<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 19, 2000
1933 ACT REGISTRATION NO. 333-
1940 ACT REGISTRATION NO. 811-08559
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
REGISTRATION STATEMENT
ON
FORM S-6
FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933
OF SECURITIES OF UNIT INVESTMENT TRUSTS
REGISTERED ON FORM N-8B-2
LINCOLN LIFE & ANNUITY FLEXIBLE PREMIUM
VARIABLE LIFE ACCOUNT M
(EXACT NAME OF REGISTRANT)
LINCOLN LIFE & ANNUITY COMPANY OF NEW YORK
(NAME OF DEPOSITOR)
120 Madison Street, Suite 1700, Syracuse, NY 13202
(ADDRESS OF DEPOSITOR'S PRINCIPAL EXECUTIVE OFFICES)
Depositor's Telephone Number, including Area Code
(888) 223-1860
<TABLE>
<S> <C>
Robert O. Sheppard, Esquire COPY TO:
Lincoln Life & Annuity Company of New York Jeremy Sachs, Esquire
120 Madison Street, Suite 1700 The Lincoln National Life Insurance
Syracuse NY 13202 Company
(NAME AND ADDRESS OF AGENT FOR SERVICE) 350 Church Street
Hartford, CT 06103
</TABLE>
APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING:
As soon as practicable after effective date of
Registration Statement, and continuously thereafter.
INDEFINITE NUMBER OF UNITS OF INTEREST IN VARIABLE LIFE INSURANCE CONTRACTS
(TITLE OF SECURITIES BEING REGISTERED)
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a)
shall determine.
<PAGE>
CROSS REFERENCE SHEET
(RECONCILIATION AND TIE)
REQUIRED BY INSTRUCTION 4 TO FORM S-6
<TABLE>
<CAPTION>
ITEM OF FORM N-8B-2 LOCATION IN PROSPECTUS
------------------- ----------------------
<S> <C>
1 Cover Page; Highlights
2 Cover Page
3 *
4 Distribution of Policies
5 LLANY, the Separate Account and the General
Account
6(a) LLANY, the Separate Account and the General
Account
6(b) *
9 *
10(a)-(c) Right-to-Examine Period; Surrenders; Accumulation
Value; Reports to Owners
10(d) Right to Exchange the Policy; Policy Loans;
Surrender of the Policy; Allocation of Net
Premium Payments
10(e) Lapse and Reinstatement
10(f) Voting Rights
10(g)-(h) Substitution of Securities
10(i) Premium Payments; Transfers; Death Benefit;
Policy Values; Settlement Options
11 The Funds
12 The Funds
13 Charges; Fees
14 The Policy
15 Premium Payments; Transfers
16 LLANY, the Separate Account and the General
Account
17 Surrender of the Policy
18 LLANY, the Separate Account and the General
Account
19 Reports to Policy Owners
20 *
21 Policy Loans
22 *
23 LLANY, the Separate Account and the General
Account
24 Incontestability; Suicide; Misstatement of Age or
Gender
25 LLANY, the Separate Account and the General
Account
26 Fund Participation Agreements
27 LLANY, the Separate Account and the General
Account
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ITEM OF FORM N-8B-2 LOCATION IN PROSPECTUS
------------------- ----------------------
<S> <C>
28 Directors and Officers of LLANY
29 LLANY, the Separate Account and the General
Account
30 *
31 *
32 *
33 *
34 *
35 *
37 *
38 Distribution of Policies
39 Distribution of Policies
40 *
41(a) Distribution of Policies
42 *
43 *
44 The Funds; Premium Payments
45 *
46 Surrender of the Policy
47 LLANY, the Separate Account and the General
Account; Surrender of the Policy, Transfers
48 *
49 *
50 LLANY, the Separate Account and the General
Account
51 Cover Page; Highlights; Premium Payments; Right
to Exchange the Policy
52 Substitution of Securities
53 Tax Matters
54 *
55 *
</TABLE>
* Not Applicable
<PAGE>
LINCOLN LIFE & ANNUITY COMPANY OF NEW YORK
LINCOLN LIFE & ANNUITY FLEXIBLE PREMIUM VARIABLE LIFE ACCOUNT M
<TABLE>
<S> <C>
HOME OFFICE LOCATION: ADMINISTRATIVE OFFICE:
120 MADISON STREET PERSONAL SERVICE CENTER MVLI
SUITE 1700 350 CHURCH STREET
SYRACUSE, NY 13202 HARTFORD, CT 06103-1106
(888) 223-1860 (800) 444-2363
</TABLE>
--------------------------------------------------------------------------------
A FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
--------------------------------------------------------------------------------
This Prospectus describes LVUL(DB), a flexible premium variable life insurance
contract (the "Policy"), offered by Lincoln Life & Annuity Company of New York
("LLANY," "we," "our" or "us").
The Policy features include: flexible premium payments; a choice of one of two
death benefit options; a choice of underlying investment options.
It may not be advantageous to replace existing insurance or supplement an
existing flexible premium variable life insurance contract with the Policy. This
Prospectus and the Prospectuses of the Funds, furnished with this Prospectus,
should be read carefully to understand the Policy being offered.
The Policy described in this prospectus is available only in New York.
You may allocate net premiums to the Sub-Accounts of our Flexible Premium
Variable Life Account M ("Separate Account"). Each Sub-Account invests in one of
the funds listed below.
AIM VARIABLE INSURANCE FUNDS
AIM V.I. Growth Fund
AIM V.I. International Equity Fund
AIM V.I. Value Fund
AMERICAN FUNDS INSURANCE SERIES
(ALSO KNOWN AS AMERICAN VARIABLE INSURANCE SERIES)
Global Small Capitalization Fund -- Class 2
Growth Fund -- Class 2
Growth-Income Fund -- Class 2
BARON CAPITAL FUNDS TRUST
Baron Capital Asset Fund -- Insurance Shares
DELAWARE GROUP PREMIUM FUND
Devon Series -- Standard Class
Emerging Markets Series -- Standard Class
High Yield Series -- Standard Class
(formerly Delchester Series)
REIT Series -- Standard Class
Small Cap Value Series -- Standard Class
Trend Series -- Standard Class
DEUTSCHE ASSET MANAGEMENT VIT FUNDS TRUST
(FORMERLY BT INSURANCE FUNDS TRUST)
EAFE-Registered Trademark- Equity Index Fund
Equity 500 Index Fund
Small Cap Index Fund
FIDELITY VARIABLE INSURANCE PRODUCTS FUND
Growth Portfolio -- Service Class
High Income Portfolio -- Service Class
FIDELITY VARIABLE INSURANCE PRODUCTS FUND II
Contrafund Portfolio -- Service Class
FIDELITY VARIABLE INSURANCE PRODUCTS FUND III
Growth Opportunities Portfolio -- Service Class
FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST
Templeton Growth Securities Fund -- Class 2
(formerly Templeton Stock Fund)
Templeton International Securities Fund -- Class 2
(formerly Templeton International Fund)
JANUS ASPEN SERIES
Janus Aspen Series Balanced Portfolio --
Institutional Shares
Janus Aspen Series Global Technology Portfolio --
Service Shares
Janus Aspen Series Worldwide Growth Portfolio --
Institutional Shares
LINCOLN NATIONAL (LN)
LN Bond Fund, Inc.
LN Capital Appreciation Fund, Inc.
LN Equity-Income Fund, Inc.
LN Global Asset Allocation Fund, Inc.
LN Money Market Fund, Inc.
LN Social Awareness Fund, Inc.
