 Act's definition of "separate account". The Commission does not supervise
the management, investment practices, or policies of LLANY or Account S. LLANY
has numerous other registered separate accounts which fund its variable life
insurance policies and variable annuity contracts.
Account S is divided into Sub-Accounts, each of which is invested solely in the
shares of one of the mutual funds available as funding vehicles under the
Policies. On each Valuation Day, Net Premium Payments allocated to Account S
will be invested in Fund shares at net asset value, and monies necessary to pay
for deductions, charges, transfers and surrenders from Account S are raised by
selling Fund shares at net asset value.
The Funds now available in Account S and their investment objectives are on
pages 10 - 12. More Fund information is in the Funds' prospectuses, which must
accompany or precede this prospectus and should be read carefully. The Funds may
or may not achieve their investment objectives.
Some Funds have investment objectives and policies similar to those of other
funds managed by the same investment adviser. Their investment results may be
higher or lower than those of the other funds, and there can be no assurance,
and no representation is made, that a Fund's investment results will be
comparable to the investment results of any other fund.
LLANY reserves the right to add, withdraw or substitute Funds, subject to the
conditions of the Policy and to compliance with regulatory requirements, if in
its sole discretion, legal, regulatory, marketing, tax or investment
considerations so warrant or in the event a particular Fund is no longer
available to LLANY for investment by the Sub-Accounts. No substitution will take
place without prior approval of the Commission, to the extent required by law.
Shares of the Funds may be used by LLANY and other insurance companies to fund
both variable annuity contracts and variable life insurance policies. While this
is not perceived as problematic, the Funds' governing bodies (Boards of
Directors/Trustees) have agreed to monitor events to identify any material
irreconcilable conflicts which might arise and to decide what responsive action
might be appropriate. If a separate account were to withdraw its investment in a
Fund because of a conflict, a Fund might have to sell portfolio securities at
unfavorable prices.
A Policy may also be funded in whole or in part through the "Fixed Account",
part of LLANY's General Account supporting its insurance and annuity
obligations. The General Account is the Company's general asset account, in
which assets attributable to the non-variable portion of the Policies are held.
Amounts held in the Fixed Account will be credited with interest at rates LLANY
determines from time to time, but not less than 4% per year. Interest, once
credited, and Fixed Account principal are guaranteed. Interests in the Fixed
Account have not been registered under the
7
Securities Act of 1933, as amended ("1933 Act") in reliance on exemptive
provisions. The Commission has not reviewed Fixed Account disclosures, but they
are subject to securities law provisions relating to accuracy and completeness.
BUYING VARIABLE LIFE INSURANCE
The variable life insurance Policies this Prospectus offers provide death
benefit protection. Investors not needing death benefit protection should
consider other forms of investment, as there are extra costs and expenses of
providing the insurance feature. Further, life insurance purchasers who are
risk-aversive or want more predictable premium levels and benefits may be more
comfortable buying more traditional, non-variable life insurance. However,
variable life insurance is a flexible tool for financial and investment planning
for persons needing death benefit protection and willing to assume investment
risk and to monitor investment choices they have made.
A business may be able to use a Policy to fund non-qualified executive
compensation or business continuation plans.
Flexibility also results from being able to select, monitor and change
investment choices within a Policy. With the wide variety of fund options
available, it is possible to fine tune an investment mix and change it to meet
changing personal objectives or investment conditions. Policy owners should be
prepared to monitor their investment choices on an ongoing basis.
Variable life insurance has significant tax advantages under current tax law. A
transfer of values from one fund to another within the Policy generates no
taxable gain or loss. And any investment income and realized capital gains
within a fund are automatically reinvested without being taxed to the
Policyowners. Policy values therefore accumulate on a tax-deferred basis. These
situations would normally result in immediate tax liabilities in the case of
direct investment in mutual funds.
While these tax deferral features also apply to variable annuities, liquidity
(the ability of Policyowners to access Policy values) is normally more easily
achieved with variable life insurance. Unless a policy has become a "Modified
Endowment Contract" (see page 35), an owner can borrow Policy values tax-free,
without surrender charges and at low net interest cost. Policy loans can be a
source of retirement income. Variable annuity withdrawals are generally taxable
to the extent of accumulated income, may be subject to surrender charges, and
will result in a penalty tax if made before age 59-1/2.
Depending on the death benefit option chosen, accumulated Policy values may also
be part of the eventual death benefit payable. If a Policy is heavily funded and
investment performance is very favorable, the death benefit may increase even
further because of tax law requirements that the death benefit be a certain
multiple of Policy value, depending on the Insured's age (see page 54). The
death benefit is income-tax free and may, with proper estate planning, be
estate-tax free. A tax advisor should be consulted.
The costs and expenses of variable life insurance ownership which are directly
related to Policy values (i.e. asset based costs) are not unlike those incurred
through
8
investment in mutual funds or variable annuities. The significant additional
cost of these Policies of variable life insurance is the "cost of insurance"
charge which is imposed on the "amount at risk" (approximately the death benefit
less outstanding loans, less Policy value) and which increases as the insured
grows older. This charge varies by age, underwriting classification and smoking
status. The effect of its increase can be seen in illustrations in this
Prospectus (see Appendix A) or in personalized illustrations available upon
request. In addition, premium taxes are deducted from premium payments.
ALLOCATION OF PREMIUMS
You may allocate all or a part of your Net Premium Payments to the Fixed Account
(part of the Company's General Account) or to the Funds currently available
through the Separate Account in connection with the Policy. In addition, the
Company may add, withdraw or substitute Funds, subject to the conditions in the
Policy and to compliance with regulatory requirements.
The investment results of the Funds, whose objectives are described below, are
likely to differ significantly. You should consider carefully, and on a
continuing basis, which Fund or combination of Funds is best suited to your
long-term investment objectives. Except where otherwise indicated, all of the
Funds are diversified, as defined in the 1940 Act.
The first Net Premium Payment will be allocated in its entirety to the LN Money
Market Fund, a fund whose objective is capital preservation and current income.
This is regardless of the Policyowner's premium allocation percentages until the
day following the expiration of the Right to Examine period. Any other Net
Premium Payment received prior to that day will also be allocated to the LN
Money Market Fund. On the day following the expiration of the Right to Examine
Period, we will allocate the policy value and future Net Premium Payments in
accordance with your selected premium allocation percentages. The LN Money
Market Fund is also one of your investment options, as is the Fixed Account.
Fixed Account
The Fixed Account is the only investment option offered with a guaranteed
return. Amounts held in the Fixed Account will be credited with interest at
rates of not less than 4.0% per year. Additional excess interest of up to 0.5%
may be credited to the Fixed Account Value beginning in Policy Year 11. Credited
interest rates reflect the Company's return on Fixed Account invested assets and
the amortization of any realized gains and/or losses which the Company may incur
on these assets.
9
Separate Account
Funds
Each of the Separate Sub-Accounts is invested solely in the shares of one of the
Funds available under the Policies. Each of the Funds is a series of one of
fourteen Massachusetts or Delaware business trusts or a Maryland corporation.
Each such trust or corporation is registered as an open-end, management
investment company under the 1940 Act. All of the Funds except for the Delaware
Group REIT Series are diversified under the 1940 Act.
Listed below are the Fund groups, their investment advisors and distributors,
and the Funds within each that are available under the Policies.
American Century Variable Products Group, Inc., managed and distributed by
American Century Investments, 4500 Main Street, Kansas City, MO 64141-6200
American Century VP Income & Growth Fund
American Century VP International Fund
American Variable Insurance Series, managed and distributed by Capital Research
and Management Company, 333 South Hope Street, Los Angeles, CA 90071
AVIS Global Growth Fund-Class 2
AVIS Growth Fund-Class 2
Baron Capital Funds Trust, managed and distributed by Baron Capital Inc., 767
Fifth Avenue, New York, NY 10153
Baron Capital Asset Fund
BT Insurance Funds Trust, managed by Bankers Trust Company, 130 Liberty Street
(One Bankers Trust Plaza), New York, NY 10006 and distributed by First Data
Distributors, Inc., 4400 Computer Drive, Westborough, MA 01581
BT EAFE[RegTM] Equity Index Fund
BT Equity 500 Index Fund
BT Small Cap Index Fund
Delaware Group Premium Fund, Inc., managed by Delaware Management Company, Inc.,
One Commerce Square, Philadelphia, PA 19103 and for International and Emerging
Markets, Delaware International Advisors, LTD., 80 Cheapside, London, England
ECV2 6EE and distributed by Delaware Distributors, L.P., 1818 Market Street,
Philadelphia, PA 19103
Delaware Group Delchester Series
Delaware Group Devon Series
Delaware Group International Series
Delaware Group REIT Series
Delaware Group Small Cap Value Series
Fidelity Variable Insurance Products Fund, and Variable Insurance Products Fund
II, managed by Fidelity Management & Research Company and distributed by
Fidelity Distributors Corporation, 82 Devonshire Street, Boston, MA 02103
10
Fidelity VIP Growth Portfolio-Service Class
Fidelity VIP II Asset Manager Portfolio-Service Class
Fidelity VIP II Contrafund Portfolio-Service Class
Janus Aspen Series, managed and distributed by Janus Capital, 100 Fillmore St.,
Denver, CO 80206-4928
Janus Aggressive Growth Portfolio
Janus Balanced Portfolio
Janus Worldwide Growth Portfolio
Lincoln National Funds, managed by Lincoln Investment Management, Inc., 200 East
Berry Street, Fort Wayne, IN 46802 and distributed by Lincoln Financial
Advisors, Inc., 350 Church Street, Hartford, CT 06103. Sub-advisors are also
noted.
LN Bond Fund, Inc.
LN Capital Appreciation Fund, Inc. (Sub-advised by Janus Capital)
LN Equity-Income Fund, Inc. (Sub-advised by Fidelity Management Trust Co.)
LN Money Market Fund, Inc.
LN Social Awareness Fund, Inc. (Sub-advised by Vantage Investment
Advisors)
MFS[RegTM] Variable Insurance Trust, managed by Massachusetts Financial
Services Company and distributed by MFS Fund Distributors, Inc., 500 Boylston
Street, Boston, MA 02116
MFS Research Series
MFS Total Return Series
MFS Utilities Series
MFS Value Series
Neuberger & Berman Advisors Management Trust, managed and distributed by N&B
Management Incorporated, 605 Third Avenue, 2nd Floor, New York, NY 10158-0006
N&B AMT Mid-Cap Growth Portfolio
N&B AMT Partners Portfolio
OCC Accumulation Trust, managed by OpCap Advisors and distributed by OCC
Distributors, One Financial Center, New York, NY 10281
OCC Trust Managed Portfolio
OppenheimerFunds, managed and distributed by OppenheimerFunds, Inc., Two World
Trade Center, New York, NY 10048
Oppenheimer Growth and Income Fund
Templeton Variable Products Series Fund, managed by Templeton Investment
Counsel, Inc. and its Templeton and Franklin affiliates and distributed by
Franklin/Templeton Distributors, Inc., 100 Fountain Parkway, St. Petersburg, FL
33716-1205
Templeton Asset Allocation Fund-Class 2
Templeton International Fund-Class 2
Templeton Stock Fund-Class 2
11
The investment advisory fees charged the Funds by their advisors are shown on
pages 18 - 19.
Below is a brief description of the investment objective and program of each
Fund. There can be no assurance that any of the stated investment objectives
will be achieved.
o American Century VP Income & Growth Fund (Large Cap Stocks): Seeks dividend
growth, current income and capital appreciation by investing in a diversified
portfolio of U.S. stocks.
o American Century VP International Fund (International): Seeks capital
appreciation over time by investing in the common stocks of foreign companies
that exhibit accelerating growth.
o AVIS Global Growth Fund--Class 2 (World Stock): Seeks to achieve long-term
growth of capital by investing in securities of issuers domiciled around the
world. The fund will invest primarily in common stocks but may invest in
other securities such as preferred stock, debt securities and securities
convertible into common stock.
o AVIS Growth Fund--Class 2 (Mid-Cap Stocks): Seeks to provide growth of
capital. Whatever current income is generated by the fund is likely to be
incidental to the objective of capital growth. Ordinarily, accomplishment of
the fund's objective of capital growth will be sought by investing primarily
in common stocks or securities with common stock characteristics.
o Baron Capital Asset Fund (Mid-Cap Stocks): Seeks capital appreciation through
investments in securities of small sized companies with market
capitalizations of approximately $100 million to $1 billion, and medium sized
companies with market capitalizations of $1 billion to $2 billion, with
undervalued assets or favorable growth prospects.
o BT EAFE(R) FUND (International): Seeks to replicate as closely as possible
(before the deduction of expenses) the total return of the Europe, Australia,
Far East Index (the EAFE Index), a capitalization-weighted index containing
approximately 1,100 equity securities of companies located outside the United
States.
o BT Equity 500 Index Fund (Large Cap Stocks): Seeks to replicate as closely as
possible the performance of the Standard & Poor's 500 Composite Stock Price
Index, before the deduction of Fund expenses.
o BT Small Cap Index Fund (Small Cap Stocks): Seeks to replicate as closely as
possible (before the deduction of expenses) the total return of the Russell
2000 Small Stock Index (the "Russell 2000"), an index consisting of
approximately 2,000 small-capitalization common stocks.
o Delaware Group Delchester Series (High Yield Bonds): Seeks as high a current
income as possible by investing in rated and unrated corporate bonds
(including high yield bonds commonly known as junk bonds), U.S. government
securities and commercial paper. An investment in this Series may involve
greater risks than an investment in a portfolio comprised primarily of
investment grade bonds.
o Delaware Group Devon Series (Large Cap Stocks): Seeks current income and
capital appreciation by investing primarily in income-producing common
stocks that
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the investment manager believes have the potential for above-average dividend
increases over time. Under normal circumstances, the Series will invest at
least 65% of its total assets in dividend paying common stocks.
o Delaware Group International Equity Series (International): Seeks long-term
growth without undue risk to principal by investing primarily in equity
securities of foreign issuers providing the potential for capital
appreciation and income.
o Delaware Group REIT Series (Specialty): Seeks to achieve maximum long-term
total return. Capital appreciation is a secondary objective. It seeks to
achieve its objectives by investing in securities of companies primarily
engaged in the real estate industry.
o Delaware Group Small Cap Value Series (Small Cap Stocks): Seeks capital
appreciation by investing primarily in small to mid-cap common stocks whose
market value appears low relative to their underlying value or future
earnings and growth potential. Emphasis will also be placed on securities of
companies that may be temporarily out of favor or whose value is not yet
recognized by the market.
o Fidelity VIP Growth Portfolio--Service Class (Large Cap Stocks): Seeks
long-term capital appreciation by investing primarily in common stocks and
other securities with capital appreciation potential, including bonds and
preferred stocks.
o Fidelity VIP II Asset Manager Portfolio--Service Class (Large Cap Stocks):
Seeks high long-term return with reduced risk by using a broad diversified
mix of stocks, bonds and short-term money market investments.
o Fidelity VIP II Contrafund Portfolio--Service Class (Large Cap Stocks): Seeks
long-term capital appreciation by investing primarily in a broad variety of
common stocks, using both growth-oriented and contrarian disciplines.
o Janus Aggressive Growth Portfolio (Mid-Cap Stocks): Seeks long-term growth of
capital by investing in medium sized companies whose market capitalizations
fall within the range of the MidCap 400 Index.
o Janus Balanced Portfolio (Large Cap Stocks): Seeks long-term growth of
capital, balanced by current income. The Portfolio normally invests 40-60% of
its assets in securities selected primarily for their growth potential and
40-60% of its assets in securities selected primarily for their income
potential.
o Janus Worldwide Growth Portfolio (Large Cap Stocks): Seeks long-term growth
of capital in a manner consistent with the preservation of capital by
investing primarily in common stocks of foreign and domestic issuers.
o Lincoln National Bond Fund (Long Term Bonds): Seeks maximum current income
consistent with prudent investment strategy. The Fund invests primarily in
medium and long-term corporate and government bonds.
o Lincoln National Capital Appreciation Fund (Large Cap Stocks): Seeks
long-term growth of capital in a manner consistent with preservation of
capital. The fund invests in a large number of companies of all sizes if the
companies are competing well and if their products and services are in high
demand. It may also buy some money market securities and bonds, including
junk (high risk) bonds.
o Lincoln National Equity-Income Fund (Large Cap Stocks): Seeks to achieve
reasonable income by investing primarily in income-producing equity
securities. The fund invests mostly in high-yielding bonds (including junk
bonds).
