The Nursing Home Enhancement will no longer be included.

Transcription

1 Vol. 7, Issue 2, February 20, 2013 Fixed Annuity State Variation Product Updates: Hawaii, New Hampshire, Missouri and Puerto Rico Effective February Due to recent state filing activity, the following changes will be applied to several products in states as shown in the summary chart below: State Product / Rider Comments Hawaii New Hampshire Missouri Lincoln Lifetime Income SM Edge Lincoln OptiPoint Lincoln OptiChoice SM Lincoln New Directions The Nursing Home Enhancement will no longer be included. The Guaranteed Minimum Cash Surrender Value calculation has been updated. The 2-Year Point-to-Point Indexed Account will no longer be offered. The Guaranteed Minimum Cash Surrender Value calculation has been updated. The Market Value Adjustment will no longer apply. Headlines State Variation Product Updates: HI, NH, MO and PR Lincoln Lifetime Income SM Edge Statement Enhancements February Forms Release Updated Suitability Form Available - How To Guide Updated South Dakota Update: Lincoln Long-Term Care SM Fixed Annuity Minimum Premium Established Lincoln Long-Term Care SM Fixed Annuity State Variations Chart Producer Solutions Hours Extended 1099-R Reminders Free NAIC General Annuity Training Puerto Rico Lincoln OptiChoice SM Lincoln New Directions Lincoln OptiPoint Lincoln MYGuarantee SM The Guaranteed Minimum Cash Surrender Value calculation has been updated. State Insurance Licensing and Training Requirements: NJ, KS, MI and MA Lincoln ClassicSolution SM Refer to the individual articles for more information and transition information regarding the above state variations. Information compiled by Product and Distribution Support The Lincoln Leader contains product and business implementation information for Lincoln fixed annuities. Products and features subject to state availability. Certain products are only available in select distribution channels. Check your selling agreement for availability. For Agent/Broker Use Only Not To Be Used With The General Public. Page 1 of 10

2 State Variation Product Updates Hawaii Lincoln Lifetime Income SM Edge Nursing Home Enhancement No Longer Available (All Fixed Indexed Annuities) Lincoln Lifetime Income SM Edge elections received Friday, February 22, 2013 and later will receive a revised version of the Rider: the Nursing Home Enhancement is no longer available in the state of Hawaii. The revised Rider (AE-245HI (Rev. 2/12)) will be available for new elections as of February 22, Updated marketing material will be available from the Lincoln Fulfillment Center as of February 22, Updated annuity illustrations will be available as of March 4, New Hampshire Lincoln OptiPoint 2-Year Point-to-Point Indexed Account No Longer Available; Guaranteed Minimum Cash Surrender Value Calculation Updated Effective with applications received after 4:00 p.m. Thursday, February 21, 2013, Lincoln OptiPoint contracts will reflect the updated Guaranteed Minimum Cash Surrender Value (GMCSV) calculation and will no longer offer the 2-Year Point-to-Point Indexed Account. The GMCSV equals 87.5% of the premium (minus any partial surrenders and related taxes) accumulated at a minimum rate of return to the date of surrender. Note: This is the current formula already in place for fixed indexed annuities in most states. Click Here to view the GMCSV Q&A explaining how the calculation works. Also, as part of this update, the 2-Year Point-to-Point Indexed account will no longer be available. A new Disclosure Statement (Form FA (dated November 2012)) is now available and should be used with any application submitted after 4:00 p.m. Thursday, February 21, Updated marketing material will be available as of February 22, 2013 Updated Illustrations reflecting the removal of the 2-Year Point-to-Point and the updated GMCSV calculation are now available. See the end of this section for transition guidelines for pending business. Missouri Lincoln OptiChoice SM and Lincoln New Directions Market Value Adjustment Removed; Guaranteed Minimum Cash Surrender Value Calculation Updated Effective with applications received after 4:00 p.m. Thursday, February 21, 2013, Lincoln OptiChoice SM and Lincoln New Directions contracts will reflect the updated Guaranteed Minimum Cash Surrender Value (GMCSV) calculation as shown above, and will no longer include the Market Value Adjustment (MVA) provision. As a result of this change: New Disclosure Statements (Lincoln New Directions : Form FA and Lincoln OptiChoice SM : Form AN ) are now available, and should be used with any application submitted after 4:00 p.m. Thursday, February 21, Updated marketing material will be available as of February 22, 2013 Updated Illustrations reflecting the removal of the MVA and the updated GMCSV calculation are now available. See the end of this section for transition guidelines for pending business. For Agent/Broker Use Only Not To Be Used With The General Public. Page 2 of 10