MFS-Registered Trademark- VARIABLE INSURANCE TRUST
MFS Emerging Growth Series
MFS Total Return Series
MFS Utilities Series
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST
AMT Mid-Cap Growth Portfolio
AMT Partners Portfolio
TO BE VALID, THIS PROSPECTUS MUST HAVE THE CURRENT MUTUAL FUNDS' PROSPECTUSES
WITH IT. KEEP ALL FOR FUTURE REFERENCE.
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES OR DETERMINED THIS PROSPECTUS IS ACCURATE OR COMPLETE. IT IS A
CRIMINAL OFFENSE TO STATE OTHERWISE.
Prospectus dated: , 2000
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
CONTENTS PAGE
-------- ----
<S> <C>
HIGHLIGHTS............................ 3
Initial Choices To Be Made.......... 3
Level or Varying Death Benefit...... 3
Amount of Premium Payments.......... 4
Selection of Funding Vehicles....... 4
No Lapse Provision.................. 5
Charges and Fees.................... 5
Fund Expenses....................... 6
Changes in Specified Amount......... 10
LLANY, THE SEPARATE ACCOUNT AND THE
GENERAL ACCOUNT...................... 10
BUYING VARIABLE LIFE INSURANCE........ 11
Replacements........................ 12
APPLICATION........................... 12
OWNERSHIP............................. 13
BENEFICIARY........................... 13
THE POLICY............................ 14
Policy Specifications............... 14
PREMIUM FEATURES...................... 14
Planned Premiums; Additional
Premiums........................... 14
Limits on Right to Make Payments
of Additional and Planned
Premiums......................... 15
Premium Load; Net Premium
Payment.......................... 15
RIGHT-TO-EXAMINE PERIOD............... 15
TRANSFERS AND ALLOCATION AMONG
ACCOUNTS............................. 15
Allocation of Net Premium
Payments........................... 15
Transfers........................... 16
Optional Sub-Account Allocation
Programs........................... 16
Dollar Cost Averaging............. 16
Automatic Rebalancing............. 17
POLICY VALUES......................... 17
Accumulation Value.................. 17
Separate Account Value.............. 18
Variable Accumulation Unit
Value............................ 18
Variable Accumulation Units....... 18
Fixed Account and Loan Account
Value.............................. 19
Net Accumulation Value.............. 19
FUNDS................................. 19
Substitution of Securities.......... 25
Voting Rights....................... 25
Fund Participation Agreements....... 25
CHARGES AND FEES...................... 25
Deductions from Premium Payments.... 25
Deductions Made Monthly............. 26
Administrative Expenses........... 26
Cost of Insurance Charge.......... 26
Mortality and Expense Risk Charge... 27
Surrender Charges................... 27
Reduction of Charges -- Purchases on
a Case Basis; Exchanges............ 27
Transaction Fee for Excess
Transfers.......................... 28
DEATH BENEFITS........................ 28
Death Benefit Options............... 28
Changes in Death Benefit Options and
Specified Amount................... 29
</TABLE>
<TABLE>
<CAPTION>
CONTENTS PAGE
-------- ----
<S> <C>
Federal Income Tax Definition of
Life Insurance..................... 29
NOTICE OF DEATH OF INSURED............ 30
PAYMENT OF DEATH BENEFIT PROCEEDS..... 30
Settlement Options.................. 30
POLICY LIQUIDITY...................... 31
Policy Loans........................ 31
Partial Surrender................... 31
Surrender of the Policy............. 32
Surrender Value................... 32
Deferral of Payment and Transfers... 32
ASSIGNMENT; CHANGE OF OWNERSHIP....... 32
LAPSE AND REINSTATEMENT............... 33
Lapse of a Policy................... 33
No Lapse Provision.................. 33
Reinstatement of a Lapsed Policy.... 34
COMMUNICATIONS WITH LLANY............. 34
Proper Written Form................. 34
Telephone Transaction Privileges.... 34
OTHER POLICY PROVISIONS............... 34
Issuance............................ 34
Date of Coverage.................... 35
Incontestability.................... 35
Misstatement of Age or Gender....... 35
Suicide............................. 35
Nonparticipating Policies........... 35
Riders.............................. 35
TAX ISSUES............................ 35
Taxation of Life Insurance Contracts
in General......................... 36
Policies Which Are MECS............. 37
Policies Which Are Not MECS......... 38
Other Considerations................ 38
Tax Status of LLANY................. 39
FAIR VALUE OF THE POLICY.............. 39
DIRECTORS AND OFFICERS OF LLANY....... 40
DISTRIBUTION OF POLICIES.............. 42
CHANGES OF INVESTMENT POLICY.......... 42
OTHER CONTRACTS ISSUED BY LLANY....... 42
STATE REGULATION...................... 42
REPORTS TO OWNERS..................... 43
ADVERTISING........................... 43
EXPERTS............................... 43
REGISTRATION STATEMENT................ 43
APPENDIX 1: MONTHLY CHARGES........... 44
APPENDIX 2: GUARANTEED MAXIMUM COST OF
INSURANCE RATES...................... 45
APPENDIX 3: ILLUSTRATION OF SURRENDER
CHARGES.............................. 46
APPENDIX 4: CORRIDOR PERCENTAGES...... 48
APPENDIX 5: ILLUSTRATION OF
ACCUMULATION VALUES, SURRENDER VALUES
AND DEATH BENEFIT PROCEEDS........... 49
FINANCIAL STATEMENTS..................
Separate Account.................... M-1
Lincoln Life & Annuity Company of
New York........................... S-1
</TABLE>
2
<PAGE>
HIGHLIGHTS
This section is an overview of key Policy features. Your
Policy is a flexible premium variable life insurance policy
under which flexible premium payments are permitted and the
Death Benefit and Policy values may vary with the investment
performance of the funding option(s) selected. Its value may
change on a:
1) fixed basis;
2) variable basis; or a
3) combination of both fixed and variable bases.
Review your personal financial objectives and discuss them
with a qualified financial counselor before you buy a
variable life insurance policy. This Policy may, or may not,
be appropriate for your individual financial goals. If you
are already entitled to favorable tax treatment, you should
satisfy yourself that this Policy meets your other financial
goals before you buy it. The value of the Policy and, under
one option, the death benefit amount depend on the
investment results of the funding options you select.
At all times, your Policy must qualify as life insurance
under the Internal Revenue Code of 1986 (the "Code") to
receive favorable tax treatment under Federal law. If these
requirements are met, you may benefit from such tax
treatment. LLANY reserves the right to return your premium
payments if they result in your Policy failing to meet Code
requirements.
INITIAL CHOICES TO BE MADE
The Policy Owner (the "Owner" or "you") is the person named
in the "Policy Specifications" who has all of the Policy
ownership rights. If no Owner is named, the Insured (the
person whose life is insured under the Policy) will be the
Owner of the Policy. You, as the Owner, have three important
choices to make when the Policy is first purchased. You need
to choose:
1) one of the two Death Benefit Options;
2) the amount of premium you want to pay; and
3) the amount of your Net Premium Payment to be placed in
each of the funding options you select. The Net Premium
Payment is the balance of your Premium Payment that
remains after certain charges are deducted from it.
LEVEL OR VARYING DEATH BENEFIT
The Death Benefit is the amount LLANY pays to the
Beneficiary(ies) when the Insured dies. Before we pay the
Beneficiary(ies), any outstanding loan account balances or
outstanding amounts due are subtracted from the Death
Benefit. LLANY calculates the Death Benefit payable as of
the date on which the Insured died.
