-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HJaJKZNozQAJEOhcbFLHzoRQo2ovrK+Z9KD1wCXouXTQi13RLcvz0nF4V/fnVcSS XqRjTXBli8kdlwp7wDqATQ== 0001047469-98-004965.txt : 19980212 0001047469-98-004965.hdr.sgml : 19980212 ACCESSION NUMBER: 0001047469-98-004965 CONFORMED SUBMISSION TYPE: N-8B-2 PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 19980211 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: LLANY SEPARATE ACCOUNT R FOR FLEXIBLE PREM VARI LIFE INSUR CENTRAL INDEX KEY: 0001055225 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 161505436 FILING VALUES: FORM TYPE: N-8B-2 SEC ACT: SEC FILE NUMBER: 811-08651 FILM NUMBER: 98532603 BUSINESS ADDRESS: STREET 1: 120 MADISON ST CITY: SYRACUSE STATE: NY ZIP: 13202-2808 BUSINESS PHONE: 3154288400 MAIL ADDRESS: STREET 1: 120 MADISON ST CITY: SYRACUSE STATE: NY ZIP: 13202-2808 N-8B-2 1 FORM N-8B-2 - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM N-8B-2 REGISTRATION STATEMENT OF UNIT INVESTMENT TRUSTS WHICH ARE CURRENTLY ISSUING SECURITIES PURSUANT TO SECTION 8(B) OF THE INVESTMENT COMPANY ACT OF 1940 LLANY SEPARATE ACCOUNT R FOR FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE OF LINCOLN LIFE ANNUITY COMPANY OF NEW YORK ISSUER OF PERIODIC PAYMENT PLAN CERTIFICATES ONLY FOR PURPOSES OF INFORMATION PROVIDED HEREIN - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ORGANIZATION AND GENERAL INFORMATION 1. (a)Furnish name of the trust and the Internal Revenue Service Employer Identification Number. LLANY Separate Account R For Flexible Premium Variable Life Insurance of Lincoln Life & Annuity Company of New York ("Account"). The Account has no Internal Revenue Service Employer Identification number. (b)Furnish title of each class or series of securities issued by the trust. Flexible Premium Variable Life Insurance Policies On the Lives of Two Insureds ("Policies"). Policy provisions may vary in some states to comply with applicable law. 2. Furnish name and principal business address and ZIP Code and the Internal Revenue Service Employer Identification Number of each depositor of the trust. Lincoln Life & Annuity Company of New York ("Company", "LLANY" or "Lincoln Life") Suite 1700, 120 Madison Street Syracuse, NY 13202 Internal Revenue Service Employer Identification Number: 16-1505436 3. Furnish name and principal business address and ZIP Code and the Internal Revenue Service Employer Identification Number of each custodian or trustee of the trust indicating for which class or series of securities each custodian or trustee is acting. Not applicable. 4. Furnish name and principal business address and ZIP Code and the Internal Revenue Service Employer Identification Number of each principal underwriter currently distributing securities of the trust. Lincoln Financial Advisors, Inc. ("LFA") 1300 South Clinton Street, P.O. Box 1110 Fort Wayne, IN 46802 Internal Revenue Service Employer Identification Number: 35-1151034 5. Furnish name of state or other sovereign power, the laws which govern with respect to the organization of the trust. New York. 6. (a)Furnish the dates of execution and termination of any indenture or agreement currently in effect under the terms of which the trust was organized and issued or proposes to issue securities. The Account was organized under New York law on January 29, 1998 pursuant to a resolution of the Board of Directors of the Company dated July 24, 1996. The Account will continue in existence until the Company's Board of Directors directs that it be terminated. (b)Furnish the dates of execution and termination of any indenture or agreement currently in effect pursuant to which the proceeds of payments on securities issued or to be issued by the trust are held by the custodian or trustee. Not applicable. 7. Furnish in chronological order the following information with respect to each change of name of the trust since January 1, 1930. Not applicable. 8. State the date on which the fiscal year of the trust ends. December 31. MATERIAL LITIGATION 9. Furnish a description of any pending legal proceedings, material with respect to the security holders of the trust by reason of the nature of the claim or the amount thereof, to which the trust, the depositor, or the principal underwriter is a party or of which the assets of the trust are the subject, including the substance of the claims involved in such proceeding and the title of the proceeding. Furnish a similar statement with respect to any pending administrative proceeding commenced by a governmental authority or any such proceeding or legal proceeding known to be contemplated by a governmental authority. Include any proceeding which, although immaterial itself, is representative of, or one of, a group which in the aggregate is material. To be filed by amendment. II. GENERAL DESCRIPTION OF THE TRUST AND SECURITIES OF THE TRUST GENERAL INFORMATION CONCERNING THE SECURITIES OF THE TRUST AND THE RIGHTS OF HOLDERS 10. Furnish a brief statement with respect to the following matters for each class or series of securities issued by the trust: (a)Whether the securities are of the registered or bearer type. The Policies which are to be issued are of the registered type, insofar as the Policies are personal to the owners of the Policies ("Owners" or "policyowners"), and the records concerning the policyowners are maintained by or on behalf of the Company. (b)Whether the securities are of the cumulative or distributive type. The Policies are of the cumulative type, providing for no distribution of income, dividends, or capital gains. Such amounts are not separately identifiable but are reflected in the accumulation value and may be reflected in the death benefit under a Policy at any time, depending on the death benefit option chosen. (c)The rights of security holders with respect to withdrawal or redemption. A Policy may be cancelled within the right-to-examine period in accordance with applicable state law. The Policy must be returned within 10 days after receipt by the Owner of the Policy (60 days after receipt where required by law for policies issued in replacement of other insurances). If the Policy is cancelled in a timely fashion, the Company will refund the premiums paid, without interest, unless state law requires otherwise. The initial premium is held in the Money Market Fund of the Account and not allocated to the other Funds of the Account even if the policyowner so directed until the expiration of the right-to-examine period. Refunds will usually occur within seven days of notice of cancellation although a refund of premiums paid by check may be delayed until the check clears a policyowner's bank. At any time before the death of the second of the two Insureds to die (the "Second Death"), a policyowner may fully or partially surrender a Policy by sending a written request to the Company at its Administrative Office, Hartford, CT 06152-2249. The amount of a partial surrender may be no less than the minimum amount set forth in the Policy, currently $500, and not more than 90% of the Surrender Value at the end of the valuation period in which the election becomes or would become effective. The amount available for a full surrender is the Surrender Value at the end of the valuation period during which the surrender request is received at the Administrative Office. Accumulation Value in the Account available for surrender on any given valuation day reflects total net premiums (premiums paid less a premium load of 8%), investment performance through the date of the request, other charges incurred in connection with a Policy, and any partial surrenders. No partial surrender will be permitted which would result in a Specified Amount lower than the then current minimum (presently $250,000) for which a Policy would be issued. The Accumulation Value will vary daily. The method for calculating Accumulation Value is described in Item 10(i)(3). If a Policy is being totally surrendered, it must be returned to the Company along with the request. Any unpaid charges and indebtedness will be deducted from or added to the Accumulation Value. Payment of a Policy's Surrender Value in connection with a full surrender, or a portion of Net Accumulation Value, in connection with a partial surrender, will normally occur within seven (7) days after receipt of a written request at the Administrative Office. Payment may be postponed whenever: (i) the New York Stock Exchange is closed, other than customary week-end and holiday closings, or trading on the New York Stock Exchange is restricted as determined by the Securities and Exchange Commission ("Commission"); (ii) the Commission by order permits postponement for the protection of policyowners; (iii) an emergency exists, as determined by the Commission, as a result of which disposal of securities is not reasonably practicable or it is not reasonably practicable to determine the value of the Account's assets. A policyowner may elect to have the Surrender Value paid in a lump sum or under one of the settlement options referred to in Item 10(i)(7). Upon the Second Death, the designated beneficiary is entitled to receive the death benefit proceeds under a Policy. The death benefit and death benefit proceeds are described in Item 10(i)(2). See Item 13 for a discussion of applicable surrender charges. (d)The rights of security holders with respect to conversion, transfer, partial redemption, and similar matters. At any time if both Insureds are still living, the policyowner may convert a Policy to a second-to-die life insurance policy then being offered by the Company, providing benefits which do not depend on the investment experience of a separate account. The new policy will have, at the policyowner's election, the same specified amount or the same net amount at risk (death benefit less Accumulation Value) as the Policy as well as the same issue ages, policy date and rate class as the Policy. No evidence of insurability is required for such an exchange. The election of the policyowner may not result in an increase in the net amount at risk. A policyowner may obtain policy loans, as described in Item 21. A policyowner may make surrenders, as described in Item 10(c), subject to a $25 transaction charge on a partial surrender, as described in Item 13. A policyowner may allocate net premiums (premiums paid less the 8% premium load) among (a) the sub-accounts of the Account (the "Variable Sub-Accounts") and (b) the Fixed Account (also a "Sub-Account"), as described in Item 15. Transfers among the Sub-Accounts are permitted subject to certain conditions. Up to the lesser of $250,000 or 25% of Policy values held in the Fixed Account (as of the preceding Policy Anniversary) may be transferred during a 30 day period following each Policy Anniversary to one or more of the Variable Sub-Accounts. Transfers to the Fixed Account or to another Variable Sub-Account from one or more of the Variable Sub-Accounts may be made at any time. The first 12 transfer requests in a policy year are free of any transfer charge as is any transfer to the Fixed Account from a Variable Sub-Account whose investment strategy has changed . A $25 transfer charge may be imposed for the 13th and each subsequent transfer request in a policy year. Any value remaining in the Fixed Account or a Variable Sub-Account after a transfer must be at least $500. Transfers resulting from policy loans and the exercise of conversion rights will not be subject to any charge and will not count against the number of free transfer requests. The Company will implement all transfers and determine all values at the end of the valuation period during which the transfer request is received and recorded. The Company may, at any time, revoke or modify the transfer privilege. (e) If the trust is the issuer of periodic plan certificates, the substance of the provisions of any indenture or agreement with respect to lapses or defaults by security holders in making principal payments, and with respect to reinstatement. A Policy matures, and the Surrender Value is paid to the Owner, if when the younger Insured attains or would have attained age 100. Following maturity, a Policy cannot be reinstated. Subject to the foregoing: The duration of a Policy depends upon the Net Accumulation Value. Except as noted below, a Policy will lapse only when the Net Accumulation Value is insufficient to cover the monthly deduction on the monthly anniversary day. If the Net Accumulation Value is insufficient to cover the monthly deduction, unless the No-Lapse Provision has been selected and is in effect, the Company will notify a policyowner of the minimum payment needed to keep the Policy in force. A policyowner will have a grace period of 61 days for the Company to receive sufficient payments. The notice will be sent at least 31 days before the end of the grace period. If the Company does not receive a sufficient payment within the grace period, lapse of the Policy will result. If a sufficient payment is received during the grace period, any resulting net premium will be allocated among the Variable and Fixed Sub-Accounts based on the most recent previous premium payment, unless the Company agrees to accept instructions otherwise, and any monthly deductions due will be charged to the Variable and Fixed Sub-Accounts. If the No Lapse Provision has been selected the Owner is required to pay, on or before each Monthly Anniversary Day, the monthly No Lapse premium as specified in the POLICY SPECIFICATIONS. As long as the sum of all premium payments less any indebtedness and partial surrenders is at least equal to the sum of the No Lapse Premiums due since the Date of Issue, the policy will not lapse even if the Net Accumulation Value is insufficient to meet the Monthly Deductions. A Grace Period of 61 days will be granted if on any Monthly Anniversary Day it is determined that the No Lapse Provision premium requirement has not been met. Within 31 days of the beginning of that Grace Period, Lincoln Life will notify the Owner of the amount of premium necessary to either a) maintain the No Lapse Provision in force for at least two months, or b) maintain the policy in force for at least two months, as specified under the GRACE PERIOD provision. The Owner will have the option to pay either amount. The No Lapse Provision will terminate if (a) the No Lapse Premium requirements are not met, (b) there is an increase in the Specified Amount, and or (c) there is a change in the Death Benefit Option. Once the No Lapse Provision is terminated, it cannot be reinstated. The Company may allow reinstatement at any time within both Insureds' lifetime(s); reinstatement will require evidence of insurability of both Insureds satisfactory to the Company and the payment of an amount which will keep the Policy in force for at least two months. (f) The substance of the provisions of any indenture or agreement with respect to voting rights, together with the names of any persons other than security holders given the right to exercise voting rights pertaining to the trust's securities or the underlying securities and the relationship of such persons to the trust. To the extent required by law, the Company will vote the shares of the various mutual funds held in the Account (the "Funds") at regular and special shareholder meetings of the Funds in accordance with instructions received from persons having voting interest in the corresponding Variable Sub-Accounts. If, however, the Investment Company Act of 1940 ("1940 Act") or any regulation thereunder would be amended or if the present interpretation thereof should change, and as a result the Company determines that it is permitted to vote the Fund(s) shares in its own right, it may elect to do so. The number of votes which a policyowner has the right to instruct will be calculated separately for each Variable Sub-Account. This number will be determined by dividing the Policy's Accumulation Value in a Sub-Account by the net asset value per share of the corresponding Fund. In determining the number of votes, fractional shares will be recognized. The number of votes that a policyowner has the right to instruct will be determined as of the date coincident with the date established by the Fund for determining shareholders eligible to vote at the meeting of the Fund, but not more than 60 days before the meeting of the Fund. Voting instructions will be solicited by written communication at least 14 days prior to such meeting in accordance with procedures established by the Fund. Each person having a voting interest in the Fund will receive appropriate proxy materials and reports. The Company will vote the Fund shares as to which no timely instructions are received in proportion to the voting instructions from others with an interest in the particular Sub-Account. Voting instructions to abstain on any item to be voted upon will be applied to reduce the votes eligible to be cast by the Company. The Company may, if 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 the Fund or to approve or disapprove an investment advisory contract for a Fund. A change would be disapproved only if the proposed change is contrary to state law or prohibited by state regulatory authorities or we determine that the change would have an adverse effect on the Sub-Account in that the proposed investment policy for a Fund may result in overly speculative or unsound investments. In the event the Company disregards voting instructions, a summary of that action and the reasons for such action will be included in the next annual report to policyowners. (g) Whether security holders must be given notice of any change in: (1) the composition of the assets of the trust. The Company reserves the right, subject to compliance with applicable law: (i) to make additions to, deletions from, or substitutions for the Fund shares that are held or purchased by the Account; (ii) to eliminate the shares of any Fund and to substitute shares of another open-end, registered investment company, if the shares of that Fund are no longer available for investment, or if in its judgment further investment in that Fund should become inappropriate in view of the investment objectives of the Account; (iii) to eliminate one or more Sub-Accounts, if, in its sole discretion, marketing, tax or investment conditions warrant; (iv) to operate the Account as a management company under the 1940 Act; (v) to deregister the Account under the 1940 Act in the event such registration is no longer required; and (vi) to combine the Account with one or more of the Company's other separate accounts as may be established. In no event will any of the changes described above be made without notice to policyowners in accordance with the 1940 Act and without obtaining, as necessary, prior approval of the Commission. (2) the terms and conditions of the securities issued by the trust. No changes in the terms and conditions of a Policy that adversely affect a policyowner's rights will be made without notice to the policyowner. (3) the provisions of any indenture or agreement of the trust. Not applicable. (4) the identity of the depositor, trustee or custodian. The Account has no trustee or custodian. There is no provision requiring notice to, or consent of, security holders, with respect to a change in the identity of the depositor. (h) Whether the consent of security holders is required in order for action to be taken concerning any change in: (1) the composition of the assets of the trust. Consent of policyowners is not required when changing the underlying securities of the Account. However, to change such securities, approval of the Commission is required by Section 26(b) of the 1940 Act. Except as required by Federal or State law or regulation, no action will be taken by the Company which will adversely affect the rights of policyowners without their consent. (2) the terms and conditions of the securities issued by the trust. No changes in the terms and conditions of a Policy that affect a policyowner's rights will be made without notice to the policyowner. The Company reserves the right to amend the Policy without policyowner consent as may be necessary to comply with applicable law. (3) the provisions of any indenture or agreement of the trust. Not applicable. (4) the identity of the depositor, trustee or custodian. See Item 10(g)(4). (i) Any other principal feature of the securities issued by the trust or any other principal right, privilege or obligation not covered by subdivisions (a) to (g) or by any other item in this form. (1) PREMIUM PAYMENTS. The policyowner may make premium payments in any amount and at any frequency, subject to the basic premium requirements and certain restrictions stated in the Policy. A policyowner may also determine a planned periodic premium payment schedule that provides for the payment of a level premium at a fixed interval for a specified period of time. A policyowner need not make premium payments in accordance with such planned periodic premium schedule and the failure to make a planned payment will not itself cause a Policy to lapse. A policyowner may make unscheduled premium payments subject to restrictions listed in the Policy. If the No Lapse Provision is in effect, the policyowner will be required to pay a stipulated cumulative premium by each Monthly Anniversary Day in order to keep the provision in effect. A premium load of 8.0% will be deducted from each premium payment. Unless the policyowner directs otherwise, additional premium payments made by a policyowner while there is indebtedness will be treated first as loan repayments with no premium load deducted, to the extent not required to be first applied to keep the Policy from lapsing. A premium paid to prevent lapse will have the premium load deducted. In the application for a Policy, a policyowner can allocate net premium payments among the Fixed and Variable Sub-Accounts. The net premium will be allocated on the first valuation day following the expiration of the right-to-examine period (see Item 10(c)) in accordance with the directions in the application. Net premiums paid thereafter will be allocated in accordance with the policyowner's instructions in the application or subsequent directions by the policyowner. Percentages must be in whole numbers allocated to a particular Fixed or Variable Sub-Account. (2) GENERAL DESCRIPTION OF BASIC POLICY BENEFITS. (A) DEATH BENEFIT. As long as the Policy remains in force, the Company will, upon receipt of proof of the death of both Insureds, pay the death benefit proceeds of the Policy, reduced by any outstanding indebtedness and due and unpaid charges, to the named beneficiary in accordance with the designated death benefit option. Death benefits will be determined at the end of the valuation period during which the Second Death occurs. The proceeds may be paid in a lump sum or under one or more of the settlement options which are added by rider. The Policies provide two death benefit options: Death Benefit Option 1 ("Option 1") and Death Benefit Option 2 ("Option 2"). Generally, the death benefit option is designated in the application. Absent such a designation, Option 1 is in effect. The death benefit under Option 1 is the greater of the specified amount of the Policy or a specified percentage (the "corridor percentage") times the Accumulation Value (in the latter case, the Policy would be "in the Corridor"). The death benefit under Option 2 is equal to the greater of the specified amount plus the Accumulation Value of the Policy or the corridor percentage times the Accumulation Value. (b) SPECIFIED AMOUNT. A policyowner may increase or decrease the specified amount if both Insureds are still living. For any increase, the Company will require satisfactory evidence of insurability of both Insureds. The effective date of the increase will be the monthly anniversary day on or following approval of the increase by the Company. No decrease may reduce the specified amount to less than $250,000. Any decrease will be applied first to the most recent coverage under the Policy, then to the next most recent, and so forth. Generally, the death benefit option in effect may be changed by sending a written request for change to the Administrative Office. The death benefit may not be changed if it would result in a specified amount less than $250,000. The effective date of any change will be the monthly anniversary day on or following receipt of the request. The specified amount will be changed when a change in death benefit option is made. If the change is from Option 1 to Option 2, the new specified amount will equal the Death Benefit, less the Accumulation Value. If the change is from Option 2 to Option 1, the new specified amount will equal the Death Benefit as of the date of the change. (3) CALCULATION OF EACH VARIABLE SUB-ACCOUNT'S VALUE. When the initial premium has been paid, the Policy's value in a Variable Sub-Account will equal the portion of the net premium allocated to the Sub-Account reduced by the portion of the first monthly deduction allocated to that Sub-Account. Thereafter, on each valuation day, the Policy's account value in each Variable Sub-Account will equal: (a) The Policy's Accumulation Value in the Sub-Account on the preceding valuation day, adjusted for changes in Fund net asset value, Fund dividends and other distributions and changes in the Sub-Account's liabilities for the current valuation period; plus (b) Any net premium payments received during the current valuation period which are allocated to the Sub-Account; plus (c) All account values transferred to the Sub-Account from the Fixed Account or Loan Account or from another Sub-Account during the current valuation period; minus (d) All account values transferred from the Sub-Account to the Fixed Account or Loan Account or to another Sub-Account during the current valuation period; minus (e) All partial surrenders from the Sub-Account during the current valuation period; minus (f) The portion of the monthly deduction allocated to the Sub- Account during the current valuation period. A Policy's Accumulation Value equals the sum of a Policy's value in each Variable Sub-Account plus the Policy's Fixed Account Value, plus the Loan Account Value. Because Accumulation Value is dependent upon a number of variables, including the investment experience of the chosen Fund(s), the frequency and amount of premium payments, transfers and surrenders, and charges assessed in connection with the Policy, the Policy's Accumulation Value cannot be predetermined. (4) INVESTMENT PERFORMANCE. Each Sub-Account has its own distinct variable accumulation unit value. Premium Payments allocated to each Variable Sub-Account are converted into Variable Accumulation Units. This is done by dividing each Premium Payment by the value of a Variable Accumulation Unit calculated at the end of the Valuation Period during which the Premium Payment is allocated to the Variable Sub-Account. The Variable Accumulation Unit value for each Variable Sub-Account was or will be established by Lincoln Life at the inception of the Variable Sub-Account. It may