3 Puerto Rico Guaranteed Minimum Cash Surrender Value Calculation Updated Effective with applications received after 4:00 p.m. Thursday, February 21, 2013, fixed and fixed indexed annuity contracts will reflect the updated Guaranteed Minimum Cash Surrender Value (GMCSV) calculation. Illustrations currently reflect the updated GMCSV calculation. Fixed Indexed Annuities Click Here to view the GMCSV Q&A explaining how the calculation works for fixed indexed annuities. Fixed Annuities The GMCSV during the surrender charge period equals 90% of the premium (minus any partial surrenders and related taxes) accumulated at a minimum rate of return to the date of surrender. Click Here to view the GMCSV Q&A explaining how the calculation works for fixed annuities. There is no change to the new business paperwork (no change to the Disclosure Statement). See the next article for transition guidelines for pending business. Transition Guidelines for New Hampshire, Missouri and Puerto Rico February 2013 State Variation Product Changes Applications must be signed, dated, and received at Lincoln before 4:00 p.m. ET Thursday, February 21, 2013 to receive the prior product versions. Standard Rate Lock Procedures apply. Click Here to view the Fixed Indexed Annuity Rate Lock Procedures (Form FA-05000). Click Here to view Fixed Annuity Rate Lock Procedures (Form FA-05042). If not funded by the end of the standard rate lock deadline, a call will be made to the representative to determine if the new version of the contract should be issued or the business returned. If the new version is to be issued, a new Disclosure Statement may be required. Applications received after 4:00 p.m. ET on Thursday, February 21, 2013 will receive the updated product versions outlined above regardless of the application signed date. ** End of State Variation Product Updates ** For Agent/Broker Use Only Not To Be Used With The General Public. Page 3 of 10

4 Update: Form Number Correction for Communication Requirements with Seniors and Veterans in California A previous article in the December Lincoln Leader discussed California s updated regulations regarding communication with Senior Citizens and Veterans, effective January 1, 2013 [SB 1170]. The updated form available from the Lincoln Forms Tool was noted incorrectly. The updated form is LF06633 (not AN06633 as originally noted). Fixed Indexed Annuity Annual Statement Enhancements: Lincoln Lifetime Income SM Edge Clients with fixed indexed annuity contracts with Lincoln Lifetime Income SM Edge elected will receive an enhanced annual statement beginning with anniversary dates occurring in mid-february Projections for the Lifetime Benefit Amount and the Income Base will be shown at 1, 5, 10 and 15 years from the rider effective date. February Forms Release The following forms were recently updated and are now available from the Lincoln Forms Tool. Form Number 33503WA Description Important Notice Regarding Replacement of Insurance Revision Date 08/12 Comments A box was added for the client/agent to note a not applicable response for Question NV Important Notice Regarding Replacement 10/12 Form retired for annuity use NV(F) Important Notice Regarding Replacement 10/12 AN AN Lincoln Long-Term Care SM Disclosure with LTC Benefits Rider and MVA - WI Lincoln Long-Term Care SM Disclosure with LTC Benefits Rider and MVA SD* 12/12 02/13 Changed to Your new annuity contract provides 30 days for you Updated minimum premium requirement. Updated minimum premium requirement and examples. AN07091 Fixed Annuity Suitability Form 01/13 AN07091NJ Fixed Annuity Suitability Form - NJ 01/13 AN Lincoln OptiChoice SM Disclosure - MO, OR 11/12 AN FA FA Lincoln OptiChoice SM Appless Disclosure - MO, OR Lincoln New Directions Disclosure - MO, MN, OR Lincoln New Directions Appless Disclosure - MO, MN, OR 01/13 11/12 01/13 FA Lincoln OptiPoint Disclosure - NH 11/12 AN Lincoln OptiPoint Appless Disclosure - NH 01/13 Various updates. See article. Now available for Missouri; removal of MVA provision. Now available for Missouri; removal of MVA provision. Removal of 2-Year Point-to- Point Indexed Account. *Will be available shortly. For Agent/Broker Use Only Not To Be Used With The General Public. Page 4 of 10