When you purchase your Policy, you must choose one of two
Death Benefit Options:
1) a level death benefit; or
2) a varying death benefit.
If you choose the level Death Benefit Option, the Death
Benefit will be the greater of:
1) the "Specified Amount", which is the amount of the death
benefit in effect for the Policy when the Insured died, less
any indebtedness and partial surrenders (The Specified
Amount is on the Policy's Specification Page); or
3
<PAGE>
2) the "Corridor Death Benefit," which is the death benefit
calculated as a percentage of the Accumulation Value. (The
"Net Accumulation Value" is the total of the balances in the
Fixed Account and the Separate Account minus any outstanding
Loan Account amounts.)
If you choose the varying Death Benefit Option, the Death
Benefit will be the greater of:
1) the Specified Amount plus the Net Accumulation Value,
less any loan interest accrued, but not yet charged, when
the Insured died; or
2) the Corridor Death Benefit.
See page 27.
If you have borrowed against your Policy or surrendered a
portion of your Policy, your Death Benefit will be reduced
by the Loan Account balance, by any loan interest accrued,
but not yet charged, and any surrendered amount.
AMOUNT OF PREMIUM PAYMENT
When you apply for your Policy, you must decide how much
premium to pay. Premium payments may be changed within the
limits described on page 15.
You may use the value of the Policy to pay the premiums due
and continue the Policy in force if sufficient values are
available for premium payments. Be careful; if the
investment options you choose do not do as well as you
expect, there may not be enough value to continue the Policy
in force without more premium payments. Charges against
Policy values for the Cost of Insurance (see page 26)
increase as the Insured gets older.
If your Policy lapses because your Monthly Premium Deduction
is larger than the Net Accumulation Value, you may reinstate
your Policy. See page 33.
When you first receive your Policy you will have 10 days to
look it over. This is called the "Right-to-Examine" period.
Use this time to review your Policy and make sure it meets
your needs. During this period, your Initial Premium Payment
will be deposited in the Money Market Sub-Account. If you
then decide you do not want your Policy, we will return all
Premium Payments to you with no interest paid. See page 15.
SELECTION OF FUNDING VEHICLES
This Prospectus focuses on the Separate Account investment
information that makes up the "variable" part of the Policy.
If you put money into the variable funding options, you
assume all the investment risk on that money. This means
that if the mutual fund(s) you select go up in value, the
value of your Policy, net of charges and expenses, also goes
up. If those funds lose value, so does your Policy. Each
fund has its own investment objective. You should carefully
read each Fund's prospectus before making your decision.
You must choose the Sub-Accounts in which you want to place
your Net Premium Payment. These Sub-Accounts make up the
Separate Account. Each Sub-Account invests in shares of a
certain Fund. You may also place your Net Premium Payment or
part of it into the Fixed Account. A Sub-Account is not
guaranteed and will increase or decrease in value according
to the particular Fund's investment performance. See page 20
4
<PAGE>
You may also use LLANY's Fixed Account to fund your Policy.
Net Premium payments put into the Fixed Account:
- become part of LLANY's General Account;
- do not share the investment experience of the Separate
Account; and
- have a guaranteed minimum interest rate of 4% per year.
Interest beyond 4% is credited at LLANY's discretion. For
additional information on the Fixed Account, see page 11.
NO LAPSE PROVISION
If elected on the application, this policy contains a
ten-year "No Lapse Provision". This means that the Policy
will not lapse during its first ten years regardless of the
gains or losses of the Funds you select as long as you pay
the specified No Lapse Premium. Therefore, the Initial Death
Benefit under your Policy will be guaranteed for ten years
even though your Net Accumulation Value is insufficient to
pay your current Monthly Deductions. Loans or Partial
Surrenders may jeopardize the No Lapse Provision. See page
33. Availability of the No Lapse Provision may vary in some
states.
CHARGES AND FEES (Fees Charged by LLANY)
We deduct charges in connection with the Policy to
compensate us for providing the Policy's insurance benefit,
administering the Policy, assuming certain risks under the
Policy and for sales-related expenses we incur.
DEDUCTION FROM PREMIUM PAYMENTS. We deduct a premium charge
of 5% from each Premium Payment.
MONTHLY DEDUCTION. There is a Monthly Deduction which
includes administrative expenses, a cost of insurance charge
and charges for riders that are placed on your policy.
ADMINISTRATIVE EXPENSES. We deduct a flat dollar Monthly
Deduction of $10 for administrative expenses.
In addition, for the first two Policy Years, we deduct a
monthly charge per $1,000 of Specified Amount. This
monthly charge will vary with the insured's age as
described on page 26 and as shown in Appendix 1. This
monthly charge also applies, for 24 months, to any
increase in Specified Amount.
The maximum for this additional monthly charge would be
$0.4242 per $1,000 of Specified Amount. This would apply
only if the insured's age as of the birth date nearest
the Policy's issue date (or increase in specified
amount) is 81 or older.
COST OF INSURANCE CHARGE. A monthly deduction is made
for the Cost of Insurance charge. This charge varies by
policy duration and insured's age, gender and premium
class. The maximum monthly deductions are listed in
Appendix 2.
Mortality and Expense Risk Charge. We make daily charges
against the Separate Account for mortality and expense risk.
This charge is guaranteed at an annual rate of 0.90% for
Policy Years 1-19 and 0.20% for Policy Years 20 and beyond.
Transfer Charge. Each Policy Year you may make 12 transfers
between funding options without charge. Beyond 12, a $25 fee
may apply.
SURRENDER CHARGES. FULL SURRENDER. If you totally surrender
your Policy within the first 15 Policy Years, the Surrender
Charge is the amount retained by us. Calculation of the
5
<PAGE>
Surrender Charge is described in Appendix 3. This charge is
based on age, gender and policy duration. The maximum
Surrender Charge will never exceed $46.82 per $1,000 of
Specified Amount. PARTIAL SURRENDER. Each time you request a
partial surrender of your Policy, we charge you $25, but not
more than 2% of the amount withdrawn. See page 27.
Loans. You may borrow within described limits against the
Policy. If you borrow against your Policy, interest will be
charged on the Loan Account Value at an annual interest rate
of 8%. As a benefit to you Lincoln Life will credit interest
of 7% per year on the Loan Account Value. See page 31.
REDUCTION OF CHARGES. Charges and fees may be reduced in
some circumstances. See page 27.
FUND EXPENSES
The investment advisor for each of the Funds deducts a daily
charge as a percent of the net assets in each fund as an
asset management charge. The charge reflects asset
management fees of the investment advisor (Management Fees),
and other expenses incurred by the funds (including 12b-1
fees for Class 2 shares and Other Expenses). The charge has
the effect of reducing the investment results credited to
the Sub-Accounts. Future Fund expenses will vary.