increase or decrease from Valuation Period to Valuation Period. The Accumulation Unit Value for a Variable Sub-Account for any later Valuation Period is determined as follows: 1. The total value of Fund shares held in the Variable Sub-Account is calculated by multiplying the number of Fund shares owned by the Variable Sub-Account at the beginning of the Valuation Period by the net asset value per share of the Fund at the end of the Valuation Period, and adding any dividend or other distribution of the Fund if an ex-dividend date occurs during the Valuation Period; minus 2. The liabilities of the Variable Sub-Account at the end of the Valuation Period; such liabilities include daily charges imposed on the Variable Sub-Account, and may include a charge or credit with respect to any taxes paid or reserved for by Lincoln Life that Lincoln Life determines result from the operations of the Variable Account; and 3. The result of (2) is divided by the number of Variable Sub-Account Variable Accumulation Units outstanding at the beginning of the Valuation Period. The daily charges imposed on a Variable Sub-Account for any Valuation Period are equal to the daily mortality and expense risk charge multiplied by the number of calendar days in the Valuation Period. (5) LOAN PROVISIONS. See Item 21. (6) PAYMENT OF BENEFITS. Death benefits will be determined as of the time of the Second Death once the Company receives due proof of death of both Insureds, and will ordinarily be paid within seven days after such receipt. Payment of the benefits under the Policy may be postponed if the Policy is contested, or whenever: (i) the New York Stock Exchange is closed other than customary week-end and holiday closings, or trading on the New York Stock Exchange is restricted as determined by the Commission; (ii) the Commission by order permits postponement for the protection of policyowners; or (iii) an emergency exists, as determined by the Commission, as a result of which disposal of securities held by a Variable Sub-Account is not reasonably practicable, or it is not reasonably practicable to determine the value of the Account's net assets. (7) SETTLEMENT OPTIONS. The benefits under a Policy will be paid in a lump sum unless another arrangement is made. Settlement options are added to the Policy with a rider which permits the Policyowner and beneficiaries, subject to a prior action of the Policyowner, to decide the form in which the benefits will be paid. The settlement options include: payments for a fixed period; life income with a guaranteed fixed period; interest only; and periodic payments of a fixed amount. (8) OPTIONAL INSURANCE BENEFIT. No optional insurance benefits may be added to a Policy by rider at this time. INFORMATION CONCERNING THE SECURITIES UNDERLYING THE TRUST'S SECURITIES 11. Describe briefly the kind or type of securities comprising the unit of specified securities in which security holders have an interest. (If the unit consists of a single security issued by an investment company, name such investment company and furnish a description of the type of securities comprising the portfolio of such investment company.) The Account invests, at the policyowner's option, in securities of one or more of the Funds (see Item 10(f)), each of which is a mutual fund registered with the Commission as an open-end diversified management company. Each Sub-Account invests solely in shares of one of the nineteen Funds. Each Fund is a series or portfolio of a corporation or a Massachusetts business trust registered under the 1940 Act. See Item 12(a). The nineteen Funds and their investment objectives are as follows: AIM V.I. CAPITAL APPRECIATION FUND (Small Cap Stocks): Seeks to provide capital appreciation through investments in common stocks, with emphasis on medium-sized and smaller emerging growth companies. AIM V.I. DIVERSIFIED INCOME FUND (Fixed Income - Intermediate Term Bonds): Seeks to achieve a high level of current income primarily by investing in a diversified portfolio of foreign and U.S. government and corporate debt securities, including lower rated high yield debt securities (commonly known as "JUNK BONDS"). AIM V.I. GROWTH FUND (Large Cap Stocks): Seeks to provide growth of capital through investments primarily in common stocks of leading U.S. companies considered by its adviser to have strong earnings momentum. AIM V.I. VALUE FUND (Large Cap Stocks): Seeks to achieve long-term growth of capital by investing primarily in equity securities judged by its adviser to be undervalued relative to the current or projected earnings of the companies issuing the securities, or relative to current market values of assets owned by the companies issuing the securities or relative to the equity markets generally. Income is secondary objective. CIGNA VP MONEY MARKET FUND (Money Market): Seeks to provide as high a level of current income as is consistent with the preservation of capital and liquidity and the maintenance of a stable $1.00 per share net asset value by investing in short-term money market instruments. CIGNA VP S&P 500 INDEX FUND (Large Cap Stocks): Seeks to achieve its objective of long-term growth of capital by attempting to replicate the composition and total return, reduced by fund expenses, of the Standard and Poor's 500 Composite Stock Price Index. FIDELITY VIP II ASSET MANAGER PORTFOLIO (Balanced or Return): Seeks high total return with reduced risk over the long-term by allocating its assets among domestic and foreign stocks, bonds and short-term fixed-income instruments. FIDELITY VIP EQUITY-INCOME PORTFOLIO (Large Cap Stocks): Seeks reasonable income by investing primarily in income-producing equity securities, with some potential for capital appreciation, seeking to exceed the composite yield on the securities comprising the Standard and Poor's 500 Composite Stock Price Index. FIDELITY VIP II INVESTMENT GRADE BOND PORTFOLIO (Fixed Income- Intermediate Term Bonds): Seeks high current income by investing primarily in fixed-income securities such as bonds, notes and debentures. MFS EMERGING GROWTH SERIES (Large Cap Stocks): Seeks to provide long-term growth of capital by investing primarily in common stocks of foreign and domestic issuers. Seeks to provide long-term growth of capital by investing in common stocks of small and medium-sized companies which have the potential for growth. MFS TOTAL RETURN SERIES (Balanced or Total Return): Seeks primarily to provide above average income (compared to a portfolio entirely invested in equity securities) consistent with the prudent employment of capital and secondarily to provide a reasonable opportunity for growth of capital and income. 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. MFS WORLD GOVERNMENTS SERIES (International Fixed Income): Seeks not only preservation, but also growth, of capital together with moderate current income through a professionally managed, internationally diversified portfolio consisting primarily of debt securities and to a lesser extent equity securities. TEMPLETON ASSET ALLOCATION FUND (Balanced or Total Return): Seeks a high level of total return through a flexible policy of investing in stocks of companies in any nation, debt securities of companies and governments of any nation, and in money market instruments. Assets are allocated among different investments depending upon worldwide market and economic conditions. TEMPLETON INTERNATIONAL FUND (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. TEMPLETON STOCK FUND (Balanced or Total Return): Seeks a high level of total return through a flexible policy of investing in stocks of companies in any nation, debt securities of companies and governments of any nation, and in money market instruments. Assets are allocated among different investments depending upon worldwide market and economic conditions. OCC SMALL CAP PORTFOLIO (Small Cap Stocks): Seeks capital appreciation through investments in a diversified portfolio of equity securities of companies with market capitalization of under $1 billion. OCC 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 assessment of relative investment values. OCC GLOBAL EQUITY PORTFOLIO (International Stocks): Seeks long-term capital appreciation through a global investment strategy primarily involving equity securities. 12. If the trust is the issuer of periodic payment plan certificates and if any underlying securities were issued by another investment company, furnish the following information for each such company: (a) Name of Company. AIM Variable Insurance Funds, Inc. ("AIM V.I. Fund"), managed by AIM Advisors, Inc., 11 Greenway Plaza, Suite 100, Houston, TX 77046-1173; CIGNA Variable Products Group ("CIGNA Funds"), managed by CIGNA Investments, Inc., 900 Cottage Grove Road, Hartford, CT 06152; Variable Insurance Products Fund I ("Fidelity Trust I") and Variable Insurance Products Fund II ("Fidelity Trust II"), managed by Fidelity Management & Research Company, 82 Devonshire Street, Boston, MA 02103; MFS Variable Insurance Trust ("MFS Trust"), managed by Massachusetts Financial Services Company, 500 Boylston Street, Boston, MA 02116; OCC Accumulation Trust ("OCC Trust"), managed by OpCap Advisors, One World Financial Center, New York, NY 10281; Templeton Variable Products Series Fund ("Templeton Series"), managed by Templeton Investment Counsel, Inc., 500 E. Broward Blvd., Broward Financial Centre, Suite 1200, Fort Lauderdale, Florida 33394-3091. (b) Name and principal business address of depositor. Not applicable. (c) Name and principal business address of trustee or custodian. AIM V.I. Fund: State Street Bank and Trust Co., 225 Franklin Street, Boston, MA 02110; CIGNA Variable Products Group: State Street Bank and Trust Co., 225 Franklin Street, Boston, MA 02110; Fidelity Trust I: EQUITY INCOME PORTFOLIO -- The Chase Manhattan Bank, N.A., 1211 Avenue of the Americas, New York, NY 10036; Fidelity Trust II: INVESTMENT GRADE BOND PORTFOLIO -- The Bank of New York, New York, NY; ASSET MANAGER PORTFOLIO -- The Chase Manhattan Bank, N.A., 1211 Avenue of the Americas, New York, NY 10036; MFS Trust: Investors Bank & Trust Company, 89 South Street, Boston, MA 02110; OCC Trust: State Street Bank and Trust Company, P.O. Box 8505, Boston, MA 02266-8505; Templeton Series: The Chase Manhattan Bank, N.A., Chase Metrotech Center, Brooklyn, NY 11245. (d) Name and principal business address of principal underwriter. AIM V.I. Fund: AIM Distributors, Inc., 11 Greenway Plaza, Suite 100, Houston, TX 77046-1173; CIGNA Financial Services, Inc., 900 Cottage Grove Road, Hartford, CT 06152; Fidelity Trust I & II: Fidelity Distribution Corporation, 82 Devonshire Street, Boston, MA 02109; MFS Trust: MFS Fund Distributors, Inc., 500 Boylston Street, Boston, MA 02116; OCC Trust: OCC Distributors, One World Financial Center, New York, NY 10281; Templeton Series: Franklin Templeton Distributors, Inc., P.O. Box 33030, St. Petersburg, Florida 33733-8030. (e) The period during which the securities of such company have been the underlying securities. Not applicable. INFORMATION CONCERNING LOAD, FEES, CHARGES AND EXPENSES 13.(a) Furnish the following information with respect to each load, fee, expense or charge to which (1) principal payments, (2) underlying securities, (3) distributions, (4) cumulated or reinvested distributions or income, and (5) redeemed or liquidated assets of the trust's securities are subject: (A) the nature of such load, fee, expense or charge; (B) the amount thereof; (C) the name of the person to whom such amounts are paid and his relationship to the trust; (D) the nature of the services performed by such person in consideration for such load, fee, expense or charge. (1) PRINCIPAL PAYMENTS A deduction of 8.0% of the premium will be made from each premium payment. The deduction represents sales load plus an amount the Company currently deems sufficient to pay state taxes and federal tax liabilities. (2) UNDERLYING SECURITIES No load, fee, expense or charge is assessed in connection with the purchase of the underlying securities for the Account. (3) DISTRIBUTIONS No load, fee, expense or charge is assessed in connection with distributions, except for a $25 transaction fee with respect to partial surrenders. (4) CUMULATED OR REINVESTED DISTRIBUTIONS OR INCOME All income and other distributions earned by each Fund are reinvested, without charge, at net asset value in shares of the Fund. (5) REDEEMED OR LIQUIDATED ASSETS For charges associated with total surrenders, see Item 13(e)(5). (b) For each installment payment type of periodic payment plan certificate of the trust, furnish the following information with respect to sales load and other deductions from principal payments. Not applicable. (c) State the amount of sales load as a percentage of the net amount invested. State the amount of total deductions as a percentage of the net amount invested for each type of security issued by the trust. Approximately 8.82% (8/92). (d) Explain fully the reasons for any differences in the price at which securities are offered generally to the public, and the price at which securities are offered for any class of transactions to any class or group of individuals, including officers, directors or employees of the depositor, trustee, custodian or principal underwriter. Not applicable. (e) Furnish a brief description of any loads, fees, expenses or charges not covered in Item 13(a) which may be paid by security holders in connection with the trust or its securities. (1) MORTALITY AND EXPENSE RISK CHARGE. The Company charges the Variable Sub- Accounts for the mortality and expense risks the Company assumes. The charge is made daily at an effective annual rate of .80% (guaranteed not to exceed .90%) of the value of each Variable Sub-Account's assets. The mortality risk assumed is that insureds may live for a shorter period of time than estimated and, therefore, a greater amount of death benefit proceeds will be payable sooner than anticipated. The expense risk assumed is that expenses incurred in issuing and administering the Policies will be greater than estimated. (2) ACCUMULATION VALUE TRANSFER CHARGE. After the twelfth transfer request during any one policy year, a charge of $25 may be imposed for each transfer request and deducted pro rata from the Fixed or Variable Sub-Account(s) from which the transfer is being made except as provided in Item 10(d). (3) TAXES. Currently no charge is made to the Account for Federal income taxes that may be attributable to the Account. The Company may, however, make such a charge in the future. Charges for other taxes, if any, attributable to the Account may also be made. (4) MONTHLY DEDUCTION. Charges will be deducted monthly from the Accumulation Value of each Policy to compensate the Company for certain administrative costs, and for the cost of insurance and optional benefits added by rider. The monthly deduction will be deducted on each monthly anniversary day and allocated among the funding vehicles used (Variable and Fixed Sub-Accounts) based on the proportionate values in each funding vehicle. The monthly charges consist of the following: (A) MONTHLY ADMINISTRATIVE CHARGE. The Company has responsibility for the administration of the Policy and the Account. Annual administrative expenses include premium billing and collection, recordkeeping, processing death benefit claims, cash surrenders and Policy changes, reporting and overhead costs. As reimbursement for administrative expenses related to the maintenance of each Policy and the Account, the Company assesses a monthly administrative fee of $12.50 during the first Policy Year and, currently $5 thereafter (guaranteed not to exceed $10). In addition, a monthly administrative fee of $0.09 per $1,000 of Specified Amount is deducted for the first twenty years of the Policy and as to an increase in Specified Amount, for the first twenty years following such increase, and, if the No Lapse Provision is selected, an additional fee of $0.01 per $1000 of Specified Amount is deducted so long as the No Lapse Provision is in effect. (B) COST OF INSURANCE CHARGE. Because the cost of insurance depends upon a number of variables, this charge can vary from month to month. The Company will determine the monthly cost of insurance charge by multiplying the applicable cost of insurance rate by the Net Amount at Risk for each policy month. The Net Amount at Risk for a policy month is (a) the death benefit at the beginning of the policy month, less (b) the Accumulation Value at the beginning of the policy month. The Net Amount at Risk may be affected by changes in the Accumulation Value or the Specified Amount of a Policy. The cost of insurance rate is based on gender classification, attained age, underwriting class and years since issue. The actual monthly cost of insurance rates will be based on the Company's expectations as to future experience. They will not, however, be greater than the guaranteed cost of insurance rates set forth in the Policy. These guaranteed rates are based on the applicable 1980 Commissioners Standard Ordinary Mortality Tables, Age Nearest Birthday (1980 CSO, Male or Female) or, for unisex rates, on the 1980 CSO-B Table and the Insureds' attained ages at the nearest birthday. Any change in the cost of insurance rates will apply to all persons of the same age, gender classification and underwriting class whose Policies have been in force for the same length of time. (C) OPTIONAL INSURANCE BENEFITS CHARGE. The monthly deduction will include deductions for any optional insurance benefits added to a Policy by rider. (5) SURRENDER CHARGE. A $25 surrender charge will be imposed on a partial surrender. A surrender charge, which is a function of the Insureds' ages, the number of years since issue and the Specified Amount, is also deducted upon a full surrender before the fifteenth anniversary of the Issue Date or, with respect to any increase in Specified Amount before the fifteenth anniversary of the increase. (f) State whether the depositor, principal underwriter, custodian or trustee, or any affiliated person of the foregoing may receive profits or other benefits not included in answer to Item 13(a) or 13(e) through the sale or purchase of the trust's securities or underlying securities or interests in underlying securities, and describe fully the nature and extent of such profits or benefits. Neither the Company nor any affiliated person of the Company may receive any profit or any other benefit from premium payments under the Policies or the investments held in the Account not included in answer to Item 13(a) or (e) through the sale or purchase of the Policies or shares of the Funds, except that (1) the Company may receive a profit to the extent that the cost of insurance built into a Policy exceeds the actual cost of insurance needed to pay benefits, (2) favorable mortality or expense experience may cause the insurance provided under a Policy to be profitable to the Company, (3) on Policy loans, the Company may derive a profit on the difference between interest charged and interest credited; (4) the Company will compensate certain other persons, including Company agents, for services rendered in connection with the distribution of a Policy, as described in Item 38, but such payments will be made from the Company's general account and (5) the Company (or an affiliate) may receive fees from the Funds or their advisers, distributors or affiliate thereof, for making the Funds available under the Policies or providing administrative, distribution or other services. (g) State the percentage that the aggregate annual charges and deductions for maintenance and other expenses of the trust bear to the dividend and interest income from the trust property during the period covered by the financial statements filed herewith. Not applicable. INFORMATION CONCERNING THE OPERATIONS OF THE TRUST 14. Describe the procedure with respect to applications (if any) and the issuance and authentication of the trust's securities, and state the substance of the provisions of any indenture or agreement pertaining thereto. Persons wishing to purchase a Policy must complete an application. A Policy may only be issued upon receipt of evidence of insurability of both Insureds satisfactory to the Company. Acceptance is subject to the Company's underwriting rules and the Company reserves the right to reject any application or to place one or both Insureds into a special underwriting category. The Company generally will issue a Policy only to Insureds between the ages of 18 and 80. Policies will be issued in accordance with the state insurance laws. Interests in the Fixed and Variable Sub-Accounts may also be acquired by transfers, as described in Item 10(d). 15. Describe the procedure with respect to the receipt of payments from purchasers of the trust's securities and the handling of the proceeds thereof, and state the substance of the provisions of any indenture or agreement pertaining thereto. Applicants for the Policy will be asked to select one or more of the applicable funding vehicles to which net premium payments are to be allocated, and the applicable percentage (a whole number) to be allocated to each such funding vehicle. That allocation can be changed at any time with respect to future premium payments upon receipt of written notice at the Administrative Office at no charge. Premiums will be allocated as the policyowner has directed. All premiums paid, after the first premium payment, must be sent directly to the Administrative Office and will be deemed received when actually received at the Administrative Office. 16. Describe the procedure with respect to the acquisition of underlying securities and the disposition thereof, and state the substance of the provisions of any indenture or agreement pertaining thereto. On each valuation day of each Fund, the Account purchases or redeems shares in each Fund based on a netting of all transactions for that day, including the amount of net premiums invested in the applicable Variable Sub-Account, transfers, policy loans and loan repayments, surrender payments, charges, and payment of benefits to be effected on that day. 17. (a) Describe the procedure with respect to withdrawal or redemption by security holders. The procedures with respect to surrenders or redemption by security holders are described in response to Items 10 (c), (d), (e) and (i). (b) Furnish the names of any persons who may redeem or repurchase, or are required to redeem or repurchase, the trust's securities or underlying securities from security holders, and the substance of the provisions of any indenture or agreement pertaining thereto. The Company is required to process all surrender requests as described in Item 10(c). Each Fund will redeem its shares upon the Company's request in accordance with the 1940 Act. Redeemed shares are retired although they may later be reissued if a Fund's governing documents permit. (c) Indicate whether repurchased or redeemed securities will be canceled or may be resold. A Policy, once totally surrendered, may not be resold. 18. (a) Describe the procedure with respect to the receipt, custody and disposition of the income and other distributable funds of the trust and state the substance of the provisions of any indenture or agreement pertaining thereto. All dividend and capital gains distributions (if any) of the Funds will be automatically reinvested in additional Funds shares at their net asset value. Pursuant to the Policy, the Company will make distributions from the Account in connection with death benefit proceeds, policy loans, and full and partial surrenders. Applicable procedures for such distributions are described in the answers to Items 10(c), 10(i)(6), and 21. (b) Describe the procedure, if any, with respect to the reinvestment of distributions to security holders and state the substance of the provisions of any indenture or agreement pertaining thereto. Not applicable. (c) If any reserves or special funds are created out of income or principal, state with respect to each such reserve or fund the purpose and ultimate disposition thereof, and describe the manner of handling of same. Net premium payments placed in the Account constitute reserves for benefits under the Policies. (d) Submit a schedule showing the periodic and special distributions which have been made to security holders during the three years covered by the financial statements filed herewith. State for each such distribution the aggregate amount and amount per share. If distributions from sources other than current income have been made, identify each such other source and indicate whether such distribution represents the return of principal payments to security holders. If payments other than cash were made, describe the nature thereof, the account charged and the basis of determining the amount of such charge. No distributions have been made. 19. Describe the procedure with respect to the keeping of records and accounts of the trust, the making of reports and the furnishing of information to security holders, and the substance of the provisions of any indenture or agreement pertaining thereto. The Company will have primary responsibility for all administration of the Policies and the Account. The administrative services provided include preparation of the Policies, maintenance of policyowners' records and all accounting, valuation, regulatory and reporting services required by the Company. The Company will send such reports of the Account and the Funds as are presently required by the 1940 Act and regulations promulgated thereunder. The Company will also mail to policyowners, at the last known address of record at the Administrative Office, any reports required by state law. Each person having a voting interest will receive proxy material, reports, and other materials relating to the Funds. 20. State the substance of the provisions of any indenture or agreement concerning the trust with respect to the following: (a) Amendments to such indenture or agreement. Not applicable. (b) The extension or termination of such indenture or agreement. Not applicable. (c) The removal or resignation of the trustee or custodian, or the failure of the trustee or custodian to perform its duties, obligations and functions. Not applicable. (d) The appointment of a successor trustee and the procedure if a successor trustee is not appointed. Not applicable. (e) The removal or resignation of the depositor, or the failure of the depositor to perform its duties, obligations and functions. The Company acts as depositor. There are no provisions relating to the removal or resignation of the depositor or the failure of the depositor to perform its duties, obligations and functions. (f) The appointment of a successor depositor and the procedure if a successor depositor is not appointed. There are no provisions relating to the appointment of a successor depositor and the procedure if a successor depositor is not appointed. 