5 Updated Suitability Form Now Available The Fixed Annuity Suitability Form (AN07091 and AN07091NJ) has been fine-tuned to address several common issues that have held up the processing of the application in the past. The new form is now available from the Lincoln Forms Tool and in sales kits. Form Enhancements (February 2013): Streamlined flow of questions in the Source of Funds section to help minimize errors. New section, Available Funds added: Do you have sufficient cash or other liquid assets for living expenses and any expenses for unexpected emergencies, such as medical expenses, in excess of the premium you are paying for this fixed annuity? Producer/Representative Statement updated to include check boxes for the most common advantages and disadvantages of purchasing the annuity. This section is currently one of the main causes of delays in processing the application. New statement added in the Producer/Representative Statement relating to Diminished Capacity. There are no current plans to further revise the form. Tips for Completing the Fixed Annuity Suitability Form: Financial Information Section (Section 2) - It is important to provide as much financial information as possible. At a minimum, provide the liquid asset amount (2e.) and do NOT check the box to the right of this item. Only check the box to the right for the information the client declines to provide. Lincoln reserves the right to request additional information. Keep in mind that without any financial information, suitability may not be approved. Additional Information Section (Section 13) - The Surrender Charge Schedule for Remaining Years is frequently answered incorrectly. Many times the client/agent will show the entire surrender charge schedule instead of just the remaining years. Review this information and compare it to the issue date and contract statement. Additional Information Section (Section 13) Review the minimum guaranteed interest rate and double check the statement for accuracy. - Make sure information provided in this section matches the information shown on the included contract statement. On page 6 of the Suitability Form, the basis for recommending the annuity purchase requires a full response, and should be in line with the client s objectives. Transition Information: It is important to use the most recent version of the form. The last day Lincoln will accept the previous version of the Fixed Annuity Suitability Form (dated July 2012) will be April 11, Updated Training Piece: How to Complete the Fixed Annuity Suitability Form The 8-page Guide: How to Complete the Fixed Annuity Suitability Form has been updated to reflect the most recent version of the form. The Guide contains useful tips and a sample completed form and will be available shortly from the Life and Annuity Compliance page or the Fixed Annuity Policy and Procedures page of the producer website. For Agent/Broker Use Only Not To Be Used With The General Public. Page 5 of 10

6 South Dakota Update: Lincoln Long-Term Care SM Fixed Annuity Minimum Premium Established There is a new minimum premium requirement for South Dakota Lincoln Long-Term Care SM fixed annuity applications. The premium requirements for South Dakota are as follows: Minimum Premium Maximum Premium 2+4 LTC Benefit Duration: $ 75,000 $400, LTC Benefit Duration: $110,000 $500,000 South Dakota LTC illustrations are currently only available by contacting the Annuity Sales Desk. The Disclosure Statement and the marketing material will be updated shortly. Lincoln Long-Term Care SM Fixed Annuity State Variations Chart Products and features, including benefits, costs, exclusions, limitations, terms, and definitions, may vary by state. State variations are shown below (this list may not be all inclusive). This chart is current as of February States Features / Specifications, Most States Alabama, Alaska, Arizona, Arkansas, Delaware, DC, Georgia, Iowa, Kentucky, Louisiana, Maine, Maryland, Michigan, Montana, Nebraska, New Mexico, North Carolina, North Dakota, Oklahoma, Rhode Island, South Carolina, West Virginia, Wyoming (23 states) States Kansas, Illinois MVA Provision - The Market Value Adjustment (MVA) provision is included (Contract form ). Assisted Living Coverage is at 50%. There is no Inflation Protection available. Both 2+4 and 3+3 LTC Benefit Durations are available LTC Coverage Effective Date: one year Minimum premium: $50,000 Maximum premium: - $400,000 for 2+ 4 LTC Benefit Duration - $600,000 for 3+ 3 LTC Benefit Duration State Variations Other product features are the same as shown above Assisted Living Coverage is at 100% Note: Extension Benefit Charge Percentage is adjusted to account for this increased benefit. Minnesota, Missouri and Oregon There is no MVA Provision (Contract form ). Mississippi South Dakota Wisconsin The 3+3 LTC Benefit Duration is not available. Minimum Premium 2+4: $75,000; 3+3: $110,000 Maximum Premium 2+4: $400,000; 3+3: $500,000 LTC Coverage Effective Date: 90 days Acceleration Benefit referred to as Accumulation LTC Benefit Minimum Premium 2+4: $50,000; 3+3: $66,000 Indiana Assisted Living Coverage is at 100% Note: Extension Benefit Charge Percentage is adjusted to account for this increased benefit. Inflation Protection included with the 3+3 LTC Benefit Duration; Inflation Protection is not available with the 2+4 LTC Benefit Duration. Note: the 3+3 LTC Benefit Duration is only offered with Inflation Protection. For Agent/Broker Use Only Not To Be Used With The General Public. Page 6 of 10