13
o Lincoln National Money Market Fund (Money Market): Seeks maximum current
income consistent with the preservation of capital. The Fund allocates its
assets among several categories of equity and fixed-income securities, both
of U.S. and foreign insurers.
o Lincoln National Social Awareness Fund (Mid-Large Cap Stocks): Seeks
long-term capital appreciation with income as a secondary objective by
investing in companies which meet the Fund's "Social Criteria".
o MFS Research Series (Large Cap Stocks): Seeks long-term growth of capital and
future income by investing in equity securities of companies believed to
possess better than average prospects for long-term growth.
o MFS Total Return Series (Balanced or Total Return): Seeks primarily to obtain
above-average income (compared to a portfolio entirely in equity securities)
consistent with the prudent employment of capital, and secondarily to provide
a reasonable opportunity for growth and income.
o MFS Utilities Series (Specialty): Seeks capital growth and current income
(income above that available from a portfolio invested entirely in equity
securities) by investing, under normal circumstances, at least 65% of its
assets in equity and debt securities of utility companies.
o MFS Value Series (Large Cap Stocks): Seeks capital appreciation. Dividend
income, if any, is a consideration incidental to the Portfolio's objective of
capital appreciation.
o Neuberger & Berman AMT Mid-Cap Growth Portfolio (Mid-Cap Stocks): Seeks
capital appreciation by investing in equity securities of medium-sized
companies.
o Neuberger & Berman AMT Partners Portfolio (Mid-Large Cap Stocks): Seeks
capital growth by investing in common stocks and other equity securities of
medium to large capitalization established companies, using the
value-oriented investment approach.
o OCC Trust Managed Portfolio (Balanced or Total Return): Seeks growth of
capital over time through investment in a portfolio of common stocks, bonds
and cash equivalents, the percentage of which will vary based on management's
assessments of relative investment values.
o Oppenheimer Growth and Income Fund (Large Cap Stocks): Seeks a high total
return (which includes growth in the value of its shares as well as current
income) from equity and debt securities. From time to time the Fund may focus
on small to medium capitalization common stocks, bonds and convertible
securities.
o Templeton Asset Allocation Fund--Class 2 (Global Stocks): Seeks high level of
total return by investing in stocks and debt obligations of companies and
governments of any nation.
o Templeton International Fund--Class 2 (International Stocks): Seeks
long-term capital growth through a flexible policy of investing in stocks and
debt obligations of companies and governments outside the United States. Any
income realized will be incidental.
14
o Templeton Stock Fund--Class 2 (Global Stocks): Seeks capital growth through a
policy of investing primarily in common and preferred stocks issued by
companies, large and small, in various nations throughout the world,
including the United States.
There is no assurance that the Funds will achieve their investment objectives.
Policyowners bear the full investment risk of investments in the Funds selected.
Some of the above Funds may use instruments known as derivatives as part of
their investment strategies, as described in their respective prospectuses. The
use of certain derivatives such as inverse floaters and principal only debt
instruments may involve higher risk of volatility to a Fund. The use of leverage
in connection with derivatives can also increase risk of losses. See the
prospectuses for the Funds for a discussion of the risks associated with an
investment in those funds. You should refer to the accompanying prospectuses of
the Funds for more complete information about their investment policies and
restrictions.
Mixed and Shared Funding
Shares of the Funds are available to insurance company separate accounts which
fund variable annuity contracts and variable life insurance policies, including
the Policy described in this Prospectus. Because Fund shares are offered to
separate accounts of both affiliated and unaffiliated insurance companies, it is
conceivable that, in the future, it may not be advantageous for variable life
insurance separate accounts and variable annuity separate accounts to invest in
these Funds simultaneously, since the interests of such Policyowners or
contractholders may differ. Although neither the Company nor the Funds currently
foresees any such disadvantages either to variable life insurance or to variable
annuity owners, each Fund's Board of Trustees/Directors has agreed to monitor
events in order to identify any material irreconcilable conflicts which may
possibly arise and to determine what action, if any, should be taken in response
thereto. If such a conflict were to occur, one of the separate accounts might
withdraw its investment in a Fund. This might force that Fund to sell portfolio
securities at disadvantageous prices.
Fund Participation Agreements
LLANY has entered into agreements with the various Funds and their advisors or
distributors under which LLANY makes the Funds available under the Policies and
performs certain administrative services. In some cases, the advisors or
distributors may compensate LLANY at annual rates of between .11% and .25% of
assets in a particular Fund attributable to the Policies.
CHARGES & FEES
Premium Load
The premium load is deducted from your premium payments. This load represents
sales and administrative expenses associated with the startup and maintenance of
the policy.
15
1. Guaranteed Premium Load
The premium load is guaranteed to be no higher than the amounts shown in the
following table.
Premiums Paid up to Premiums Paid greater than
Target Premium -- Target Premium --
load is this percentage of load is this percentage of
Policy Year(s) premium premium
- ---------------- ---------------------------- ---------------------------
1 15% 6%
2-5 10% 6%
6 and after 6% 6%
2. Current Premium Load
The premium load charge is currently set at the amounts shown in the following
table.
Premiums Paid up to Premiums Paid greater than
Target Premium -- Target Premium --
load is this percentage of load is this percentage of
Policy Year(s) premium premium
- ---------------- ---------------------------- ---------------------------
1 10.5% 2.5%
2-5 7.5% 1.5%
6-7 3.5% 1.5%
8 and after 1.5% 1.5%
Premium Load Refund
Upon a full surrender of your Policy within the first 24 months if your Policy
is not in default you may be entitled to a credit for some or all of the premium
loads which have been deducted from your premium payments. To determine the
Surrender Value during the premium load refund period, the Total Account Value
will be reduced by the amount of any Loan Account Value, including accrued
interest. That amount would be increased by the applicable credit for the
premium load. A decrease in the specified amount in Policy Years 1 or 2 will
proportionately decrease the amount of the premium load refund.
Calculation of the Premium Load Refund Amount
For Policies surrendered during the first twelve months after the Date of Issue,
the refund is 7% of premium paid in the first Policy Year up to the Target
Premium and 3% of premium paid in the first Policy Year above Target Premium.
For months 13 through 24, the refund is 75% of the First Policy Year refund
amount.
Premium Tax Charge
Except as noted below, an amount equal to the state and municipal taxes
associated with premiums received is deducted from premium payments in addition
to the premium load. For Policies issued or delivered in New York, this charge
is currently 1.75% and is guaranteed not to exceed 5% of premium received.
Charges and Fees Assessed Against the Total Account Value
A Monthly Deduction is made from the Total Account Value. The Monthly Deduction
is made as of the same day each month, beginning with the Date of Issue. The
Monthly Deduction includes the Cost of Insurance and any charges for
supplemental riders or benefits. The Cost of Insurance is the portion of the
monthly deduction attributable to the basic insurance coverage, not including
riders, supplemental benefits or monthly expense charges. The Cost of Insurance
depends on the Issue
16
Age, risk class of the Insured and the number of Policy Years elapsed and
Specified Amount of the Policy.
Once a Policy is issued, Monthly Deductions, including Cost of Insurance
charges, will begin as of the Date of Issue, even if the Policy's issuance was
delayed due to underwriting requirements, and will be in amounts based on the
Specified Amount of the Policy issued, even if any temporary insurance coverage
provided during the underwriting period was for a lesser amount.
The Monthly Deduction also includes a monthly administrative expense charge of
$6 currently, guaranteed not to exceed $10 during all Policy Years.
The monthly administrative expense charge is for items such as premium billing
and collection, Policy value calculation, confirmations and periodic reports and
will not exceed our costs. The Monthly Deduction is deducted proportionately
from each funding option, if more than one is used. This is accomplished by
liquidating Accumulation Units and withdrawing the value of the liquidated
Accumulation Units from each funding option in the same proportion as their
respective values have to your Fixed Account and Separate Account Values.
Charges and Fees Associated with the Variable Funding Options
Mortality and Expense Risk Charge
The Company deducts a daily charge from the assets of Account S for mortality
and expense risks assumed by it in connection with the Policy.
Currently, the amount of this charge, on an annualized basis, is the following
percentage of Policy value in the Separate Account:
Annualized Mortality and
Policy Years Expense Risk Charge
1-10 0.70%
11 and later 0.35%
The mortality and expense risk charge is assessed to compensate the Company for
assuming certain mortality and expense risks under the Policies. The Company
reserves the right to increase the mortality and expense risk charge if it
believes that circumstances have changed so that current charges are no longer
adequate. In no event will the charge exceed 1.25% of average daily net assets
in Policy Years 1-10 and 0.90% of average daily net assets in Policy Years 11
and thereafter, on an annualized basis.
17
Charges Assessed Against the Underlying Funds
The following table illustrates the investment advisory fees, other expenses and
total expenses paid by each of the Funds as a percentage of average net assets
based on figures for the year ended December 31, 1997 unless otherwise
indicated:
Management 12b-1 Other
Fees Fees Expenses Total
------------ ---------- ---------- ----------
American Century VP Income & Growth Fund 0.70% 0.70%
American Century VP International Fund 1.50% 1.50%
AVIS Global Growth Fund-Class 2 0.68% 0.25% 0.05% 0.98%
AVIS Growth Fund-Class 2 0.39% 0.25% 0.01% 0.65%
Baron Capital Asset Fund 1.00% 0.25% 0.25% 1.50%
BT EAFE(R) Fund 0.45% 0.20% 0.65%
BT Equity 500 Index Fund 0.20% 0.10% 0.30%
BT Small Cap Index Fund 0.35% 0.10% 0.45%
Delaware Group Delchester Series 0.60% 0.10% 0.70%
Delaware Group Devon Series 0.54% 0.26% 0.80%
Delaware Group International Equity Series 0.75% 0.15% 0.90%
Delaware Group REIT Series 0.75% 0.10% 0.85%
Delaware Group Small Cap Value Series 0.60% 0.25% 0.85%
Fidelity VIP Growth Portfolio-Service Class 0.60% 0.10% 0.07% 0.77%
Fidelity VIP II Asset Manager
Portfolio-Service Class 0.55% 0.10% 0.09% 0.74%
Fidelity VIP II Contrafund Portfolio-Service
Class 0.60% 0.10% 0.11% 0.81%
Janus Aggressive Growth Portfolio 0.73% 0.03% 0.76%
Janus Balanced Portfolio 0.76% 0.07% 0.83%
Janus Worldwide Growth Portfolio 0.66% 0.08% 0.84%
Lincoln National Bond Fund 0.46% 0.07% 0.53%
Lincoln National Capital Appreciation Fund 0.75% 0.09% 0.84%
Lincoln National Equity-Income Fund 0.75% 0.07% 0.82%
Lincoln National Money Market Fund 0.48% 0.11% 0.59%
Lincoln National Social Awareness Fund 0.36% 0.05% 0.41%
MFS Research Series 0.75% 0.13% 0.88%
MFS Total Return Series 0.75% 0.25% 1.00%
MFS Utilities Series 0.75% 0.25% 1.00%
MFS Value Series 0.75% 0.25% 1.00%
Neuberger & Berman AMT Mid-Cap Growth
Portfolio 0.55% 0.30% 0.85%
Neuberger & Berman AMT Partners Portfolio 0.80% 0.06% 0.86%
OCC Trust Managed Portfolio 0.80% 0.07% 0.87%
Oppenheimer Growth and Income Fund 0.75% 0.08% 0.83%
Templeton Asset Allocation Fund-Class 2 0.60% 0.25% 0.18% 1.03%
Templeton International Fund-Class 2 0.69% 0.25% 0.19% 1.13%
Templeton Stock Fund-Class 2 0.69% 0.25% 0.19% 1.13%
[Footnotes to be filed by amendment.]
Reduction of Charges
The Policies are available for purchase by corporations or other groups where
the individuals share a common employer or affiliation with the group or
sponsoring organization. Each Policy covers a single insured. We reserve the
right to reduce premium loads or any other charges on certain multiple life
sales ("cases") where it is expected that the amount or nature of such cases
will result in savings of sales, underwriting, administrative or other costs.
Eligibility for these reductions and the amount of reductions will be determined
by a number of factors, including the number of lives to be insured, the total
premiums expected to be paid, total assets
18
under management for the Policyowner, the nature of the relationship among the
insured individuals, the purpose for which the policies are being purchased,
expected persistency of the individual policies, and any other circumstances
which we believe to be relevant to the expected reduction of our expenses. Some
of these reductions may be guaranteed and others may be subject to withdrawal or
modification by us on a uniform case basis. Reductions in charges will not be
unfairly discriminatory to any Policyowners.
POLICY CHOICES
When you buy a Policy, you make several important choices:
o The amount of premium you intend to pay;
o Which one of the three Death Benefit Options you would like, and the Premium
Accumulation Rate you would like if you choose Death Benefit Option 3;
o The way your net premiums will be allocated to the Funds and/or the Fixed
Account.
Each of these choices is described in detail below:
Premium Payments
Planned Premiums are those premiums you choose to pay on a scheduled basis. We
will bill you annually, semiannually, or quarterly, or at any other agreed-upon
frequency. Additional Premiums are any premiums you pay in addition to Planned
Premiums.
Payment of Minimum Monthly Premiums, Planned Premiums, or Additional Premiums in
any amount will not guarantee that your Policy will remain in force. Conversely,
failure to pay Planned Premiums or Additional Premiums will not necessarily
cause your Policy to lapse. The Policy's surrender value must be sufficient to
cover the next Monthly Deduction.
At any time, you may increase your Planned Premium by written notice to us, or
pay Additional Premiums, except that:
o We may require evidence of insurability if the Additional Premium or the new
Planned Premium during the current Policy Year increases the difference
between the Death Benefit and the Total Account Value. If satisfactory
evidence of insurability is requested and not provided, we will refund the
increase in premium without interest and without investing such amounts in
the underlying funding options.
o If you make a sufficient premium payment when you apply for a Policy, and
have answered favorably to certain questions relating to the Insured's
health, a "temporary insurance agreement" in the amount applied for (subject
to stated maximums) will be provided.
o After your first premium payment all premiums must be sent to our
Administrator. Your premium payments received will be allocated as you have
directed and amounts allocated to the Funds will be credited at the
Accumulation Unit value determined at the end of the business day after each
payment is received.
19
You may reallocate your future premium payments at any time free of charge. Any
reallocation will apply to premium payments made after you have received written
verification from us.
Under limited circumstances, we may backdate a Policy, upon request, by
assigning a Date of Issue earlier than the date the application is signed, but
no earlier than six months prior to state approval of the Policy. The Date of
Issue is the date from which policy years, policy anniversaries and Attained Age
are determined. The Date of Coverage is the date on or after the Date of Issue
that the initial premium has been paid (1) while the Insured is alive and (2)
prior to any change in health and insurability, as represented in the
application. Issue Age is the Insured's age on his/her birthday closest to the
Policy Date of Issue. Backdating may be desirable, for example, so that you can
purchase a particular Specified Amount for lower cost of insurance rates, based
on a younger insurance age. For a backdated Policy, you must pay the minimum
premium payable for the period between the Date of Issue and the date the
initial premium is invested in the Separate Account. Backdating of your Policy
will not affect the date on which your premium payments are credited to the
Separate Account and you are credited with Accumulation Units. You cannot be
credited with Accumulation Units until your Net Premium Payment is actually
deposited in the Separate Account. (See "Policy Values.")
If we decline an application for a policy we will refund all premium payments
made.
Life Insurance Qualification
This Policy must satisfy the Cash Value Accumulation testing method to qualify
as a life insurance contract for tax purposes under Section 7702 of the Internal
Revenue Code of 1986, as amended ("Code"). This requires a life insurance policy
to meet minimum ratios of life insurance coverage to Total Account Value. We
refer to the ratios as Applicable Percentages. We refer to required life
insurance coverage in excess of the Total Account Value as the Death Benefit
corridor.
The Cash Value Accumulation test does not limit premiums which may be paid but
has required Applicable Percentages. For example, Applicable Percentages for
Non-Smokers range from 730% at Attained Age 20 to 380% at Attained Age 40 to
100% at Attained Age 100.
The payment of higher premiums, which is associated with the Cash Value
Accumulation method, increases the possibility that the amount paid into the
Policy will exceed the amount that would have been paid had the Policy provided
for seven level annual premiums (the "7-pay test"). If premiums paid exceed such
limits during any 7-pay testing period, any partial surrender or Policy loan may
be subject to federal income taxation. (See "Tax Considerations for
Policyowners".)