21. (a) State the substance of the provisions of any indenture or agreement with respect to loans to security holders. So long as the Policy remains in force, a policyowner may borrow money from the Company using a Policy as the only security for the loan. The maximum amount that may be borrowed is 90% of the Surrender Value at the time of the loan. The loan may be repaid in whole or in part at any time while the Policy is in force. An amount equal to the loan plus interest will be withdrawn from the funding vehicles being used in proportion to the value of each funding vehicle, and transferred to the Loan Account until the loan is repaid. The interest rate charged on policy loans will be at the rate of 8% per year in arrears. If unpaid when due, interest will be added to the amount of the loan and will become part of the loan and bear interest at the same rate. The Loan Account will be credited with interest which may vary, but will not be less than the loan interest rate less 2% per year in the first ten Policy Years and 1% thereafter. Indebtedness equals the total of all policy loans and accrued interest on the loans. If at any time indebtedness exceeds the Accumulation Value, unless a No Lapse Provision is in effect, a grace period will begin, and the Company will notify a policyowner and any assignee of record at least 31 days before the end of the grace period. If a sufficient payment to eliminate such excess indebtedness is not received by the Company within 61 days after the grace period begins, the Policy will lapse and terminate without value. The Policy, however, may later be reinstated subject to certain conditions. Indebtedness may be repaid any time while the Policy is in force. Additional premium payments made by the policyowner while there is indebtedness will (unless the policyowner directs otherwise) be applied first to reduce indebtedness, unless it must first be applied to prevent the Policy from lapsing. If not repaid, the Company may deduct indebtedness from any amount payable under the Policy. As indebtedness is repaid, the value in the Loan Account securing the indebtedness will be transferred from the Loan Account to the Variable and Fixed Sub-Accounts in the same proportion in which net premium payments are then being allocated, at the end of the valuation period during which the repayment is received. (b) Furnish a brief description of any procedure or arrangement by which loans are made available to security holders by the depositor, principal underwriter, trustee or custodian, or any affiliated person of the foregoing. The portion of a policy loan attributable to the Variable Sub-Accounts will normally be paid within seven days after receipt of written request. The Company may postpone payment of any such policy loan whenever: (i) the New York Stock Exchange is closed other than customary weekend and holiday closings, or trading on the New York Stock Exchange is restricted as determined by the Commission; (ii) the Commission by order permits postponement for the protection of policyowners; (iii) an emergency exists, as determined by the Commission, as a result of which disposal of securities is not reasonably practicable or it is not reasonably practicable to determine the value of any Variable Sub- Account's net assets. In addition, the Company may delay the payment of policy loans secured by Accumulation Value that the policyowner paid by check until such time as the check has cleared a policyowner's bank. See also paragraph (a) of this Item. (c) If such loans are made, furnish the aggregate amount of loans outstanding at the end of the last fiscal year, the amount of interest collected during the last fiscal year allocated to the depositor, principal underwriter, trustee or custodian or affiliated person of the foregoing and the aggregate amount of loans in default at the end of the last fiscal year covered by financial statements filed herewith. Not applicable. 22. State the substance of the provisions of any indenture or agreement with respect to limitations on the liabilities of the depositor, trustee or custodian, or any party to such indenture or agreement. There are no such provisions. 23. Describe any bonding arrangement for officers, directors, partners or employees of the depositor or principal underwriter of the trust, including the amount of coverage and the type of bond. A blanket bond with a per event limit of $25 million and an annual policy aggregate limit of $50 million covers all of the officers and employees of the Company. 24. State the substance of any other material provisions of any indenture or agreement concerning the trust or its securities and a description of any other material functions or duties of the depositor, trustee or custodian not stated in Item 10 or Items 14 to 23 inclusive. INCONTESTABILITY. The Company cannot contest the Policy as to the initial specified amount after it has been in force during the lifetime of both Insureds for two years from the date of issue. A new two year contestability period will apply to each increase in specified amount beginning on the effective date of each such increase and will apply to material misrepresentations made in the application for the increase. If the Policy is reinstated, a new two year contestability period (apart from any remaining contestability period) will apply from the date of the application for reinstatement and will apply only to statements made in the application for reinstatement. SUICIDE. If the Second Death results from suicide, while sane or insane, within two years from the issue date, the only benefit paid upon the Second Death will be the sum of: a) premiums paid, minus the amount of any partial surrenders, minus any outstanding loan balance. In the event of lapse of a Policy, the suicide period will be measured from the effective date of reinstatement. If the Second Death results from suicide, while sane or insane, within two years after the effective date of any increase in insurance or any reinstatement, the Company's total liability with respect to such increase or reinstatement will be a refund of the monthly charges for its cost of insurance. MISSTATEMENT OF AGE. If the age of either insured is misstated, the death benefit will be adjusted based on what the cost of insurance charge for the most recent monthly deduction would have purchased based on the correct age. III. ORGANIZATION, PERSONNEL AND AFFILIATED PERSONS OF DEPOSITOR ORGANIZATION AND OPERATIONS OF DEPOSITOR 25. State the form or organization of the depositor of the trust, the name of the state or other sovereign power under the laws of which the depositor was organized and the date of organization. The Company was incorporated under the laws of New York in 1996. 26. (a) Furnish the following information with respect to all fees received by the depositor of the trust in connection with the exercise of any functions or duties concerning securities of the trust during the period covered by the financial statements filed herewith. Not applicable. (b) Furnish the following information with respect to any fee or any participation in fees received by the depositor from any underlying investment company or any affiliated person or investment adviser of such company. Pursuant to Fund Participation Agreements with the investment advisers to and/or principal underwriters for the Fund Groups, the depositor anticipates receiving asset-based fees from the advisers or their affiliated persons for administrative, distribution or other services. 27. Describe the general character of the business engaged in by the depositor including a statement as to any business other than that of depositor of the trust. If the depositor acts or has acted in any capacity with respect to any investment company or companies other than the trust, state the name or names of such company or companies, their relationship, if any, to the trust, and the nature of the depositor's activities therewith. If the depositor has ceased to act in such named capacity, state the date of and circumstance surrounding such cessation. The Company is principally engaged in offering life insurance policies and annuity contracts in New York. It is licensed to do business in New York. Guam and the Virgin Islands. The Company is also the depositor of other separate accounts registered with the Commission as unit investment trusts which fund or will fund variable annuity contracts or variable life insurance policies of the Company. OFFICIALS AND AFFILIATED PERSONS OF DEPOSITOR 28. (a) Furnish as at latest practicable date the following information with respect to the depositor of the trust, with respect to each officer, director, or partner of the depositor, and with respect to each natural person directly or indirectly owning, controlling or holding with power to vote 5% or more of the outstanding voting securities of the depositor. (i) name and principal business address; (ii) nature of relationship or affiliation with depositor or the trust; (iii) ownership of all securities of the depositor; (iv) ownership of all securities of the trust; (v) other companies of which each person named above is presently officer, director or partner. See the table below. See also Item 29. (b) Furnish a brief statement of the business experience during the last five years of each officer, director or partner of the depositor. DIRECTORS AND OFFICERS OF THE COMPANY EXECUTIVE OFFICERS AND DIRECTORS LINCOLN LIFE & ANNUITY COMPANY OF NEW YORK
NAME, ADDRESS AND POSITION(S) WITH REGISTRANT PRINCIPAL OCCUPATIONS LAST FIVE YEARS - ---------------------------------------------------------------------------------------- ROLAND C. BAKER President [1/95-present], First Penn-Pacific Life DIRECTOR Insurance Co. Formerly: Chairman and CEO 1801 S. Meyers Road [7/88-1/95], Baker, Ralish, Shipley & Politzer, Inc. Oakbrook Terrace, Ill. 60181 J. PATRICK BARRETT President [12/94-present], BGS Leasing Group, Ltd.; DIRECTOR Chief Executive Officer [1/93-present], Syracuse 4605 Watergap Executive Air Service, Inc. Formerly: Chief Manlius, NY 13104 Executive Officer [8/81-9/87] and Chairman [7/83-9/87], Avis, Inc. DAVID N. BECKER Vice President [1/90-present], The Lincoln National SECOND VICE PRESIDENT AND Life Insurance Company APPOINTED ACTUARY 1300 South Clinton Street Fort Wayne, Ind. 46802 THOMAS D. BELL, JR. President and Chief Executive Officer DIRECTOR [4/95-present], Burson-Marstellar. Formerly: Vice 230 Park Avenue, South Chairman [4/94-4/95], Gulfstream Aerospace Corp.; New York, NY 10003 Vice Chairman and Chief Executive Officer [1/89-1/94], Burson-Marstellar JON A. BOSCIA President and Chief Executive Officer DIRECTOR [10/96-present] (formerly Chief Operating Officer 1300 South Clinton Street [5/94-10/96]), Lincoln National Life Insurance Co. Fort Wayne, Ind. 46802 Formerly: President [7/91-5/94] Lincoln Investment Management Inc. PHILIP L. HOLSTEIN President, Lincoln Life & Annuity Company of New PRESIDENT AND DIRECTOR York [7/96-Present] Formerly: President, [1/82-7/96] 120 Madison Street, Suite 1700 The Holstein Company, Inc. Syracuse, NY 13202 HARRY L. KAVETAS Executive Vice President and Chief Financial Officer DIRECTOR [2/94-present], Eastman Kodak Company. Formerly: 343 State Street Vice President [9/61-12/93], IBM Corp. Rochester, NY 14650-0235 BARBARA S. KOWALCZYK Senior Vice-President Corporation Planning DIRECTOR [1/94-present], Lincoln National Corp.; Formerly: 200 East Berry Street Senior Vice President [1/77-1/94], Lincoln National Fort Wayne, Ind. 46802 Investment Management Co. MARGEURITE L. LACHMAN Managing Director DIRECTOR [4/87-present], Schroder Real Estate Associates 437 Madison Avenue, 18th Floor New York, NY 10022
34
NAME, ADDRESS AND POSITION(S) WITH REGISTRANT PRINCIPAL OCCUPATIONS LAST FIVE YEARS - ---------------------------------------------------------------------------------------- LOUIS G. MARCOCCIA Officer [1/75-present], Syracuse University DIRECTOR 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] Formerly: Manager [9/90-11/96], CHIEF FINANCIAL OFFICER Ernst & Young LLP 120 Madison Street, Suite 1700 Syracuse, New York 13202 JOHN M. PIETRUSKI Chairman of Board DIRECTOR [1/89-present], Texas Biotechnology Corp. One Penn Plaza Suite 3408 New York, NY 10119 LAWRENCE T. ROWLAND Executive Vice President [10/96-present] (formerly DIRECTOR Senior Vice President One Reinsurance [1/93-10/96], Place Vice President [10/91-1/93]), Lincoln National Life 1700 Magnavox Way Insurance Co. Fort Wayne, Ind. 46804 JOHN L. STEINKAMP Vice President and Associate General Counsel DIRECTOR [8/77-present], Lincoln National Corp. 200 East Berry Street Fort Wayne, Ind. 46802 RICHARD C. VAUGHAN Executive Vice President and Chief Financial Officer DIRECTOR [1/95-present] (formerly Senior Vice President 200 East Berry Street [6/92-1/95], Lincoln National Corp. Fort Wayne, Ind. 46802
COMPANIES OWNING SECURITIES OF DEPOSITOR 29. Furnish as at latest practicable date the following information with respect to each company which directly or indirectly owns, controls or holds power to vote 5% or more of the outstanding voting securities of the depositor: (a) name and principal business address; (b) nature of business; (c) ownership of all securities of the depositor. The depositor of the trust is: Lincoln Life & Annuity Company of New York 120 Madison Street, Suite 1700 Syracuse, NY 13202 There are no natural persons directly or indirectly owning controlling or holding power to vote 5% of more of the outstanding voting securities of the depositor. The Company is a subsidiary of The Lincoln National Life Insurance Company, which is wholly-owned by Lincoln National Corporation. The Lincoln National Life Insurance Company's address is: The Lincoln National Life Insurance Company 1300 South Clinton Street Fort Wayne, IN 46801 The address for Lincoln National Corporation is: Lincoln National Corporation 200 East Berry Street Fort Wayne, IN 46802 CONTROLLING PERSONS 30. Furnish as at latest practicable date the following information with respect to any person, other than those covered by Items 28, 29, and 42 who directly or indirectly controls the depositor. None. COMPENSATION OF OFFICERS AND DIRECTORS OF DEPOSITOR COMPENSATION OF OFFICERS 31. Furnish the following information with respect to the remuneration for services paid by the depositor during the last fiscal year covered by financial statements filed herewith: (a) directly to each of the officers or partners of the depositor directly receiving the three highest amounts of remuneration; (b) directly to all officers or partners of the depositor as a group exclusive of persons whose remuneration is included under Item 31(a), stating separately the aggregate amount paid by the depositor itself and the aggregate amount paid by all the subsidiaries; (c) indirectly or through subsidiaries to each of the officers or partners of the depositor. Not applicable with respect to the Account. As of this date, the Account had not yet commenced operations. COMPENSATION OF DIRECTORS 32. Furnish the following information with respect to the remuneration for services, exclusive of remuneration reported under Item 31, paid by the depositor during the last fiscal year covered by financial statements filed herewith: (a) the aggregate direct remuneration to directors; (b) indirectly or through subsidiaries to directors. Not applicable with respect to the Account. See Item 31. COMPENSATION TO EMPLOYEES 33. (a) Furnish the following information with respect to the aggregate amount of remuneration for services of all employees of the depositor (exclusive of persons whose remuneration is reported in Items 31 and 32) who received remuneration in excess of $10,000 during the last fiscal year covered by financial statements filed herewith from the depositor and any of its subsidiaries. Not applicable with respect to the Account. See Item 31. (b) Furnish the following information with respect to the remuneration for services paid directly during the last fiscal year covered by financial statements filed herewith to the following classes of persons (exclusive of those persons covered by Item 33(a)): (1) Sales managers, branch managers, district managers and other persons supervising the sale of registrant's securities; (2) Salesmen, sales agents, canvassers and other persons making solicitations but not in supervisory capacity; (3) Administrative and clerical employees; and (4) Others (specify). If a person is employed in more than one capacity, classify according to predominant type of work. Not applicable with respect to the Account. See Item 31. COMPENSATION TO OTHER PERSONS 34. Furnish the following information with respect to the aggregate amount of compensation for services paid any person (exclusive of persons whose remuneration is reported in Items 31, 32 and 33), whose aggregate compensation in connection with services rendered with respect to the trust in all capacities exceeded $10,000 during the last fiscal year covered by financial statements filed herewith from the depositor and any of its subsidiaries. Not applicable with respect to the Account. See Item 31. IV. DISTRIBUTION AND REDEMPTION OF SECURITIES DISTRIBUTION OF SECURITIES 35. Furnish the names of the states in which sales of the trust's securities (A) are currently being made, (B) are presently proposed to be made, and (C) have been discontinued, indicating by appropriate letter the status with respect to each state. No sales are currently being made. It is proposed that Policies will initially be offered in New York. The sale of the Policies has not been discontinued in any states. 36. If sales of the trust's securities have at any time since January 1, 1936 been suspended for more than a month describe briefly the reasons for such suspension. Not applicable. 37. (a) Furnish the following information with respect to each instance where subsequent to January 1, 1937, any federal or state governmental officer, agency, or regulatory body denied authority to distribute securities of the trust, excluding a denial which was merely a procedural step prior to any determination by such officer, etc., and which denial was subsequently rescinded. (1) Name of officer, agency or body. (2) Date of denial. (3) Brief statement of reason given for revocation. Not applicable. (b) Furnish the following information with regard to each instance where, subsequent to January 1, 1937, the authority to distribute securities of the trust has been revoked by any federal or state governmental officer, agency or regulatory body. Not applicable. 38. (a) Furnish a general description of the method of distribution of securities of the trust. The Account's principal underwriter, Lincoln Financial Advisors, Inc. ("LFA"), plans to distribute the Policies through its own agents and through selling agreements with other broker-dealers and insurance agencies. LFA is a broker-dealer registered with the Commission, and is a member of the National Association of Securities Dealers, Inc. ("NASD"). (b) State the substance of any current selling agreement between each principal underwriter and the trust or the depositor, including a statement as to the inception and termination dates of the agreement, any renewal and termination provisions, and any assignment provisions. Not applicable. (c) State the substance of any current agreements or arrangements of each principal underwriter with dealers, agents, salesmen, etc., with respect to commissions and overriding commissions, territories, franchises, qualifications and revocations. If the trust is the issuer of periodic payment plan certificates, furnish schedules of commissions and the bases thereof. In lieu of a statement concerning schedules of commissions, such schedules of commissions may be filed as Exhibit A(3)(c). Not applicable. INFORMATION CONCERNING PRINCIPAL UNDERWRITER 39. (a) State the form of organization of each principal underwriter of securities of the trust, the name of the state of other sovereign power under the laws of which each underwriter was organized and the date of organization. LFA is an Indiana corporation incorporated in 1968. (b) State whether any principal underwriter currently distributing securities of the trust is a member of the National Association of Securities Dealers, Inc. Not applicable. 40. (a) Furnish the following information with respect to all fees received by each principal underwriter of the trust from the sale of securities of the trust and any other functions in connection therewith exercised by such underwriter in such capacity or otherwise during the period covered by the financial statements filed herewith. Not applicable. (b) Furnish the following information with respect to any fee or any participation in fees received by each principal underwriter from any underlying investment company or any affiliated person or investment adviser of such company: (1) The nature of such fee or participation. (2) The name of the person making payment. (3) The nature of the services rendered in consideration for such fee or participation. (4) The aggregate amount received during the last fiscal year covered by the financial statements filed herewith. Not applicable. 41. (a) Describe the general character of the business engaged in by each principal underwriter, including a statement as to any business other than the distribution of securities of the trust. If a principal underwriter acts or has acted in any capacity with respect to any investment company or companies other than the trust, state the name or names of such company or companies, their relationship, if any, to the trust and the nature of such activities. If a principal underwriter has ceased to act in such named capacity, state the date of and the circumstances surrounding such cessation. See Item 27. (b) Furnish as at latest practicable date the address of each branch office of each principal underwriter currently selling securities of the trust and furnish the name and residence address of the person in charge of such office. Not applicable. (c) Furnish the number of individual salesmen of each principal underwriter through whom any of the securities of the trust were distributed for the last fiscal year of the trust covered by the financial statements filed herewith and furnish the aggregate amount of compensation received by such salesmen in such year. Not applicable. 42. Furnish as at latest practicable date the following information with respect to each principal underwriter currently distributing securities of the trust and with respect to each of the officers, directors or partners of such underwriter: (a) name and principal business address; (b) position with principal underwriter; (c) ownership of securities of the trust. Not applicable. 43. Furnish, for the last fiscal year covered by the financial statements filed herewith, the amount of brokerage commissions received by any principal underwriter who is a member of a national securities exchange and who is currently distributing the securities of the trust or effecting transactions for the trust in the portfolio securities of the trust. Not applicable. OFFERING PRICE OR ACQUISITION VALUATION OF SECURITIES OF THE TRUST 44. (a) Furnish the following information with respect to the method of valuation used by the trust for purpose of determining the offering price to the public of securities issued by the trust or the valuation of shares or interests in the underlying securities acquired by the holder of a periodic payment plan certificate: (1) The source of quotations used to determine the value of portfolio securities. Each Fund's shares are valued at net asset value as supplied to the Company by the Fund or its agent. (2) Whether opening, closing, bid, asked or any other price is used. See Item 44(a)(1) and 16. (3) Whether price is as of the day of sale or as of any other time. See Item 16. (4) A brief description of the methods used by registrant for determining other assets and liabilities including accrual for expenses and taxes (including taxes on unrealized appreciation). The Account's assets and liabilities (such as charges against the Account) are valued in accordance with generally-accepted accounting principles on an accrual basis. The Company does not currently intend to create a reserve for its Federal income taxes. (5) Other items which registrant adds to the net asset value in computing offering price of its securities. Not applicable. (6) Whether adjustments are made for fractions: (i) before adding distributor's compensation (load); and (ii) after adding distributor's compensation (load). Not applicable because the Account does not compute per-unit values and sales loads in the manner presupposed by this Item and Item 44(b). Appropriate adjustments will be made for fractions in all computations. (b) Furnish a specimen schedule showing the components of the offering price of the trust's securities as the latest practicable date. No Policies have yet been offered for sale to the public. (c) If there is any variation in the offering price of the trust's securities to any person or classes of persons other than underwriters, state the nature and amount of such variation and indicate the person or classes of persons to whom such offering is made. The Company does not require a premium payment of a fixed amount at fixed intervals for a specified time period. A policyowner may, subject to the limitations set forth in Item 10(i), pay premiums at any frequency in any amount prior to maturity of the Policy (see Item 10(e)). Nonetheless, policyowners will need to pay sufficient premiums to maintain adequate surrender value to pay monthly charges, including the cost of insurance. The cost of insurance will vary, depending upon the insureds' ages, gender classification, underwriting classification and years since issue. In addition, there will be additional charges if optional insurance benefits are elected. 45. Furnish the following information with respect to any suspension of the redemption rights of the securities issued by the trust during the three fiscal years covered by the financial statements filed herewith. Not applicable. REDEMPTION VALUATION OF SECURITIES OF THE TRUST 46. (a) Furnish the following information with respect to the method of determining the redemption or withdrawal valuation of securities issued by the trust: (1) The source of quotations used to determine the value of portfolio securities. See Item 44(a)(1). (2) Whether opening, closing, bid, asked or any other price is used. See Item 44(a)(2). (3) Whether price is as of the day of sale or as of any other time. As of the day a request for surrender is received at the Administrative Office. (4) A brief description of the methods used by registrant for determining other assets and liabilities including accrual for expenses and taxes (including taxes on unrealized appreciation). See Item 44(a)(4) and 18(c). (5) Other items which registrant deducts from the net asset value in computing redemption value of its securities: See Item 10(c). (6) Whether adjustments are made for fractions. Not applicable. (b) Furnish a specimen schedule showing the components of the redemption price to the holders of the trust's securities as at latest practicable date. No Policies have yet been offered for sale to the public. PURCHASE AND SALE OF INTERESTS IN UNDERLYING SECURITIES FROM AND TO SECURITY HOLDERS. 