7 Producer Solutions Hours Extended Have you heard? Lincoln Producer Solutions is extending their hours to meet your needs. You spoke and we listened! The Producer Solutions Care Center s hours of operation are now 8:00 a.m. to 6:00 p.m. EST. If you need us, just call Compensation inquiries or requests press option 1, option 1. Appointment/Licensing inquiries or requests press option 1, option 2. Updated Contact Information See Back Page Operating hours and other information has been added or updated for the Sales Desk, Partner Solutions, New Business and Post Issue and Contact Centers. Check out the back page of the Fixed Annuity Lincoln Leader for this handy reference chart R Information Lincoln receives many client calls during tax season regarding the receipt of the IRS Form 1099-R. Lincoln has begun mailing 1099-Rs to clients. Generally, distributions from pensions, annuities, profit-sharing and retirement plans (including section 457 state and local government plans), IRAs, insurance contracts, etc., are reported to recipients on Form 1099-R. The most common reasons a client might receive a 1099-R include: Taking a distribution from their qualified plan (1099-R Box 7, Distribution Code 1 or 7), 1035 exchanges (1099-R Box 7, Distribution Code 6) or A direct rollover (1099-R Box 7, Distribution Code G). For more information, go to and view the instructions for 1099-R. For questions or a duplicate 1099-R, contact the Lincoln Call Center. Updated Reference Materials Three fixed annuity Reference Guides have been updated for recent product changes. Click on the product name below to link directly to the updated Reference Guide or go to the specific fixed annuity product and click on Reference Materials. Lincoln MYGuarantee SM Plus Reference Guide (January 2013) Lincoln ClassicSolution SM Reference Guide (February 2013) Lincoln Insured Income SM Reference Guide (January 2013) For Agent/Broker Use Only Not To Be Used With The General Public. Page 7 of 10

8 Free NAIC General Annuity Training Provided by Lincoln Lincoln is excited to announce that we now offer producers the ability to take their required NAIC 4-hour general annuity training for free through LIMRA/Kaplan. In order to offer this great service, users will see a small change when they log into LIMRA and select State Specific Training. When producers click on the link to launch their state specific training, a pop up will appear to transfer them to Kaplan s website. Once they are on the Kaplan website they must enter the portal code LincolnFG to receive free training. The pop up includes the portal code and step-by-step directions so producers have them readily available. The portal code will automatically populate after the producer s first log in. This change does not impact existing producers that have already completed their staterequired NAIC general annuity training. It only impacts new producers that have not completed the state s one-time, 4-hour general annuity training requirement. This change does not impact how producers access the Lincoln-specific NAIC training through LIMRA. This change does not impact producers who use RegEd, QuestCE or SuccessCE to complete their NAIC training. In addition to the free training, producers can receive a 20% discount on continuing education (CE) through Kaplan when they use the portal code LincolnFG. Please note that if a producer wants to use the general annuity training for CE hours credit, he or she will be responsible for the filing fee. When producers click to launch the state annuity training on LIMRA s website, a pop-up window opens up to take them to the Kaplan website. It includes links to step-by-step directions for accessing the free general annuity training, as well as Kaplan s user guide. Kaplan customer service can be reached at State Insurance Licensing and Training Requirements General Annuity / Product-Specific Training Requirements The NAIC Suitability in Annuity Transactions Model Regulation mandates general annuity and product-specific training requirements. States may have modified these requirements or have additional state-specific training requirements. Annuity Education Grid updates: New Jersey. Kansas and Michigan New Jersey has adopted the NAIC Annuity Suitability model regulation with a minor variation on the compliance dates. Due to the short timeframe between the adoption to the regulation and the effective date, New Jersey is allowing six months from the effective date for the requirements to be met. - Effective date: February 4, General Annuity Deadline if licensed prior to effective date: August 4, General Annuity Deadline if NOT licensed prior to effective date: August 4, Reciprocity: Yes - Product Specific Deadline: August 4, 2013 Kansas: - Effective date: June 1, General Annuity Deadline if licensed prior to effective date: December 1, General Annuity Deadline if NOT licensed prior to effective date: June 1, Reciprocity: Yes - Product Specific (Carrier Training) Deadline : June 1, 2013 Annuity education grid updates continued on next page For Agent/Broker Use Only Not To Be Used With The General Public. Page 8 of 10