The Policy's Death Benefit may also be referred to as the Target Face Amount. If
a Term Insurance Rider is attached to the Policy, the Target Face Amount is the
Term Insurance Rider's Benefit Amount plus the Policy's Death Benefit, which is
dependent upon the Death Benefit Option in effect.
20
Death Benefit Options
At purchase, you must choose from three available Death Benefit Options. The
amount payable under the option chosen will be determined as of the date of the
Insured's death. The Death Benefit may be affected by partial surrenders. It
will be reduced by the Loan Account Value plus any accrued interest.
Under Option 1, the Death Benefit will be the greater of the Specified Amount or
Target Face Amount if a Term Insurance Rider is attached to the Policy (see
"Term Insurance Rider"), or the Applicable Percentage of the Total Account
Value. Option 1 generally provides a level Death Benefit.
Under Option 2, the Death Benefit will be the greater of the Specified Amount,
plus the Total Account Value or the Target Face Amount if a Term Insurance Rider
is attached to the Policy (see "Term Insurance Rider"), or the Applicable
Percentage of the Total Account Value. Option 2 provides a varying Death Benefit
which increases or decreases over time, depending on the amount of premium paid
and the investment performance of the underlying funding options You choose.
Under Option 3, the Death Benefit will be the greater of the Specified Amount
plus the Accumulated Premium(s) accumulated at the Premium Accumulation Rate or
Target Face Amount if a Term Insurance Rider is attached to the Policy (see
"Term Insurance Rider"), or the Applicable Percentage of the Total Account Value
but will not exceed the total Death Benefit paid under Option 2. This option may
only be selected at issue.
The Accumulated Premium is the sum of all the premiums paid from the Date of
Issue accumulated or the Premium Accumulation Rate. You select the Premium
Accumulation Rate at issue. Any rate requested in excess of 10% may be subject
to additional underwriting.
The choice of Death Benefit Option should be based upon the pattern of Death
Benefits which best matches the intended use of the Policy. For example, an
Option 1 Policy should be chosen for a simple, fixed, level total Death Benefit
need. Option 2 would be chosen to provide a level death benefit in addition to
the Policy Total Account Value, and Option 3 would provide a level death benefit
for the Specified Amount plus a return of Accumulated Premiums.
Choosing the option which provides the lowest pattern of Death Benefits which
meets the desired need will be the most efficient for accumulating potential
cash value, since the lower Cost of Insurance charges will improve the growth or
preservation of the Total Account Value. Other than providing the appropriate
pattern of desired Death Benefits, there is no economic advantage of one option
over another, since the Cost of Insurance charges for all three Options are
based upon the amount at risk, the difference between the Death Benefit and the
Total Account Value each month.
The same is true for the choice of a Premium Accumulation Rate under Option 3.
Choice of a higher Premium Accumulation Rate will cause the death benefit to
increase more rapidly, but this will also generate higher Cost of Insurance
charges and lower the potential growth in Total Account Value.
Allocations and Transfers to Funding Options
At purchase, you must decide how to allocate your Net Premium Payments in whole
percentages among the Funds and/or the Fixed Account. Carefully consider current
market conditions and each Fund's investment policies and related risks before
allocating money to or transferring values among the Funds.
21
Before the Maturity Date, you may transfer Policy values from one Fund to
another at any time, or to the Fixed Account. The Company reserves the right to
charge $25 for each transfer after the twelfth transfer per year. Within 45 days
after each Policy anniversary, and before the Maturity Date, you may also
transfer a portion of the Fixed Account Value to one or more Funds. A transfer
from the Fixed Account is allowed only once each year and will be effective as
of the next Valuation Period after our Administrator receives your request. The
amount of such transfer cannot exceed the greater of 20% of the greatest amount
held in the Fixed Account Value during the prior 5 years or $1000.
Any transfer among the Funds or to the Fixed Account will result in the
crediting and cancellation of Accumulation Units based on the Accumulation Unit
values determined at the end of the Valuation Period after our Administrator
receives your request. (See "Accumulation Unit Value.") The Valuation Period is
the period of time from when the Company determines the Accumulation Unit Value
and Settlement Option Unit Value of a variable investment option until the next
time it determines such unit value. Currently, the calculation occurs after the
close of business of the New York Stock Exchange on any normal business day,
Monday through Friday, that the New York Stock Exchange is open.
POLICY VALUES
Total Account Value
The Total Account Value is the sum of the Fixed Account Value, the Separate
Account Value and the Loan Account Value.
We will allocate each Net Premium Payment to one or more funding options in the
Separate Account and credit it in the form of Accumulation Units. An
Accumulation Unit measures the value of a Policyowner's interest in each
applicable funding option. We will credit each Net Premium Payment at the
Accumulation Unit Value for a selected funding option at the end of the business
day we receive it. The number of Accumulation Units credited is the Net Premium
Payment divided by that Accumulation Unit Value. Shares in each Fund you select
will be purchased for the Separate Account at the Fund's net asset value next
computed after we receive the Net Premium Payment. Since each Fund has its own
Accumulation Unit value if you choose a combination of funding options, you will
have Accumulation Units credited for each funding option.
Separate Account Value is the sum of values in each Separate Account funding
option which is the total number of Accumulation Units times the current
Accumulation Unit Value. To that we add any Fixed Account values and any Loan
Account Values to arrive at the Policy's Total Account Value.
The number of Accumulation Units you have is not changed by any change in the
value of an Accumulation Unit. The number is increased by contributions or
transfers and decreased by charges and withdrawals.
There is no guarantee that the Separate Account Value will equal or exceed Net
Premiums placed in the Separate Account.
We will notify you annually as to the number of Accumulation Units credited to
your Policy for each Fund, the current Accumulation Unit values, the Separate
Account Value, the Fixed Account Value, and the Total Account Value.
22
Accumulation Unit Value
We convert any Net Premium Payment allocated to, or Policy Value transferred to
a Variable Sub-Account into Variable Accumulation Units. The Variable
Accumulation Unit Value for a Variable Sub-Account is determined by:
o multiplying the Fund shares owned by the Variable Sub-Account at the
beginning of the business day by the Fund net asset value per share at the
end of the business day and adding any dividend or other distribution during
the business day; minus
o the daily Variable Sub-Account charges, including any tax charge or credit;
and
o dividing the result of the foregoing subtraction by the number of Variable
Accumulation Units for that Sub-Account at the beginning of the business day.
Accumulation Unit Value may vary from one business day to the next.
Maturity Value
The Maturity Date is the policy Anniversary on which the Insured attains age
100.
The Maturity Value of the Policy is the Total Account Value on the Maturity
Date, less the Loan Account Value and any unpaid accrued interest.
Surrender Value
The Surrender Value of your Policy is the amount you can receive in cash by
surrendering the Policy. This equals the Total Account Value minus the Loan
Account Value and any accrued interest, plus any credit for premium loads paid.
All or part of the Surrender Value may be applied to one or more of the
Settlement Options.
POLICY RIGHTS
Partial Surrenders
A partial surrender may be made at any time after the first Policy Year. If, at
the time of a partial surrender your Total Account Value is attributable to more
than one funding option, the transaction charge and the amount paid to you upon
the surrender will be taken proportionately from the Accumulation Unit values in
each funding option.
The amount of a partial surrender may not exceed the Surrender Value on the date
the request is received and may not be less than $500.
Partial surrenders may only be made prior to election of a Settlement Option.
For an Option 1 Death Benefit Policy (see "Death Benefit Options"):
A partial surrender will reduce the Total Account Value, Death Benefit, and
Specified Amount. The Specified Amount and Total Account Value will be reduced
by equal amounts and will reduce any past increases in the reverse order in
which they occurred.
For an Option 2 Death Benefit Policy (see "Death Benefit Options"):
23
A partial surrender will reduce the Total Account Value and the Death Benefit,
but it will not reduce the Specified Amount.
For an Option 3 Death Benefit Policy (see "Death Benefit Options"):
A partial surrender will reduce the Total Account Value, Death Benefit, and
Specified Amount. The Specified Amount and Total Account Value will be reduced
by equal amounts and will reduce any past increases in the reverse order in
which they occurred.
We will pay you on a full or partial surrender within seven calendar days after
we receive your written request. Payment may be postponed if the New York Stock
Exchange has been closed or trading has been restricted. Your payment from the
Fixed Account Values may be deferred up to six months except when used to pay
premiums to the Company.
The Specified Amount remaining in force after a partial surrender may not be
less than $100,000. Any request for partial surrender that would reduce the
Specified Amount below this amount will not be granted. In addition, if,
following the partial surrender and the corresponding decrease in the Specified
Amount, the Policy would not comply with the maximum premium limitations
required by federal tax law, the decrease may be limited to the extent necessary
to meet the federal tax law requirements.
Reinstatement of a Lapsed Policy
A lapse occurs if your Monthly Deduction is greater than the Policy's Surrender
Value and you make no payment to cover the deduction within 61 days of our
notifying you.
You can apply for reinstatement within five years after the date of lapse and
before the Maturity Date. To reinstate your Policy we will require satisfactory
evidence of insurability and an amount sufficient to pay for the current Monthly
Deductions, plus two additional Monthly Deductions.
Policy Loans
The maximum loan amount is 90% of Total Account Value. The Loan Account Value,
which is the loan amount plus interest, reduces any proceeds payable.
Any loan made will be taken proportionally from the amount in each funding
option. Repayments on the loan will be allocated in proportion to current
premium allocations, and will reduce the Loan Account Value.
The rate we charge during any Policy Year will be:
o the monthly average (Moody's Investors Service, Inc. Composite Yield on
Corporate Bonds) for the calendar month which ends two months before the
month in which the Policy Anniversary occurs, or, if greater,
o 5%
This rate may increase only when it would be at least 0.5% higher than the prior
Policy Year's and decrease only when it would be at least 0.5% lower than the
prior Policy Year's.
24
When you take a loan, we will tell you the current policy loan interest rate. We
will tell you in advance of any interest rate change. You must pay interest on
the anniversary of the loan, or earlier upon surrender, payment of proceeds, or
maturity of a Policy. Any unpaid interest is added to the loan.
The Loan Account Value will earn interest at a rate equal to the greater of:
o the policy loan interest rate less a rate not to exceed 0.90%; or
o 4.0%
The interest earned by the Loan Account Value will be added to the Fixed Account
Value and the Separate Account Value in the same proportion in which the loan
amount was originally deducted from these values.
Policy Changes
You may make changes to your Policy as described below by submitting a written
request to our Administrator in a form satisfactory to us.
Increases: You may increase the Specified Amount of your Policy any time
subject to satisfactory evidence of insurability which may be required.
Decreases: Generally, you may decrease the Specified Amount of your Policy;
however, no decrease may reduce the Specified Amount below the minimum for the
type of Policy (see "Death Benefit Options"), and to our satisfaction that the
decrease is intended to meet a legitimate, non-insurance related business need
of yours.
The new Specified Amount will equal the Specified Amount less the Total Account
Value at the time of the change.
o Changes from Option 1 to Option 2 are allowed at any time. The new Specified
Amount will equal the Specified Amount less the Total Account Value at the
time of the change.
o Changes from Option 2 to Option 1 are allowed at any time. The new Specified
Amount will equal the Specified Amount plus the Total Account Value as of the
time of the change.
o Changes from Option 3 to Option 1 are allowed at any time. The Specified
Amount will be increased to equal the Specified Amount prior to the change
plus the lesser of the Accumulated Premiums or the Total Account Value at the
time of the change.
o Changes from Option 3 to Option 2 are allowed at any time. The Specified
Amount will be reduced to equal the Specified Amount prior to the change
minus the difference between the Total Account Value and the sum of the
Accumulated Premiums at the time of the change.
o Changes from Options 1 or 2 to Option 3 are not allowed.
Right to Examine the Policy
The Policy has a "Right to Examine Period" during which you may examine the
Policy. If, for any reason, you are dissatisfied, you may return it within ten
days after you receive the Policy to our Administrator for a refund. If you
return (cancel) the
25
Policy, we will pay a refund equal to all premiums paid, without interest.
Refunds will usually occur within seven days of notice of cancellation, although
a refund of premiums you paid by check may be delayed until the check clears
your bank.
DEATH BENEFIT
The Death Benefit under the Policy will be paid in a lump sum within seven days
after we receive due proof of the Insured's death (a certified copy of the death
certificate), unless you or the beneficiary have elected that it be paid under
one or more of the Settlement Options or such options as we may choose to make
available in the future. Payment of the Death Benefit may be delayed if the
Policy is being contested.
POLICY SETTLEMENT
Settlement Options
Proceeds in the form of Settlement Options are payable by the Company upon the
Insured's death, upon Maturity of the Policy, or upon election of one of the
Settlement Options.
Upon the death of the Insured, the proceeds of the Policy will be paid to the
Beneficiary(ies) in the form of an annuity in Settlement Option 1, 2 or 3 if the
Beneficiary(ies) so elect. An annuity is a series of payments for a definite
period of time or for the life of an individual. For Settlement Option 4,
payments of requested amounts are made at the request of the Payee or payments
may be through one of the other available Settlement Options.
All or part of the Proceeds of this Policy may be applied, under one or more of
the options described below. An election shall be made by written request to the
Administrator. The Payee of Proceeds may make this election if no prior election
has been made.
The Payee must designate whether the payments will be:
o on a fixed basis
o on a variable basis, or
o a combination of fixed and variable.
Variable Settlement Options will be supported by the then available Funds of the
Company's Variable Annuity Account N (Account N), a separate account very
similar to the Separate Account, except that Account N supports variable annuity
benefits rather than variable life insurance benefits. We will provide an
Account N prospectus in connection with selection of a Settlement Option. That
prospectus will describe the available Funds, the cost and expenses of such
Funds and the charges imposed on Account N. The available Funds may be, and the
charges imposed on Account N are expected to be, different from those that
relate to the Separate Account prior to commencement of a Settlement Option.
Accordingly, you should review the Account N prospectus, as well as prospectuses
for Account N's underlying Funds, prior to selecting any variable payment
Settlement Option. A minimum monthly payment of $50 from each funding option
will be required.
26
You make transfers among Funds while receiving payments on a variable basis
under our administrative procedures in effect at the time. Currently, we limit
the number of transfers to three per calendar year, but we can change this limit
in the future.
If no designation is made, the Separate Account Value shall be used to provide a
variable payment, and the Fixed Account Value shall be used to provide a fixed
payment.
If a fixed annuity is chosen, the annuity purchase rate for the option chosen
will reflect at least the minimum guaranteed interest rate of 3.0%.
Annuity Payment Options:
Option 1 -- Life Annuity/Life Annuity with Guaranteed Period -- Fixed and/or
variable annuity payments will be made for the lifetime of the Annuitant with no
certain period, or life and a 10 year certain period, or life and a 20 year
certain period.
Option 2 -- Unit Refund Life Annuity -- Variable annuity payments will be made
for the lifetime of the Annuitant with the guarantee that upon death, if (a) the
number of the Fund settlement option annuity units initially purchased
(determined by dividing the total dollar amount applied to purchase this
settlement option by the Fund settlement option annuity unit value on the
Annuity Commencement Date) is greater than (b) the number of Fund settlement
option annuity units paid as part of each variable annuity benefit payment
multiplied by the number of annuity benefit payments paid prior to death; then a
refund payment equal to the number of Fund settlement option annuity units
determined by (a) minus (b) will be made. The refund payment value will be
determined using the Fund settlement option annuity unit value on the Valuation
Date on which the death claim is approved by us for payment after we have
received (1) proof of death acceptable to us; (2) written authorization for
payment; and (3) all claim forms, fully completed.
Option 3 -- Cash Refund Life Annuity -- Fixed annuity payments will be made for
the lifetime of the Annuitant with the guarantee that upon death, if (a) the
total dollar amount applied to purchase this option is greater than (b) the
fixed annuity benefit payment multiplied by the number of annuity benefit
payments paid prior to death; then a refund payment equal to the dollar amount
of (a) minus (b) will be made. The refund payment will be made on the Valuation
Date on which the death claim is approved by us for payment after we are in
receipt of (1) proof of death acceptable to us; (2) written authorization for
payment; and (3) all claim forms, fully completed.
Option 4 -- Joint Life Annuity/Joint Life Annuity with Guaranteed Period --
Fixed and/or variable payments will be made during the joint life of the
Annuitant and a Joint Annuitant of the Owner's choice. Payments will be made for
life with no certain period, or life and a 10 year certain period, or life and a
20 year certain period. Payments continue for the life of the survivor at the
death of the Annuitant or Joint Annuitant.