47. Furnish a statement as to the procedure with respect to the maintenance of a position in the underlying securities or interests in the underlying securities, the extent and nature thereof and the person who maintains such a position. Include a description of the procedure with respect to the purchase of underlying securities or interests in underlying securities from security holders who exercise redemption or withdrawal rights and the sale of such underlying securities and interests in the underlying securities to other security holders. State whether the method of valuation of such underlying securities or interests in underlying securities differs from that set forth in Items 44 and 46. If any item of expenditure included in the determination of the valuation is not or may not actually be incurred or expended, explain the nature of such item and who may benefit from the transaction. The Company will invest net premiums, through the Account, in shares of the underlying Funds at net asset value and allocate them to Variable Sub- Accounts designated by a policyowner. Shares of the Funds are currently sold only to the Company and to other life insurance companies to support their obligations under variable annuity and variable life insurance contracts, or to qualified plans, and are not sold directly to the general public. The Company may redeem sufficient shares of the appropriate Fund to pay death benefits, benefits at maturity, or surrender proceeds, or for other purposes contemplated by the Policies. In addition, if a policyowner elects to transfer Accumulation Value among the Sub-Accounts, the Company may redeem shares held in any Variable Sub-Account from which a transfer is made and purchase shares for any Variable Sub-Account into which Accumulation Value is transferred. See Item 10(c). V. INFORMATION CONCERNING THE TRUSTEE OR CUSTODIAN 48. Furnish the following information as to each trustee or custodian of the trust: (a) Name and principal business address. (b) Form or organization. (c) State or other sovereign power under the laws of which the trustee or custodian was organized. (d) Name of governmental supervising or examining authoity. Not applicable. 49. State the basis for payment of fees or expenses of the trustee or custodian for services rendered with respect to the trust and its securities, and the aggregate amount thereof for the last fiscal year. Indicate the person paying such fees or expenses. If any fees or expenses are prepaid, state the unearned amount. Not applicable. 50. State whether the trustee or custodian or any other person has or may create a lien on the assets of the trust and, if so, give full particulars, outlining the substance of the provisions of any indenture or agreement with respect thereto. The assets of the Account are not chargeable with liabilities arising out of any other business that the Company may conduct except to the extent such assets exceed liabilities arising under the variable portion of the Policy. The income, capital gains, and capital losses of each Variable Sub- Account are credited to or charged against the assets held in that Variable Sub-Account in accordance with the terms of each Policy, without regard to the income, capital gains and capital losses of any other Variable Sub- Account. VI. INFORMATION CONCERNING INSURANCE OF HOLDERS OF SECURITIES 51. Furnish the following information with respect to insurance of holders of securities: (a) The name and address of the insurance company. The name and address of the Company are set forth in the answer to Item 2. (b) The types of Policies and whether individual or group Policies. The Policy is an individual flexible premium variable life insurance policy. Under circumstances described in Item 10(d), a Policy may be converted to a permanent life insurance policy with death benefits that do not vary based on the performance of a separate account. The Policies are issued on an individual basis. (c) The types of risks insured and excluded. The Company assumes the risk that the deductions made for mortality risks will prove inadequate to cover actual mortality costs. The Company also assumes the risk that deductions for expenses may be inadequate. (d) The coverage of the Policies. See Paragraph (c) of this Item. The minimum specified amount is $250,000. Death benefit proceeds will be reduced by any outstanding indebtedness and any due and unpaid charges and increased by any unearned loan interest. (e) The Beneficiaries of such Policies and the uses to which the proceeds of Policies must be put. The recipient of the benefits of the insurance undertakings described in Item 51(c) is either the owner or the beneficiary under a Policy. There are no restrictions on the use of the proceeds other than those established by a policyowner. (f) The terms and manners of cancellation and of reinstatement. The insurance undertakings described in Item 51(c) are an integral part of a Policy and may not be terminated while a Policy remains in effect. (g) The method of determining the amount of premiums to be paid by holders of securities. See Items 13(a) and 13(d) for the amount of charges imposed. See Items 10(c), 10(i) and 44(c) for the manner in which the premium is determined. (h) The amount of aggregate premiums paid to the insurance company during the last fiscal year. Not applicable. (i) Whether any person other than the insurance company receives any part of such premiums, the name of each such person and the amounts involved, and the nature of the services rendered therefor. No person other than the Company receives any part of the premiums. (j) The substance of any other material provisions of any indenture or agreement of the trust relating to insurance. None. VII. POLICY OF REGISTRANT 52. (a) Furnish the substance of the provisions of any indenture or agreement with respect to the conditions upon which and the method of selection by which particular portfolio securities must or may be eliminated from assets of the trust or must or may be replaced by other portfolio securities. If an investment adviser or other person is to be employed in connection with such selection, elimination of substitution, state the name of such person, the nature of any affiliation to the depositor, trustee or custodian, and any principal underwriter, and the amount of remuneration to be received for such services. If any particular person is not designated in the indenture or agreement, describe briefly the method of selection of such person. See Items 10(g) and 10(h) as regards the Company's right to substitute any other investment for shares of any Fund. (b) Furnish the following information with respect to each transaction involving the elimination of any underlying security during the period covered by the financial statements filed herewith. Not applicable. (c) Describe the policy of the trust with respect to the substitution and elimination of the underlying securities of the trust with respect to: (1) the grounds for elimination and substitution; (2) the type of securities which may be substituted; (3) whether the acquisition of such substituted security or securities would constitute the concentration of investment in a particular industry or group of industries or would conform to a policy of concentration of investment in a particular industry or group of industries; (4) whether such substituted securities may be the securities of another investment company; and (5) the substance of the provisions of any indenture or agreement which authorize or restrict the policy of the registrant in this regard. See Items 10(g) and 10(h). (d) Furnish a description of any policy (exclusive of policies covered by paragraphs (a) and (b) herein) of the trust which is deemed a matter of fundamental policy and which is elected to be treated as such. None. 53. (a) State the taxable status of the trust. The Company does not initially expect to incur any income tax upon the earnings or the realized gains attributable to the Account. Accordingly, the Company does not intend to create a reserve for its Federal income taxes attributable to the Account. If, however, the Company determines that it may incur such taxes, it may assess a charge for those taxes from the Account. Under current laws the Company may incur state and local taxes (in addition to premium taxes) in several states, and will incur certain federal tax liabilities in connection with the Policies. The premium load of 8% is intended in part to defray such obligations. (b) State whether the trust qualified for the last taxable year as a regulated investment company as defined in Section 851 of the Internal Revenue Code of 1954, and state its present intention with respect to such qualification during the current taxable year. Not applicable. See Item 53(a). VIII. FINANCIAL AND STATISTICAL INFORMATION 54. If the trust is not the issuer of periodic payment plan certificates, furnish the following information with respect to each class or series of its securities. Not applicable. 55. If the trust is the issuer of periodic payment plan certificates, a transcript of a hypothetical account shall be filed in approximately the following form on the basis of the certificate calling for the smallest amount of payments. The schedule shall cover a certificate of the type currently being sold assuming that such certificate had been sold at a date approximately ten years prior to the date of registration or at the approximate date of organization of the trust. Not applicable. 56. If the trust is the issuer of periodic payment plan certificates, furnish by years for the period covered by the financial statements filed herewith in respect of certificates sold during each period, the following information for each fully paid type and each installment payment type of periodic payment plan certificate currently being issued by the trust. Not applicable. 57. If the trust is the issuer of periodic payment plan certificates, furnish by years for the period covered by the financial statements filed herewith the following information for each installment payment type of periodic payment plan certificate currently being issued by the trust. Not applicable. 58. If the trust is the issuer of periodic payment plan certificates, furnish the following information for each installment payment type of periodic payment plan certificate outstanding as at the latest practicable date. Not applicable. 59. Financial statements: (a) FINANCIAL STATEMENTS OF THE TRUST Not applicable. The Trust is newly organized. (c) FINANCIAL STATEMENTS OF THE DEPOSITOR To be furnished by amendment. IX. EXHIBITS A. (1) Resolution of the Board of Directors of the Company authorizing establishment of the Account, and Memorandum "Establishment of Seperate Account". (2) Not applicable. (3) (a) Underwriting Agreement between Lincoln Financial Advisors, Inc. Company and Lincoln Life & Annuity Company of New York (to be provided by amendment). (b) Form of selling group agreement among depositor principal underwriter and selling dealers. (to be provided by amendment) (c) Schedule of sales commissions (to be provided by amendment). (4) Not applicable. (5) Proposed form of Policy and Application, Form #LN650NY, together with Settlement Option Rider, Form #LR650NY. (6) (a) Articles of Incorporation of the Company.* (b) By-laws of the Company.* (7) Not applicable. (8) (a) Fund participation agreements between the depositor and certain of the underlying investment companies and affiliated persons (to be provided by amendment). (b) Form of Service Agreement between the Company and Delaware Management Company, incorporated by reference to Registration Statement on Form N-4, File No. 333-38007, filed October 16, 1997. (9) Not applicable. (10) See Exhibit A(5). B. (1) Not applicable. (2) Not applicable. C. Not applicable. * Incorporated by reference to Registration Statement on Form N-4, File No. 333-38007, filed by the Company on October 16, 1997. SIGNATURE Pursuant to the requirements of the Investment Company Act of 1940, the depositor of the registrant has caused this registration statement on Form N-8B-2 to be duly signed on behalf of the registrant in the City of Syracuse and State of New York on the 11th day of February, 1998. LLANY SEPARATE ACCOUNT R FOR FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE (Name of registrant) [SEAL] BY: Lincoln Life & Annuity Company of New York (Depositor) BY: /s/ PHILIP L. HOLSTEIN --------------------------------------------- Lincoln Life & Annuity Company of New York Attest: /s/ ROBERT O. SHEPPARD - ------------------------------------------- Lincoln Life & Annuity Company of New York EX-99.A1 2 EXHIBIT 99.A1 ESTABLISHMENT OF SEPARATE INVESTMENT ACCOUNT OF LINCOLN LIFE & ANNUITY COMPANY OF NEW YORK Pursuant to the authority given me by Resolution Number 96-21 adopted by the Board of Directors of Lincoln Life & Annuity Company of New York (LLANY) on July 24, 1996, I establish a separate investment account designated as "LLANY Separate Account R for Flexible Premium Variable Life Insurance" (the "Account"). The Account is to be used in connection with the issuance by LLANY of variable life insurance policies (the "Policies"). The Account will be registered as a unit investment trust with the Securities and Exchange Commission ("SEC") and shall invest in shares of the investment companies which are registered with the SEC. The establishment and operation of the Account will be in accordance with the applicable provisions of New York Insurance Law and all rules and regulations issued pursuant thereto ("New York Insurance Law"), and subject to the approval of the Superintendent of the Insurance Department of the State of New York. The Account's investment objectives, policies, and limitations shall be in accordance with (1) the registration statement for the policies filed with the SEC under the Securities Act of 1933, and (2) applicable provisions of New York Insurance Law and any other applicable legal requirements. /s/ PHILIP L. HOLSTEIN ----------------------------- PHILIP L. HOLSTEIN, PRESIDENT DATED: 1/29/98 ------- EX-99.A5 3 EXHIBIT 99.A5 Insureds JOHN DOE SPECIMEN Policy Number JANE DOE Initial Specified Amount $500,000 May 15, 1998 Date of Issue LINCOLN LIFE & ANNUITY COMPANY OF NEW YORK A Stock Company Home Office Location: 120 Madison Street, Suite 1700 Syracuse, New York 13202 ADMINISTRATOR MAILING ADDRESS: [LINCOLN LIFE & ANNUITY COMPANY OF NEW YORK ANNUITY & VARIABLE LIFE SERVICES CENTER - ROUTING S249 HARTFORD, CT 06152-2249] Lincoln Life & Annuity Company of New York ("Lincoln Life") agrees to pay the Death Benefit Proceeds to the Beneficiary upon receipt of due proof of the death of the second Insured to die. Such payment shall be made as provided under GENERAL PROVISIONS, PAYMENT OF PROCEEDS. Lincoln Life further agrees to pay the surrender value to the Owner on the Coverage Date provided an Insured is then alive. RIGHT TO EXAMINE THE POLICY. The policy may be returned to the insurance agent through whom it was purchased or to Lincoln Life at the administrator mailing address located above within 10 days after receipt of the policy (60 days after its receipt for policies issued in replacement of other insurance). During this period (the "Right-to-Examine Period"), any premium paid will be placed in the Money Market Fund and, if the policy is so returned, it will be deemed void from the Date of Issue and Lincoln Life will refund all premium paid. If the policy is not returned, the premium payment will be processed as set forth in PREMIUM AND REINSTATEMENT PROVISIONS, ALLOCATION OF NET PREMIUM PAYMENTS. ANY BENEFITS AND VALUES PROVIDED BY THE POLICY BASED ON THE INVESTMENT EXPERIENCE OF THE VARIABLE ACCOUNT ARE VARIABLE AND ARE NOT GUARANTEED AS TO DOLLAR AMOUNT. THE DEATH BENEFIT PROCEEDS ON THE DATE OF ISSUE EQUAL THE INITIAL SPECIFIED AMOUNT OF THE POLICY. THEREAFTER, THE DEATH BENEFIT PROCEEDS MAY VARY UNDER THE CONDITIONS DESCRIBED UNDER INSURANCE COVERAGE PROVISIONS. THE DURATION OF COVERAGE IS VARIABLE AND MAY INCREASE OR DECREASE WHEN BASED ON THE INVESTMENT EXPERIENCE OF THE VARIABLE ACCOUNT. The policy is issued and accepted subject to the terms set forth on the following pages, which are made a part of the policy. In consideration of the application and the payment of premiums as provided, the policy is executed by Lincoln Life as of the Date of Issue. /s/ Philip L. Holstein PRESIDENT Registrar FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY ON THE LIVES OF TWO INSUREDS Non-Participating Variable life insurance payable upon the Second Death before the Coverage Date. Adjustable Death Benefit. Surrender Value payable upon surrender of the policy or on the Coverage Date, whichever is earlier. Flexible premiums payable to the Coverage Date or to the death of the second Insured to die, whichever is earlier. Investment results reflected in policy benefits. Premium Payments and Supplementary Coverages as shown in the Policy Specifications. LN650 NY TABLE OF CONTENTS Page* POLICY SPECIFICATIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . .3 LIST OF VARIABLE SUB-ACCOUNTS. . . . . . . . . . . . . . . . . . . . . . . . .5 SCHEDULE 1: SURRENDER CHARGES . . . . . . . . . . . . . . . . . . . . . . . .7 SCHEDULE 2: EXPENSE CHARGES AND FEES. . . . . . . . . . . . . . . . . . . . .8 SCHEDULE 3: TABLE OF GUARANTEED MAXIMUM COST OF INSURANCE RATES PER $1,000 . .9 SCHEDULE 4: CORRIDOR PERCENTAGES TABLE. . . . . . . . . . . . . . . . . . . 10 DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 PREMIUM AND REINSTATEMENT PROVISIONS . . . . . . . . . . . . . . . . . . . . 13 OWNERSHIP, ASSIGNMENT AND BENEFICIARY PROVISIONS . . . . . . . . . . . . . . 15 VARIABLE ACCOUNT PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . . . 16 POLICY VALUES PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 17 TRANSFER PRIVILEGE PROVISION . . . . . . . . . . . . . . . . . . . . . . . . 19 NONFORFEITURE AND SURRENDER VALUE PROVISIONS . . . . . . . . . . . . . . . . 19 LOAN PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 INSURANCE COVERAGE PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . . 21 GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Followed by Optional Methods of Settlement and Any Riders *Pages 4 and 6 are intentionally "blank." LN650 NY 2 POLICY SPECIFICATIONS Date of Issue MAY 15, 1998 Policy Number SPECIMEN Insureds JOHN DOE Issue Age 35 Premium Class STANDARD JANE DOE Issue Age 32 Premium Class STANDARD Initial Specified Amount $500,000 Minimum Specified Amount $250,000 Monthly Anniversary Day 15 LN650 FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE BENEFIT AMOUNT: See Initial Specified Amount EFFECTIVE DATE: May 15, 1998 [Date initial premium is applied] DEATH BENEFIT OPTION: Death Benefit Option is 1. (SEE INSURANCE COVERAGE PROVISIONS). PREMIUM PAYMENTS: Initial premium paid with application $ 1,429 Planned Premium $ 3,090 Additional premium payments may vary by frequency or amount. PAYMENT MODE: Annually NO LAPSE PREMIUM: A payment of at least $257.50 is due as of each Monthly Anniversary Day since the Date of Issue. If such cumulative premium payments are paid, it will prevent the policy from lapsing. (SEE PREMIUM AND REINSTATEMENT PROVISIONS, NO LAPSE PROVISION.) NOTE: Unless the No Lapse Provision is in effect, the policy will terminate before the Coverage Date if the actual premiums paid and investment experience are insufficient to continue coverage to such a date. The Coverage Date is the next Monthly Anniversary after the younger Insured becomes or would have become age 100. LIMITS ON ALLOCATION OF NET PREMIUM PAYMENTS: All allocations of Net Premium Payments must be made in whole percentages and in aggregate must total 100%. LIMITS ON TRANSFERS FROM THE FIXED ACCOUNT: Transfers from the Fixed Account shall be made only within the 30 day period after an anniversary of the Date of Issue. The amount of all such transfers in any such 30 day period shall not exceed the lesser of (a) 25% of the Fixed Account value as of that Policy Anniversary, or (b) $250,000. (SEE TRANSFER PRIVILEGE PROVISION.) GUARANTEED MINIMUM LOAN INTEREST RATES: The annual rate at which interest is credited on the Loan Account Value may vary but will never be less than 6% on and before the 10th Policy Anniversary and not less than 7% thereafter. (As of the Date of Issue, the annual rate at which interest is credited on the Loan Account Value will be 7% on and before the 10th Policy Anniversary and 8% thereafter.) OWNER: The Insureds BENEFICIARY: Margaret Doe, Daughter, if surviving both Insureds LN650 NY 3 THIS PAGE INTENTIONALLY BLANK POLICY SPECIFICATIONS MORTALITY AND EXPENSE RISK CHARGES. The guaranteed mortality and expense risk ("M&E") charge which is referenced on page 8 is a daily rate equivalent to an annual rate of .90% of a Variable Sub-Account's value. As of the Date of Issue of the policy, this charge is equal to a daily rate equivalent to an annual rate of .80% of a Variable Sub-Account's value. MONTHLY ADMINISTRATIVE FEE. The monthly administrative fee, as set forth on page 8, includes: (a) As of the Date of Issue of the policy, a fee of $12.50 per month during the first Policy Year (this fee may be changed by Lincoln Life for subsequent years, but is guaranteed not to exceed $10.00 per month), (b) A monthly charge of $0.09 per $1,000 of initial Specified Amount or an increase in Specified Amount for the first twenty Policy Years following the Date of Issue and the first twenty Policy Years following an increase in Specified Amount; and (c) If the No Lapse Provision is in effect, a monthly charge of $0.01 per $1,000 of Specified Amount for as long as the No Lapse Provision is in effect. LN650 NY 3A LIST OF VARIABLE SUB-ACCOUNTS
FUND GROUPS VARIABLE SUB-ACCOUNTS [AIM VARIABLE INSURANCE FUNDS, INC. AIM V.I. Capital Appreciation Fund AIM V.I. Diversified Income Fund AIM V.I. Growth Fund AIM V.I. Value Fund CIGNA VARIABLE PRODUCTS GROUP CIGNA VP Money Market Fund CIGNA VP S&P 500 Index Fund FIDELITY VARIABLE INSURANCE PRODUCTS FUND Equity-Income Portfolio FIDELITY VARIABLE INSURANCE PRODUCTS FUND II Asset Manager Portfolio Investment Grade Bond Portfolio MFS-Registered Trademark- VARIABLE INSURANCE TRUST MFS Emerging Growth Series MFS Total Return Series MFS Utilities Series MFS World Governments Series OCC ACCUMULATION TRUST Global Equity Portfolio Managed Portfolio Small Cap Portfolio TEMPLETON VARIABLE PRODUCTS SERIES FUND Templeton Asset Allocation Fund Class I Templeton International Fund Class I Templeton Stock Fund Class I NOTE: NET PREMIUM PAYMENTS MAY ALSO BE ALLOCATED TO THE FIXED ACCOUNT. SEPARATE ACCOUNT: LLANY Separate Account R for Flexible Premium Variable Life Insurance.
LN650 NY 5 THIS PAGE INTENTIONALLY BLANK SCHEDULE 1: SURRENDER CHARGES The charge assessed upon full surrender of the policy will be the lesser of the Surrender Charge shown or the then current Net Accumulation Value. Upon either a partial surrender or a decrease in Specified Amount, no surrender charge is applied. An additional surrender charge table will apply to each increase in Specified Amount permitted by Lincoln Life. Surrender Charge as of Policy Year Beginning of Policy Year ----------- ------------------------ 0 $ 2,020.00 1 2,020.00 2 1,962.00 3 1,884.00 4 1,807.00 5 1,729.00 6 1,632.00 7 1,450.00 8 1,269.00 9 1,088.00 10 907.00 11 725.00 12 544.00 13 363.00 14 181.00 15 and thereafter 0.00 The procedures for full and partial surrenders and the imposition of surrender charges for full surrenders are described in greater detail in NONFORFEITURE AND SURRENDER VALUE PROVISIONS. A transaction fee of $25 is assessed for each partial surrender and will be processed as set forth in NONFORFEITURE AND SURRENDER VALUE PROVISIONS, PARTIAL SURRENDER. LN650 NY 7 SCHEDULE 2: EXPENSE CHARGES AND FEES PREMIUM LOAD. Lincoln Life will deduct a Premium Load of 8.0% from each premium payment. MONTHLY ADMINISTRATIVE FEE. A Monthly Deduction is made on each Monthly Anniversary Day from the Net Accumulation Value. (SEE POLICY VALUES PROVISIONS, MONTHLY DEDUCTION.) It includes an administrative fee charge, Cost of Insurance charges and any charges for supplemental riders or optional benefits. The monthly administrative fee as of the Date of Issue of the policy consists of: (a) a fee of $12.50 per month during the first Policy Year and $5.00 per month during subsequent Policy Years. This fee may be changed by Lincoln Life after the first Policy Year based on its expectations of future expenses, but the amount of such fee is guaranteed not to exceed the amount set forth in the POLICY SPECIFICATIONS. (b) a charge of $0.09 per $1,000 of initial Specified Amount or an increase in Specified Amount will be deducted monthly for the first twenty Policy Years from the Date of Issue and the first twenty Policy Years following an increase in Specified Amount. In addition, if the No Lapse Provision is in effect, a charge of $0.01 per $1,000 of Specified Amount will be deducted monthly for as long as the No Lapse Provision is in effect. CHARGES AND FEES ASSOCIATED WITH THE VARIABLE SUB-ACCOUNTS. Lincoln Life imposes a mortality and expense risk ("M&E") charge, which is calculated as a percentage of the value of the Variable Sub-Accounts. The M&E charge is deducted from each Variable Sub-Account at the end of each Valuation Period. This charge may be changed by Lincoln Life from time to time, but it is guaranteed not to exceed a daily rate which is set forth in the POLICY SPECIFICATIONS. As of the Date of Issue of the policy, this charge was equal to an annual rate of .80% of a Variable Sub-Account's value. Fund operating expenses may be deducted by each Fund as set forth in its prospectus. TRANSFER FEE. A transaction fee of $25 may be applied by Lincoln Life to each transfer request in excess of 12 made during any Policy Year. A single transfer request, either In Writing or by telephone, may consist of multiple transactions. LN650 NY 8 SCHEDULE 3: TABLE OF GUARANTEED MAXIMUM COST OF INSURANCE RATES (MONTHLY RATES PER $1,000 OF NET AMOUNT AT RISK) SPECIAL NOTE: The Cost of Insurance Rate is the monthly rate charged under the policy. The Cost of Insurance Rate varies based on the sex, issue age (nearest birthday), duration and premium class of each Insured. It is determined under an actuarial formula, on file with the insurance supervisory official of the jurisdiction in which the policy is delivered, that reflects one-alive and both alive probabilities. The rates set forth in the table below reflect the amount of the Flat Extra or the Risk Factor (substandard risk classification rates), if any, shown in the POLICY SPECIFICATIONS, and are based on the 1980 CSO Tables. The monthly Cost of Insurance Rate charged under the policy shall not exceed the applicable rate set forth in the table below for each respective duration (number of years from the Date of Issue).