6
<PAGE>
PORTFOLIO EXPENSE TABLE
<TABLE>
<CAPTION>
TOTAL
ANNUAL TOTAL FUND
FUND OPERATING
OPERATING EXPENSES
EXPENSES TOTAL WITH
WITHOUT WAIVERS WAIVERS
MANAGEMENT 12(B)1 OTHER WAIVERS OR AND AND
FUND FEES(1) FEE EXPENSES REDUCTIONS REDUCTIONS REDUCTIONS
--------------------------- ----------- -------- -------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
AIM V.I. Growth Fund....... 0.63% N/A% 0.10% 0.73% N/A 0.73%
AIM V.I. International
Equity Fund.............. 0.75% N/A 0.22% 0.97% N/A 0.97%
AIM V.I. Value Fund........ 0.61% N/A 0.15% 0.76% N/A 0.76%
AFIS Global Small
Capitalization Fund-
Class 2.................. 0.78% 0.25% 0.03% 1.06% N/A 1.06%
AFIS Growth Fund
Class 2.................. 0.38% 0.25% 0.01% 0.64% N/A 0.64%
AFIS Growth Income Fund
Class 2.................. 0.34% 0.25% 0.01% 0.60% N/A 0.60%
Baron Capital Asset
Fund-Insurance
Shares(2)................ 1.00% 0.25% 0.63% 1.88% (0.38)% 1.50%
Delaware Devon Series
Standard Class (3a)...... 0.65% N/A 0.12% 0.75% N/A 0.77%
Delaware Emerging Markets
Series-Standard
Class (3b)............... 1.19% N/A 0.28% 1.53% (0.06)% 1.47%
Delaware High Yield Series
(formerly Delchester)
Standard Class (3c)...... 0.65% N/A 0.09% 0.72% N/A 0.74%
Delaware REIT Series
Standard Class (3d)...... 0.75% N/A 0.21% 0.96% (0.11)% 0.85%
Delaware Small Cap Value
Series Standard
Class (3e)............... 0.75% N/A 0.10% 0.85% N/A 0.85%
Delaware Trend Series
Standard Class (3f)...... 0.75% N/A 0.07% 0.82% N/A 0.82%
Deutsche VIT EAFE Index
Fund(4).................. 0.45% N/A 0.70% 1.15% (0.50)% 0.65%
Deutsche VIT Equity 500
Index Fund(4)............ 0.20% N/A 0.23% 0.43% (0.13)% 0.30%
Deutsche VIT Small Cap
Index Fund(4)............ 0.35% N/A 0.83% 1.18% (0.73)% 0.45%
Fidelity VIP Growth
Portfolio Service
Class (5)................ 0.58% 0.10% 0.09% 0.77% N/A 0.77%
Fidelity VIP High Income
Portfolio Service
Class (5)................ 0.58% 0.10% 0.11% 0.79% N/A 0.79%
Fidelity VIP II ContraFund
Portfolio-Service
Class (5)................ 0.58% 0.10% 0.10% 0.78% N/A 0.78%
Fidelity VIP III Growth
Opportunities Portfolio
Service Class (5)........ 0.58% 0.10% 0.11% 0.79% N/A 0.79%
Janus Aspen Series Balanced
Portfolio (Institutional
Shares)(6)............... 0.65% N/A 0.02% 0.67% N/A 0.67%
Janus Aspen Series Global
Technology Portfolio
(Service Shares)(6)...... 0.65% 0.25% 0.13% 1.03% N/A 1.03%
Janus Aspen Series
Worldwide Growth
Portfolio(6)............. 0.65% N/A 0.05% 0.70% N/A 0.70%
LN Bond Fund............... 0.45% N/A 0.08% 0.53% N/A 0.53%
LN Capital Appreciation
Fund..................... 0.72% N/A 0.06% 0.78% N/A 0.78%
LN Equity-Income Fund...... 0.72% N/A 0.07% 0.79% N/A 0.79%
LN Global Asset Allocation
Fund..................... 0.72% N/A 0.19% 0.91% N/A 0.91%
LN Money Market Fund....... 0.48% N/A 0.11% 0.59% N/A 0.59%
LN Social Awareness Fund... 0.33% N/A 0.05% 0.38% N/A 0.38%
MFS Emerging Growth
Fund(7).................. 0.75% N/A 0.09%(1) 0.84% N/A 0.84%
MFS Total Return
Series(7)................ 0.75% N/A 0.15%(1) 0.90% N/A 0.90%
MFS Utilities
Series (7)............... 0.75% N/A 0.16%(1) 0.91% N/A 0.91%
Neuberger Berman AMT
Mid-Cap Growth
Portfolio(8)............. 0.85% N/A 0.23% 1.08% (0.08)% 1.00%
Neuberger Berman AMT
Partners Portfolio(8).... 0.80% N/A 0.07% 0.87% N/A 0.87%
Templeton Growth Securities
Fund Class 2(9a,b,c)..... 0.83% 0.25% 0.05% 1.13% N/A 1.13%
Templeton International
Securities Fund
Class 2(9b,d)............ 0.69% 0.25% 0.19% 1.13% N/A 1.13%
</TABLE>
---------------------------------------------------
(1) Certain of the fund advisers reimburse the company
for administrative costs incurred in connection with
administering the funds as variable funding options
under the contract. These reimbursements are
generally paid out of the management fees and are not
charged to investors.
(2) The Adviser is contractually obligated to reduce its
fee to the extent required to limit Baron Capital
Asset Fund's total operating expenses to 1.5% for the
first $250 million of assets in the Fund, 1.35%
7
<PAGE>
for Fund assets over $250 million and 1.25% for Fund
assets over $500 million. Without the expense
limitations, total operating expenses for the Fund
for the period January 1, 1999 through December 31,
1999 would have been 1.88%.
(3)(a) The investment advisor for the Devon Series is
Delaware Management Company ("DMC"). Effective
May 1, 2000 through October 31, 2000, DMC has
voluntarily agreed to waive its management fee and
reimburse each Series for expenses to the extent
that total expenses will not exceed 0.80%. Under its
Management Agreement, the Series pays a management
fee based on average daily net assets as follows:
0.65% on the first $500 million, 0.60% on the next
$500 million, 0.55% on the next $1,500 million,
0.50% on assets in excess of $2,500 million; all per
year.
(b) The investment advisor for the Emerging Markets
Series is Delaware International Advisers Ltd.
("DIAL"). Effective May 1, 2000 through October 31,
2000, DIAL has voluntarily agreed to waive its
management fee and reimburse the Series for expenses
to the extent that total expenses will not exceed
1.50%. Without such an arrangement, the total annual
operating expenses for the Series would have been
1.53%. Under its Management Agreement, the
Series pays a management fee based on average daily
net assets as follows: 1.25% on the first $500
million, 1.20% on the next $500 million, 1.15% on the
next $1,500 million, 1.10% on assets in excess of
$2,500 million; all per year.
(c) The investment advisor for the High Yield Series is
Delaware Management Company ("DMC"). Effective
May 1, 2000 through October 31, 2000, DMC has
voluntarily agreed to waive its management fee and
reimburse the Series for expenses to the extent that
total expenses will not exceed 0.80%. Under its
Management Agreement, the Series pays a management
fee based on average daily net assets as follows:
0.65% on the first $500 million, 0.60% on the next
$500 million, 0.55% on the next $1,500 million, 0.50%
on assets in excess of $2,500 million; all per year.
(d) The investment advisor for the REIT Series is
Delaware Management Company ("DMC"). Effective
May 1, 2000 through October 31, 2000, DMC has
voluntarily agreed to waive its management fee and
reimburse the Series for expenses to the extent that
total expenses will not exceed 0.85%. Without such an
arrangement, the total annual operating expenses for
the Series would have been 0.96%. Under its
Management Agreement, the Series pays a management
fee based on average daily net assets as follows:
0.75% on the first $500 million, 0.70% on the next
$500 million, 0.65% on the next $1,500 million, 0.60%
on assets in excess of $2,500 million; all per year.
(e) The investment advisor for the Small Cap Value
Series is Delaware Management Company ("DMC").