Other Options -- other options may be available as agreed upon in writing by us.
27
TERM INSURANCE RIDER
The Policy can be issued with a Term Insurance Rider as a portion of the total
Death Benefit. The Rider provides term life insurance on the life of the
Insured, which is annually renewable to Attained Age 100. This rider will
continue in effect unless explicitly canceled by the Policyowner. The Rider
provides a vehicle for short-term insurance protection for Policyowners who
desire lower required premiums under the Policy, in anticipation of growth in
Total Account Value to fund life insurance coverage in later Policy Years. The
amount of coverage provided under the Rider's Benefit Amount, varies from month
to month.
The Benefit Amount is the Target Face Amount minus the Specified Amount.
However, if the Death Benefit of the Policy is defined as a percentage of the
Total Account Value, the Benefit Amount is zero.
The cost of the Rider is added to the Monthly Deductions, and is based on the
Insured's premium class, Issue Age and the number of Policy Years elapsed. We
may adjust the monthly rider rate from time to time, but the rate will never
exceed the guaranteed cost of insurance rates for the Rider for that Policy
Year.
If the Policy's Death Benefit increases as a result of an increase in Total
Account Value (see "Life Insurance Qualification"), the Rider's Target Death
Benefit will be reduced by an equivalent amount to maintain the total desired
Death Benefit.
The Rider's Death Benefit is included in the total Death Benefit paid under the
Policy. (See "Death Benefit Options.")
28
THE COMPANY
Directors and Officers of LLANY
The following persons are Directors and Officers of LLANY. Except as indicated
below, the address of each is 120 Madison Street, Suite 1700, Syracuse, NY
13202, and each has been employed by LLANY or its affiliates for more than 5
years.
Name, Address and
Position(s) with Registrant Principal Occupations Last Five Years
- ----------------------------- ------------------------------------------------------------
Roland C. Baker President [1/95-present], First Penn-Pacific Life Insurance
Director Co. Formerly: Chairman and CEO [7/88-1/95], Baker,
1801 S. Meyers Road Rakish, Shipley & Politzer, Inc.
Oakbrook Terrace, IL 60181
J. Patrick Barrett Chairman and Chief Executive Officer, CARPAT
Director Investments
4605 Watergap
Manlius, NY 13104
David N. Becker Vice President and Chief Actuarial Officer, The
Second Vice President and Lincoln National Life Insurance Company
Appointed Actuary
1300 South Clinton Street
Fort Wayne, IN 46802
Thomas D. Bell, Jr. President and Chief Executive Officer [4/95-present],
Director Burson-Marstellar. Formerly: Vice Chairman
230 Park Avenue, South [3/94-5/95], Gulfstream Aerospace Corp.; Vice
New York, NY 10003 Chairman and Chief Executive Officer [6/89-3/94],
Burson-Marstellar
Jon A. Boscia President, Lincoln National Corp. [1/98-present],
Director Formerly: President and Chief Executive Officer
1300 South Clinton Street [10/96-1/98], and Chief Operating Officer
Fort Wayne, IN 46802 [5/94-10/96], The Lincoln National Life Insurance
Co. Formerly: President [7/91-5/94] Lincoln
Investment Management Inc.
John H. Gotta Senior Vice President and General Manager
Second Vice President [1/98-present], The Lincoln National Life Insurance
350 Church Street Co. Formerly: Senior Vice President, Connecticut
Hartford, CT 06103 General Life Insurance Company [3/96-12/97]; Vice
President, Connecticut Mutual Life Insurance
Company [8/94-3/96]; Vice President, Connecticut
General Life Insurance Company [3/93-8/94]
Philip L. Holstein President and Treasurer, Lincoln Life & Annuity
President and Director Company of New York [7/96-present] Formerly:
President, [1/82-7/96] The Holstein Company, Inc.
Harry L. Kavetas Executive Vice President and Chief Financial Officer
Director [2/94-present], Eastman Kodak Company.
343 State Street
Rochester, NY 14650-0235
Barbara S. Kowalczyk Senior Vice President, Corporation Planning
Director [5/94-present], Lincoln National Corp.; Formerly:
200 East Berry Street Senior Vice President [7/92-5-94], Lincoln
Fort Wayne, IN 46802 Investment Management Co.
29
Name, Address and
Position(s) with Registrant Principal Occupations Last Five Years
- ----------------------------- -----------------------------------------------------
Margeurite L. Lachman Managing Director, Schroder Real Estate Associates
Director
437 Madison Avenue
18th Floor
New York, NY 10022
Louis G. Marcoccia Senior Vice President, Business, Finance and
Director Administrative Services, Syracuse University
Skytop Office Building
Skytop Road
Syracuse, NY 13244-5300
Troy D. Panning Second Vice President and Chief Financial Officer
Second Vice President and [11/96-present], Lincoln Life & Annuity Company of
Chief Financial Officer New York; Formerly: Accountant [9/90-11/96], Ernst
& Young LLP
John M. Pietruski Chairman of the Board, Texas Biotechnology Corp.
Director
One Penn Plaza
Suite 3408
New York, NY 10119
Lawrence T. Rowland President [97-present] Lincoln Reinsurance,
Director Formerly: Senior Vice President (96), Vice President
One Reinsurance Place [94-95] Lincoln Reinsurance.
1700 Magnavox Way
Fort Wayne, IN 46804
Gabriel L. Shaheen President, Chief Executive Officer and Director
Director [1/98-present], The Lincoln National Life Insurance
1300 South Clinton Street Co. Formerly: Managing Director, Lincoln National
Fort Wayne, IN 46802 (UK) PLC [12/96-1/98]; President, Lincoln National
Reinsurance Company [7/94-12/96]; Senior Vice
President, Lincoln National Life Reinsurance
Company [1/93-7/95]
Robert O. Sheppard, Esq. Assistant Vice President, Lincoln Life & Annuity
Assistant Vice President Company of New York [7/97-present]; Second Vice
President, Unity Mutual Life Insurance Company
[2/86-7/97]
Richard C. Vaughan Executive Vice President and Chief Financial Officer
Director [1/95-present] Formerly: Senior Vice President
200 East Berry Street [5/92-1/95], Lincoln National Corp.
Fort Wayne, IN 46802
C. Suzanne Womack Secretary, Lincoln Life & Annuity Company of New
Secretary York [7/96-present]; Second Vice President and
200 East Berry Street Secretary, Lincoln National Corporation
Fort Wayne, IN 46802 [5/97-present]; Second Vice President and
Secretary, The Lincoln National Life Insurance
Company [5/97-present]; Secretary, Lincoln Financial
Advisors Corporation [6/87-present]
30
ADDITIONAL INFORMATION
Reports to Policyowners
Within 30 days after each Policy Anniversary and before proceeds are applied to
a Settlement Option, we will send you a report containing the following
information:
o a statement of changes in the Total Account Value and Surrender Value since
the prior report or since the Date of Issue, if there has been no prior
report. This includes a statement of Monthly Deductions and investment
results and any interest earnings for the report period;
o Surrender Value, Death Benefit, and any Loan Account Value as of the Policy
Anniversary;
o a projection of the Total Account Value, Loan Account Value and Surrender
Value as of the succeeding Policy Anniversary.
In addition, if you have Policy values funded in a Separate Account you will
receive such periodic reports as may be required by the Commission.
Right to Instruct Voting of Fund Shares
In accordance with our view of present applicable law, we will vote the shares
of each of the Funds held in each Separate Account. The votes will be cast at
meetings of the shareholders of the Fund and will be based on instructions
received from Policyowners. However, if the 1940 Act or any regulations
thereunder should be amended or if the present interpretation thereof should
change, and as a result we determine that we are permitted to vote the shares of
the Fund in our own right, we may elect to do so.
The number of Fund shares which each Policyowner is entitled to direct a vote is
determined by dividing the portion of Total Account Value attributable to a
Fund, if any, by the net asset value of one share in the Fund. Where the value
of the Total Account Value or the Valuation Reserve relates to more than one
Fund, the calculation of votes will be performed separately for each Fund. The
number of shares which a person has a right to vote will be determined as of a
date to be chosen by us, but not more than 90 days before the meeting of the
Fund. Voting instructions will be solicited by written communication at least 14
days before such meeting. Fund shares for which no timely instructions are
received, and Fund shares which are not otherwise attributable to Policyowners,
will be voted by us in the same proportion as the voting instructions which are
received for all Policies participating in each Fund through Account S.
Policyowners having a voting interest will receive periodic reports relating to
the Fund, proxy material and a form for giving voting instructions.
Disregard of Voting Instructions
We may, when required by state insurance regulatory authorities, disregard
voting instructions if the instructions require that the shares be voted so as
to cause a change in the sub-classification or investment objectives of a Fund
or to approve or
31
disapprove an investment advisory contract for a Fund. In addition, we may
disregard voting instructions in favor of changes initiated by a Policyowner in
the investment policy or the investment adviser of the Fund if we reasonably
disapprove of such changes.
A change would be disapproved only if the proposed change is contrary to state
law or prohibited by state regulatory authorities or we determined that the
change would have an adverse effect on the Separate Account in that the proposed
investment policy for a Fund may result in overly speculative or unsound
investments. In the event we do disregard voting instructions, a summary of that
action and the reasons for such action will be included in the next annual
report to Policyowners.
State Regulation
We are subject to regulation and supervision by the Insurance Department of the
state of New York, which periodically examines our affairs. The Policies have
been approved by the New York Insurance Department.
We are required to submit annual statements of our operations, including
financial statements, to the New York Insurance Department, for the purposes of
determining solvency and compliance with insurance laws and regulations.
Legal Matters
The Company knows of no material legal proceedings pending to which the Separate
Account is a party or which would materially affect the Separate Account.
The legal validity of the securities described in the Prospectus has been passed
on by Robert O. Sheppard, Esq., Assistant Vice President of the Company.
The Registration Statement
A Registration Statement under the 1933 Act has been filed with the Commission
relating to the offering described in this Prospectus. This Prospectus does not
include all the information set forth in the Registration Statement, certain
portions of which have been omitted pursuant to the rules and regulations of the
Commission. The omitted information may be obtained at the Commission's
principal office in Washington, DC, upon payment of the Commission's prescribed
fees.
Distribution of the Policies
The Policy will be sold by individuals and entities, who in addition to being
licensed as life insurance agents for LLANY are also registered representatives
of Lincoln Financial Advisors, Inc. ("LFA") or of other registered
broker-dealers who maintain a selling relationship with LFA. Registered
broker-dealers and registered representatives of broker-dealers ordinarily
receive commission and service fees up to 35% of the first year premium as
defined and limited by Internal Revenue Code Section 7702, plus up to 10% of all
other premiums paid. A registered representative or registered broker-dealer may
be required to return all or part of any commission if the Policy is not
continued for a certain period. All compensation is paid from LLANY resources,
which include sales charges made under this policy.
Records and Accounts
Andesa, TPA, Inc., Suite 502, 1621 N. Cedar Crest Boulevard, Allentown,
Pennsylvania, will act as a Transfer Agent on behalf of LLANY as it relates to
the policies described in this Prospectus. In the role of a Transfer Agent,
Andesa will perform administrative
32
functions, such as decreases, increases, surrenders and partial surrenders, fund
allocation changes and transfers on behalf of the Company.
All records and accounts relating to the Separate Account and the Funds shares
held in the Separate Account will be maintained by the Company. All financial
transactions will be handled by the Company. All reports required to be made and
information required to be given will be provided by Andesa on behalf of the
Company.
Independent Auditors
Ernst & Young LLP are the independent auditors for the Separate Account and for
the Company. The services provided to the Separate Account include primarily the
examination of the Separate Account's financial statements and review of filings
made with the Commission.
Preparing for Year 2000
Many existing computer programs use only two digits to identify a year in the
date field. These programs were designed and developed without considering the
impact of the upcoming change in the century. If not corrected, many computer
applications could fail or create erroneous results by or at the year 2000. The
year 2000 issue affects virtually all companies and organizations.
LLANY, as part of its year 2000 updating process, and in conjunction with its
parent company, The Lincoln National Life Insurance Company ("Lincoln Life"), is
responsible for the updating of its Account S-related computer systems. An
affiliate of LLANY, Delaware Service Company (Delaware), provides substantially
all of the necessary accounting and valuation services for Account S. Delaware,
for its part, is responsible for updating all of its internal computer systems,
including those which service Account S, to accommodate the year 2000. LLANY,
Lincoln Life and Delaware (the "Companies") have each been redirecting a large
portion of their internal information technology efforts and contracting with
outside consultants as part of this updating process. Meanwhile, they have been
coordinating with each other as part of the process.
The year 2000 issue is pervasive and complex and affects virtually every aspect
of the businesses of the Companies. The computer systems of the Companies and
their interfaces with the computer systems of vendors, suppliers, customers and
other business partners are particularly vulnerable. The inability to properly
recognize date-sensitive electronic information and to transfer data between
systems could cause errors or even complete failure of systems, which would
result in a temporary inability to process transactions correctly and engage in
normal business activities for Account S. The Companies respectively are
redirecting significant portions of their internal information technology
efforts and are contracting, as needed, with outside consultants to help update
their systems to accommodate the year 2000. The Companies have respectively
initiated formal discussions with other critical parties that interface with
their systems to gain an understanding of the progress by those parties in
addressing year 2000 issues. While the Companies are making substantial efforts
to address their own systems and the systems with which they interface, it is
not possible to provide assurance that operational problems will not occur. The
Companies presently believe that, assuming the modification of existing computer
systems, updated by vendors and conversion to new software and hardware, the
year 2000 issue will not pose significant operations problems for their
respective
33
computer systems. In addition, the Companies are incorporating potential issues
surrounding year 2000 into their contingency planning process, in the event
that, despite these substantial efforts, there are unresolved year 2000
problems. If the remediation efforts noted above are not completed timely or
properly, the year 2000 issue could have a material adverse impact on the
operation of the Companies.
The cost of addressing year 2000 issues and the timeliness of completion is
being monitored by management of the respective Companies. Nevertheless, there
can be no guarantee by LLANY, Lincoln Life or by Delaware that estimated costs
will be achieved, and actual results could differ significantly from those
anticipated. Specific factors that might cause such differences include, but are
not limited to, the availability and cost of personnel trained in this area, the
ability to locate and correct all relevant computer problems, and other
uncertainties.
TAX MATTERS
General
The following is a discussion of the federal income tax considerations relating
to the Policy. This discussion is based on the Company's understanding of
federal income tax laws as they now exist and are currently interpreted by the
Internal Revenue Service ("IRS"). These laws are complex, and tax results may
vary among individuals. A person or persons contemplating the purchase of or the
exercise of elections under the Policy described in this Prospectus should seek
competent tax advice.
Federal Tax Status of the Company
The Company is taxed as a life insurance company under the Code. For federal
income tax purposes, Separate Account operations are part of the Company's total
operations and are not taxed separately, although operations of each Separate
Account are treated separately for accounting and financial statement purposes.
The Company believes that the Separate Account investment income and realized
net capital gains will not be federally taxed to the extent that such income and
gains are applied to increase the reserves under the contracts. Accordingly, the
Company does not anticipate that it will incur any federal income tax liability
attributable to the Separate Account. Therefore, the Company does not now
provide for any such taxes. However, the Company reserves the right to make a
deduction for such taxes should they be imposed with respect to such items in
the future.
Life Insurance Qualification
Section 7702 of the Code includes a definition of life insurance for tax
purposes. The Code and IRS rules generally place limits on the amount of
premiums payable under the contract and the level of cash surrender value. In no
event may the total of all premiums paid exceed the then-current maximum premium
limitations established by federal law for a Policy to qualify as life
insurance. If, at any time, a premium is paid which would result in total
premiums exceeding such maximum premium limitation, we will only accept that
portion of the premium which will make total premiums equal the maximum. Any
part of the premium in excess of that amount will be returned or applied as
otherwise agreed and no further premiums will be accepted until allowed by the
then-current maximum premium limitations prescribed
34
by law. The Secretary of the Treasury has been granted authority to prescribe
regulations to carry out the purposes of Section 7702. Proposed regulations
governing mortality charges were issued in 1991. The Company believes that the
Policy meets the statutory definition of life insurance. As such, and assuming
the diversification standards of Section 817(h) (discussed below) are satisfied,
then except in limited circumstances (a) death benefits paid under the Policy
should generally be excluded from the gross income of the beneficiary for
federal income tax purposes under Section 101(a)(1) of the Code, and (b) a
Policyowner should not generally be taxed on the cash value under a Policy,
including increments thereof, prior to actual receipt. The principal exceptions
to these rules are corporations that are subject to the alternative minimum tax,
and thus may be subject to tax on increments in the Policy's Total Account
Value, and Policyowners who acquire a Policy in a "transfer for value" and thus
can become subject to tax on the portion of the Death Benefit which exceeds the
total of their cost of acquisition and subsequent premium payments.