MONTHLY MONTHLY MONTHLY DURATION RATE DURATION RATE DURATION RATE - -------- ------- -------- ------- -------- ------- 1 0.000255 2 0.000812 3 0.001471 4 0.002239 5 0.003179 6 0.004319 7 0.005723 8 0.007423 9 0.009504 10 0.011998 11 0.014987 12 0.018426 13 0.022453 14 0.027117 15 0.032525 16 0.038750 17 0.046192 18 0.054929 19 0.065288 20 0.077486 21 0.091747 22 0.108619 23 0.127776 24 0.149675 25 0.174402 26 0.202244 27 0.233535 28 0.269512 29 0.311366 30 0.360877 31 0.419730 32 0.489946 33 0.571976 34 0.665795 35 0.772171 36 0.892098 37 1.026150 38 1.179951 39 1.359657 40 1.571045 41 1.820886 42 2.114438 43 2.453583 44 2.836841 45 3.265740 46 3.741661 47 4.267789 48 4.855635 49 5.520031 50 6.269863 51 7.114259 52 8.058703 53 9.091792 54 10.203369 55 11.385377 56 12.634074 57 13.950328 58 15.343913 59 16.834785 60 18.472779 61 20.339516 62 22.573392 63 25.430002 64 29.281829 65 34.418148 66 41.212040 67 57.813939 68 83.333330
LN650 9 SCHEDULE 4: CORRIDOR PERCENTAGES TABLE The amount of the Death Benefit Proceeds must satisfy certain requirements under the Internal Revenue Code if the policy is to qualify as insurance for Federal income tax purposes. The amount of the Death Benefit Proceeds required to be paid under the Internal Revenue Code to maintain the policy as life insurance under each of the Death Benefit Options (SEE INSURANCE COVERAGE PROVISIONS, DEATH BENEFIT OPTIONS) is equal to the product of the Accumulation Value and the applicable Corridor Percentage set forth below.
ATTAINED AGE OF THE CORRIDOR PERCENTAGE ATTAINED AGE OF THE CORRIDOR PERCENTAGE YOUNGER INSURED YOUNGER INSURED (NEAREST BIRTHDAY) (NEAREST BIRTHDAY) 0-40 250 61 128 - -------------------------------------------------------------------------------------------------- 41 243 62 126 42 236 63 124 43 229 64 122 44 222 65 120 45 215 66 119 - -------------------------------------------------------------------------------------------------- 46 209 67 118 47 203 68 117 48 197 69 116 49 191 70 115 50 185 71 113 - -------------------------------------------------------------------------------------------------- 51 178 72 111 52 171 73 109 53 164 74 107 54 157 75-90 105 55 150 91 104 - -------------------------------------------------------------------------------------------------- 56 146 92 103 57 142 93 102 58 138 94 101 59 134 95-99 100 60 130 - --------------------------------------------------------------------------------------------------
LN650 10 DEFINITIONS ACCUMULATION VALUE. The sum of (i) the Fixed Account value, (ii) the Variable Account value, and (iii) the Loan Account value under the policy. ADMINISTRATOR MAILING ADDRESS. The Administrator Mailing Address for the policy is indicated on the front cover. AGE. The age of the subject person at her or his nearest birthday. COST OF INSURANCE. SEE POLICY VALUES PROVISIONS, COST OF INSURANCE. COST OF INSURANCE RATES. This term is defined in SCHEDULE 3. DATE OF ISSUE. The date on which coverage under the policy becomes effective. The Date of Issue is shown on the POLICY SPECIFICATIONS. DEATH BENEFIT PROCEEDS. The amount payable to the Beneficiary upon the Second Death (defined below) in accordance with the Death Benefit Option elected, after deduction of the amount necessary to repay any loans in full and overdue deductions. The two Death Benefit Options are described in INSURANCE COVERAGE PROVISIONS, DEATH BENEFIT OPTIONS. DUE PROOF OF DEATH. A certified copy of an official death certificate, a certified copy of a decree of a court of competent jurisdiction as to the finding of death, or any other proof of death satisfactory to Lincoln Life. EFFECTIVE DATE. The date on which the initial premium is applied. The Effective Date is shown in the POLICY SPECIFICATIONS. FIXED ACCOUNT. The account under which principal is guaranteed and interest is credited at a rate of not less than 4% per year. (SEE POLICY VALUES PROVISION, INTEREST CREDITED UNDER FIXED ACCOUNT.) Fixed Account assets are general assets of Lincoln Life and are held in Lincoln Life's general account. FUND(S). The Funds in the Variable Sub-Account portfolios to which the Owner may allocate Net Premium Payments or transfers and in the shares of which such allocations shall be invested. FUND GROUP. Each of the open-end management investment companies registered under the 1940 Act, one or more of the portfolios (funds) of which fund the Variable Sub-Accounts. GRACE PERIOD. SEE PREMIUM AND REINSTATEMENT PROVISIONS, GRACE PERIOD. HOME OFFICE. The term "Home Office" means The Lincoln National Life Insurance Company. IN WRITING. With respect to any notice to Lincoln Life, this term means a written form satisfactory to Lincoln Life and received by it at the Administrator Mailing Address. With respect to any notice by Lincoln Life to the Owner, any assignee or other person, this term means written notice by ordinary mail to such person at the most recent address in Lincoln Life's records. LN650 11 DEFINITIONS (CONTINUED) LOAN ACCOUNT. The account in which policy indebtedness (outstanding loans and interest) accrues once it is transferred out of the Fixed and/or Variable Sub-Accounts. The Loan Account is part of Lincoln Life's general account. MONTHLY ANNIVERSARY DAY. The Day of the month, as shown in the POLICY SPECIFICATIONS, when Lincoln Life makes the Monthly Deduction, or the next Valuation Day if that day is not a Valuation Day or is nonexistent for that month. MONTHLY DEDUCTION. The Monthly Deduction is made from the Net Accumulation Value; this deduction includes the Cost of Insurance, an administrative expense charge and charges for supplemental riders or benefits, if applicable. (SEE POLICY VALUES PROVISIONS, MONTHLY DEDUCTION). MORTALITY AND EXPENSE RISK (M&E) RATE. A daily rate assessed, by Lincoln Life as a percentage of the value of the Variable Sub-Accounts for its assumption of mortality and expense risks. In no event shall the daily M&E Rate exceed the maximum rate specified in SCHEDULE 2. NET ACCUMULATION VALUE. The Accumulation Value less the Loan Account Value. NET PREMIUM PAYMENT. The portion of a premium payment, after deduction of the Premium Load as specified in SCHEDULE 2, available for allocation to the Fixed and/or Variable Sub-Accounts. 1940 ACT. The Investment Company Act of 1940, as amended. NO LAPSE PREMIUM: The premium required to be paid each Monthly Anniversary Day on a cumulative basis to prevent the policy from lapsing, if the No Lapse Provision is elected. (SEE PREMIUM AND REINSTATEMENT PROVISIONS, NO LAPSE PROVISION.) NYSE. New York Stock Exchange. POLICY ANNIVERSARY. The day of the year the policy was issued, or the next Valuation Day if that day is not a Valuation Day or is nonexistent for that year. POLICY YEAR. Each twelve-month period, beginning on the Date of Issue, during which the policy is in effect. RIGHT-TO-EXAMINE PERIOD. SEE RIGHT TO EXAMINE THE POLICY, on the Cover of the Policy. SEC. The Securities and Exchange Commission. SECOND DEATH. The death of the second of the two Insureds to die. SUB-ACCOUNT. The investment options available under this policy, including Variable Sub-Accounts and the Fixed Account. LN650 12 DEFINITIONS (CONTINUED) SURRENDER VALUE. SEE NONFORFEITURE AND SURRENDER VALUE PROVISIONS, SURRENDER VALUE. VALUATION DAY. Any day on which the NYSE is open for business, except a day during which trading on the NYSE is restricted or on which an SEC-determined emergency exists or on which the valuation or disposal of securities is not reasonably practicable, as determined under applicable law. VALUATION PERIOD. The period beginning immediately after the close of business on a Valuation Day and ending at the close of business on the next Valuation Day. VARIABLE ACCOUNT. The account consisting of all Variable Sub-Account(s) invested in shares of the Fund(s). Variable Account assets are separate account assets of Lincoln Life, the investment performance of which is kept separate from that of the general assets of Lincoln Life. Variable Account assets are not chargeable with the general liabilities of Lincoln Life. VARIABLE ACCUMULATION UNIT. A unit of measure used to calculate the value of a Variable Sub-Account. PREMIUM AND REINSTATEMENT PROVISIONS PREMIUMS. The first premium shall be paid on or before the Effective Date. Additional premium may be paid, with the consent of Lincoln Life and subject to the requirements under ADDITIONAL PREMIUMS, at any time before the Coverage Date. There is no minimum premium requirement. However, except as provided under the NO LAPSE PROVISION, the policy will lapse subject to the terms set forth in the GRACE PERIOD if the Net Accumulation Value is insufficient to pay a Monthly Deduction. PAYMENT OF PREMIUM. The initial premium is payable at the Administrator Mailing Address or to an authorized representative of Lincoln Life. All subsequent premium payments are payable at the Administrator Mailing Address. PLANNED PREMIUM. If the Owner chooses to make periodic premium payments, Lincoln Life shall send premium reminder notices In Writing for the amounts and with the frequency elected by the Owner. Changes in the amounts or frequency of such payments will be subject to consent of Lincoln Life. ADDITIONAL PREMIUM. In addition to any planned premium, it is possible to make additional premium payments of no less than $100 at any time before the Coverage Date. Lincoln Life reserves the right to limit the amount or frequency of any such additional premium payments. If a payment of any additional premium would increase the difference between the Accumulation Value and the Specified Amount, Lincoln Life may reject the additional premium payment unless evidence of insurability is furnished to Lincoln Life and it agrees to accept the risk for both Insureds or any surviving Insured. If a payment of additional premium would cause the policy to cease to qualify as insurance for federal income tax purposes, Lincoln Life may reject all or such excess portion of the additional premium. Any payment received by Lincoln Life shall be applied to repay any outstanding loans and to that extent shall not be treated as premium, unless Lincoln Life is specifically instructed otherwise In Writing by the Owner. ALLOCATION OF NET PREMIUM PAYMENTS. Net Premium Payments may be allocated to the Fixed and/or Variable Sub-Accounts under the policy subject to POLICY SPECIFICATIONS, LIMITS ON ALLOCATION OF NET PREMIUM PAYMENTS. The Net Premium Payment associated with the initial premium payment and any LN650 NY 13 PREMIUM AND REINSTATEMENT PROVISIONS (CONTINUED) Net Premium Payments received during the Right-to-Examine Period shall be allocated upon the expiration of the Right-to-Examine Period in accordance with the allocation percentages specified in the application. Subsequent Net Premium Payments shall be allocated on the same basis as the most recent Net Premium Payment unless Lincoln Life is otherwise instructed In Writing. COVERAGE DATE. Payment of (a) the No Lapse Premium shown in the Policy Specifications, or (b) Planned Premiums payable in accordance with the payment mode specified, may not continue the policy in force until the Coverage Date even if the amount is paid as scheduled. The Coverage Date is not guaranteed based upon the level of Planned Premiums. The period for which the policy will continue will depend on: 1. The amount, timing, and frequency of premium payment; 2. Changes in the Specified Amount and Death Benefit options; 3. Interest credits and insurance costs; 4. Changes in deductions for riders, if any; and 5. Partial withdrawals and loans. NO LAPSE PROVISION. If the No Lapse Provision has been selected, the Owner is required to pay, on or before each Monthly Anniversary Day, the monthly No Lapse Premium as specified in the POLICY SPECIFICATIONS. As long as the sum of all premium payments less any indebtedness and partial surrenders is at least equal to the sum of the No Lapse Premiums due since the Date of Issue, the policy will not lapse even if the Net Accumulation Value is insufficient to meet the Monthly Deductions. A period of 61 days will be granted for the No Lapse Provision if on any Monthly Anniversary Day it is determined that the No Lapse Premium requirement has not been met. At least 31 days before the end of that period, Lincoln Life will notify the Owner of the amount of premium necessary to maintain the No Lapse Provision. The No Lapse Provision will terminate if (a) the No Lapse Premium requirements are not met, (b) there is an increase in the Specified Amount, or (c) there is a change in the Death Benefit Option. Once the No Lapse Provision is terminated, it cannot be reinstated. GRACE PERIOD. Except as provided under the NO LAPSE PROVISION, if on any Monthly Anniversary Day the Net Accumulation Value is insufficient to cover the current Monthly Deduction, or if the amount of indebtedness exceeds the Surrender Value, Lincoln Life shall send a notice In Writing to the Owner and any assignee of record. Such notice shall state the amount which must be paid to avoid termination. The Net Premium Payment due will be at least equal to (a) the amount by which the Monthly Deduction Amount exceeds the Net Accumulation Value, or (b) the amount by which the indebtedness exceeds the Surrender Value, and (c) enough additional premium to maintain the policy in force for at least two months. If the amounts set forth in the notice are not paid to Lincoln Life on or before the day that is the later of (a) 31 days after the date of mailing of the notice, and (b) 61 days after the Monthly Anniversary Day with respect to which such notice applies (together, the "Grace Period"), then the policy shall terminate. All coverage under the policy will then lapse without value. LN650 NY 14 PREMIUM AND REINSTATEMENT PROVISIONS (CONTINUED) REINSTATEMENT. After the policy has lapsed due to the failure to make a necessary payment before the end of an applicable Grace Period, the policy may be reinstated at any time prior to the Coverage Date if both Insureds are living provided (a) the policy has not been surrendered, (b) there is an application for reinstatement In Writing, (c) evidence of insurability is furnished to Lincoln Life and it agrees to accept the risk as to both Insureds, (d) enough premium is paid to keep the policy in force for at least 2 months, and (e) any accrued loan interest is paid. The reinstated policy shall be effective as of the Monthly Anniversary Day after the date on which Lincoln Life approves the application for reinstatement. The Net Premium Payment and any loan repayment upon reinstatement will be allocated as set forth under ALLOCATION OF NET PREMIUM PAYMENTS and LOAN PROVISIONS, LOAN ACCOUNT and LOAN REPAYMENT. Upon reinstatement, the surrender charges assessed at the time of lapse will be credited to the Accumulation Value (in proportion to the then current allocation of Net Premium Payments), and the surrender charges set forth in SCHEDULE 1 will be reinstated as of the Policy Year in which the policy lapsed. OWNERSHIP, ASSIGNMENT AND BENEFICIARY PROVISIONS OWNER. The Owner on the Date of Issue will be the person designated in the POLICY SPECIFICATIONS. If no person is designated as Owner, the Insureds will be the Owner. RIGHTS OF OWNER. So long as one of the Insureds is alive and except as provided below, the Owner may exercise all rights and privileges under the policy including the right to: (a) release or surrender the policy to Lincoln Life, (b) agree with Lincoln Life to any change in or amendment to the policy, (c) transfer all rights and privileges to another person, (d) change the Beneficiary, and (e) assign the policy. The Owner may exercise any rights and privileges under the policy without the consent of any designated Beneficiary if the Owner has reserved the right to change the Beneficiary. If there is an assignment of the policy recorded with Lincoln Life, the Owner may exercise the rights and privileges under the policy only with the consent of the recorded assignee. Unless provided otherwise, if the Owner is a person other than an Insured and dies before the Second Death, all of the rights and privileges of the Owner under the policy shall vest in the Owner's executors, administrators or assigns. TRANSFER OF OWNERSHIP. The Owner may transfer all rights and privileges of the Owner. On the date of transfer, the transferee shall become the Owner and shall have all the rights and privileges of the Owner. The Owner may revoke any transfer before the date of transfer. A transfer, or a revocation of transfer, shall be In Writing and shall take effect the later of the date of transfer specified by the Owner or the date it is recorded by Lincoln Life, and any payment made or any action taken or allowed by Lincoln Life before such time in reliance on the recorded ownership of the policy shall be without prejudice to Lincoln Life. Unless otherwise directed by the Owner, with the consent of any assignee recorded with Lincoln Life, a transfer shall not affect the interest of any Beneficiary designated before the date of transfer. LN650 NY 15 OWNERSHIP, ASSIGNMENT AND BENEFICIARY PROVISIONS (CONTINUED) ASSIGNMENT. Assignment of the policy shall be In Writing and shall be effective when Lincoln Life receives it. Lincoln Life shall not be responsible for the validity or sufficiency of any assignment. An assignment of the policy shall remain effective only so long as the assignment remains in force. If an assignment so provides, it shall transfer the interest of any designated transferee or of any Beneficiary if the Owner has reserved the right to change the Beneficiary. BENEFICIARY. The Beneficiary on the Date of Issue shall be the person designated in the POLICY SPECIFICATIONS. Unless provided otherwise, the interest of any Beneficiary who dies before the Second Death shall vest in the Owner or the Owner's executors, administrators or assigns. CHANGE OF BENEFICIARY. The Beneficiary may be changed from time to time. Unless provided otherwise, the right to change the Beneficiary is reserved to the Owner. A request for change of Beneficiary shall be In Writing, signed by the Owner and, if the right to change the Beneficiary has not been reserved to the Owner, signed by the existing Beneficiary. A change of Beneficiary shall be effective, retroactive to the date of request, only when the change recorded by Lincoln Life, and any payment made or any action taken or allowed by Lincoln Life before such time in reliance on its records as to the identity of the Beneficiary shall be without prejudice to Lincoln Life. VARIABLE ACCOUNT PROVISIONS VARIABLE ACCOUNT AND VARIABLE SUB-ACCOUNTS. Assets invested on a variable basis are held in the separate account ("Variable Account") which is designated on page 5 of the policy. The separate account was established by a resolution of Lincoln Life's Board of Directors as a "separate account" under the insurance law of the State of Indiana, Lincoln Life's state of domicile, is registered as a unit investment trust under the 1940 Act and is subject to the law of the state in which this policy is delivered. The assets of the Variable Account (except assets in excess of the reserves and other contract liabilities of the Variable Account) shall not be chargeable with liabilities arising out of any other business conducted by Lincoln Life and the income, gains or losses from the Variable Account assets shall be credited or charged against the Variable Account without regard to the income, gains or losses of Lincoln Life. The Variable Account assets are owned and controlled exclusively by Lincoln Life, and Lincoln Life is not a trustee with respect to such assets. The Variable Account is divided into Variable Sub-Accounts. The assets of each Variable Sub-Account shall be invested fully and exclusively in shares of the appropriate Fund for such Variable Sub-Account. The investment performance of each Variable Sub-Account shall reflect the investment performance of the appropriate Fund. For each Variable Sub-Account, Lincoln Life shall maintain Variable Accumulation Units as a measure of the investment performance of the Fund shares held in such Variable Sub-Account. Subject to any vote by persons entitled to vote thereon under the 1940 Act, Lincoln Life may elect to operate the Variable Account as a management company instead of a unit investment trust under the 1940 Act or, if registration under the 1940 Act is no longer required, to deregister the Variable Account. In the event of such a change, Lincoln Life shall endorse the policy to reflect the change and may take any other necessary or appropriate action required to effect the change. Any changes in the investment policies of the Variable Account shall first be approved by the Indiana Insurance Commissioner and approved or filed, as required, in any other state or other jurisdiction where the policy was issued. INVESTMENTS OF THE VARIABLE SUB-ACCOUNTS. All amounts allocated or transferred to a Variable Sub-Account will be used to purchase shares of the appropriate Fund. Each Fund Group shall at all times be LN650 NY 16 VARIABLE ACCOUNT PROVISIONS (CONTINUED) registered under the 1940 Act as an open-end management investment company. The Funds available for investment and for which Variable Sub-Accounts have been established as of the Date of Issue are listed in the application and on page 5 of the policy. Lincoln Life, after due consideration of appropriate factors, may add additional Funds and Fund Groups at any time or may eliminate or substitute Funds or Fund Groups in accordance with FUND WITHDRAWAL AND SUBSTITUTED SECURITIES. Any and all distributions made by a Fund will be reinvested in additional shares of that Fund at net asset value. Deductions by Lincoln Life from a Variable Sub-Account will be made by redeeming a number of Fund shares at net asset value equal in total value to the amount to be deducted. INVESTMENT RISK. Fund share values fluctuate, reflecting the risks of changing economic conditions and the ability of a Fund Group's investment adviser or sub-adviser to manage that Fund and anticipate changes in economic conditions. As to the Variable Account assets, the Owner bears the entire investment risk of gain or loss. FUND WITHDRAWAL AND SUBSTITUTED SECURITIES. If a particular Fund ceases to be available for investment, or Lincoln Life determines that further investment in the particular Fund is not appropriate in view of the purposes of the Variable Account (including without limitation that it is not appropriate in light of legal, regulatory or federal income tax considerations), Lincoln Life may withdraw the particular Fund as a possible investment in the Variable Account and may substitute shares of a new or different Fund for shares of the withdrawn Fund. Lincoln Life shall obtain any necessary regulatory or other approvals. Lincoln Life may make appropriate endorsements to the policy to the extent reasonably required to reflect any withdrawal or substitution. POLICY VALUES PROVISIONS ACCUMULATION VALUE. The Accumulation Value equals the sum of (i) the Fixed Account value, (ii) the Variable Account value, and (iii) the Loan Account value. At any point in time, therefore, the Accumulation Value reflects (a) Net Premium Payments made, (b) the amount of any partial surrenders, (c) any increases or decreases as a result of market performance in the Variable Sub-Accounts, (d) interest credited under the Fixed Account, (e) interest credited under the Loan Account, and (f) all expenses and fees as specified under SCHEDULE 2. FIXED ACCOUNT VALUE. The Fixed Account value, if any, with respect to the policy, at any point in time, is equal to the sum of the Net Premium Payments allocated