Effective May 1, 2000 through October 31, 2000, DMC
has voluntarily agreed to waive its management fee
and reimburse the Series for expenses to the extent
that total expenses will not exceed 0.85%. Under its
Management Agreement, the Series pays a management
fee based on average daily net assets as follows:
0.75% on the first $500 million, 0.70% on the next
$500 million, 0.65% on the next $1,500 million, 0.60%
on assets in excess of $2,500 million; all per year.
(f) The investment advisor for the Trend Series is
Delaware Management Company ("DMC"). Effective
May 1, 2000 through October 31, 2000, DMC has
voluntarily agreed to waive its management fee and
reimburse the Series for expenses to the extent that
total expenses will not exceed 0.85%. Under its
Management Agreement, the Series pays a management
fee based on average daily net assets as follows:
0.75% on the first $500 million, 0.70% on the next
$500 million, 0.65% on the next $1,500 million, 0.60%
on assets in excess of $2,500 million; all per year.
(4) Under the Advisory Agreement with Bankers Trust
Company (the "Advisor"), the fund will pay an
advisory fee at an annual percentage rate of 0.20% of
the average daily net assets of the Equity 500 Index
Fund. These fees are accrued daily and paid monthly.
The Advisor has voluntarily undertaken to waive its
fee and to reimburse the fund for certain expenses so
that the fund's total operating expenses will not
exceed 0.30% of average daily net assets. Under the
Advisory Agreement with the "Advisor", the Small Cap
Index Fund will pay an advisory fee at an annual
percentage rate of 0.35% of the average daily net
assets of the fund. These fees are accrued daily and
paid monthly. The Advisor has voluntarily undertaken
to waive its fee and to reimburse the fund for
certain expenses so that the fund's total operating
expenses will not exceed 0.45% of average daily net
assets. Under the Advisory Agreement the "Advisor",
the EAFE Equity Index Fund will pay an advisory fee
at an annual percentage rate of 0.45% of the average
daily net assets of the fund. These fees are accrued
daily and paid
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monthly. The Advisor has voluntarily undertaken to
waive its fee and to reimburse the fund for certain
expenses so that the fund's total operating expenses
will not exceed 0.65% of average daily net assets.
Without the reimbursement to the Funds for the year
ended 12/31/99 total expenses would have been 0.43%
for the Equity 500 Index Fund, 1.18% for the Small
Cap Index Fund and 1.15% for the EAFE Equity Index
Fund.
(5) A portion of the brokerage commissions that certain
funds pay was used to reduce fund expenses. In
addition, through arrangements with certain funds',
or FMR on behalf of certain funds' custodian, credits
realized as a result of uninvested cash balances were
used to reduce a portion of each applicable fund's
expenses. The total operating expenses, after
reimbursement would have been: Growth 0.75%
(service); Contrafund 0.75% (service); Growth
Opportunities 0.78% (service).
(6) Expenses (except for Global Technology Portfolio) are
based upon expenses for the fiscal year ended
December 31, 1999, restated to reflect a reduction in
the management fee for Worldwide Growth and Balanced
Portfolios. Expenses for Global Technology Portfolio
are based on the estimated expenses that the
Portfolio expects to incur in its initial fiscal
year. All expenses are shown without the effect of
expense offset arrangements.
(7) Each series has an expense offset arrangement which
reduces the series' custodian fee based on the amount
of cash maintained by the series with its custodian
and dividend disbursing agent. Each series may enter
into other such arrangement and directed brokerage
arrangements, which would also have the effect of
reducing the series' expenses. "Other Expenses" do
not take into account these expense reductions, and
are therefore higher than the actual expenses of the
series. Had the fee reductions been taken into
account, "Net Expenses" would be lower for certain
series and would equal:
0.83% for Emerging Growth Series
0.89% for Total Return Series
0.90% for Utilities Series
(8) Expenses reflect expense reimbursement. Neuberger
Berman Management Inc. ("NBMI") has undertaken
through May 1, 2001 to reimburse certain operating
expenses, including the compensation of NBMI and
excluding taxes, interest, extraordinary expenses,
brokerage commissions and transaction costs, that
exceed in the aggregate, 1.0% of the AMT Mid-Cap
Growth Portfolio's average daily net asset value.
Absent such reimbursement, Total Annual Expenses for
the portfolio for the year ended December 31, 1999
would have been 1.08%.
(9)(a) The fund administration fee is paid indirectly
through the management fee.
(b) The fund's class 2 distribution plan or "rule 12b-1
plan" is described in the fund's prospectus. While
the maximum amount payable under the fund's class 2
rule 12b-1 plan is 0.35% per year of the fund's
average daily net assets, the Board of Trustees of
Franklin Templeton Variable Insurance Products Trust
has set the current rate at 0.25% per year.
(c) On 2/8/00, a merger and reorganization was approved
that combined the fund with a similar fund of the
Templeton Variable Products Series Fund, effective
5/1/00. The table shows total expenses based on the
fund's assets as of 12/31/99, and not the assets of
the combined fund. However, if the table reflected
combined assets, the fund's expenses after 5/01/00
would be estimated as: Management Fees 0.80%,
Distribution and Service Fees 0.25%, Other Expenses
0.05%, and Total Fund Operating Expenses 1.10%
(d) On 2/8/00, shareholders approved a merger and
reorganization that combined the fund with the
Templeton International Equity Fund. The shareholders
of that fund approved new management fees, which
apply to the combined fund effective 5/1/00. The
table shows restated total expenses based on the new
fees and the assets of the fund as of 12/31/99, and
not the assets of the combined fund. However, if the
table reflected both the new fees and the combined
assets, the fund's expenses after 5/1/00 would be
estimated as: Management Fees 0.65%, Distribution and
Service Fees 0.25%, Other Expenses 0.20%, and Total
Fund Operating Expenses 1.10%.
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CHANGES IN SPECIFIED AMOUNT
The Initial Specified Amount, chosen by the Policy Owner, is
the initial Death Benefit.
Within certain limits, you may decrease or, with
satisfactory evidence of insurability, increase the
Specified Amount. The minimum Specified Amount is currently
$100,000. Such changes will affect other aspects of your
Policy. See page 29.
LLANY, THE SEPARATE ACCOUNT AND
THE GENERAL ACCOUNT
Lincoln Life & Annuity Company of New York is a life
insurance company chartered under New York law on June 6,
1996. Wholly-owned by The Lincoln National Life Insurance
Company ("Lincoln Life") and in turn by Lincoln National
Corporation ("LNC"), a publicly held Indiana insurance
holding company incorporated in 1968, it is licensed to sell
life insurance policies and annuity contracts in New York.
Its principal office is at 120 Madison Street, Suite 1700,
Syracuse, NY 13202. LLANY, Lincoln Life, LNC and their
affiliates comprise the "Lincoln Financial Group" which
provides a variety of wealth accumulation and protection
products and services.
Lincoln Life & Annuity Flexible Premium Variable Life
Account M ("Account M") is a "separate account" established
pursuant to a resolution of the Board of Directors of LLANY.
Under New York law, the assets of Account M attributable to
the Policies, though LLANY's property, are not chargeable
with liabilities of any other business of LLANY and are
available first to satisfy LLANY's obligations under the
Policies. Account M's income, gains, and losses are credited
to or charged against Account M without regard to other
income, gains, or losses of LLANY. Its values and investment
performance are not guaranteed. It is registered with the
Securities and Exchange Commission (the "Commission") as a
"unit investment trust" under the 1940 Act and meets the
1940 Act's definition of "separate account". Such
registration does not involve supervision by the Commission
of Account M's or our management, investment practices, or
policies. We have other registered separate accounts which
fund other variable life insurance policies and variable
annuity contracts.