The Company intends to comply with any future regulations issued under Sections
7702 and 817(h) of the Code, and reserves the right to make changes it deems
necessary to ensure such compliance. Any such changes will apply uniformly to
affected Policyowners and will be made only after advance written notice.
General Rules
Upon the surrender or cancellation of any Policy, whether or not it is a
Modified Endowment Contract, you will be taxed on the Surrender Value only to
the extent that it exceeds the gross premiums paid less prior untaxed
withdrawals. The amount of any unpaid Policy Loans will, upon surrender, be
added to the Surrender Value and will be treated for this purpose as if it had
been received.
Assuming the Policy is not a Modified Endowment Contract, the proceeds of any
Partial Surrenders are generally not taxable unless the total amount received
due to such surrenders exceeds total premiums paid less prior untaxed Partial
Surrender amounts. However, Partial Surrenders made within the first 15 Policy
Years may be taxable in certain limited instances where the Surrender Value plus
any unpaid Policy debt exceeds the total premiums paid less the untaxed portion
of any prior Partial Surrenders. This result may occur even if the total amount
of any Partial Surrenders does not exceed total premiums paid to that date.
Loans received under the Policy will ordinarily be considered indebtedness of
the Policyowner, and assuming the Policy is not considered a Modified Endowment
Contract, Policy Loans will not be treated as current distributions subject to
tax. Generally, amounts of loan interest paid by individuals will be considered
nondeductible "personal interest."
Modified Endowment Contracts
A class of contracts known as "Modified Endowment Contracts" has been created
under Section 7702A of the Code. The tax rules applicable to loan proceeds and
proceeds of a Partial Surrender of any Policy that is considered to be a
Modified Endowment Contract will differ from the general rules noted above.
A contract will be considered a Modified Endowment Contract if it fails the
"7-pay test." A Policy fails the 7-pay test if, at any time in the first seven
Policy Years, the
35
amount paid into the Policy exceeds the amount that would have been paid had the
Policy provided for the payment of seven (7) level annual premiums. In the event
of a distribution under the Policy, the Company will notify the Policyowner if
the Policy is a Modified Endowment Contract.
In addition, each Policy is subject to the 7-pay test during the first seven
Policy Years following the time a material change takes effect. A material
change, for these purposes, includes the exchange of a life insurance policy for
another life insurance policy or the conversion of a term life insurance policy
into a whole life or universal life insurance policy. In addition, an increase
in the future benefits provided constitutes a material change unless the
increase is attributable to (1) the payment of premiums necessary to fund the
lowest Death Benefit payable in the first seven Policy Years or (2) the
crediting of interest or other earnings with respect to such premiums. A
reduction in death benefits during the first seven Policy Years may also cause a
Policy to be considered a Modified Endowment Contract.
If the Policy is considered to be a Modified Endowment Contract, the proceeds of
any Partial Surrenders, any Policy Loans and most assignments will be currently
taxable to the extent that the Policy's Total Account Value immediately before
payment exceeds gross premiums paid (increased by the amount of loans previously
taxed and reduced by untaxed amounts previously received). These rules may also
apply to Policy Loans or Partial Surrender proceeds received during the two-year
period prior to the time that a Policy becomes a Modified Endowment Contract. If
the Policy becomes a Modified Endowment Contract, it may be aggregated with
other Modified Endowment Contracts purchased by you from the Company (and its
affiliates) during any one calendar year for purposes of determining the taxable
portion of withdrawals from the Policy.
A penalty tax equal to 10% of the amount includable in income will apply to the
taxable portion of the proceeds of any Policy Surrender or Policy Loan received
by any Policyowner of a Modified Endowment Contract who is not an individual.
Taxable policy distributions made to an individual who has not reached the age
of 59-1/2 will also be subject to the penalty tax unless those distributions are
attributable to the individual becoming disabled, or are part of a series of
equal periodic payments made not less frequently than annually for the life or
life expectancy of such individual (i.e., an annuity).
Diversification Standards
Section 817(h) of the Code provides that separate account investments (or the
investments of a mutual fund, the shares of which are owned by separate accounts
of insurance companies) underlying the Policy must be "adequately diversified"
in accordance with Treasury regulations in order for the Policy to qualify as
life insurance. The Treasury Department has issued regulations prescribing the
diversification requirements in connection with variable contracts. The Separate
Account, through the Funds, intends to comply with these requirements.
Investor Control
In certain circumstances, owners of variable contracts may be considered the
owners for federal income tax purposes of the assets of the separate account
used to support their contracts. In those circumstances, income and gains from
separate account assets would be includable in the variable contract owner's
gross income. In several rulings published prior to the enactment of Section
817(h), the IRS stated
36
that a variable contract owner will be considered the owner of separate account
assets if the contractowner possesses incidents of ownership in those assets,
such as the ability to exercise investment control over the assets. The Treasury
Department has also announced, in connection with the issuance of regulations
under Section 817(h) concerning diversification, that those regulations "do not
provide guidance concerning the circumstances in which investor control of the
investments of a segregated asset account may cause the investor (i.e., you),
rather than the insurance company, to be treated as the owner of the assets in
the account." This announcement also stated that guidance would be issued by way
of regulations or rulings on the "extent to which Policyowners may direct their
investments to particular Funds without being treated as owners of the
underlying assets." As of the date of this Prospectus, no such guidance has been
issued.
The ownership rights under the Policy are similar to, but different in certain
respects from those described by the IRS in pre-Section 817(h) rulings in which
it was determined that Policyowners were not owners of separate account assets.
For example, a Policyowner has additional flexibility in allocating premium
payments and account values. While the Company does not believe that these
differences would result in a Policyowner being treated as the owner of a pro
rata portion of the assets of the Separate Account, there is no regulation or
ruling of the IRS that confirms this conclusion. In addition, the Company does
not know what standards will be set forth, if any, in the regulations or rulings
which the Treasury Department has stated it expects to issue. The Company
therefore reserves the right to modify the Policy as necessary or to limit the
number of variable options available to attempt to prevent a Policyowner from
being considered the owner of a pro rata share of the assets of the Separate
Account.
Other Tax Considerations
Business-owned life insurance may be subject to certain additional rules.
Section 264(a)(1) of the Code generally prohibits employers from deducting
premiums on policies covering officers, employees or other financially
interested parties where the employer is a beneficiary under the Policy.
Additions to the Policy's Total Account Value may also be subject to tax under
the corporation alternative minimum tax provisions. In addition, Section
264(a)(4) of the Code limits the Policyowner's deduction for interest on loans
taken against life insurance covering the lives of officers, employees, or
others financially interested in the Policyowner's trade or business. Under
current tax law, interest may generally be deducted on an aggregate total of
$50,000 of loans per covered life only with respect to life insurance policies
covering each officer, employee or others who may have a financial interest in
the Policyowner's trade or business and are considered key persons.
Generally, a key person means an officer or a 20 percent owner. However, the
number of key persons will be limited to the greater of (a) 5 individuals, or
(b) the lesser of 5 percent of the total officers and employees of the taxpayor
or 20 individuals. Deductible interest for these contracts will be capped based
on applicable Moody's Corporate Bond Rate. Section 264 (f) of the Code denies a
deduction for a portion of a Policyowner's otherwise deductible interest that is
allocable to nonborrowed policy cash values. The nondeductible interest amount
is the amount that bears the same ratio to such interest as the company's
average nonborrowed cash values of life insurance and annuity policies issued
after June 8, 1997 bears to the sum of the average nonborrowed cash values of
policies plus the average adjusted tax basis of other assets owned by the
company. This provision does not apply to policies in which the insured is a 20
percent owner, officer,
37
director or employee of the business, including policies jointly covering such
individual and his or her spouse. The rule also will not apply where the
Policyowner is a natural person, unless a trade or business is directly or
indirectly the beneficiary of the policy.
Depending on the circumstances, the exchange of a policy, a change in the
Policy's Death Benefit Option, a Policy Loan, a Full or Partial Surrender, a
change in Ownership or an assignment of the Policy may have federal income tax
consequences. In addition, federal, state and local transfer, estate,
inheritance and other tax consequences of policy ownership, premium payments and
receipt of policy proceeds depend on the circumstances of each Policyowner or
beneficiary. Any person concerned about these tax implications should consult a
competent tax advisor before initiating any transaction.
MISCELLANEOUS POLICY PROVISIONS
The Policy, including riders, which you receive and the application you make
when you purchase the Policy are the whole contract. A copy of the application
is attached to the Policy when it is issued to you. Any application for changes,
once approved by us, will become part of the Policy.
Payment of Benefits
All benefits are payable by the Administrator. We may require submission of the
Policy before we grant loans, make changes or pay benefits.
Age
If age is misstated on the application, the amount payable on death will be that
which would have been purchased by the most recent monthly deduction at the
current age.
Incontestability
We will not contest coverage under the Policy after the Policy has been in force
during the lifetime of the insured for a period of two years from the Policy's
Date of Issue.
For coverage which takes effect on a later date (e.g., an increase in coverage),
we will not contest such coverage after it has been in force during the lifetime
of the Insured more than two years from its effective date.
Suicide
If the Insured commits suicide within two years from the Date of Issue, the only
benefit paid will be the sum of:
a) premiums paid less amounts allocated to the Separate Account; and
b) the Separate Account Value on the date of suicide, plus the portion of the
Monthly Deduction from the Separate Account Value, minus
c) the amount necessary to repay any loans in full and any interest earned on
the Loan Account Value transferred to the Separate Account Value, and any
surrenders from the Fixed Account.
38
If the Insured commits suicide within two years from the effective date of any
increase in coverage, we will pay as a benefit only the Monthly Deduction for
the increase, in lieu of the face amount of the increase.
All amounts described in (a) and (c) above will be calculated as of the date of
death.
Coverage Beyond Maturity
The New York Insurance Department does not permit coverage beyond the Maturity
Date.
Nonparticipation
The Policy is not entitled to share in the divisible surplus of the Company. No
dividends are payable.
39
Appendix A
Illustrations of Death Benefit, Total Account Values and Surrender Values.
The following tables illustrate how the Death Benefit, Total Account Values and
Surrender Values of a Policy change with the investment experience of the
variable funding options. The tables show how the Death Benefit, Total Account
Values and Surrender Values of a Policy issued with an insured of a given age
and a given premium would vary over time if the investment return on the assets
held in each Fund were a uniform, gross after tax annual rate of 0%, 6%, and
12%, respectively.
Tables I, II, VII and VIII illustrate Policies issued on a unisex basis, age 45,
in the preferred nonsmoker rate class for fully underwriting issue. Tables III,
IV, IX and X illustrate Policies issued on a unisex basis, age 45 in the
nonsmoker rate class for guaranteed issue underwriting. Tables V, VI, XI and XII
illustrate Policies issued on a unisex basis, age 45 in the nonsmoker rate class
for simplified issue underwriting. Tables I through VI show values under the
Guideline Premium Test for the definition of life insurance, and Tables VII
through XII show values under the Cash Value Accumulation Test for the
definition of life insurance. The Death Benefit, Total Account Values, and
Surrender Values would be different from those shown if the gross annual
investment rates of return averaged 0%, 6%, and 12%, respectively, over a period
of years, but fluctuated above and below those averages for individual Policy
Years.
The second column of each table shows the accumulated values of the premiums
paid at an assumed rate of 5%. The third through fifth columns illustrate the
Death Benefit of a Policy over a designated period. The sixth through eighth
columns illustrate the Total Account Values, while the ninth through eleventh
columns illustrate the Surrender Values of each Policy over the designated
period. Tables I, III, V, VII, IX and XI assume the maximum Cost of Insurance
allowable under the Policy is charged in all Policy Years. These tables also
assume that the maximum allowable mortality and expense risk charge of 1.25% in
Policy Years 1-10 and 0.90% in Policy Years 11 and thereafter on an annual
basis, the maximum allowable premium load of 15% up to the first year's Target
Premium and 6% over the Target Premium, are assessed in the first Policy Year;
the maximum allowable premium load of 10% up to the second year's Target Premium
and 6% over the Target Premium, are assessed in the second through fifth Policy
Year and 6% on all premium in all Policy years thereafter, and an assumed
Premium Tax charge of 5% on all premium in all Policy Years.
The amounts shown for Death Benefit, Surrender Values, and Total Account Values
reflect the fact that the net investment return is lower than the gross return
on the assets held in each Fund as a result of expenses paid by each Fund and
Separate Account charges levied.
The values shown take into account the daily investment advisory fee and other
Fund expenses paid by each Fund. See individual prospectuses for each Fund for
more information.
In addition, these values reflect the application of the mortality and expense
risk charge, premium load and assumed premium tax charge described above. After
deduction of these amounts, the illustrated net annual return on a maximum
charge basis is -1.90%, 4.10% and 10.10% for Policy Years 1-10 and -1.55%, 4.45%
and
40
10.45% on a maximum charge basis for Policy Years 11 and thereafter. The
illustrated net annual return on a current charge Basis is -1.35%, 4.65% and
10.65% for Policy Years 1-10 and -1.15%, 4.85% and 10.85% for Policy Years 11
and thereafter.
The amounts shown also reflect the deduction of Fund investment advisory fees
and other expenses which will vary depending on which funding vehicle is chosen
but which are assumed for purposes of these illustrations to be equivalent to an
annual effective rate of 0.84% of the daily net asset value of the Variable
Account. This rate reflects an arithmetic average of total Fund portfolio annual
expenses for the year ending December 31, 1997.
The hypothetical values shown in the tables do not reflect any Separate Account
charges for federal income taxes, since we are not currently making such
charges. However, such charges may be made in the future, and in that event, the
gross annual investment rate of return would have to exceed 0%, 6% or 12% by an
amount sufficient to cover the tax charges in order to produce the Death
Benefit, Total Account Values, and Surrender Values illustrated.
The tables illustrate the Policy Values that would result based upon the
hypothetical investment rates of return if premiums were paid as indicated, if
all Net Premiums were allocated to Account S, and if no Policy loans have been
made. The tables are based on the assumptions that the Policyowner has not
requested an increase or decrease in the Specified Amount of the Policy, and no
partial surrenders have been made.
Upon request, we will provide an illustration based upon the proposed Insured's
age, and underwriting classification, the Specified Amount or premium requested,
the proposed frequency of premium payments and any available riders requested.
The hypothetical gross annual investment return assumed in such an illustration
will not exceed 12%.
[Tables I through XII to be updated via amendment]
41
Table I
FLEXIBLE PREMIUM CORPORATE VARIABLE UNIVERSAL LIFE INSURANCE POLICY UNISEX
ISSUE AGE 45 PREFERRED NONSMOKER RISK
GUARANTEED INSURANCE COSTS AND MAXIMUM CHARGES ASSUMED
FULLY UNDERWRITTEN
$8,897.00 ANNUAL PREMIUM
GUIDELINE PREMIUM TEST
FACE AMOUNT $500,000
DEATH BENEFIT OPTION 1
Premiums Death Benefit
Accumulated Guaranteed Annual Investment Total Account Value Cash Surrender Value
at Return of Annual Investment Return of Annual Investment Return of
Policy 5% Interest --------------------------------- --------------------------------- ----------------------------------
Year Per Year Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12%
- ------------ ------------ ---------- ---------- ----------- ---------- ---------- ----------- ---------- ---------- ------------
1 9,342 500,000 500,000 500,000 5,549 5,937 6,326 6,172 6,560 6,949
2 19,151 500,000 500,000 500,000 11,337 12,488 13,687 11,804 12,955 14,154
3 29,450 500,000 500,000 500,000 16,916 19,209 21,697 16,916 19,209 21,697
4 40,265 500,000 500,000 500,000 22,272 26,094 30,408 22,272 26,094 30,408
5 51,620 500,000 500,000 500,000 27,408 33,149 39,897 27,408 33,149 39,897
6 63,542 500,000 500,000 500,000 32,667 40,746 50,634 32,667 40,746 50,634
7 76,061 500,000 500,000 500,000 37,667 48,510 62,335 37,667 48,510 62,335
8 89,206 500,000 500,000 500,000 42,394 56,434 75,091 42,394 56,434 75,091
9 103,009 500,000 500,000 500,000 46,824 64,503 89,000 46,824 64,503 89,000
10 117,501 500,000 500,000 500,000 50,930 72,696 104,171 50,930 72,696 104,171
15 201,584 500,000 500,000 500,000 66,048 115,346 204,521 66,048 115,346 204,521
20 308,897 500,000 500,000 500,000 69,166 159,380 368,017 69,166 159,380 368,017
25 445,859 500,000 500,000 742,749 51,801 200,594 640,300 51,801 200,594 640,300
30 620,662 0 500,000 1,151,852 0 232,707 1,076,497 0 232,707 1,076,497
20 (Age 65) 308,897 500,000 500,000 500,000 69,166 159,380 368,017 69,166 159,380 368,017
If premiums are paid more frequently than annually, the Death Benefits, Total
Account Values, and Cash Surrender Values would be less than those illustrated.