or other amounts (net of any charges) transferred to the Fixed Account plus interest credited to such account less the Monthly Deductions applied to such account and less any partial surrenders or amounts transferred from the Fixed Account. INTEREST CREDITED UNDER FIXED ACCOUNT. Lincoln Life will credit interest to the Fixed Account daily. The interest rate applied to the Fixed Account will be the greater of: (a) a compounded daily rate of 0.010746% (equivalent to a compounded annual rate of 4%), or (b) a rate determined by Lincoln Life from time to time. Such rate will be established on a prospective basis. LOAN ACCOUNT VALUE. The Loan Account value, if any, with respect to the policy, is the amount of any outstanding loan(s), including accrued interest on the loan(s). (SEE LOAN PROVISIONS, LOAN ACCOUNT.) INTEREST RATE CREDITED ON LOAN ACCOUNT. The interest rate credited on the Loan Account may vary, but will not be less than the loan interest rate less 2% per year during Policy Years 1 through 10 and less 1% per year thereafter. (SEE the POLICY SPECIFICATIONS for the rate in effect as of the Date of Issue.) VARIABLE ACCOUNT VALUE. The Variable Account value, if any, with respect to the policy, for any Valuation Period is equal to the sum of the then stated values of all Variable Sub-Accounts under the policy. The stated value of each Variable Sub-Account is determined by multiplying the number of Variable Accumulation Units, if any, credited or debited to such Variable Sub-Account with respect to the policy by the Variable Accumulation Unit Value of the particular Variable Sub-Account for such Valuation Period. LN650 NY 17 POLICY VALUES PROVISIONS (CONTINUED) VARIABLE ACCUMULATION UNIT VALUE. Net Premium Payments, or portions thereof, allocated, or amounts transferred, to each Variable Sub-Account are converted into Variable Accumulation Units. The Variable Accumulation Unit value for a Variable Sub-Account for any Valuation Period after the inception of the Variable Sub-Account is determined as follows: 1. The total value of Fund shares held in the Variable Sub-Account is calculated by multiplying the number of Fund shares owned by the Variable Sub-Account at the beginning of the Valuation Period by the net asset value per share of the Fund at the end of the Valuation Period and adding any dividend or other distribution of the Fund earned during the Valuation Period; minus 2. The liabilities of the Variable Sub-Account at the end of the Valuation Period; such liabilities include daily charges imposed on the Variable Sub-Account and may include a charge or credit with respect to any taxes paid or reserved for by Lincoln Life that Lincoln Life determines result from the operations of the Variable Account; and 3. The result of (2) is divided by the number of Variable Accumulation Units for that Variable Sub-Account outstanding at the beginning of the Valuation Period. The daily charges imposed on a Variable Sub-Account for any Valuation Period are equal to the M&E charge multiplied by the number of calendar days in the Valuation Period. The accumulation unit value may increase or decrease from Valuation Period to Valuation Period. COST OF INSURANCE. The Cost of Insurance is determined monthly. Such cost is calculated as (1), multiplied by the result of (2) minus (3), where: (1) is the Cost of Insurance Rate as described in COST OF INSURANCE RATES, (2) is the Death Benefit at the beginning of the policy month, divided by 1.0032737, and (3) is the Accumulation Value at the beginning of the policy month prior to the deduction for the monthly Cost of Insurance. COST OF INSURANCE RATES. The Cost of Insurance Rates are determined from time to time by Lincoln Life based on its expectations of future mortality and vary as set forth in SCHEDULE 3. The actuarial formula used to make such determination has been filed with the insurance supervisory official of the jurisdiction in which the policy is delivered. Any change in Cost of Insurance Rates will apply to all individuals of the same class as the Insured. The Cost of Insurance Rates shall not exceed the amounts described in SCHEDULE 3. MONTHLY DEDUCTION. Each month, on the Monthly Anniversary Day, Lincoln Life will deduct the Monthly Deduction by withdrawing the amount from the Fixed and Variable Sub-Accounts in proportion to which the balances invested in such Fixed and Variable Sub-Accounts bear to the Net Accumulation Value as of the date on which the deduction is made. The Monthly Deduction for a policy month will be calculated as Charge (1) plus Charge (2) where: CHARGE (1) is the Cost of Insurance (as described in COST OF INSURANCE) and the cost of any supplemental riders or optional benefits, and CHARGE (2) is the Monthly Administrative Fee as described under SCHEDULE 2. The amount of the Monthly Deduction will be deducted from the Fixed and Variable Sub-Accounts in the same proportion that the value of each account bears to the Net Accumulation Value as of the date on which the deduction is made. LN650 NY 18 POLICY VALUES PROVISIONS (CONTINUED) BASIS OF COMPUTATIONS. The Cost of Insurance Rates are guaranteed to be no greater than that calculated based on the applicable 1980 Commissioners Standard Ordinary Mortality Table (Age nearest birthday). All policy values are at least equal to that required by the jurisdiction in which the policy is delivered. A detailed statement of the method of computing values has been filed with the insurance supervisory official of that jurisdiction. TRANSFER PRIVILEGE PROVISION TRANSFER PRIVILEGE. At any time while the policy is in force, other than during the Right-to-Examine Period, the Owner has the right to transfer amounts among the Fixed and Variable Sub-Accounts then available under the policy. All such transfers are subject to the following provisions. Transfers may be made In Writing. Transfer requests must be received at the Administrator Mailing Address prior to the time of day set forth in the prospectus and provided the NYSE is open for business, in order to be processed as of the close of business on the date the request is received; otherwise, the transfer will be processed on the next business day the NYSE is open for business. A single transfer request may consist of multiple transactions. Transfers from the Fixed Sub-Account are subject to the POLICY SPECIFICATIONS, LIMITS ON TRANSFERS. Transfers to the Fixed Sub-Account will earn interest as specified under POLICY VALUES PROVISIONS, INTEREST CREDITED UNDER FIXED ACCOUNT. Transfers involving Variable Sub-Accounts will reflect the purchase or cancellation of Variable Accumulation Units having an aggregate value equal to the dollar amount being transferred to or from a particular Variable Sub-Account. The purchase or cancellation of such units shall be made using Variable Accumulation Unit values of the applicable Variable Sub-Account for the Valuation Period during which the transfer is effective. Unless otherwise changed by Lincoln Life to be less restrictive, transfers shall be subject to the following conditions: (a) Up to 12 transfer requests may be made during any Policy Year without charge, however, for each transfer request in excess of 12, a transfer fee as set forth in SCHEDULE 2 may be deducted on a pro-rata basis from the Fixed and/or Variable Sub-Accounts from which the transfer is being made; (b) The amount being transferred may not be less than $100 unless the entire value of the Fixed or Variable Sub-Account is being transferred; (c) The amount being transferred may not exceed Lincoln Life's maximum amount limit then in effect; (d) Transfers among the Variable Sub-Accounts or from a Variable Sub-Account to the Fixed Account can be made at any time; (e) Transfers involving Variable Sub-Account(s) shall be subject to such additional terms and conditions as may be imposed by the Funds; and (f) Any value remaining in the Fixed or a Variable Sub-Account following a transfer may not be less than $100. If the investment strategy of a Variable Sub-Account were changed, the Owner may transfer the amount in that Variable Sub-Account to the Fixed Account without a transfer charge, even if the 12 free transfers have already been used. Moreover, no transfer charge will be imposed when the Owner, in accordance with INSURANCE COVERAGE PROVISIONS, RIGHT TO CONVERT and GENERAL PROVISIONS, CHANGE OF PLAN, exchanges the policy for an equivalent fixed account policy, even if the 12 free transfers have already been used. NONFORFEITURE AND SURRENDER VALUE PROVISIONS SURRENDER. Surrender of the policy is effective on the business day of receipt by Lincoln Life of the policy and a request for surrender In Writing, provided that at the time of such receipt the policy is in force and it is prior to the Coverage Date. LN650 NY 19 NONFORFEITURE AND SURRENDER VALUE PROVISIONS (CONTINUED) SURRENDER VALUE. The amount payable on surrender of the policy (the "Surrender Value") shall be the Net Accumulation Value less any Surrender Charges as determined under the provision of SCHEDULE 1. The Surrender Value shall be paid by Lincoln Life in a lump sum or as provided under the OPTIONAL METHOD OF SETTLEMENT rider. Any deferment of payments by Lincoln Life will be subject to GENERAL PROVISIONS, DEFERMENT OF PAYMENTS. PARTIAL SURRENDER. A partial surrender may be made from the Policy on any Valuation Day prior to the Coverage Date in accordance with the following as long as the policy is in force. A partial surrender must be requested In Writing or, if previously authorized, by telephone. A partial surrender may only be made if the amount of the partial surrender, including the transaction fee, is (a) not less than $525; (b) not more than 90% of the Surrender Value of the policy as of the end of the Valuation Period ending on the Valuation Day on which the request is accepted by Lincoln Life; and (c) would not cause the Specified Amount to decline below the Minimum Specified Amount set forth in the POLICY SPECIFICATIONS. The amount of the partial surrender and the $25 transaction fee shall be withdrawn from the Fixed and/or Variable Sub-Accounts in proportion to the balances invested in such Sub-Accounts. Any surrender results in a withdrawal of funds from all of the Fixed and/or Variable Sub-Accounts. Any surrender from a Variable Sub-Account will result in the cancellation of Variable Accumulation Units which have an aggregate value on the date of the surrender equal to the total amount by which the Variable Sub-Account is reduced. The cancellation of such units will be based on the Variable Accumulation Unit value of the Variable Sub-Account determined at the close of the Valuation Period during which the surrender is effective. EFFECT OF PARTIAL SURRENDERS ON ACCUMULATION VALUE AND SPECIFIED AMOUNT. As of the end of the Valuation Day on which there is a partial surrender, (a) the Accumulation Value shall be reduced by the sum of (i) the amount of the partial surrender, plus (ii) the transaction fee specified in SCHEDULE 1; and (b) if DEATH BENEFIT OPTION 1 is in effect, the Specified Amount shall be reduced by the amount of the partial surrender. LOAN PROVISIONS POLICY LOANS. If the policy has Surrender Value, Lincoln Life will grant a loan against the policy provided: (a) a proper loan agreement is executed and (b) a satisfactory assignment of the policy to Lincoln Life is made. The loan may be for any amount up to 90% of the then current Surrender Value. The amount borrowed will be paid within seven days of Lincoln Life's receipt of such request, except as Lincoln Life may be permitted to defer the payment of amounts as specified under GENERAL PROVISIONS, DEFERMENT OF PAYMENTS. The minimum loan amount is $500. Lincoln Life reserves the right to modify this amount in the future. Lincoln Life will withdraw such loan from the Fixed and/or Variable Sub-Accounts in proportion to the then current account values, unless the Owner instructs Lincoln Life otherwise. LOAN ACCOUNT. The amount of any loan will be transferred out of the Fixed and/or Variable Sub-Accounts as described above. Such amount will become part of the Loan Account Value. The outstanding loan balance at any time includes accrued interest on the loan. LOAN REPAYMENT. The outstanding loan balance (i.e. indebtedness) may be repaid at any time during the lifetime of either Insured, however, the minimum loan repayment is $100 or the amount of the outstanding indebtedness, if less. The Loan Account will be reduced by the amount of any loan repayment. Any repayment of indebtedness, other than loan interest, will be allocated to the Fixed and/or Variable Sub-Accounts in the same proportion in which Net Premium Payments are currently allocated, unless the Owner and Lincoln Life agree otherwise In Writing. LN650 NY 20 LOAN PROVISIONS (CONTINUED) INTEREST RATE CHARGED ON LOAN ACCOUNT. Interest charged on the Loan Account will be at a rate equivalent to 8% per year, payable in arrears. Interest charged on the Loan Account is payable annually on each Policy Anniversary or as otherwise agreed In Writing by the Owner and Lincoln Life. Such loan interest amount, if not paid when due, will be transferred out of the Fixed and/or Variable Sub-Accounts in proportion to the then current Net Accumulation Value and into the Loan Account, unless both the Owner and Lincoln Life agree otherwise. INDEBTEDNESS. The term "indebtedness" means money which is owed on this policy due to an outstanding loan and interest accrued thereon. A loan, whether or not repaid, will have a permanent effect on the Net Accumulation Value and on the Death Benefit Proceeds. Any indebtedness at time of settlement will reduce the proceeds payable under the policy. A policy loan reduces the then current Net Accumulation Value under the policy while repayment of a loan will cause an increase in the then current Net Accumulation Value. If at any time the total indebtedness against the policy, including interest accrued but not due, equals or exceeds the then current Accumulation Value less surrender charge, a notice will be sent at least 31 days before the end of the grace period to the Owner and to assignees, if any, that this policy will terminate unless the indebtedness is repaid. The policy will thereupon terminate without value subject to the conditions in PREMIUM AND REINSTATEMENT PROVISIONS, GRACE PERIOD. INSURANCE COVERAGE PROVISIONS DATE OF COVERAGE. The date of coverage will be the Date of Issue provided the initial premium has been paid (1) while both Insureds are alive and (2) prior to any change in health and insurability as represented in the application. For any insurance that has been reinstated, the date of coverage will be the Monthly Anniversary Day that coincides with or next follows the day the application for reinstatement is approved by Lincoln Life, provided both of the Insureds are alive on such day. (SEE PREMIUM AND REINSTATEMENT PROVISIONS, REINSTATEMENT.) TERMINATION OF COVERAGE. All coverage under the policy terminates on the first to occur of the following: 1. Surrender of the policy; 2. Death of the second of the Insureds to die; and 3. The policy matures at its Coverage Date. 4. Failure to pay the amount of premium necessary to avoid termination before the end of any applicable Grace Period. No action by Lincoln Life after such a termination of the policy, including any Monthly Deduction made after termination of coverage, shall constitute a reinstatement of the policy or waiver of the termination. Any such deduction will be refunded. LN650 NY 21 INSURANCE COVERAGE PROVISIONS (CONTINUED) DEATH BENEFIT PROCEEDS. If both Insureds die while the policy is in force, Lincoln Life shall pay Death Benefit Proceeds equal to the sum of the greater of (i) the amount determined under the Death Benefit Option in effect at the time of the Second Death, or (ii) an amount determined by Lincoln Life equal to that required by the Internal Revenue Code to maintain the contract as a life insurance policy (SEE SCHEDULE 4.) DEATH BENEFIT OPTIONS. Following are the Death Benefit Options available under the policy: DEATH BENEFIT OPTION 1: THE SPECIFIED AMOUNT. The Specified Amount on the Second Death, less any partial surrenders. DEATH BENEFIT OPTION 2: SUM OF THE SPECIFIED AMOUNT AND THE ACCUMULATION VALUE. The sum of the Specified Amount plus the Accumulation Value as of the Valuation Day immediately after the Second Death. Unless DEATH BENEFIT OPTION 2 is elected, the Owner will be deemed to have elected DEATH BENEFIT OPTION 1. CHANGES IN SPECIFIED AMOUNT AND DEATH BENEFIT OPTION. Unless provided otherwise, a change in Specified Amount or Death Benefit Option may be effected any time while this policy is in force, subject to (a) the consent of Lincoln Life, b) all such changes must be requested In Writing on a form satisfactory to Lincoln Life and filed at the Administrator Mailing Address, and (c) the following conditions: CHANGES IN SPECIFIED AMOUNT: 1. If a decrease in the Specified Amount is requested, the decrease will become effective on the Monthly Anniversary Day that coincides with or next follows receipt of the request provided any requirements as determined by Lincoln Life are met. In such event, Lincoln Life will reduce the existing Specified Amount against the most recent increase first, then against the next most recent increases successively, and finally, against insurance provided under the original application; however, Lincoln Life reserves the right to limit the amount of any decrease so that the Specified Amount will not be less than the Minimum Specified Amount shown in the POLICY SPECIFICATIONS. 2. If an increase in the Specified Amount is requested: (a) a supplemental application must be submitted and evidence of insurability of both Insureds satisfactory to Lincoln Life must be furnished; and (b) any other requirements as determined by Lincoln Life must be met. If Lincoln Life approves the request, the increase will become effective upon (i) the Monthly Anniversary Day that coincides with or next follows the date the request is approved by Lincoln Life and (ii) the deduction from the Accumulation Value (in proportion to the then current account values of the Fixed and/or Variable Sub-Accounts) of the first month's Cost of Insurance for the increase, provided both Insureds are alive on such day. LN650 NY 22 INSURANCE COVERAGE PROVISIONS (CONTINUED) CHANGES IN DEATH BENEFIT OPTION: 1. On a change from DEATH BENEFIT OPTION 1 to DEATH BENEFIT OPTION 2: The Specified Amount will be reduced by the Accumulation Value as of the Monthly Anniversary Day that coincides with or next follows date of receipt of the request for change. 2. On a change from Death BENEFIT OPTION 2 to DEATH BENEFIT OPTION 1: The Specified Amount will be increased by the Accumulation Value and the date of the change will be the Monthly Anniversary Day that coincides with or next follows the date of receipt of the request for change. Lincoln Life will not allow a decrease in the amount of insurance below the minimum amount required to maintain this contract as a life insurance policy under the Internal Revenue Code. RIGHT TO CONVERT. The Owner may convert this policy to a substantially comparable flexible premium adjustable life insurance policy without evidence of insurability for an amount of insurance not exceeding the death benefit of the variable life insurance policy on the date of conversion. PAID-UP INSURANCE OPTION. At any time, the Owner may transfer all of the Variable Account Value to the Fixed Account and then surrender the policy for reduced guaranteed nonparticipating paid-up insurance. No monthly administrative fees would apply to such paid-up insurance. The amount of paid-up insurance will be that which the surrender value will purchase when applied as a net single premium at the Insured's then attained age using the guaranteed interest and mortality basis set forth under the "Basis of Computations" provision of the policy. The paid-up insurance will not include any supplementary or additional benefits provided by rider under the original policy. GENERAL PROVISIONS THE POLICY. The policy and the application for the policy constitute the entire contract between the parties. All statements made in the application shall be deemed representations and not warranties. No statement may be used in defense of a claim under the policy unless it is contained in the application and a copy of the application is attached to the policy when issued. Only the President, a Vice President, an Assistant Vice President, a Secretary, a Director or an Assistant Director of Lincoln Life may execute or modify the policy. The policy is executed at the Administrator Mailing Address located on the front cover of the policy. NON-PARTICIPATION. The policy is not entitled to share in surplus distribution. NOTICE OF CLAIM. Due Proof of Death must be furnished to Lincoln Life as soon as reasonably practicable after the death of each Insured. Such notice shall be given to Lincoln Life In Writing by or on behalf of the Owner. PAYMENT OF PROCEEDS. Proceeds, as used in this policy, means the amount payable (a) on the Coverage Date, (b) upon the surrender of this policy before the Coverage Date, or (c) upon the Second Death. LN650 NY 23 GENERAL PROVISIONS (CONTINUED) The amount payable upon receipt of due proof of the Second Death will be the Death Benefit Proceeds as of the date of death. (SEE INSURANCE COVERAGE PROVISIONS, DEATH BENEFIT PROCEEDS.) Death Benefit Proceeds are payable at the Administrator Mailing Address upon the Second Death subject to the receipt of Due Proof of Death for both Insureds. If the Second Death occurs during the GRACE PERIOD, Lincoln Life will pay the Death Benefit Proceeds for the Death Benefit Option in effect immediately prior to the GRACE PERIOD reduced by any overdue monthly deductions. If the policy is surrendered before the Coverage Date, the proceeds will be the Surrender Value described in NONFORFEITURE AND SURRENDER VALUE PROVISIONS. On the Coverage Date, the proceeds will be the Surrender Value. The proceeds are subject to the further adjustments described in the following provisions: 1. Misstatement of Age or Sex; 2. Incontestability; and 3. Suicide. When settlement is made, Lincoln Life may require return of the policy. DEFERMENT OF PAYMENTS. Any amounts payable as a result of loans, surrender, or partial surrenders will be paid within 7 days of Lincoln Life's receipt of such request. However, payment of amounts from the Variable Sub-Accounts may be postponed when the NYSE is closed or when the SEC declares an emergency. Additionally, Lincoln Life reserves the right to defer the payment of such amounts from the Fixed Account for a period not to exceed 6 months from the date written request is received by Lincoln Life; during any such deferred period, the amount payable will bear interest as required by law. MISSTATEMENT OF AGE OR SEX. If the age or sex of either of the Insureds is misstated, Lincoln Life will adjust all benefits to the amounts that would have been purchased for the correct ages and sexes according to the basis specified in the "Table of Guaranteed Maximum Life Insurance Rates." SUICIDE. If either insured commits suicide within 2 years from the Date of Issue, the surviving insured may convert this policy to a single life flexible premium variable life insurance policy. If the second of the Insureds to die commits suicide within 2 years from the Date of Issue, the Death Benefit Proceeds will be limited to a refund of premiums paid, less (a) any indebtedness against the policy and (b) the amount of any partial surrenders. If the second of the Insureds to die commits suicide within 2 