Account M is divided into Sub-Accounts, each of which is
invested solely in the shares of one of the Funds available
as funding vehicles under the Policies. On each Valuation
Day (any day on which the New York Stock Exchange is open
and trading is unrestricted), Net Premium Payments allocated
to Account M will be invested in Fund shares at net asset
value, and monies necessary to pay for deductions, charges,
transfers and surrenders from Account M are raised by
selling Fund shares at net asset value.
The Funds and their investment objectives, which they may or
may not achieve, are described in FUNDS. More Fund
information is in the Funds' prospectuses, which must
accompany or precede this prospectus and should be read
carefully. Some Funds have investment objectives and
policies similar to those of other funds managed by the same
investment adviser. Their investment results may be higher
or lower than those of the other funds, and there can be no
assurance, and no representation is made, that a Fund's
investment results will be comparable to the investment
results of any other fund.
We reserve the right to add, withdraw or substitute Funds,
subject to the conditions of the Policy and to compliance
with regulatory requirements, if in our sole discretion,
legal, regulatory, marketing, tax or investment
considerations so warrant or in the event
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a particular Fund is no longer available for investment by
the Sub-Accounts. No substitution will take place without
prior approval of the Commission, to the extent required by
law.
Shares of the Funds may be used by us and other insurance
companies to fund both variable annuity contracts and
variable life insurance policies. While this is not
perceived as problematic, the Funds' governing bodies
(Boards of Directors/Trustees) have agreed to monitor events
to identify any material irreconcilable conflicts which
might arise and to decide what responsive action might be
appropriate. If a Sub-Account were to withdraw its
investment in a Fund because of a conflict, a Fund might
have to sell portfolio securities at unfavorable prices.
A Policy may also be funded in whole or in part through the
"Fixed Account", part of LLANY's General Account supporting
its insurance and annuity obligations. We will credit
interest on amounts held in the Fixed Account as we
determine from time to time, but not less than 4% per year.
Interest, once credited, and Fixed Account principal are
guaranteed. Interests in the Fixed Account have not been
registered under the 1933 Act in reliance on exemptive
provisions. The Commission has not reviewed Fixed Account
disclosures, but they are subject to securities law
provisions relating to accuracy and completeness.
BUYING VARIABLE LIFE INSURANCE
The Policies this Prospectus offers are variable life
insurance policies which provide death benefit protection.
Investors not needing death benefit protection should
consider other forms of investment, as there are extra costs
and expenses of providing the insurance feature. Further,
life insurance purchasers who are risk-aversive or want more
predictable premium levels and benefits may be more
comfortable buying more traditional, non-variable life
insurance. However, variable life insurance is a flexible
tool for financial and investment planning for persons
needing death benefit protection and willing to assume
investment risk and to monitor investment choices they have
made.
Flexibility starts with the ability to make differing levels
of premium payments. A young family just starting out may
only be able to pay modest premiums initially but hope to
increase premium payments over time. At first, this family
would be paying primarily for the insurance feature (perhaps
at ages where the insurance cost is relatively low) and
later use a Policy more as a savings vehicle. A customer at
peak earning capacity may wish to pay substantial premiums
for a limited number of years prior to retirement, after
which Policy values may suffice, based on future expected
return results, though not guaranteed, to keep the Policy
inforce for the expected lifetime and to provide, through
loans, supplemental retirement income. A customer may be
able to pay a large single premium, using the Policy
primarily as a savings and investment vehicle for potential
tax advantages. A parent or grandparent may find a policy on
the life of a child or grandchild a useful gifting
opportunity over a period of years and the basis of an
investment program for the donee. A business may be able to
use a Policy to fund non-qualified executive compensation or
business continuation plans.
Sufficient premiums must always be paid to keep a policy
inforce, and there is a risk of lapse if premiums are too
low in relation to the insurance amount and if investment
results are less favorable than anticipated. The No Lapse
Provision, while in effect, may help assure a death benefit
even if investment results are unfavorable.
Flexibility also results from being able to select, monitor
and change investment choices within a Policy. With the wide
variety of funding options available, it is possible to fine
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<PAGE>
tune an investment mix and change it to meet changing
personal objectives or investment conditions. Policy owners
should be prepared to monitor their investment choices on an
ongoing basis.
Variable life insurance has significant tax advantages under
current tax law. A transfer of values from one fund to
another within the Policy generates no taxable gain or loss.
Any investment income and realized capital gains within a
fund are automatically reinvested without being taxed to the
Policy owners. Policy values therefore accumulate on a tax-
deferred basis. These situations would normally result in
immediate tax liabilities in the case of direct investment
in mutual funds.
While these tax deferral features also apply to variable
annuities, liquidity (the ability of Policy owners to access
Policy values) is normally more easily achieved with
variable life insurance. Unless a policy has become a
"modified endowment contract" (see TAX ISSUES), an Owner can
borrow Policy values tax-free, without surrender charges and
at very low net interest cost. Policy loans can be a source
of retirement income. Variable annuity withdrawals are
generally taxable to the extent of accumulated income, may
be subject to surrender charges, and will result in penalty
tax if made before age 59 1/2.
Depending on the death benefit option chosen, accumulated
Policy values may also be part of the eventual death benefit
payable. If a Policy is heavily funded and investment
performance is very favorable, the death benefit may
increase even further because of tax law requirements that
the death benefit be a certain multiple of Policy value,
depending on the Insured's age (see DEATH BENEFITS). The
death benefit is income-tax free and may, with proper estate
planning, be estate-tax free. A tax advisor should be
consulted.
There are costs and expenses of variable life insurance
ownership which are directly related to Policy values (i.e.
asset based costs),as is true with investment in mutual
funds or variable annuities. A significant additional cost
of variable life insurance is the "cost of insurance" charge
which is imposed on the "amount at risk" (the death benefit
less Policy value) and increases as the insured grows older.
This charge varies by age, underwriting classification,
smoking status and in most states by gender. The effect of
its increase can be seen in illustrations in this Prospectus
(see Appendix 5) or in personalized illustrations available
upon request. Surrender Charges, which decrease over time,
are another significant additional cost if the Policy is not
retained.
REPLACEMENTS
Before purchasing the Policy to replace, or to be funded
with proceeds borrowed or withdrawn from, an existing life
insurance policy, the applicant should consider a number of
matters. Will any commission be paid to an agent or any
other person with respect to the replacement? Are coverages
and comparable values available from the Policy, as compared
to his or her existing policy? The Insured may no longer be
insurable, or the contestability period may have elapsed
with respect to the existing policy, while the Policy could
be contested. The Owner should consider similar matters
before deciding to replace the Policy or withdraw funds from
the Policy for the purchase of funding a new policy of life
insurance.
APPLICATION
Any person who wants to buy a Policy must first complete an
application on a form provided by LLANY.
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A completed application identifies the prospective Insured
and provides sufficient information about the prospective
insured to permit LLANY to begin underwriting the risks
under the Policy. We require a medical history and
examination of the Insured. LLANY may decline to provide
insurance, or may place the Insured into a special
underwriting category (these include preferred, non-smoker
standard, smoker standard, non-smoker substandard and smoker
substandard). The amount of the Cost of Insurance deducted
monthly from the Policy value after issue varies among the
underwriting categories as well as by age of the Insured at
his/her nearest birthday and gender of the Insured.