If a larger premium is paid, the Surrender Value as a percentage of the Total
Account Value will be greater than or equal to those illustrated. If a smaller
premium is paid, the Surrender Value as a percentage of the Total Account Value
will be less than or equal to those illustrated.
Assumes no Policy loan has been made. Guaranteed cost of insurance rates
assumed. Maximum mortality and expense risk charges, administrative charges, and
premium load assumed.
These investment results are illustrative only and should not be considered a
representation of past or future investments results. Actual investment results
may be more or less than those shown and will depend on a number of factors
including the Policy Owner's allocations, and the Fund's rate of return. The
Total Account Value and Cash Surrender Value for a Policy would be different
from those shown in the actual investment rates of return averaged 0%, 6%, and
12% over a period of years, but fluctuated above or below those averages for
individual Policy Years. No representations can be made that these rates of
return will definitely be achieved for any one year or sustained over a period
of time.
42
Table II
FLEXIBLE PREMIUM CORPORATE VARIABLE UNIVERSAL LIFE INSURANCE POLICY
UNISEX ISSUE AGE 45 PREFERRED NONSMOKER RISK
CURRENT INSURANCE COSTS AND CURRENT CHARGES ASSUMED
FULLY UNDERWRITTEN
$8,897.00 ANNUAL PREMIUM
GUIDELINE PREMIUM TEST
FACE AMOUNT $500,000
DEATH BENEFIT OPTION 1
Premiums Death Benefit
Accumulated Guaranteed Annual Investment Total Account Value Cash Surrender Value
at Return of Annual Investment Return of Annual Investment Return of
Policy 5% Interest --------------------------------- --------------------------------- ----------------------------------
Year Per Year Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12%
- ------------ ------------ ---------- ---------- ----------- ---------- ---------- ----------- ---------- ---------- ------------
1 9,342 500,000 500,000 500,000 6,775 7,213 7,652 7,397 7,836 8,275
2 19,151 500,000 500,000 500,000 13,517 14,831 16,199 13,984 15,298 16,666
3 29,450 500,000 500,000 500,000 19,977 22,608 25,457 19,977 22,608 25,457
4 40,265 500,000 500,000 500,000 26,181 30,574 35,527 26,181 30,574 35,527
5 51,620 500,000 500,000 500,000 32,158 38,768 46,529 32,158 38,768 46,529
6 63,542 500,000 500,000 500,000 38,287 47,601 58,986 38,287 47,601 58,986
7 76,061 500,000 500,000 500,000 44,234 56,748 72,683 44,234 56,748 72,683
8 89,206 500,000 500,000 500,000 50,179 66,420 87,961 50,179 66,420 87,961
9 103,009 500,000 500,000 500,000 55,939 76,446 104,791 55,939 76,446 104,791
10 117,501 500,000 500,000 500,000 61,492 86,824 123,328 61,492 86,824 123,328
15 201,584 500,000 500,000 500,000 86,435 145,915 252,204 86,435 145,915 252,204
20 308,897 500,000 500,000 573,848 104,331 217,101 470,367 104,331 217,101 470,367
25 445,859 500,000 500,000 969,884 117,912 308,579 836,107 117,912 308,579 836,107
30 620,662 500,000 500,000 1,543,773 120,829 427,080 1,442,778 120,829 427,080 1,442,778
20 (Age 65) 308,897 500,000 500,000 573,848 104,331 217,101 470,367 104,331 217,101 470,367
If premiums are paid more frequently than annually, the Death Benefits, Total
Account Values, and Cash Surrender Values would be less than those illustrated.
If a larger premium is paid, the Surrender Value as a percentage of the Total
Account Value will be greater than or equal to those illustrated. If a smaller
premium is paid, the Surrender Value as a percentage of the Total Account Value
will be less than or equal to those illustrated.
Assumes no Policy loan has been made. Current cost of insurance rates assumed.
Current mortality and expense risk charges, administrative charges, and premium
load assumed. The current mortality and expense risk charges may be reduced from
0.70% to 0.35% in Policy Years 11 and thereafter. Beginning in Policy Years 11
and thereafter, the illustrated net annual return is -1.00%, 5.00%, and 11.00%.
These investment results are illustrative only and should not be considered a
representation of past or future investments results. Actual investment results
may be more or less than those shown and will depend on a number of factors
including the Policy Owner's allocations, and the Fund's rate of return. The
Total Account Value and Cash Surrender Value for a Policy would be different
from those shown in the actual investment rates of return averaged 0%, 6%, and
12% over a period of years, but fluctuated above or below those averages for
individual Policy Years. No representations can be made that these rates of
return will definitely be achieved for any one year or sustained over a period
of time.
43
Table III
FLEXIBLE PREMIUM CORPORATE VARIABLE UNIVERSAL LIFE INSURANCE POLICY
UNISEX ISSUE AGE 45 NONSMOKER RISK
GUARANTEED INSURANCE COSTS AND MAXIMUM CHARGES ASSUMED
GUARANTEED ISSUE
$8,897.00 ANNUAL PREMIUM
GUIDELINE PREMIUM TEST
FACE AMOUNT $500,000
DEATH BENEFIT OPTION 1
Premiums Death Benefit
Accumulated Guaranteed Annual Investment Total Account Value Cash Surrender Value
at Return of Annual Investment Return of Annual Investment Return of
Policy 5% Interest --------------------------------- --------------------------------- ----------------------------------
Year Per Year Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12%
- ------------ ------------ ---------- ---------- ----------- ---------- ---------- ----------- ---------- ---------- ------------
1 9,342 500,000 500,000 500,000 5,549 5,937 6,326 6,172 6,560 6,949
2 19,151 500,000 500,000 500,000 11,337 12,488 13,687 11,804 12,955 14,154
3 29,450 500,000 500,000 500,000 16,916 19,209 21,697 16,916 19,209 21,697
4 40,265 500,000 500,000 500,000 22,272 26,094 30,408 22,272 26,094 30,408
5 51,620 500,000 500,000 500,000 27,408 33,149 39,897 27,408 33,149 39,897
6 63,542 500,000 500,000 500,000 32,667 40,746 50,634 32,667 40,746 50,634
7 76,061 500,000 500,000 500,000 37,667 48,510 62,335 37,667 48,510 62,335
8 89,206 500,000 500,000 500,000 42,394 56,434 75,091 42,394 56,434 75,091
9 103,009 500,000 500,000 500,000 46,824 64,503 89,000 46,824 64,503 89,000
10 117,501 500,000 500,000 500,000 50,930 72,696 104,171 50,930 72,696 104,171
15 201,584 500,000 500,000 500,000 66,048 115,346 204,521 66,048 115,346 204,521
20 308,897 500,000 500,000 500,000 69,166 159,380 368,017 69,166 159,380 368,017
25 445,859 500,000 500,000 742,749 51,801 200,594 640,300 51,801 200,594 640,300
30 620,662 0 500,000 1,151,852 0 232,707 1,076,497 0 232,707 1,076,497
20 (Age 65) 308,897 500,000 500,000 500,000 69,166 159,380 368,017 69,166 159,380 368,017
If premiums are paid more frequently than annually, the Death Benefits, Total
Account Values, and Cash Surrender Values would be less than those illustrated.
If a larger premium is paid, the Surrender Value as a percentage of the Total
Account Value will be greater than or equal to those illustrated. If a smaller
premium is paid, the Surrender Value as a percentage of the Total Account Value
will be less than or equal to those illustrated.
Assumes no Policy loan has been made. Guaranteed cost of insurance rates
assumed. Maximum mortality and expense risk charges, administrative charges, and
premium load assumed.
These investment results are illustrative only and should not be considered a
representation of past or future investments results. Actual investment results
may be more or less than those shown and will depend on a number of factors
including the Policy Owner's allocations, and the Fund's rate of return. The
Total Account Value and Cash Surrender Value for a Policy would be different
from those shown in the actual investment rates of return averaged 0%, 6%, and
12% over a period of years, but fluctuated above or below those averages for
individual Policy Years. No representations can be made that these rates of
return will definitely be achieved for any one year or sustained over a period
of time.
44
Table IV
FLEXIBLE PREMIUM CORPORATE VARIABLE UNIVERSAL LIFE INSURANCE POLICY
UNISEX ISSUE AGE 45 NONSMOKER RISK
CURRENT INSURANCE COSTS AND CURRENT CHARGES ASSUMED
GUARANTEED ISSUE
$8,897.00 ANNUAL PREMIUM
GUIDELINE PREMIUM TEST
FACE AMOUNT $500,000
DEATH BENEFIT OPTION 1
Premiums Death Benefit
Accumulated Guaranteed Annual Investment Total Account Value Cash Surrender Value
at Return of Annual Investment Return of Annual Investment Return of
Policy 5% Interest --------------------------------- --------------------------------- ----------------------------------
Year Per Year Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12%
- ------------ ------------ ---------- ---------- ----------- ---------- ---------- ----------- ---------- ---------- ------------
1 9,342 500,000 500,000 500,000 6,452 6,880 7,309 7,075 7,503 7,931
2 19,151 500,000 500,000 500,000 12,970 14,246 15,576 13,437 14,714 16,043
3 29,450 500,000 500,000 500,000 19,295 21,849 24,617 19,295 21,849 24,617
4 40,265 500,000 500,000 500,000 25,434 29,705 34,521 25,434 29,705 34,521
5 51,620 500,000 500,000 500,000 31,394 37,831 45,387 31,394 37,831 45,387
6 63,542 500,000 500,000 500,000 37,529 46,614 57,715 37,529 46,614 57,715
7 76,061 500,000 500,000 500,000 43,477 55,707 71,267 43,477 55,707 71,267
8 89,206 500,000 500,000 500,000 49,405 65,301 86,365 49,405 65,301 86,365
9 103,009 500,000 500,000 500,000 55,119 75,218 102,968 55,119 75,218 102,968
10 117,501 500,000 500,000 500,000 60,596 85,453 121,225 60,596 85,453 121,225
15 201,584 500,000 500,000 500,000 84,954 143,487 247,966 84,954 143,487 247,966
20 308,897 500,000 500,000 564,134 101,498 212,661 462,405 101,498 212,661 462,405
25 445,859 500,000 500,000 953,335 112,053 300,482 821,841 112,053 300,482 821,841
30 620,662 500,000 500,000 1,516,522 109,833 413,823 1,417,310 109,833 413,823 1,417,310
20 (Age 65) 308,897 500,000 500,000 564,134 101,498 212,661 462,405 101,498 212,661 462,405
If premiums are paid more frequently than annually, the Death Benefits, Total
Account Values, and Cash Surrender Values would be less than those illustrated.
If a larger premium is paid, the Surrender Value as a percentage of the Total
Account Value will be greater than or equal to those illustrated. If a smaller
premium is paid, the Surrender Value as a percentage of the Total Account Value
will be less than or equal to those illustrated.
Assumes no Policy loan has been made. Current cost of insurance rates assumed.
Current mortality and expense risk charges, administrative charges, and premium
load assumed. The current mortality and expense risk charges may be reduced from
0.70% to 0.35% in Policy Years 11 and thereafter. Beginning in Policy Years 11
and thereafter, the illustrated net annual return is -1.00%, 5.00%, and 11.00%.
These investment results are illustrative only and should not be considered a
representation of past or future investments results. Actual investment results
may be more or less than those shown and will depend on a number of factors
including the Policy Owner's allocations, and the Fund's rate of return. The
Total Account Value and Cash Surrender Value for a Policy would be different
from those shown in the actual investment rates of return averaged 0%, 6%, and
12% over a period of years, but fluctuated above or below those averages for
individual Policy Years. No representations can be made that these rates of
return will definitely be achieved for any one year or sustained over a period
of time.
45
Table V
FLEXIBLE PREMIUM CORPORATE VARIABLE UNIVERSAL LIFE INSURANCE POLICY
UNISEX ISSUE AGE 45 NONSMOKER RISK
GUARANTEED INSURANCE COSTS AND MAXIMUM CHARGES ASSUMED
SIMPLIFIED ISSUE
$8,897.00 ANNUAL PREMIUM
GUIDELINE PREMIUM TEST
FACE AMOUNT $500,000
DEATH BENEFIT OPTION 1
Premiums Death Benefit
Accumulated Guaranteed Annual Investment Total Account Value Cash Surrender Value
at Return of Annual Investment Return of Annual Investment Return of
Policy 5% Interest --------------------------------- --------------------------------- ----------------------------------
Year Per Year Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12%
- ------------- ------------ ---------- ---------- ----------- ---------- ---------- ----------- ---------- ---------- ------------
1 9,342 500,000 500,000 500,000 5,549 5,937 6,326 6,172 6,560 6,949
2 19,151 500,000 500,000 500,000 11,337 12,488 13,687 11,804 12,955 14,154
3 29,450 500,000 500,000 500,000 16,916 19,209 21,697 16,916 19,209 21,697
4 40,265 500,000 500,000 500,000 22,272 26,094 30,408 22,272 26,094 30,408
5 51,620 500,000 500,000 500,000 27,408 33,149 39,897 27,408 33,149 39,897
6 63,542 500,000 500,000 500,000 32,667 40,746 50,634 32,667 40,746 50,634
7 76,061 500,000 500,000 500,000 37,667 48,510 62,335 37,667 48,510 62,335
8 89,206 500,000 500,000 500,000 42,394 56,434 75,091 42,394 56,434 75,091
9 103,009 500,000 500,000 500,000 46,824 64,503 89,000 46,824 64,503 89,000
10 117,501 500,000 500,000 500,000 50,930 72,696 104,171 50,930 72,696 104,171
15 201,584 500,000 500,000 500,000 66,048 115,346 204,521 66,048 115,346 204,521
20 308,897 500,000 500,000 500,000 69,166 159,380 368,017 69,166 159,380 368,017
25 445,859 500,000 500,000 742,749 51,801 200,594 640,300 51,801 200,594 640,300
30 620,662 0 500,000 1,151,852 0 232,707 1,076,497 0 232,707 1,076,497
20 (Age 65) 308,897 500,000 500,000 500,000 69,166 159,380 368,017 69,166 159,380 368,017
If premiums are paid more frequently than annually, the Death Benefits, Total
Account Values, and Cash Surrender Values would be less than those illustrated.
If a larger premium is paid, the Surrender Value as a percentage of the Total
Account Value will be greater than or equal to those illustrated. If a smaller
premium is paid, the Surrender Value as a percentage of the Total Account Value
will be less than or equal to those illustrated.
Assumes no Policy loan has been made. Guaranteed cost of insurance rates
assumed. Maximum mortality and expense risk charges, administrative charges, and
premium load assumed.
These investment results are illustrative only and should not be considered a
representation of past or future investments results. Actual investment results
may be more or less than those shown and will depend on a number of factors
including the Policy Owner's allocations, and the Fund's rate of return. The
Total Account Value and Cash Surrender Value for a Policy would be different
from those shown in the actual investment rates of return averaged 0%, 6%, and
12% over a period of years, but fluctuated above or below those averages for
individual Policy Years. No representations can be made that these rates of
return will definitely be achieved for any one year or sustained over a period
of time.