years from the date of any increase in the Specified Amount, the Death Benefit Proceeds with respect to such increase will be limited to a refund of the monthly charges for the cost of such additional insurance and the amount of insurance will be limited to the amount of Death Benefit Proceeds applicable before such increase was made provided that the increase became effective at least 2 years from the Date of Issue of the policy. INCONTESTABILITY. Except for nonpayment of Monthly Deductions, this policy will be incontestable after it has been in force during the lifetime of either Insured for 2 years from its Date of Issue. This means that Lincoln Life will not use any misstatement in the application to challenge a claim or avoid liability after that time. Any increase in the Specified Amount effective after the Date of Issue will be incontestable only after such increase has been in force for 2 years during the lifetime of either Insured. The basis for contesting an increase in Specified Amount will be limited to material misrepresentations made in the supplemental application for the increase. The basis for contesting after reinstatement will be (a) limited for a period of 2 years from the date of reinstatement and (b) limited to material misrepresentations made in the reinstatement application. LN650 NY 24 GENERAL PROVISIONS (CONTINUED) ANNUAL REPORT. Lincoln Life will send a report to the Owner at least once a year without charge. The report will show the Accumulation Value as of the reporting date and the amounts deducted from or added to the Accumulation Value since the last report. The report will also show (a) the current Death Benefit Proceeds, (b) the current policy values, (c) premiums paid and all deductions made since the last report, (d) outstanding policy loans, and (e) any other information required by the Superintendent of Insurance. PROJECTION OF BENEFITS AND VALUES. Lincoln Life will provide a projection of illustrative future Death Benefit Proceeds and values to the Owner at any time upon written request and payment of a service fee, if any. CHANGE OF PLAN. Within the first 2 Policy Years the Owner may exchange the policy without any evidence of insurability for any one of the permanent survivorship life insurance policies then being issued by Lincoln Life to the same class to which this policy belongs. The request for the exchange must be In Writing and received by Lincoln Life within 24 months from the Date of Issue of the policy. Unless otherwise agreed to between the Owner and Lincoln Life, the new policy shall have the same amount of insurance and surrender value as this policy as of the date of exchange, its Date of Issue shall be the date of exchange, the Insureds under the policy shall be the Insureds under the new policy, and the issue ages of the Insureds under the new policy shall be the then attained Ages of the Insureds (as of the date of exchange). If only one Insured is alive at the time of exchange, such permanent life insurance policy issued will be a single life policy. If at any time while both Insureds are alive, a change in the Internal Revenue Code would result in a less favorable tax treatment of the insurance provided under the policy or if the Insureds are legally divorced while the policy is in force, the Owner may exchange the policy for separate single life policies on each of the Insureds subject to the following conditions: (a) evidence of insurability satisfactory to Lincoln Life is furnished, (b) the Amount of Insurance of each new policy is not larger than one half of the Amount of Insurance then in force under the policy, (c) the premium for each new policy is determined according to Lincoln Life's rates then in effect for that policy based on each Insured's then attained age and sex, and (d) any other requirements as determined by Lincoln Life are met. The new policy will not take effect until the date all such requirements are met. LN650 NY 25 LINCOLN LIFE & ANNUITY COMPANY OF NEW YORK FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY ON THE LIVES OF TWO INSUREDS Non-Participating Variable life insurance payable upon the Second Death before the Coverage Date. Adjustable Death Benefit. Surrender Value payable upon surrender of the policy or on the Coverage Date, whichever is earlier. Flexible premiums payable to the Coverage Date or to the death of the second Insured to die, whichever is earlier. Investment results reflected in policy benefits. Premium Payments and Supplementary Coverages as shown in the Policy Specifications. LN650 NY OPTIONAL METHODS OF SETTLEMENT This rider is made part of the policy to which it is attached as of the Date of Issue. Upon written request, Lincoln Life will agree to pay in accordance with any one of the options shown below all or part of the net proceeds that may be payable under the policy. If any income optional settlement provides for instalment payments for a given age of payee for an amount which would be the same for different periods certain, Lincoln Life will deem that an election has been made for the longest period certain for such age and amount. While an Insured is alive, the request, including the designation of the payee, may be made by the Owner. At the time the Death Benefit Proceeds become payable under the policy, the request, including the designation of the payee, may then be made by the Beneficiary. Once Income Payments have begun, the policy cannot be surrendered and the payee cannot be changed, nor can the settlement option be changed. PAYMENT DATES. The first Income Payment under the settlement option selected will become payable on the date proceeds are settled under the option. Subsequent payments will be made on the first day of each month in accordance with the manner of payment selected. MINIMUM PAYMENT AMOUNT. The settlement option elected must result in an Income Payment at least equal to the minimum payment amount in accordance with Lincoln Life's rules then in effect. If at any time payments are less than the minimum payment amount, Lincoln Life has the right to change the frequency to an interval that will provide the minimum payment amount. If any amount due is less than the minimum per year, Lincoln Life may make other arrangements that are equitable. INCOME PAYMENTS. Income Payments will remain constant pursuant to the terms of the settlement option(s) selected. The amount of each Income Payment shall be determined in accordance with the terms of the settlement option and the table(s) set forth in this rider, as applicable. The mortality table used is the 1983 Individual Annuitant Mortality (IAM) Table "a" and 3% interest. In determining the settlement amount, the settlement age of the payee will be reduced by one year when the first installment is payable during the 1990's, reduced by two years when the first installment is payable during the decade 2000-2009, and so on. FIRST OPTION: LIFE ANNUITY. An annuity payable monthly to the payee during the lifetime of the payee, ceasing with the last payment due prior to the death of the payee. SECOND OPTION: LIFE ANNUITY WITH CERTAIN PERIOD. An annuity providing monthly income to the payee for a fixed period of 60, 120, 180, or 240 months (as selected), and for as long thereafter as the payee shall live. THIRD OPTION: ANNUITY CERTAIN. An amount payable monthly for the number of years selected which may be from 5 to 30 years. FOURTH OPTION: AS A DEPOSIT AT INTEREST. Lincoln Life will retain the proceeds while the payee is alive and will pay interest annually thereon at a rate of not less than 3% per year. Upon the payee's death, the amount on deposit will be paid. EXCESS INTEREST. At the sole discretion of Lincoln Life, excess interest may be paid or credited from time to time in addition to the payments guaranteed under any Optional Method of Settlement. ADDITIONAL OPTIONS. Any proceeds payable under the policy may also be settled under any other method of settlement offered by Lincoln Life at the time of the request. LINCOLN LIFE & ANNUITY COMPANY OF NEW YORK /s/ Philip L. Holstein PRESIDENT LR650 NY (Page 1) OPTIONAL METHODS OF SETTLEMENT (CONTINUED) LIFE ANNUITY AND LIFE ANNUITY WITH CERTAIN PERIOD TABLE FOR EACH $1,000 APPLIED - MALE - -------------------------------------------------------- Settlement age of Number of instalments certain payee nearest birthday 60 120 180 240 - -------------------------------------------------------- Age Life Annuity 10 $2.87 $2.87 $2.87 $2.87 $2.87 11 2.89 2.89 2.89 2.88 2.88 12 2.90 2.90 2.90 2.90 2.90 13 2.92 2.92 2.91 2.91 2.91 14 2.93 2.93 2.93 2.93 2.92 15 2.95 2.95 2.95 2.94 2.94 16 2.96 2.96 2.96 2.96 2.96 17 2.98 2.98 2.98 2.98 2.97 18 3.00 3.00 3.00 2.99 2.99 19 3.02 3.02 3.01 3.01 3.01 20 3.04 3.04 3.03 3.03 3.03 21 3.06 3.05 3.05 3.05 3.05 22 3.08 3.08 3.07 3.07 3.07 23 3.10 3.10 3.09 3.09 3.09 24 3.12 3.12 3.12 3.11 3.11 25 3.14 3.14 3.14 3.14 3.13 26 3.17 3.17 3.16 3.16 3.15 27 3.19 3.19 3.19 3.19 3.18 28 3.22 3.22 3.22 3.21 3.20 29 3.25 3.25 3.24 3.24 3.23 30 3.28 3.28 3.27 3.27 3.26 31 3.31 3.31 3.30 3.30 3.29 32 3.34 3.34 3.33 3.33 3.32 33 3.37 3.37 3.37 3.36 3.35 34 3.41 3.41 3.40 3.39 3.38 35 $3.44 $3.44 $3.44 $3.43 $3.41 36 3.48 3.48 3.48 3.46 3.45 37 3.52 3.52 3.52 3.50 3.48 38 3.57 3.56 3.56 3.54 3.52 39 3.61 3.61 3.60 3.58 3.56 40 3.66 3.65 3.65 3.63 3.60 41 3.71 3.70 3.69 3.67 3.64 42 3.76 3.75 3.74 3.72 3.68 43 3.81 3.81 3.79 3.77 3.73 44 3.87 3.86 3.85 3.82 3.77 45 3.93 3.92 3.90 3.87 3.82 46 3.99 3.98 3.96 3.92 3.87 47 4.05 4.05 4.02 3.98 3.92 48 4.12 4.11 4.09 4.04 3.97 49 4.19 4.18 4.15 4.10 4.03 50 4.27 4.26 4.22 4.17 4.08 51 4.34 4.33 4.30 4.23 4.14 52 4.43 4.41 4.37 4.30 4.20 53 4.51 4.50 4.45 4.37 4.26 54 4.60 4.59 4.54 4.45 4.32 55 4.70 4.68 4.62 4.53 4.39 56 4.80 4.78 4.72 4.61 4.45 57 4.91 4.89 4.82 4.69 4.51 58 5.03 5.00 4.92 4.78 4.58 59 5.15 5.12 5.03 4.87 4.65 60 $5.28 $5.25 $5.14 $4.96 $4.71 61 5.43 5.39 5.27 5.06 4.78 62 5.58 5.53 5.39 5.16 4.84 63 5.74 5.69 5.53 5.26 4.90 64 5.91 5.85 5.66 5.36 4.96 65 6.10 6.03 5.81 5.46 5.02 66 6.30 6.21 5.96 5.56 5.08 67 6.51 6.41 6.12 5.66 5.13 68 6.73 6.62 6.28 5.77 5.18 69 6.97 6.84 6.44 5.86 5.23 70 7.23 7.07 6.61 5.96 5.27 71 7.51 7.32 6.79 6.05 5.31 72 7.80 7.58 6.96 6.14 5.34 73 8.12 7.85 7.14 6.23 5.37 74 8.46 8.14 7.32 6.31 5.40 75 8.82 8.45 7.50 6.38 5.42 76 9.21 8.76 7.67 6.45 5.44 77 9.63 9.10 7.84 6.51 5.45 78 10.08 9.44 8.01 6.57 5.47 79 10.56 9.80 8.17 6.62 5.48 80 11.07 10.17 8.33 6.66 5.49 81 11.62 10.55 8.48 6.70 5.49 82 12.20 10.94 8.61 6.73 5.50 83 12.82 11.33 8.74 6.76 5.50 84 13.47 11.73 8.86 6.79 5.51 85 14.17 12.12 8.97 6.81 5.51 - -------------------------------------------------------- LR650 NY (Page 2) OPTIONAL METHODS OF SETTLEMENT (CONTINUED) LIFE ANNUITY AND LIFE ANNUITY WITH CERTAIN PERIOD TABLE FOR EACH $1,000 APPLIED - FEMALE - -------------------------------------------------------- Settlement age of Number of instalments certain payee nearest birthday 60 120 180 240 - -------------------------------------------------------- Age Life Annuity 10 $2.80 $2.80 $2.80 $2.80 $2.80 11 2.81 2.81 2.81 2.81 2.81 12 2.82 2.82 2.82 2.82 2.82 13 2.83 2.83 2.83 2.83 2.83 14 2.85 2.85 2.85 2.84 2.84 15 2.86 2.86 2.86 2.86 2.86 16 2.87 2.87 2.87 2.87 2.87 17 2.89 2.89 2.89 2.88 2.88 18 2.90 2.90 2.90 2.90 2.90 19 2.92 2.92 2.92 2.91 2.91 20 2.93 2.93 2.93 2.93 2.93 21 2.95 2.95 2.95 2.95 2.94 22 2.96 2.96 2.96 2.96 2.96 23 2.98 2.98 2.98 2.98 2.98 24 3.00 3.00 3.00 3.00 2.99 25 3.02 3.02 3.02 3.02 3.01 26 3.04 3.04 3.04 3.03 3.03 27 3.06 3.06 3.06 3.06 3.05 28 3.08 3.08 3.08 3.08 3.07 29 3.10 3.10 3.10 3.10 3.09 30 3.13 3.13 3.12 3.12 3.12 31 3.15 3.15 3.15 3.14 3.14 32 3.18 3.18 3.17 3.17 3.16 33 3.20 3.20 3.20 3.20 3.19 34 3.23 3.23 3.23 3.22 3.22 35 $3.26 $3.26 $3.26 $3.25 $3.24 36 3.29 3.29 3.29 3.28 3.27 37 3.32 3.32 3.32 3.31 3.30 38 3.35 3.35 3.35 3.34 3.33 39 3.39 3.39 3.38 3.38 3.37 40 3.42 3.42 3.42 3.41 3.40 41 3.46 3.46 3.46 3.45 3.43 42 3.50 3.50 3.50 3.49 3.47 43 3.54 3.54 3.54 3.53 3.51 44 3.59 3.59 3.58 3.57 3.55 45 3.64 3.63 3.63 3.61 3.59 46 3.68 3.68 3.67 3.66 3.63 47 3.73 3.73 3.72 3.71 3.68 48 3.79 3.79 3.77 3.76 3.72 49 3.84 3.84 3.83 3.81 3.77 50 3.90 3.90 3.89 3.86 3.82 51 3.97 3.96 3.95 3.92 3.88 52 4.03 4.03 4.01 3.98 3.93 53 4.10 4.10 4.08 4.04 3.99 54 4.18 4.17 4.15 4.11 4.04 55 4.25 4.25 4.22 4.18 4.11 56 4.34 4.33 4.30 4.25 4.17 57 4.42 4.41 4.38 4.32 4.23 58 4.52 4.51 4.47 4.40 4.30 59 4.61 4.60 4.56 4.48 4.37 60 $4.72 $4.70 $4.66 $4.57 $4.44 61 4.83 4.81 4.76 4.66 4.51 62 4.95 4.93 4.87 4.75 4.58 63 5.08 5.05 4.98 4.85 4.65 64 5.21 5.18 5.10 4.95 4.72 65 5.36 5.32 5.22 5.05 4.79 66 5.51 5.47 5.36 5.16 4.86 67 5.67 5.63 5.50 5.26 4.93 68 5.85 5.80 5.65 5.37 5.00 69 6.04 5.98 5.80 5.49 5.06 70 6.25 6.18 5.97 5.60 5.12 71 6.47 6.39 6.14 5.71 5.18 72 6.71 6.62 6.32 5.83 5.23 73 6.98 6.86 6.50 5.94 5.28 74 7.26 7.12 6.69 6.04 5.32 75 7.57 7.40 6.89 6.14 5.35 76 7.90 7.69 7.09 6.24 5.39 77 8.26 8.01 7.29 6.33 5.41 78 8.65 8.34 7.49 6.41 5.43 79 9.08 8.70 7.69 6.49 5.45 80 9.54 9.07 7.89 6.55 5.47 81 10.03 9.47 8.08 6.61 5.48 82 10.58 9.88 8.26 6.66 5.49 83 11.16 10.31 8.43 6.70 5.49 84 11.80 10.75 8.59 6.74 5.50 85 12.48 11.20 8.74 6.77 5.50 - -------------------------------------------------------- ANNUITY CERTAIN TABLE FOR EACH $1,000 APPLIED - -------------------------------------------------------- Numbers of years Amount of each instalment during which instalments will be paid Annual Monthly - -------------------------------------------------------- 5 $211.99 $17.91 6 179.22 15.14 7 155.83 13.16 8 138.31 11.68 9 124.69 10.53 10 113.82 9.61 11 104.93 8.86 12 $97.54 $8.24 13 91.29 7.71 14 85.95 7.26 15 81.33 6.87 16 77.29 6.53 17 73.74 6.23 18 70.59 5.96 19 $67.78 $5.73 20 65.26 5.51 25 55.76 4.71 30 49.53 4.18 - -------------------------------------------------------- LR650 NY (Page 3) SCHEDULE 3: TABLE OF GUARANTEED MAXIMUM COST OF INSURANCE RATES (MONTHLY RATES PER $1,000 OF NET AMOUNT AT RISK) SPECIAL NOTE: The Cost of Insurance Rate is the monthly rate charged under the policy. The Cost of Insurance Rate varies based on the issue age (nearest birthday), duration and premium class of each Insured. It is determined under an actuarial formula, on file with the insurance supervisory official of the jurisdiction in which the policy is delivered, that reflects one-alive and both alive probabilities. The rates set forth in the table below reflect the amount of the Flat Extra or the Risk Factor (substandard risk classification rates), if any, shown in the POLICY SPECIFICATIONS, and are based on the 1980 CSO Table D. The monthly Cost of Insurance Rate charged under the policy shall not exceed the applicable rate set forth in the table below for each respective duration (number of years from the Date of Issue).
MONTHLY DURATION RATE DURATION RATE DURATION RATE -------- -------- -------- -------- -------- -------- 1 0.000257 2 0.000821 3 0.001486 4 0.002274 5 0.003237 6 0.004396 7 0.005835 8 0.007575 9 0.009656 10 0.012142 11 0.015113 12 0.018564 13 0.022520 14 0.027258 15 0.032683 16 0.039016 17 0.046467 18 0.055206 19 0.065610 20 0.077859 21 0.092216 22 0.109071 23 0.128320 24 0.150387 25 0.175589 26 0.204075 27 0.236976 28 0.275456 29 0.321002 30 0.375198 31 0.438870 32 0.513626 33 0.600335 34 0.698255 35 0.809323 36 0.936182 37 1.080500 38 1.249201 39 1.448597 40 1.683612 41 1.959705 42 2.280688 43 2.647067 44 3.057177 45 3.514351 46 4.022239 47 4.586356 48 5.221094 49 5.940697 50 6.751632 51 7.661261 52 8.670858 53 9.772693 54 10.953680 55 12.205020 56 13.524612 57 14.913305 58 16.384004 59 17.967216 60 19.723250 61 21.796414 62 24.412086 63 27.927756 64 32.685066 65 38.036856 66 41.360225 67 57.868958 68 83.333330
LN650 AA (Page 4) SCHEDULE 4: CORRIDOR PERCENTAGES TABLE The amount of the Death Benefit Proceeds must satisfy certain requirements under the Internal Revenue Code if the policy is to qualify as insurance for Federal income tax purposes. The amount of the Death Benefit Proceeds required to be paid under the Internal Revenue Code to maintain the policy as life insurance under each of the Death Benefit Options (SEE INSURANCE COVERAGE PROVISIONS, DEATH BENEFIT OPTIONS) is equal to the product of the Accumulation Value and the applicable Corridor Percentage set forth below. ATTAINED AGE OF CORRIDOR ATTAINED AGE OF CORRIDOR THE YOUNGER INSURED PERCENTAGE THE YOUNGER INSURED PERCENTAGE (NEAREST BIRTHDAY) (NEAREST BIRTHDAY) 0-40 250 61 128 - -------------------------------------------------------------------------------- 41 243 62 126 42 236 63 124 43 229 64 122 44 222 65 120 45 215 66 119 - -------------------------------------------------------------------------------- 46 209 67 118 47 203 68 117 48 197 69 116 49 191 70 115 50 185 71 113 - -------------------------------------------------------------------------------- 51 178 72 111 52 171 73 109 53 164 74 107 54 157 75-90 105 55 150 91 104 - -------------------------------------------------------------------------------- 56 146 92 103 57 142 93 102 58 138 94 101 59 134 95-99 100 60 130 - -------------------------------------------------------------------------------- LN650 AA (Page 5) INSURANCE COVERAGE PROVISIONS (CONTINUED) CHANGES IN DEATH BENEFIT OPTION: 1. On a change from DEATH BENEFIT OPTION 1 to DEATH BENEFIT OPTION 2: The Specified Amount will be reduced by the Accumulation Value as of the Monthly Anniversary Day that coincides with or next follows date of receipt of the request for change. 2. On a change from Death BENEFIT OPTION 2 to DEATH BENEFIT OPTION 1: The Specified Amount will be increased by the Accumulation Value and the date of the change will be the Monthly Anniversary Day that coincides with or next follows the date of receipt of the request for change. Lincoln Life will not allow a decrease in the amount of insurance below the minimum amount required to maintain this contract as a life insurance policy under the Internal Revenue Code. RIGHT TO CONVERT. The Owner may convert this policy to a substantially comparable flexible premium adjustable life insurance policy without evidence of insurability for an amount of insurance not exceeding the death benefit of the variable life insurance policy on the date of conversion. PAID-UP INSURANCE OPTION. At any time, the Owner may transfer all of the Variable Account Value to the Fixed Account and then surrender the policy for reduced guaranteed nonparticipating paid-up insurance. No monthly administrative fees would apply to such paid-up insurance. The amount of paid-up insurance will be that which the surrender value will purchase when applied as a net single premium at the Insured's then attained age using the guaranteed interest and mortality basis set forth under the "Basis of Computations" provision of the policy. The paid-up insurance will not include any supplementary or additional benefits provided by rider under the original policy. GENERAL PROVISIONS THE POLICY. The policy and the application for the policy constitute the entire contract between the parties. All statements made in the application shall be deemed representations and not warranties. No statement may be used in defense of a claim under the policy unless it is contained in the application and a copy of the application is attached to the policy when issued. Only the President, a Vice President, an Assistant Vice President, a Secretary, a Director or an Assistant Director of Lincoln Life may execute or modify the policy. The policy is executed at the Administrator Mailing Address located on the front cover of the policy. NON-PARTICIPATION. The policy is not entitled to share in surplus distribution. NOTICE OF CLAIM. Due Proof of Death must be furnished to Lincoln Life as soon as reasonably practicable after the death of each Insured. Such notice shall be given to Lincoln Life In Writing by or on behalf of the Owner. PAYMENT OF PROCEEDS. Proceeds, as used in this policy, means the amount payable (a) on the Coverage Date, (b) upon the surrender of this policy before the Coverage Date, or (c) upon the Second Death. LN650 NY AA (Page 6) GENERAL PROVISIONS (CONTINUED) The amount payable upon receipt of due proof of the Second Death will be the Death Benefit Proceeds as of the date of death. (SEE INSURANCE COVERAGE PROVISIONS, DEATH BENEFIT PROCEEDS.) Death Benefit Proceeds are payable at the Administrator Mailing Address upon the Second Death subject to the receipt of Due Proof of Death for both Insureds. If the Second Death occurs during the GRACE PERIOD, Lincoln Life will pay the Death Benefit Proceeds for the Death Benefit Option in effect immediately prior to the GRACE PERIOD reduced by any overdue monthly deductions. If the policy is surrendered before the Coverage Date, the proceeds will be the Surrender Value described in NONFORFEITURE AND SURRENDER VALUE PROVISIONS. On the Coverage Date, the proceeds will be the Surrender Value. The proceeds are subject to the further adjustments described in the following provisions: 1. Misstatement of Age; 2. Incontestability; and 3. Suicide. When settlement is made, Lincoln Life may require return of the policy. DEFERMENT OF PAYMENTS. Any amounts payable as a result of loans, surrender, or partial surrenders will be paid within 7 days of Lincoln Life's receipt of such request. However, payment of amounts from the Variable Sub-Accounts may be postponed when the NYSE is closed or when the SEC declares an emergency. Additionally, Lincoln Life reserves the right to defer the payment of such amounts from the Fixed Account for a period not to exceed 6 months from the date written request is received by Lincoln Life; during any such deferred period, the amount payable will bear interest as required by law. MISSTATEMENT OF AGE. If the age of either of the Insureds is misstated, Lincoln Life will adjust all benefits to the amounts that would have been purchased for the correct ages according to the basis specified in the "Table of Guaranteed Maximum Life Insurance Rates." SUICIDE. If either insured commits suicide within 2 years from the Date of Issue, the surviving insured may convert this policy to a single life flexible premium variable life insurance policy. If the second of the Insureds to die commits suicide within 2 years from the Date of Issue, the Death Benefit Proceeds will be limited to a refund of premiums paid, less (a) any indebtedness against the policy and (b) the amount of any partial surrenders. If the second of the Insureds to die commits suicide within 2 years from the date of any increase in the Specified Amount, the Death Benefit Proceeds with respect to such increase will be limited to a refund of the monthly charges for the cost of such additional insurance and the amount of insurance will be limited to the amount of Death Benefit Proceeds applicable before such increase was made provided that the increase became effective at least 2 years from the Date of Issue of the policy. INCONTESTABILITY. Except for nonpayment of Monthly Deductions, this policy will be incontestable after it has been in force during the lifetime of either Insureds for 2 years from its Date of Issue. This means that Lincoln Life will not use any misstatement in the application to challenge a claim or avoid liability after that time. Any increase in the Specified Amount effective after the Date of Issue will be incontestable only after such increase has been in force for 2 years during the lifetime of either Insureds. The basis for contesting an increase in Specified Amount will be limited to material misrepresentations made in the supplemental application for the increase. The basis for contesting after reinstatement will be (a) limited for a period of 2 years from the date of reinstatement and (b) limited to