9 State Insurance Licensing and Training Requirements, Continued Michigan: - Effective Date: June 1, General Annuity Deadline if licensed prior to effective date: December 1, General Annuity Deadline if NOT licensed prior to effective date: June 1, Reciprocity: Yes - Product Specific Deadline: June 1, 2013 Click Here to view the updated Lincoln Individual Annuity Products State Insurance Licensing and Training Requirements chart for more information. Send questions regarding the NAIC training requirements to AskAnnuityNAIC@LFG.com Review the Annuity Education Q&A for answers to commonly asked questions about the NAIC Annuity Suitability Model Regulation requirements. Click Here to view the Annuity Education Q&A. Long-Term Care (LTC) Hybrid Product Training Requirements: Massachusetts and Others Certain states require additional training for representatives selling long-term care policies. Massachusetts - LTC Presale hours: 8 hours - LTC Ongoing Training: 4 hours every 2 years - Deadline Date: July 1, Footnote- LTC products in MA require these training requirements BEGINNING July 1, 2014 to help provide further clarification, since this is a new requirement. - Reciprocity notes- Resident and non-resident can satisfy the training requirements by completing an approved LTC course in any state. Virgin Islands - Added a licensing requirement of Life and Health licenses in State Licensing Requirements section. Colorado, Louisiana, Ohio and West Virginia - Adjusted language in LTC ongoing training hours and frequency to within the following licensing period from other language to be more specific and correctly reflect the requirement. Ohio - Updated link for the approved course website. Click Here to view the Lincoln Life and Annuity Long-Term Care (LTC) Hybrid Products State Insurance Licensing & Training chart. These two charts and the NAIC Annuity Training Q&A are available online from producer sites under the Conducting Business tab, and represent Lincoln s interpretation of the current state law: CONDUCTING BUSINESS > CONTRACTING AND APPOINTMENTS > STATE REGULATION INFORMATION For Agent/Broker Use Only Not To Be Used With The General Public. Page 9 of 10

10 Product Availability Click here to view the current product availability chart. Click here to view the current bank product availability chart. Looking for an Article? Click here to view the Index of Articles for past issues of the Fixed Annuity Lincoln Leader. Fixed Annuity Contact Information Sales Desk Product questions/ Sales ideas/ Illustrations/ Website training Operating hours: 8AM 7PM ET Partner Solutions Appointments/ Contracting/ Compensation Operating hours: 8AM 6PM ET Annuity Sales Desk Agent Use Only Sales Desk: , Option 2 FixedAnnuitySales@LFD.com Appointments/Contracting Call Center: , Option 1, Option 2 New Contracting Paperwork Submission: Contracting@LFG.com Fax: NAIC Training Questions: AskAnnuityNAIC@LFG.com Appointment Status Updates: LicensingStatus@LFG.com Compensation Call Center: , Option 1, Option 1 Commissions@LFG.com You must be logged in to one of the producer sites to access the attachments (LFAplanner / LFD.com / LincolnFinancialNetwork.com). If you are logged in and are trying to get to a document and are prompted with a new log-in screen, just hit the Login Button and the document will flow through and open. New Business and Post-Issue Operating hours:8:30am 5:15PM ET Contact Centers For agent/client use Operating hours:8am 7PM ET (8AM 5:30PM ET Fridays) FAX Numbers New business: (fax) Post issue: (fax) Pre-Issue Good Order (GO) Team Telephone number: Overnight Servicing Address Lincoln Financial Group Individual Annuity Operations 1300 South Clinton Street Fort Wayne, IN Servicing Address Lincoln Financial Group P.O. Box 2348 Fort Wayne, IN Fixed and Fixed Indexed Annuity: Lincoln SmartIncome, Lincoln Insured Income, Lincoln Long-Term Care and annuitization: Not a deposit Not FDIC-insured Not insured by any federal government agency Not guaranteed by any bank or savings association May go down in value Products and features subject to state availability. Some of these products are only available in select distribution channels. Check your selling agreement for availability. Lincoln fixed, fixed indexed and immediate annuities are issued by The Lincoln National Life Insurance Company, Fort Wayne, IN. The Lincoln National Life Insurance Company does not solicit business in the state of New York, nor is it authorized to do so. The "contract" may be referred to as a "certificate" in certain states. The certificate is a group annuity certificate issued under a group annuity contract issued by The Lincoln National Life Insurance Company to a group annuity trust. Contractual obligations are subject to the claims-paying ability of The Lincoln National Life Insurance Company. Contracts sold in New York are issued by Lincoln Life & Annuity Company of New York, Syracuse, NY. The contractual obligations are subject to the claims-paying ability of Lincoln Life & Annuity Company of New York. Lincoln Financial Group is the marketing name for Lincoln National Corporation and its affiliates. Affiliates are separately responsible for their own financial and contractual obligations The Lincoln National Life Insurance Company, Fort Wayne, IN LCN Newsletter compiled and edited by Ellen Hollis, Lincoln Insurance and Retirement Solutions, Product and Distribution Support. Please send any comments or suggestions regarding the Fixed Annuity Lincoln Leader newsletter to: Ellen.Hollis@LFG.com For Agent/Broker Use Only Not To Be Used With The General Public. Page 10 of 10