46
Table VI
FLEXIBLE PREMIUM CORPORATE VARIABLE UNIVERSAL LIFE INSURANCE POLICY
UNISEX ISSUE AGE 45 NONSMOKER RISK
CURRENT INSURANCE COSTS AND CURRENT CHARGES ASSUMED
SIMPLIFIED ISSUE
$8,897.00 ANNUAL PREMIUM
GUIDELINE PREMIUM TEST
FACE AMOUNT $500,000
DEATH BENEFIT OPTION 1
Premiums Death Benefit
Accumulated Guaranteed Annual Investment Total Account Value Cash Surrender Value
at Return of Annual Investment Return of Annual Investment Return of
Policy 5% Interest --------------------------------- --------------------------------- ----------------------------------
Year Per Year Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12%
- ------------ ------------ ---------- ---------- ----------- ---------- ---------- ----------- ---------- ---------- ------------
1 9,342 500,000 500,000 500,000 6,634 7,068 7,502 7,257 7,691 8,125
2 19,151 500,000 500,000 500,000 13,329 14,628 15,981 13,796 15,095 16,448
3 29,450 500,000 500,000 500,000 19,825 22,430 25,251 19,825 22,430 25,251
4 40,265 500,000 500,000 500,000 26,127 30,487 35,401 26,127 30,487 35,401
5 51,620 500,000 500,000 500,000 32,239 38,814 46,528 32,239 38,814 46,528
6 63,542 500,000 500,000 500,000 38,510 47,793 59,131 38,510 47,793 59,131
7 76,061 500,000 500,000 500,000 44,578 57,075 72,969 44,578 57,075 72,969
8 89,206 500,000 500,000 500,000 50,603 66,846 88,360 50,603 66,846 88,360
9 103,009 500,000 500,000 500,000 56,387 76,922 105,262 56,387 76,922 105,262
10 117,501 500,000 500,000 500,000 61,904 87,293 123,821 61,904 87,293 123,821
15 201,584 500,000 500,000 500,000 85,872 145,554 252,165 85,872 145,554 252,165
20 308,897 500,000 500,000 572,338 101,429 214,501 469,129 101,429 214,501 469,129
25 445,859 500,000 500,000 966,122 111,768 302,786 832,864 111,768 302,786 832,864
30 620,662 500,000 500,000 1,536,039 109,565 417,053 1,435,550 109,565 417,053 1,435,550
20 (Age 65) 308,897 500,000 500,000 572,338 101,429 214,501 469,129 101,429 214,501 469,129
If premiums are paid more frequently than annually, the Death Benefits, Total
Account Values, and Cash Surrender Values would be less than those illustrated.
If a larger premium is paid, the Surrender Value as a percentage of the Total
Account Value will be greater than or equal to those illustrated. If a smaller
premium is paid, the Surrender Value as a percentage of the Total Account Value
will be less than or equal to those illustrated.
Assumes no Policy loan has been made. Current cost of insurance rates assumed.
Current mortality and expense risk charges, administrative charges, and premium
load assumed. The current mortality and expense risk charges may be reduced from
0.70% to 0.35% in Policy Years 11 and thereafter. Beginning in Policy Years 11
and thereafter, the illustrated net annual return is -1.00%, 5.00%, and 11.00%.
These investment results are illustrative only and should not be considered a
representation of past or future investments results. Actual investment results
may be more or less than those shown and will depend on a number of factors
including the Policy Owner's allocations, and the Fund's rate of return. The
Total Account Value and Cash Surrender Value for a Policy would be different
from those shown in the actual investment rates of return averaged 0%, 6%, and
12% over a period of years, but fluctuated above or below those averages for
individual Policy Years. No representations can be made that these rates of
return will definitely be achieved for any one year or sustained over a period
of time.
47
Table VII
FLEXIBLE PREMIUM CORPORATE VARIABLE UNIVERSAL LIFE INSURANCE POLICY
UNISEX ISSUE AGE 45 PREFERRED NONSMOKER RISK
GUARANTEED INSURANCE COSTS AND MAXIMUM CHARGES ASSUMED
FULLY UNDERWRITTEN
$25,084.02 ANNUAL PREMIUM FOR SEVEN YEARS
CASH VALUE ACCUMULATION TEST
FACE AMOUNT $500,000
DEATH BENEFIT OPTION 1
Premiums Death Benefit
Accumulated Guaranteed Annual Investment Total Account Value Cash Surrender Value
at Return of Annual Investment Return of Annual Investment Return of
Policy 5% Interest --------------------------------- --------------------------------- ----------------------------------
Year Per Year Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12%
- ------------ ------------ ---------- ---------- ----------- ---------- ---------- ----------- ---------- ---------- ------------
1 26,338 500,000 500,000 500,000 18,793 19,990 21,188 20,549 21,746 22,944
2 53,993 500,000 500,000 500,000 38,443 42,095 45,893 39,760 43,412 47,210
3 83,031 500,000 500,000 500,000 57,701 65,102 73,107 57,701 65,102 73,107
4 113,521 500,000 500,000 500,000 76,566 89,050 103,096 76,566 89,050 103,096
5 145,535 500,000 500,000 500,000 95,051 113,994 136,172 95,051 113,994 136,172
6 179,150 500,000 500,000 500,000 114,152 141,038 173,792 114,152 141,038 173,792
7 214,446 500,000 500,000 572,728 132,860 169,224 215,089 132,860 169,224 215,089
8 225,168 500,000 500,000 606,423 128,372 174,422 234,933 128,372 174,422 234,933
9 236,427 500,000 500,000 642,084 123,737 179,693 256,524 123,737 179,693 256,524
10 248,248 500,000 500,000 679,818 118,923 185,022 279,995 118,923 185,022 279,995
15 316,834 500,000 500,000 904,558 91,248 212,273 431,294 91,248 212,273 431,294
20 404,370 500,000 500,000 1,202,321 53,313 239,030 656,917 53,313 239,030 656,917
25 516,090 0 500,000 1,595,856 0 260,945 984,973 0 260,945 984,973
30 658,676 0 500,000 2,112,853 0 270,318 1,451,175 0 270,318 1,451,175
20 (Age 65) 404,370 500,000 500,000 1,202,321 53,313 239,030 656,917 53,313 239,030 656,917
If premiums are paid more frequently than annually, the Death Benefits, Total
Account Values, and Cash Surrender Values would be less than those illustrated.
If a larger premium is paid, the Surrender Value as a percentage of the Total
Account Value will be greater than or equal to those illustrated. If a smaller
premium is paid, the Surrender Value as a percentage of the Total Account Value
will be less than or equal to those illustrated.
Assumes no Policy loan has been made. Guaranteed cost of insurance rates
assumed. Maximum mortality and expense risk charges, administrative charges, and
premium load assumed.
These investment results are illustrative only and should not be considered a
representation of past or future investments results. Actual investment results
may be more or less than those shown and will depend on a number of factors
including the Policy Owner's allocations, and the Fund's rate of return. The
Total Account Value and Cash Surrender Value for a Policy would be different
from those shown in the actual investment rates of return averaged 0%, 6%, and
12% over a period of years, but fluctuated above or below those averages for
individual Policy Years. No representations can be made that these rates of
return will definitely be achieved for any one year or sustained over a period
of time.
48
Table VIII
FLEXIBLE PREMIUM CORPORATE VARIABLE UNIVERSAL LIFE INSURANCE POLICY
UNISEX ISSUE AGE 45 PREFERRED NONSMOKER RISK
CURRENT INSURANCE COSTS AND CURRENT CHARGES ASSUMED
FULLY UNDERWRITTEN
$25,084.02 ANNUAL PREMIUM FOR SEVEN YEARS
CASH VALUE ACCUMULATION TEST
FACE AMOUNT $500,000
DEATH BENEFIT OPTION 1
Premiums Death Benefit
Accumulated Guaranteed Annual Investment Total Account Value Cash Surrender Value
at Return of Annual Investment Return of Annual Investment Return of
Policy 5% Interest --------------------------------- --------------------------------- ----------------------------------
Year Per Year Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12%
- ------------- ------------ ---------- ---------- ----------- ---------- ---------- ----------- ---------- ---------- ------------
1 26,338 500,000 500,000 500,000 20,744 22,033 23,324 22,500 23,789 25,079
2 53,993 500,000 500,000 500,000 41,754 45,680 49,762 43,071 46,997 51,079
3 83,031 500,000 500,000 500,000 62,309 70,254 78,846 62,309 70,254 78,846
4 113,521 500,000 500,000 500,000 82,446 95,836 110,899 82,446 95,836 110,899
5 145,535 500,000 500,000 500,000 102,204 122,511 146,284 102,204 122,511 146,284
6 179,150 500,000 500,000 512,448 122,609 151,418 186,511 122,609 151,418 186,511
7 214,446 500,000 500,000 614,303 142,683 181,638 230,703 142,683 181,638 230,703
8 225,168 500,000 500,000 653,512 139,010 188,393 253,175 139,010 188,393 253,175
9 236,427 500,000 500,000 695,384 135,283 195,393 277,818 135,283 195,393 277,818
10 248,248 500,000 500,000 740,098 131,479 202,635 304,822 131,479 202,635 304,822
15 316,834 500,000 516,676 1,028,153 112,179 246,352 490,225 112,179 246,352 490,225
20 404,370 500,000 545,392 1,434,674 87,104 297,988 783,869 87,104 297,988 783,869
25 516,090 500,000 586,125 2,038,141 57,791 361,760 1,257,954 57,791 361,760 1,257,954
30 658,676 500,000 637,039 2,928,099 15,352 437,539 2,011,112 15,352 437,539 2,011,112
20 (Age 65) 404,370 500,000 545,392 1,434,674 87,104 297,988 783,869 87,104 297,988 783,869
If premiums are paid more frequently than annually, the Death Benefits, Total
Account Values, and Cash Surrender Values would be less than those illustrated.
If a larger premium is paid, the Surrender Value as a percentage of the Total
Account Value will be greater than or equal to those illustrated. If a smaller
premium is paid, the Surrender Value as a percentage of the Total Account Value
will be less than or equal to those illustrated.
Assumes no Policy loan has been made. Current cost of insurance rates assumed.
Current mortality and expense risk charges, administrative charges, and premium
load assumed. The current mortality and expense risk charges may be reduced from
0.70% to 0.35% in Policy Years 11 and thereafter. Beginning in Policy Years 11
and thereafter, the illustrated net annual return is -1.00%, 5.00%, and 11.00%.
These investment results are illustrative only and should not be considered a
representation of past or future investments results. Actual investment results
may be more or less than those shown and will depend on a number of factors
including the Policy Owner's allocations, and the Fund's rate of return. The
Total Account Value and Cash Surrender Value for a Policy would be different
from those shown in the actual investment rates of return averaged 0%, 6%, and
12% over a period of years, but fluctuated above or below those averages for
individual Policy Years. No representations can be made that these rates of
return will definitely be achieved for any one year or sustained over a period
of time.
49
Table IX
FLEXIBLE PREMIUM CORPORATE VARIABLE UNIVERSAL LIFE INSURANCE POLICY
UNISEX ISSUE AGE 45 NONSMOKER RISK
GUARANTEED INSURANCE COSTS AND MAXIMUM CHARGES ASSUMED
GUARANTEED ISSUE
$25,084.02 ANNUAL PREMIUM FOR SEVEN YEARS
CASH VALUE ACCUMULATION TEST
FACE AMOUNT $500,000
DEATH BENEFIT OPTION 1
Premiums Death Benefit
Accumulated Guaranteed Annual Investment Total Account Value Cash Surrender Value
at Return of Annual Investment Return of Annual Investment Return of
Policy 5% Interest --------------------------------- --------------------------------- ----------------------------------
Year Per Year Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12%
- ------------- ------------ ---------- ---------- ----------- ---------- ---------- ----------- ---------- ---------- ------------
1 26,338 500,000 500,000 500,000 18,793 19,990 21,188 20,549 21,746 22,944
2 53,993 500,000 500,000 500,000 38,443 42,095 45,893 39,760 43,412 47,210
3 83,031 500,000 500,000 500,000 57,701 65,102 73,107 57,701 85,102 73,107
4 113,521 500,000 500,000 500,000 76,566 89,050 103,096 76,566 89,050 103,096
5 145,535 500,000 500,000 500,000 95,051 113,994 136,172 95,051 113,994 136,172
6 179,150 500,000 500,000 500,000 114,152 141,038 173,792 114,152 141,038 173,792
7 214,446 500,000 500,000 572,728 132,860 169,224 215,089 132,860 169,224 215,089
8 225,168 500,000 500,000 606,423 128,372 174,422 234,933 128,372 174,422 234,933
9 236,427 500,000 500,000 642,084 123,737 179,693 256,524 123,737 179,693 256,524
10 248,248 500,000 500,000 679,818 118,923 185,022 279,995 118,923 185,022 279,995
15 316,834 500,000 500,000 904,558 91,248 212,273 431,294 91,248 212,273 431,294
20 404,370 500,000 500,000 1,202,321 53,313 239,030 656,917 53,313 239,030 656,917
25 516,090 0 500,000 1,595,856 0 260,945 984,973 0 260,945 984,973
30 658,676 0 500,000 2,112,853 0 270,318 1,451,175 0 270,318 1,451,175
20 (Age 65) 404,370 500,000 500,000 1,202,321 53,313 239,030 656,917 53,313 239,030 656,917
If premiums are paid more frequently than annually, the Death Benefits, Total
Account Values, and Cash Surrender Values would be less than those illustrated.
If a larger premium is paid, the Surrender Value as a percentage of the Total
Account Value will be greater than or equal to those illustrated. If a smaller
premium is paid, the Surrender Value as a percentage of the Total Account Value
will be less than or equal to those illustrated.
Assumes no Policy loan has been made. Guaranteed cost of insurance rates
assumed. Maximum mortality and expense risk charges, administrative charges, and
premium load assumed.
These investment results are illustrative only and should not be considered a
representation of past or future investments results. Actual investment results
may be more or less than those shown and will depend on a number of factors
including the Policy Owner's allocations, and the Fund's rate of return. The
Total Account Value and Cash Surrender Value for a Policy would be different
from those shown in the actual investment rates of return averaged 0%, 6%, and
12% over a period of years, but fluctuated above or below those averages for
individual Policy Years. No representations can be made that these rates of
return will definitely be achieved for any one year or sustained over a period
of time.
50
Table X
FLEXIBLE PREMIUM CORPORATE VARIABLE UNIVERSAL LIFE INSURANCE POLICY
UNISEX ISSUE AGE 45 NONSMOKER RISK
CURRENT INSURANCE COSTS AND CURRENT CHARGES ASSUMED
GUARANTEED ISSUE
$25,084.02 ANNUAL PREMIUM FOR SEVEN YEARS
CASH VALUE ACCUMULATION TEST
FACE AMOUNT $500,000
DEATH BENEFIT OPTION 1
Premiums Death Benefit
Accumulated Guaranteed Annual Investment Total Account Value Cash Surrender Value
at Return of Annual Investment Return of Annual Investment Return of
Policy 5% Interest --------------------------------- --------------------------------- ----------------------------------
Year Per Year Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12%
- ------------- ------------ ---------- ---------- ----------- ---------- ---------- ----------- ---------- ---------- ------------
1 26,338 500,000 500,000 500,000 20,430 21,710 22,990 22,186 23,466 24,746
2 53,993 500,000 500,000 500,000 41,229 45,120 49,166 42,546 46,437 50,483
3 83,031 500,000 500,000 500,000 61,661 69,536 78,052 61,661 69,536 78,052
4 113,521 500,000 500,000 500,000 81,743 95,019 109,955 81,743 95,019 109,955
5 145,535 500,000 500,000 500,000 101,487 121,634 145,218 101,487 121,634 145,218
6 179,150 500,000 500,000 509,195 121,897 150,494 185,327 121,897 150,494 185,327
7 214,446 500,000 500,000 610,828 141,974 180,665 229,398 141,964 180,665 229,398
8 225,168 500,000 500,000 649,743 138,289 187,354 251,719 138,289 187,354 251,719
9 236,427 500,000 500,000 691,254 134,525 194,263 276,169 134,525 194,263 276,169
10 248,248 500,000 500,000 735,497 130,658 201,388 302,927 130,658 201,388 302,927
15 316,834 500,000 512,372 1,019,935 110,832 244,299 486,306 110,832 244,299 486,306
20 404,370 500,000 539,152 1,418,760 84,390 294,579 775,174 84,390 294,579 775,174
25 516,090 500,000 576,295 2,004,687 51,699 355,693 1,237,306 51,699 355,693 1,237,306
30 658,676 500,000 622,263 2,861,257 2,954 427,390 1,965,203 2,954 427,390 1,965,203
20 (Age 65) 404,370 500,000 539,152 1,418,760 84,390 294,579 775,174 84,390 294,579 775,174
If premiums are paid more frequently than annually, the Death Benefits, Total
Account Values, and Cash Surrender Values would be less than those illustrated.
If a larger premium is paid, the Surrender Value as a percentage of the Total
Account Value will be greater than or equal to those illustrated. If a smaller
premium is paid, the Surrender Value as a percentage of the Total Account Value
will be less than or equal to those illustrated.