material misrepresentations made in the reinstatement application. LN650 NY AA (Page 7) OPTIONAL METHODS OF SETTLEMENT This rider is made part of the policy to which it is attached as of the Date of Issue. Upon written request, Lincoln Life will agree to pay in accordance with any one of the options shown below all or part of the net proceeds that may be payable under the policy. If any income optional settlement provides for instalment payments for a given age of payee for an amount which would be the same for different periods certain, Lincoln Life will deem that an election has been made for the longest period certain for such age and amount. While an Insured is alive, the request, including the designation of the payee, may be made by the Owner. At the time the Death Benefit Proceeds become payable under the policy, the request, including the designation of the payee, may then be made by the Beneficiary. Once Income Payments have begun, the policy cannot be surrendered and the payee cannot be changed, nor can the settlement option be changed. PAYMENT DATES. The first Income Payment under the settlement option selected will become payable on the date proceeds are settled under the option. Subsequent payments will be made on the first day of each month in accordance with the manner of payment selected. MINIMUM PAYMENT AMOUNT. The settlement option elected must result in an Income Payment at least equal to the minimum payment amount in accordance with Lincoln Life's rules then in effect. If at any time payments are less than the minimum payment amount, Lincoln Life has the right to change the frequency to an interval that will provide the minimum payment amount. If any amount due is less than the minimum per year, Lincoln Life may make other arrangements that are equitable. INCOME PAYMENTS. Income Payments will remain constant pursuant to the terms of the settlement option(s) selected. The amount of each Income Payment shall be determined in accordance with the terms of the settlement option and the table(s) set forth in this rider, as applicable. The mortality table used is the 1983 Individual Annuitant Mortality (IAM) Table "a" and 3% interest. In determining the settlement amount, the settlement age of the payee will be reduced by one year when the first installment is payable during the 1990's, reduced by two years when the first installment is payable during the decade 2000-2009, and so on. FIRST OPTION: LIFE ANNUITY. An annuity payable monthly to the payee during the lifetime of the payee, ceasing with the last payment due prior to the death of the payee. SECOND OPTION: LIFE ANNUITY WITH CERTAIN PERIOD. An annuity providing monthly income to the payee for a fixed period of 60, 120, 180, or 240 months (as selected), and for as long thereafter as the payee shall live. THIRD OPTION: ANNUITY CERTAIN. An amount payable monthly for the number of years selected which may be from 5 to 30 years. FOURTH OPTION: AS A DEPOSIT AT INTEREST. Lincoln Life will retain the proceeds while the payee is alive and will pay interest annually thereon at a rate of not less than 3% per year. Upon the payee's death, the amount on deposit will be paid. EXCESS INTEREST. At the sole discretion of Lincoln Life, excess interest may be paid or credited from time to time in addition to the payments guaranteed under any Optional Method of Settlement. ADDITIONAL OPTIONS. Any proceeds payable under the policy may also be settled under any other method of settlement offered by Lincoln Life at the time of the request. LINCOLN LIFE & ANNUITY COMPANY OF NEW YORK /s/ Philip L. Holstein PRESIDENT LR651 NY (Page 1) OPTIONAL METHODS OF SETTLEMENT (CONTINUED) LIFE ANNUITY AND LIFE ANNUITY WITH CERTAIN PERIOD TABLE FOR EACH $1,000 APPLIED - UNISEX - -------------------------------------------------------- Settlement age of Number of instalments certain Annuitant nearest birthday 60 120 180 240 - -------------------------------------------------------- Age Life Annuity 10 2.84 2.84 2.84 2.84 2.83 11 2.85 2.85 2.85 2.85 2.85 12 2.86 2.86 2.86 2.86 2.86 13 2.88 2.88 2.88 2.87 2.87 14 2.89 2.89 2.89 2.89 2.89 15 2.91 2.90 2.90 2.90 2.90 16 2.92 2.92 2.92 2.92 2.91 17 2.94 2.94 2.93 2.93 2.93 18 2.95 2.95 2.95 2.95 2.95 19 2.97 2.97 2.97 2.96 2.96 20 2.99 2.99 2.98 2.98 2.98 21 3.00 3.00 3.00 3.00 3.00 22 3.02 3.02 3.02 3.02 3.01 23 3.04 3.04 3.04 3.04 3.03 24 3.06 3.06 3.06 3.06 3.05 25 3.08 3.08 3.08 3.08 3.07 26 3.11 3.11 3.10 3.10 3.10 27 3.13 3.13 3.13 3.12 3.12 28 3.15 3.15 3.15 3.15 3.14 29 3.18 3.18 3.17 3.17 3.16 30 3.20 3.20 3.20 3.20 3.19 31 3.23 3.23 3.23 3.22 3.22 32 3.26 3.26 3.26 3.25 3.24 33 3.29 3.29 3.29 3.28 3.27 34 3.32 3.32 3.32 3.31 3.30 35 3.35 3.35 3.35 3.34 3.33 36 3.39 3.39 3.38 3.38 3.36 37 3.42 3.42 3.42 3.41 3.40 38 3.46 3.46 3.46 3.45 3.43 39 3.50 3.50 3.49 3.48 3.47 40 3.54 3.54 3.54 3.52 3.50 41 3.59 3.59 3.58 3.56 3.54 42 3.63 3.63 3.62 3.61 3.58 43 3.68 3.68 3.67 3.65 3.62 44 3.73 3.73 3.72 3.70 3.67 45 3.78 3.78 3.77 3.74 3.71 46 3.84 3.84 3.82 3.79 3.76 47 3.90 3.89 3.88 3.85 3.80 48 3.96 3.95 3.93 3.90 3.85 49 4.02 4.02 3.99 3.96 3.91 50 4.09 4.08 4.06 4.02 3.96 51 4.16 4.15 4.13 4.08 4.01 52 4.23 4.22 4.20 4.15 4.07 53 4.31 4.30 4.27 4.21 4.13 54 4.39 4.38 4.35 4.28 4.19 55 4.48 4.47 4.43 4.36 4.25 56 4.57 4.56 4.51 4.43 4.32 57 4.67 4.65 4.60 4.51 4.38 58 4.78 4.76 4.70 4.60 4.45 59 4.89 4.87 4.80 4.68 4.51 60 5.00 4.98 4.91 4.77 4.58 61 5.13 5.10 5.02 4.87 4.65 62 5.27 5.23 5.13 4.96 4.72 63 5.41 5.37 5.26 5.06 4.79 64 5.56 5.52 5.39 5.16 4.85 65 5.73 5.68 5.52 5.27 4.92 66 5.90 5.84 5.67 5.37 4.98 67 6.09 6.02 5.82 5.48 5.04 68 6.29 6.21 5.97 5.58 5.10 69 6.51 6.41 6.13 5.69 5.15 70 6.74 6.63 6.30 5.79 5.20 71 6.99 6.86 6.47 5.90 5.25 72 7.25 7.10 6.65 6.00 5.29 73 7.54 7.36 6.83 6.09 5.33 74 7.85 7.63 7.02 6.19 5.36 75 8.19 7.92 7.21 6.27 5.39 76 8.55 8.23 7.39 6.36 5.42 77 8.93 8.56 7.58 6.43 5.44 78 9.35 8.90 7.77 6.50 5.45 79 9.80 9.26 7.95 6.56 5.47 80 10.29 9.63 8.12 6.61 5.48 81 10.81 10.02 8.29 6.66 5.49 82 11.37 10.42 8.45 6.70 5.49 83 11.98 10.83 8.60 6.74 5.50 84 12.62 11.25 8.74 6.76 5.50 85 13.31 11.67 8.86 6.79 5.51 - -------------------------------------------------------- ANNUITY CERTAIN TABLE FOR EACH $1,000 APPLIED - -------------------------------------------------------- Numbers of years Amount of each instalment during which instalments will be paid Annual Monthly - -------------------------------------------------------- 5 211.99 17.91 6 179.22 15.14 7 155.83 13.16 8 138.31 11.68 9 124.69 10.53 10 113.82 9.61 11 104.93 8.86 12 97.54 8.24 13 91.29 7.71 14 85.95 7.26 15 81.33 6.87 16 77.29 6.53 17 $ 73.74 $ 6.23 18 70.59 5.96 19 67.78 5.73 20 65.26 5.51 25 55.76 4.71 30 49.53 4.18 - -------------------------------------------------------- LR651 NY (Page 2) VUL/SVUL ADDENDUM TO APPLICATION [LOGO] INSTRUCTIONS This Application Package Includes: 1. An Important Notice form. INSTRUCTIONS: Please give to the proposed insured in every case. 2. A VUL/SVUL Addendum to Application INSTRUCTIONS: Write legibly. Complete all questions. Explain answers where asked to in the spaces provided. Transfer(s) from the Fixed Account may only be made during the 30-day period following each Policy Anniversary and is (are) subject to a maximum annual limit of 20% of the Fixed Account Value as of that Policy Anniversary. (See Policy Specification Page) The VUL/SVUL Addendum must be signed by the proposed insured(s) and any applicant if other that the insured(s). The signatures of the owner and subowner are required. A licensed agent/ representative must witness the signatures. Leave pages attached when submitting to the Company. DO NOT SEPARATE. - -------------------------------------------------------------------------------- GENERAL INSTRUCTIONS: - WRITE WITH BLACK OR DARK BLUE INK. - ERASURES AND WHITEOUTS ARE NOT ACCEPTABLE. - ANY ALTERATIONS MUST BE INITIALED BY THE APPLICANT. - -------------------------------------------------------------------------------- DETAILED INSTRUCTIONS FOR COMPLETING THE ATTACHED FORM CAN BE FOUND IN THE INB MANUALS. - -------------------------------------------------------------------------------- IMPORTANT NOTICE Since you have applied for insurance, we'd like you to know more about our underwriting process and what occurs after you submit your application. THE UNDERWRITING PROCESS All forms of insurance are based on the concept of risk-sharing. Underwriters seek to determine the level of risk represented by each applicant, and then assign that person to a group with similar risk characteristics. In this way, the risk potential can be spread among all policyholders within a given risk group, assuring that each assumes his or her fair share of the insurance cost. Underwriters collect and review risk factors such as age, occupation, physical condition, medical history and any hazardous avocations. The level of risk and premium for the amount of coverage requested is based on this information. If you, like most of our applicants, are not subject to unusual accident hazards, and meet our risk selection standards, underwriters will approve your application and will issue your policy at standard rates. In other cases, we may charge a higher premium, offer limited coverage or decline insurance. Our goal is to provide the coverage you need in an equitable manner. To do this we may ask for additional information about you or any other person to be insured and we may request a medical exam, electrocardiogram, blood or urine sample or additional information from sources such as attending physicians, hospitals, the Medical Information Bureau, or an Investigative Consumer Report. (A full description of the Medical Information Bureau and Investigative Consumer Reports follows and should be read carefully.) When information from another party is needed, this information will only be requested with your written authorization, which is obtained when the application is completed. You are our most important source of information and in some cases we may wish to telephone you directly for an interview. A Lincoln National Life Insurance Company interviewer from our Underwriting Department may call you to review and verify information provided on your application and ask additional questions which will aid in evaluating your application for insurance. You benefit because complete underwriting information may result in lower rates. CONFIDENTIALITY Information we collect about you will not be given to anyone without your consent, except when it is necessary for conducting our business. The only people who have access to the information are employees or those of our reinsurers who service your policy or claim and those who have an insurance related, regulatory, legal, research or marketing need for the information. In other situations, we will ask you for written authorization to disclose information about you. IF YOU WOULD LIKE TO KNOW WHAT INFORMATION LINCOLN NATIONAL LIFE INSURANCE COMPANY HAS ON FILE ABOUT YOU OR IF YOU DESIRE BACKGROUND INFORMATION ON THE INVESTIGATIVE CONSUMER REPORT, PLEASE WRITE OR CALL: Individual Underwriting Department Lincoln National Life Insurance Company Hartford, CT 06152 (860) 726-5027 To protect your privacy, we will request proper identification (Social Security Number, Policy Number, etc.). We will then advise you of the nature and substance of the information by phone, or if you prefer, in writing. We can also arrange for you to see or obtain copies of the information in our files that was provided either by you or a third party. We may ask you to pay for the cost of copying the information which you request. We reserve the right to disclose medical information only to a doctor and we will request that you provide us with the name of your physician. Within 30 days from the date we receive your request, we will furnish you and/or your doctor the information that we have about you that you are entitled to receive. If you believe any of the information we have furnished you is incorrect or incomplete, you may request correction or amendment of our information and include any appropriate documentation to support your claim. If we agree with your request, we will make the correction and furnish a notice of the correction to any person or organization which provided the information to us or received the information from us. If we do not agree with your correction, we will let you know our reasons and you may place on record a concise statement explaining the basis of your dispute. This information will be clearly noted in any future disclosure of the information. Also, the statement of dispute will be given to other persons and organizations who have supplied us with such information or received it from us in the past. FAIR CREDIT REPORTING ACT As a part of our routine procedure for processing your initial application, we may request that an Investigative Consumer Report be made. The insurance support organization making the report may obtain a copy of the report and disclose its contents to others for whom it performs such services. This report typically includes information such as identity and residence verification, character, reputation, marital status, estimate of worth and income, occupation, avocations, medical history, habits, mode of living and other personal characteristics. You have the right to be personally interviewed as part of any investigative consumer report which is completed. If you desire such an interview, please indicate this at the time your application is submitted. Additional information is usually obtained from several different sources. Confidential interviews are conducted with neighbors, friends, business associates, and acquaintances. Public records are carefully reviewed. Past experience shows that information from investigative reports usually does not have an adverse effect on our underwriting decision. If it should, we will notify you in writing and identify the reporting agency. At that point, if you wish to do so, you may discuss the matter with the reporting agency. All of these rights are guaranteed to you by the Fair Credit Reporting Act, which took effect in April, 1971. The procedures called for in this law are consistent with our long-standing feeling concerning consumer reports and we fully support this legislation. MEDICAL INFORMATION BUREAU Information you provide regarding your insurability or claims will be treated as confidential except that Lincoln National Life Insurance Company or its reinsurers, may make a brief report of it to the Medical Information Bureau. This is a nonprofit membership organization of life insurance companies which operates an information exchange on behalf of its members. Upon request by another member insurance company to which you have applied for life or health insurance coverage or submitted a claim, the Bureau will provide the information it may have in its file. Upon receipt of a request from you, the Bureau will arrange disclosure of any information it may have in your file. If you question the accuracy of information in the Bureau's file, you may contact the Bureau and seek a correction in accordance with the procedures set forth in the Federal Fair Credit Reporting Act. The address of the Bureau's Information Office is: Post Office Box 105, Essex Station, Boston, MA 02112 - Telephone number (617)426-3660. The Lincoln National Life Insurance Company or its reinsurers, may also release information in its file to other life insurance companies to whom you may apply for life or health insurance or to whom a claim for benefits may be submitted. Lincoln Life & Annuity Company of New York VUL/SVUL ADDENDUM TO APPLICATION [LOGO]
THIS VUL/SVUL ADDENDUM IS SUBMITTED AS A SUPPLEMENT TO LIFE INSURANCE APPLICATION NO. - ---------------------------------------------------------------------------------------------------------------------------------- NAME OF PROPOSED INSURED(S): ----------------------------------------------------------------------------------------------------- First Middle Initial Last ----------------------------------------------------------------------------------------------------- First Middle Initial Last NAME OF OWNER(S): ---------------------------------------------------------------------------------------------------------------- First Middle Initial Last ---------------------------------------------------------------------------------------------------------------- First Middle Initial Last - ---------------------------------------------------------------------------------------------------------------------------------- 1. BROKER/ DEALER Print Name of Broker/Dealer: INFORMATION --------------------------------------------------------------------------------- Address: ----------------------------------------------------------------------------------------------------- Telephone: Field Office Code: ------------------------------ ---------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------------- 2. INVESTMENT Overall Investment Objective for Sub-Account Selections: OBJECTIVE / / Conservative / / Moderate Conservative / / Moderate / / Moderate Aggressive / / Aggressive - ---------------------------------------------------------------------------------------------------------------------------------- 3. INITIAL FIXED ACCOUNT __________% Transfer(s) from the Fixed Account may only be made during the 30-day period PREMIUM following each Policy Anniversary and is (are) subject to a maximum annual limit of 20% of the Fixed Account PAYMENT Value as of that Policy Anniversary. (SEE POLICY SPECIFICATION PAGE) ALLOCATION (Allocation VARIABLE ACCOUNT - SUB-ACCOUNTS (FUNDS) to any one % line must be AIM OPCAP 1% or more. ___% AIM V.I. Capital Appreciation Fund ___% OCC Global Equity Portfolio Use whole ___% AIM V.I. Diversified Income Fund ___% OCC Managed Portfolio percentages ___% AIM V.I. Growth Fund ___% OCC Small Cap Portfolio only. Grand ___% AIM V.I. Value Fund Total of all allocations made in this CIGNA INVESTMENTS, INC. TEMPLETON section of the ___% CIGNA VP Money Market Fund ___% Templeton Asset Allocation Fund application ___% CIGNA VP S&P 500 Index Fund ___% Templeton International Fund must equal ___% Templeton Stock Fund 100%) FIDELITY INVESTMENTS ___% Asset Manager Portfolio OTHER (IF AVAILABLE FOR THESE PRODUCTS) ___% Equity-Income Portfolio ___%__________________________ If DOLLAR ___% Investment Grade Bonds Portfolio ___%__________________________ COST AVERAGING is elected, an MASSACHUSETTS FINANCIAL SERVICES allocation must ___% MFS Emerging Growth Series be made to the ___% MFS Total Return Series Money Market ___% MFS Utilities Series Fund and the % ___% MFS World Governments Series allocated must result in an initial amount NOTE: ALL PAYMENTS AND VALUES PROVIDED BY THE LIFE INSURANCE POLICY WHEN BASED ON THE INVESTMENT EXPERIENCE of at least OF THE VARIABLE ACCOUNT ARE VARIABLE AND ARE NOT GUARANTEED AS TO DOLLAR AMOUNT. THE DEATH BENEFIT PROCEEDS $1,000 in such AND THE CASH VALUES MAY INCREASE OR DECREASE IN ACCORDANCE WITH THE EXPERIENCE OF THE VARIABLE ACCOUNT. account. Please ALSO, THE DEATH BENEFIT PROCEEDS MAY BE VARIABLE OR FIXED UNDER SPECIFIED CONDITIONS. complete Section 5. - ---------------------------------------------------------------------------------------------------------------------------------- 4. AUTOMATIC / / Quarterly / / Semi-Annual / / Annual REBALANCING / / Yes / / No NOTE: THIS SERVICE IS NOT AVAILABLE IF DOLLAR COST AVERAGING IS SELECTED. - ----------------------------------------------------------------------------------------------------------------------------------
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- ---------------------------------------------------------------------------------------------------------------------------------- 5. DOLLAR COST SELECT ONE TRANSFER OPTION ($100 MINIMUM PER TRANSFER): AVERAGING / / $_____________ monthly / / $_____________ quarterly (FOLLOW Each amount transferred is tobe applied to the following Fund(s) in these percentages (USE WHOLE PERCENTAGES INSTRUCTIONS ONLY. TOTAL MUST EQUAL 100%) IN SECTION 3 BEFORE AIM OPCAP COMPLETING ___% AIM V.I. Capital Appreciation Fund ___% OCC Global Equity Portfolio THIS SECTION) ___% AIM V.I. Diversified Income Fund ___% OCC Managed Portfolio ___% AIM V.I. Growth Fund ___% OCC Small Cap Portfolio ___% AIM V.I. Value Fund CIGNA INVESTMENTS, INC. TEMPLETON ___% CIGNA VP Money Market Fund ___% Templeton Asset Allocation Fund ___% CIGNA VP S&P 500 Index Fund ___% Templeton International Fund ___% Templeton Stock Fund FIDELITY INVESTMENTS ___% Asset Manager Portfolio ___% Equity-Income Portfolio OTHER (IF AVAILABLE FOR THESE PRODUCTS) ___% Investment Grade Bonds Portfolio ___%_____________________________ ___%_____________________________ MASSACHUSETTS FINANCIAL SERVICES ___% MFS Emerging Growth Series ___% MFS Total Return Series ___% MFS Utilities Series ___% MFS World Governments Series I(We) understand that these transfers will continue until the Fund is exhausted or I(we) terminate the program, whichever occurs earlier. I(We) also understand that I(we) may add to such Fund at any time to continue this program or may change the periodic amounts. - ---------------------------------------------------------------------------------------------------------------------------------- 6. CERTIFICA- I(We) have read the above questions and answers and declare that they are complete and true to the best of TIONS my (our) knowledge and belief. I(We) agree, a) that this VUL/SVUL Addendum to Application and Life Insurance Application (Part I pages 1, 2, 3 and 4, and Part II, or Part IIA, if required) shall form a part of any policy/contract issued, and b) that no Agent/Representative of the Company shall have the authority to waive a complete answer to any question in this Addendum to Application, make or alter any contract, or waive any of the Company's other rights or requirements. I(We) further agree that no insurance shall take effect unless and until the policy/contract has been delivered to and accepted by me(us) and the initial premium paid during the lifetime of the Proposed Insured(s), and provided the Proposed Insured(s) remain in the state of health and insurability represented in Parts I and II, or Part IIA if required, of this Application. I(We) acknowledge receipt of a current prospectus. ILLUSTRATIONS OF BENEFITS, INCLUDING DEATH BENEFITS, POLICY VALUES AND CASH SURRENDER VALUES ARE AVAILABLE UPON REQUEST. - --------------------------------------------------------------------------------------------------------------------------------- 7. SIGNATURES Signed at On / / -------------------------------------------------------------- ----- ----- ----- CITY / STATE MO. DAY YEAR ----------------------------------------------------------------------------------------------------------- SIGNATURE OF PROPOSED INSURED(S) ----------------------------------------------------------------------------------------------------------- SIGNATURE(S) OF OWNER(S) IF OTHER THAN PROPOSED INSURED(S) ----------------------------------------------------------------------------------------------------------- SIGNATURE OF WITNESS ----------------------------------------------------------------------------------------------------------- SIGNATURE OF LICENSED AGENT/REGISTERED REPRESENTATIVE ----------------------------------------------------------------------------------------------------------- SIGNATURE OF LICENSED AGENT/REGISTERED REPRESENTATIVE - ---------------------------------------------------------------------------------------------------------------------------------
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