The applicant will initially select the Beneficiary or
Beneficiaries who are to receive Death Benefit Proceeds, the
initial face amount (the Initial Specified Amount) of the
Death Benefit and which of two methods of computing the
Death Benefit is to be used. (See DEATH BENEFITS, Death
Benefit Options). The applicant will also indicate both the
frequency and amount of Premium Payments, (see PREMIUM
FEATURES), and how Policy values are initially to be
allocated among the available funding options following the
expiration of the Right-to-Examine Period. (See
RIGHT-TO-EXAMINE PERIOD).
OWNERSHIP
The Owner is the person or persons named as Owner in the
application, and on the Date of Issue will usually be
identified as Owner in the Policy Specifications. If no
person is identified as Owner in the Policy Specifications,
then the Insured is the Owner. The person or persons
designated to be Owner of the Policy must have, or hold
legal title for the sole benefit of a person who has, an
"insurable interest" in the life of the Insured under
applicable state law. The Owner may be the Insured, or any
other natural person or non-natural entity.
The Owner is entitled to exercise rights under the Policy so
long as the Insured is living. These rights include the
power to select and change the Beneficiary and the Death
Benefit Option. The Owner generally also has the right to
request policy loans, make partial surrenders or surrender
the Policy. The Owner may also name a new owner, assign the
Policy or agree not to exercise all of the Owner's rights
under the Policy.
If the Owner predeceases the Insured, the Owner's rights in
the Policy will belong to the Owner's estate, unless
otherwise specified to LLANY.
BENEFICIARY
The Beneficiary is designated by the Owner or the Applicant
to receive the Death Benefit proceeds payable under the
Policy. The person or persons named in the application as
"Beneficiary" are the Beneficiaries of the Death Benefit
under the Policy, unless subsequently changed. Multiple
Beneficiaries will be paid in equal shares, otherwise
specified to us.
Except when LLANY has acknowledged an assignment of the
Policy or an agreement not to change the Beneficiary, the
Owner may change the Beneficiary at any time while the
Insured is living. Any request for a change in the
Beneficiary must be in a written form satisfactory to LLANY
and submitted to LLANY. Unless the Owner has reserved the
right to change the Beneficiary, such a request must be
signed by both the Owner and the Beneficiary. When LLANY has
recorded the change of Beneficiary, it will be effective as
of the date of signature or, if there is no such date, the
date recorded. No change of Beneficiary will affect or
prejudice LLANY as to any payment made or action taken by
LLANY before it was recorded.
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If any Beneficiary dies before the Insured, the
Beneficiary's potential interest shall pass to any surviving
Beneficiaries, unless otherwise specified to LLANY. If no
named Beneficiary survives the Insured, any Death Benefit
Proceeds will be paid to the Owner or the Owner's executor,
administrator or assignee.
THE POLICY
The Policy is the life insurance contract described in this
Prospectus. The Date of Issue is the date on which LLANY
begins life insurance coverage under a Policy, assuming the
initial premium has been paid. A Policy Year is each twelve
month period, beginning on the Date of Issue, during which
the Policy is in effect. The Policy Anniversary is the day
of the year the Policy was issued, or the next Valuation Day
if that day is not a Valuation Day or is non-existent for
that year. On issuance, a life insurance contract (Policy)
will be delivered to the Owner. The Owner should promptly
review the Policy to confirm that it sets forth the features
specified in the application. The ownership and other
options set forth in the Policy are registered, and may be
transferred, solely on LLANY's books and records. Mere
possession of the Policy does not imply ownership rights. If
the Owner loses the Policy, LLANY will issue a replacement
on request. LLANY may impose a Policy replacement fee.
POLICY SPECIFICATIONS
The Policy includes a Policy Specifications page, with
supporting schedules, stating Policy information including
the identity of the Owner, the Date of Issue, the Initial
Specified Amount, the Death Benefit Option selected, the
Insured, the Issue Age, the Beneficiary, the initial Premium
Payment, the Surrender Charges, Expense Charges and Fees,
Guaranteed Maximum Cost of Insurance Rates, and the No Lapse
Premium.
PREMIUM FEATURES
The Policy permits flexible premium payments, meaning that
the Owner may select the frequency and the amount of Premium
Payments. After the Initial Premium Payment is made there is
no minimum premium required, except to maintain the No Lapse
Provision. (See LAPSE AND REINSTATEMENT No Lapse Provision).
The initial Premium Payment is due on the Effective Date
(the date on which the initial premium is applied to the
Policy) and must be equal to or exceed the amount necessary
to provide for two Monthly Deductions.
PLANNED PREMIUMS; ADDITIONAL PREMIUMS
Planned Premiums are the amount of premium (as shown in the
Policy Specifications) the Applicant chooses to pay LLANY on
a scheduled basis. This is the amount for which LLANY sends
a premium reminder notice.
Any subsequent Premium Payments (Additional Premiums) must
be sent directly to the Administrative Office. Additional
Premiums will be credited only when actually received by
LLANY. Planned Premiums may be billed annually,
semiannually, or quarterly. Pre-authorized automatic Premium
Payments can also be arranged at any time.
Unless specifically otherwise directed, any payment received
(other than any Premium Payment necessary to prevent, or
cure, Policy Lapse) will be applied first to reduce Policy
Indebtedness. There is no premium load on such payments to
the extent applied to reduce indebtedness.
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LIMITS ON RIGHT TO MAKE PAYMENTS OF ADDITIONAL AND PLANNED
PREMIUMS
The Owner may increase Planned Premiums, or pay Additional
Premiums, subject to the following limitations and LLANY's
right to limit the amount or frequency of Additional
Premiums.
LLANY may require evidence of insurability if any payment of
Additional Premium (including Planned Premium) would
increase the difference between the Death Benefit and the
Accumulation Value. If LLANY is unwilling to accept the
risk, the increase in premium will be refunded without
interest and without participation of such amounts in any
underlying investment.
LLANY may also decline any Additional Premium (including
Planned Premium) or a portion thereof that would result in
total Premium Payments exceeding the maximum limitation for
life insurance under federal tax laws. The excess amount
would be returned.
PREMIUM LOAD; NET PREMIUM PAYMENT
LLANY deducts 5% from each Premium Payment. This amount,
sometimes referred to as premium load, covers certain
Policy-related state tax and federal income tax liabilities
and a portion of the sales expenses incurred by LLANY. The
Premium Payment, net of the premium load, is called the "Net
Premium Payment."
RIGHT-TO-EXAMINE PERIOD
The Owner may return the Policy to LLANY for cancellation as
follows.
If the Owner mails or delivers the Policy to the
Administrative Office on or before 10 days after delivery of
the Policy (60 days for Policies issued in replacement of
other insurance) (Right-to-Examine Period), LLANY will
refund to the Owner all Premium Payments.
Any Premium Payments received by LLANY before the end of the
Right-to-Examine Period will be held in the Money Market
Sub-Account, and will be allocated to the Sub-Accounts
designated by the Owner at the end of the Right-to-Examine
Period. If the Policy is returned for cancellation within
the Right-to-Examine Period, we will return any Premium
Payments within seven days, although refund of a Premium
Payment made by check may be delayed until the check clears.
TRANSFERS AND ALLOCATION AMONG ACCOUNTS
ALLOCATION OF NET PREMIUM PAYMENTS
The allocation of Net Premium Payments among the Fixed
Account and the Sub-Accounts may be set forth in the
application. An Owner may change the allocation of future
Net Premium Payments at any time. In any allocation, the
amount allocated to any Sub-Account must be in whole
percentages and result in a Sub-Account Value of at least
$100 or a Fixed Account Value of $2,500. LLANY, at its sole
discretion, may waive minimum balance requirements on the
Sub-Accounts.