Assumes no Policy loan has been made. Current cost of insurance rates assumed.
Current mortality and expense risk charges, administrative charges, and premium
load assumed. The current mortality and expense risk charges may be reduced from
0.70% to 0.35% in Policy Years 11 and thereafter. Beginning in Policy Years 11
and thereafter, the illustrated net annual return is -1.00%, 5.00%, and 11.00%.
These investment results are illustrative only and should not be considered a
representation of past or future investments results. Actual investment results
may be more or less than those shown and will depend on a number of factors
including the Policy Owner's allocations, and the Fund's rate of return. The
Total Account Value and Cash Surrender Value for a Policy would be different
from those shown in the actual investment rates of return averaged 0%, 6%, and
12% over a period of years, but fluctuated above or below those averages for
individual Policy Years. No representations can be made that these rates of
return will definitely be achieved for any one year or sustained over a period
of time.
51
Table XI
FLEXIBLE PREMIUM CORPORATE VARIABLE UNIVERSAL LIFE INSURANCE POLICY
UNISEX ISSUE AGE 45 NONSMOKER RISK
GUARANTEED INSURANCE COSTS AND MAXIMUM CHARGES ASSUMED
SIMPLIFIED ISSUE
$25,084.02 ANNUAL PREMIUM FOR SEVEN YEARS
CASH VALUE ACCUMULATION TEST
FACE AMOUNT $500,000
DEATH BENEFIT OPTION 1
Premiums Death Benefit
Accumulated Guaranteed Annual Investment Total Account Value Cash Surrender Value
at Return of Annual Investment Return of Annual Investment Return of
Policy 5% Interest --------------------------------- --------------------------------- ----------------------------------
Year Per Year Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12%
- ------------- ------------ ---------- ---------- ----------- ---------- ---------- ----------- ---------- ---------- ------------
1 26,338 500,000 500,000 500,000 18,793 19,990 21,188 20,549 21,746 22,944
2 53,993 500,000 500,000 500,000 38,443 42,095 45,893 39,760 43,412 47,210
3 83,031 500,000 500,000 500,000 57,701 65,102 73,107 57,701 65,102 73,107
4 113,521 500,000 500,000 500,000 76,566 89,050 103,096 76,566 89,050 103,096
5 145,535 500,000 500,000 500,000 95,051 113,994 136,172 95,051 113,994 136,172
6 179,150 500,000 500,000 500,000 114,152 141,038 173,792 114,152 141,038 173,792
7 214,446 500,000 500,000 572,728 132,860 169,224 215,089 132,860 169,224 215,089
8 225,168 500,000 500,000 606,423 128,372 174,422 234,933 128,372 174,422 234,933
9 236,427 500,000 500,000 642,084 123,737 179,693 256,524 123,737 179,693 256,524
10 248,248 500,000 500,000 679,818 118,923 185,022 279,995 118,923 185,022 279,995
15 316,834 500,000 500,000 904,558 91,248 212,273 431,294 91,248 212,273 431,294
20 404,370 500,000 500,000 1,202,321 53,313 239,030 656,917 53,313 239,030 656,917
25 516,090 0 500,000 1,595,856 0 260,945 984,973 0 260,945 984,973
30 658,676 0 500,000 2,112,853 0 270,318 1,451,175 0 270,318 1,451,175
20 (Age 65) 404,370 500,000 500,000 1,202,321 53,313 293,030 656,917 53,313 239,030 656,917
If premiums are paid more frequently than annually, the Death Benefits, Total
Account Values, and Cash Surrender Values would be less than those illustrated.
If a larger premium is paid, the Surrender Value as a percentage of the Total
Account Value will be greater than or equal to those illustrated. If a smaller
premium is paid, the Surrender Value as a percentage of the Total Account Value
will be less than or equal to those illustrated.
Assumes no Policy loan has been made. Guaranteed cost of insurance rates
assumed. Maximum mortality and expense risk charges, administrative charges, and
premium load assumed.
These investment results are illustrative only and should not be considered a
representation of past or future investments results. Actual investment results
may be more or less than those shown and will depend on a number of factors
including the Policy Owner's allocations, and the Fund's rate of return. The
Total Account Value and Cash Surrender Value for a Policy would be different
from those shown in the actual investment rates of return averaged 0%, 6%, and
12% over a period of years, but fluctuated above or below those averages for
individual Policy Years. No representations can be made that these rates of
return will definitely be achieved for any one year or sustained over a period
of time.
52
Table XII
FLEXIBLE PREMIUM CORPORATE VARIABLE UNIVERSAL LIFE INSURANCE POLICY
UNISEX ISSUE AGE 45 NONSMOKER RISK
CURRENT INSURANCE COSTS AND CURRENT CHARGES ASSUMED
SIMPLIFIED ISSUE
$25,084.02 ANNUAL PREMIUM FOR SEVEN YEARS
CASH VALUE ACCUMULATION TEST
FACE AMOUNT $500,000
DEATH BENEFIT OPTION 1
Premiums Death Benefit
Accumulated Guaranteed Annual Investment Total Account Value Cash Surrender Value
at Return of Annual Investment Return of Annual Investment Return of
Policy 5% Interest --------------------------------- --------------------------------- ----------------------------------
Year Per Year Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12%
- ------------- ------------ ---------- ---------- ----------- ---------- ---------- ----------- ---------- ---------- ------------
1 26,338 500,000 500,000 500,000 20,607 21,892 23,178 22,363 23,648 24,934
2 53,993 500,000 500,000 500,000 41,573 45,485 49,553 42,890 46,802 50,869
3 83,031 500,000 500,000 500,000 62,160 70,081 78,645 62,160 70,081 78,645
4 113,521 500,000 500,000 500,000 82,385 95,740 110,763 82,385 95,740 110,763
5 145,535 500,000 500,000 500,000 102,257 122,523 146,244 102,257 122,523 146,244
6 179,150 500,000 500,000 512,618 122,777 151,543 186,573 122,777 151,543 186,573
7 214,446 500,000 500,000 614,764 142,947 181,860 230,876 142,947 181,860 230,876
8 225,168 500,000 500,000 654,197 139,338 188,686 253,441 139,338 188,686 253,441
9 236,427 500,000 500,000 696,182 135,631 195,721 278,137 135,631 195,721 278,137
10 248,248 500,000 500,000 740,871 131,797 202,957 305,140 131,797 202,957 305,140
15 316,834 500,000 516,067 1,026,389 111,613 246,061 489,383 111,613 246,061 489,383
20 404,370 500,000 541,809 1,424,484 84,187 296,030 778,301 84,187 296,030 778,301
25 516,090 500,000 578,899 2,011,944 51,261 357,300 1,241,785 51,261 357,300 1,241,785
30 658,676 500,000 625,101 2,871,728 2,533 429,339 1,972,395 2,533 429,339 1,972,395
20 (Age 65) 404,370 500,000 561,218 1,424,484 84,187 296,030 778,301 84,187 296,030 778,301
If premiums are paid more frequently than annually, the Death Benefits, Total
Account Values, and Cash Surrender Values would be less than those illustrated.
If a larger premium is paid, the Surrender Value as a percentage of the Total
Account Value will be greater than or equal to those illustrated. If a smaller
premium is paid, the Surrender Value as a percentage of the Total Account Value
will be less than or equal to those illustrated.
Assumes no Policy loan has been made. Current cost of insurance rates assumed.
Current mortality and expense risk charges, administrative charges, and premium
load assumed. The current mortality and expense risk charges may be reduced from
0.70% to 0.35% in Policy Years 11 and thereafter. Beginning in Policy Years 11
and thereafter, the illustrated net annual return is -1.00%, 5.00%, and 11.00%.
These investment results are illustrative only and should not be considered a
representation of past or future investments results. Actual investment results
may be more or less than those shown and will depend on a number of factors
including the Policy Owner's allocations, and the Fund's rate of return. The
Total Account Value and Cash Surrender Value for a Policy would be different
from those shown in the actual investment rates of return averaged 0%, 6%, and
12% over a period of years, but fluctuated above or below those averages for
individual Policy Years. No representations can be made that these rates of
return will definitely be achieved for any one year or sustained over a period
of time.
53
Appendix B
Corridor Percentages
Attained Age of Attained Age of
The Insured Corridor The Insured Corridor
(Nearest Birthday) Percentage (Nearest Birthday) Percentage
------------------ ---------- ----------------- ----------
18 774% 61 198%
19 752% 62 193%
20 730% 63 188%
21 708% 64 183%
22 687% 65 178%
23 667% 66 174%
24 646% 67 170%
25 626% 68 166%
26 606% 69 162%
27 587% 70 158%
28 568% 71 155%
29 550% 72 152%
30 532% 73 149%
31 514% 74 146%
32 497% 75 143%
33 481% 76 140%
34 465% 77 138%
35 449% 78 136%
36 435% 79 133%
37 420% 80 131%
38 406% 81 129%
39 393% 82 128%
40 380% 83 126%
41 368% 84 124%
42 356% 85 123%
43 344% 86 121%
44 333% 87 120%
45 322% 88 119%
46 312% 89 118%
47 302% 90 117%
48 293% 91 116%
49 284% 92 114%
50 275% 93 113%
51 266% 94 112%
52 258% 95 111%
53 250% 96 109%
54 243% 97 108%
55 236% 98 106%
56 229% 99 104%
57 222% 100+ 100%
58 216%
59 210%
60 204%
54
Financial Statements of the
Separate Account
TO BE FILED BY AMENDMENT
S-1
Financial Statements of the
Company
TO BE FILED BY AMENDMENT
F-1
FEES AND CHARGES REPRESENTATION
Lincoln Life & Annuity Company of New York represents that the fees and
charges deducted under the Policies, in the aggregate, are reasonable in
relation to the services rendered, the expenses expected to be incurred, and the
risks assumed by Lincoln Life & Annuity Company of New York.
UNDERTAKING TO FILE REPORTS
Subject to the terms and conditions of Section 15(d) of the Securities
Exchange Act of 1934, the undersigned registrant hereby undertakes to file with
the Securities and Exchange Commission such supplementary and periodic
information, documents, and reports as may be prescribed by any rule or
regulation of the Commission heretofore or hereafter duly adopted pursuant to
authority conferred in that section.
INDEMNIFICATION
(a) Brief description of indemnification provisions.
In general, Article VII of the By-Laws of Lincoln Life & Annuity
Company of New York (LLANY) provides that LLANY will indemnify certain
persons against expenses, judgments and certain other specified costs
incurred by any such person if he/she is made a party or is threatened
to be made a party to a suit or proceeding because he/she was a
director, officer, or employee of LLANY, as long as he/she acted in
good faith and in a manner he/she reasonably believed to be in the best
interests of, or not opposed to the best interests of, LLANY. Certain
additional conditions apply to indemnification in criminal proceedings.
In particular, separate conditions govern indemnification of directors,
officers, and employees of LLANY in connection with suits by, or in the
right of, LLANY.
Please refer to Article VII of the By-Laws of LLANY (Exhibit No. 6(b)
hereto) for the full text of the indemnification provisions.
Indemnification is permitted by, and is subject to the requirements of
New York law.
(b) Undertaking pursuant to Rule 484 of Regulation C under the Securities
Act of 1933.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the provisions described in Item
28(a) above or otherwise, the Registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer, or controlling person of the
Registrant in the successful defense of any such action, suit or
proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant
will, unless in the opinion of its counsel the matter has been settled
by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final
adjudication of such issue.
CONTENTS OF REGISTRATION STATEMENT
This registration statement comprises the following papers and documents:
The facing sheet;
A cross-reference sheet (reconciliation and tie); The prospectus,
consisting of 57 pages; The undertaking to file reports; The signatures;
Written consents of the following persons:
Robert O. Sheppard, Esq.
Vaughn Robbins, FSA
Ernst & Young, LLP*
1. The following exhibits correspond to those required by paragraph A of the
instructions as to exhibits in Form N-8B-2:
(1) Resolution of the Board of Directors of Lincoln Life & Annuity
Company of New York and related documents authorizing establishment
of the Account.*
(2) Not applicable.
(3) (a) Form of Selling Group Agreement.*
(b) Commission Schedule for Variable Life Policies.*
(4) Not applicable.
(5) (a) Proposed Form of Policy and Application--LN920 NY and B10392 NY
through B10395 NY.
(b) Riders.
(6) (a) Articles of Incorporation of Lincoln Life & Annuity Company
of New York.(1)
(b) Bylaws of Lincoln Life & Annuity Company of New York.(1)
(7) Not applicable.
(8) Fund Participation Agreements.
Agreements between Lincoln Life & Annuity Company of New York and:
(a) American Century Variable Products Group, Inc.*
(b) American Variable Insurance Series*
(c) Baron Capital Funds Trust*
(d) BT Insurance Funds Trust(2)
(e) Delaware Group Premium Fund, Inc.(2)
(f) Fidelity Variable Insurance Products Fund(2)
(g) Fidelity Variable Insurance Products Fund II(2)
(h) Janus Aspen Series*
(i) Lincoln National Funds*
(j) MFS[RegTM] Variable Insurance Trust(2)
(k) Neuberger & Berman Advisers Management Trust*
(l) OCC Accumulation Trust(2)
(m) OppenheimerFunds*
(n) Templeton Variable Products Series Fund(2)
(9) Form of Services Agreement between Lincoln Life & Annuity Company of
New York and Delaware Management Co. is incorporated herein by
reference to Registration Statement on Form N-4 (File No. 333-38007)
filed on October 16, 1997.
(10) See Exhibit 1(5).
See Exhibit 1(5).
Opinion and Consent of Robert O. Sheppard, Esq.
Not applicable.
Not applicable.
Opinion and consent of Vaughn Robbins, F.S.A.
Opinion and consent of Ernst & Young, LLP, Independent Accountants.*
Not applicable.
*To be filed by amendment.
(1) Incorporated by reference to Registration Statement on Form N-4 (File No.
333-38007) filed on October 16, 1997.
(2) Incorporated by reference to Post-Effective Amendment No. 1 to Registration
Statement S-6 (File No. 333-42507) filed on February 26, 1999.
SIGNATURES
As required by the Securities Act of 1933, the Registrant, Lincoln Life &
Annuity Company of New York, has duly caused this Registration Statement on Form
S-6 to be signed on its behalf by the undersigned thereunto duly authorized, in
the City of Syracuse and State of New York, on the 11th day of March, 1999.
LLANY Separate Account S for
Flexible Premium Variable Life Insurance
(Name of Registrant)
By: /s/ Philip L. Holstein
-------------------------------------
Philip L. Holstein
President, Treasurer and Director
Lincoln Life & Annuity Company of New York
(Name of Depositor)
By: /s/ Philip L. Holstein
-------------------------------------
Philip L. Holstein
President, Treasurer and Director
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below on March 11, 1999 by the following
persons, as officers and directors of the Depositor, in the Capacities
indicated:
Signature Title
- -------------------------------- ------------------------------------------
/s/ Philip L. Holstein President, Treasurer and Director
- -------------------------------- (Principal Executive Officer)
Philip L. Holstein
/s/ Troy D. Panning * Second Vice President and Chief Financial
- -------------------------------- Officer (Principal Financial Officer and
Troy D. Panning Principal Accounting Officer)
/s/ Jon A. Boscia * Director
- --------------------------------
Jon A. Boscia
/s/ Richard C. Vaughan * Director
- --------------------------------
Richard C. Vaughan
/s/ Thomas D. Bell, Jr. * Director
- --------------------------------
Thomas D. Bell, Jr.
/s/ Roland C. Baker * Director
- --------------------------------
Roland C. Baker
/s/ Harry L. Kavetas * Director
- --------------------------------
Harry L. Kavetas
/s/ Barbara Steury Kowalczyk * Director
- --------------------------------
Barbara Steury Kowalczyk
/s/ Marguerite Leanne Lachman * Director
- --------------------------------
Marguerite Leanne Lachman
/s/ John M. Pietruski * Director
- --------------------------------
John M. Pietruski
/s/ Lawrence T. Roland * Director
- --------------------------------
Lawrence T. Roland
/s/ J. Patrick Barrett * Director
- --------------------------------
J. Patrick Barrett
Signature Title
- -------------------------------- ----------
/s/ Louis G. Marcoccia * Director
- --------------------------------
Louis G. Marcoccia
/s/ Gabriel L. Shaheen * Director
- --------------------------------
Gabriel L. Shaheen
(A majority of the Directors)
by
/s/ Philip L. Holstein
-----------------------------
Philip L. Holstein
Attorney-in-Fact