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TRANSFERS
The Owner may make transfers among the Sub-Accounts, on the
terms set forth below, at any time before the Insured
reaches Age 100. The Owner should carefully consider current
market conditions and each Sub-Account's investment policies
and related risks before allocating money to the
Sub-Accounts.
Transfer of amounts from one Sub-Account to another or from
the Sub-Accounts to the Fixed Account are possible at any
time. Within 30 days after each anniversary of the Date of
Issue, the Owner may transfer up to 20% of the Fixed Account
Value (as of the preceding anniversary of the Date of Issue)
to one or more Sub-Accounts. The cumulative amount of
transfers from the Fixed Account within any such 30 day
period cannot exceed 20% of the Fixed Account Value on the
most recent Policy Anniversary. Up to 12 transfer requests
(a request may involve more than a single transfer) may be
made in any Policy Year without charge, and any value
remaining in a Sub-Account after a transfer must be at least
$100. LLANY reserves the right to impose a minimum transfer
amount of $100 and a charge for each transfer request in
excess of 12 requests in any Policy Year. LLANY may further
limit transfers from the Fixed Account at any time.
Transfers must be made in proper written form, unless the
Owner has given written authorization to LLANY to accept
telephone transactions. Contact our Administrative Office
for authorization forms and information on permitted
telephone transactions. Written transfer requests or
adequately authenticated telephone transfer requests
received at the Administrative Office by the close of the
New York Stock Exchange (usually 4:00 PM ET) on a Valuation
Day will be effective as of that day. Otherwise, requests
will be effective as of the next Valuation Day.
Any transfer among the Sub-Accounts or to the Fixed Account
will result in the crediting and cancellation of
Accumulation Units based on the Accumulation Unit values
next determined after the Administrative Office receives a
request in proper written form or adequately authenticated
telephone transfer requests. Any transfer made which causes
the remaining value of Accumulation Units for a Sub-Account
or the Fixed Account to be less than $100 may result in
those remaining Accumulation Units being canceled and their
aggregate value reallocated proportionately among the other
Sub-Accounts and the Fixed Account to which Policy values
are then allocated.
OPTIONAL SUB-ACCOUNT ALLOCATION PROGRAMS
You may elect to participate in programs providing for
Dollar Cost Averaging or Automatic Rebalancing, currently
without charge, but may participate in only one program at
any time. Transfers under these programs do not count
against the 12 transfers per year without charge.
DOLLAR COST AVERAGING
Dollar Cost Averaging systematically transfers specified
dollar amounts from the Money Market Sub-Account. Transfer
allocations may be made to one or more of the Sub-Accounts
(not the Fixed Account) on a monthly or quarterly basis.
These transfers do not count against the free transfers
available. By making allocations on a regularly scheduled
basis, instead of on a lump sum basis, an Owner may reduce
exposure to market volatility. Dollar Cost Averaging will
not assure a profit or protect against a declining market.
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If the Owner elects Dollar Cost Averaging, the value in the
Money Market Sub-Account must be at least $1,000 initially.
The minimum amount that may be allocated is $50 monthly.
An election for Dollar Cost Averaging is effective after the
Administrative Office receives a request from the Owner in
proper written form or by telephone, if adequately
authenticated. An election is effective within ten business
days, but only if there is sufficient value in the Money
Market Sub-Account. LLANY may, in its sole discretion, waive
Dollar Cost Averaging minimum deposit and transfer
requirements.
Dollar Cost Averaging terminates automatically: (1) if the
number of designated transfers has been completed; (2) if
the value in the Money Market Sub-Account is insufficient to
complete the next transfer; (3) within one week after the
Administrative Office receives a request for termination in
proper written form, or by telephone if adequately
authenticated; or (4) if the Policy is surrendered.
AUTOMATIC REBALANCING
Automatic Rebalancing periodically restores to a
pre-determined level the percentage of Policy value
allocated to each Sub-Account (e.g. 20% Money Market, 50%
Growth, 30% Utilities). The Fixed Account is not subject to
rebalancing. The pre-determined level is the allocation
initially selected on the application, until you change it.
If Automatic Rebalancing is elected, all Net Premium
Payments allocated to the Sub-Accounts will be subject to
Automatic Rebalancing.
The Owner may select Automatic Rebalancing on a quarterly,
semi-annual or annual basis. Automatic Rebalancing may be
elected, terminated or the allocation may be changed at any
time, effective within ten business days upon receipt by the
Administrative Office of a request in proper written form or
by telephone if adequately authenticated.
POLICY VALUES
The Accumulation Value is the sum of the Fixed Account
Value, Separate Account Value and the Loan Account Value.
The Accumulation Value of the Policy depends on the
performance of the underlying investments. Policy values are
used to pay for Policy fees and expenses, including the Cost
of Insurance. Premium Payments to meet your objectives will
vary based on the investment performance of the underlying
investments. A market downturn, affecting the Sub-Accounts
upon which the Accumulation Value of a particular Policy
depends, may require additional premium payments beyond
those expected (unless the No Lapse Provision requirements
have been satisfied) to maintain the level of coverage or to
avoid lapse of the Policy. We strongly suggest you review
periodic statements to determine if additional premium
payments must be made to avoid lapse of the Policy.
We will tell you at least annually the Accumulation Value,
the number of Accumulation Units credited to the Policy,
current Accumulation Unit values, Sub-Account values, the
Fixed Account Value and the Loan Account Value.
ACCUMULATION VALUE
The portion of a Premium Payment, after deduction for 5.0%
for the premium load, is the Net Premium Payment. It is the
Net Premium Payment that is available for allocation to the
Fixed Account or the Sub-Accounts.
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We credit each Net Premium Payment to the Policy as of the
end of the Valuation Period in which it is received at the
Administrative Office. The Valuation Period is the time
between Valuation Days, and a Valuation Day is every day on
which the New York Stock Exchange is open and trading
unrestricted. Accumulation Units are valued on every
Valuation Day.
The "Accumulation Value" of a Policy is determined by:
(1) multiplying the total number of Variable Accumulation
Units credited to the Policy for each Sub-Account by its
appropriate current Variable Accumulation Unit Value;
(2) if a combination of Sub-Accounts is elected, totaling
the resulting values; and (3) adding any values attributable
to the Fixed Account and the Loan Account. The Accumulation
Value will be affected by Monthly Deductions.
SEPARATE ACCOUNT VALUE
The Separate Account Value is the portion of the
Accumulation Value that is attributable to the Separate
Account.
VARIABLE ACCUMULATION UNIT VALUE
All or a part of a Net Premium Payment allocated to a
Sub-Account is converted into Variable Accumulation Units by
dividing the amount allocated by the value of the Variable
Accumulation Unit for the Sub-Account next calculated after
it is received at the Administrative Office. The Variable
Accumulation Unit value for each Sub-Account was initially
established at $10.00. The Variable Accumulation Unit Value
for each Sub-Account would thereafter increase or decrease
from one Valuation Period to the next. Allocations to
Sub-Accounts are made only as of the end of a Valuation Day.
VARIABLE ACCUMULATION UNITS
A "Variable Accumulation Unit" is a unit of measure used in
the calculation of the value of each Sub-Account. The
Variable Accumulation Unit value for a Sub-Account for a
Valuation Period is determined as follows:
1. The total value of Fund shares held in the Sub-Account
is calculated by multiplying the number of Fund shares
owned by the 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 Sub-Account at the end of the
Valuation Period; such liabilities include daily
charges imposed on the Sub-Account, and may include a
charge or credit with respect to any taxes paid or
reserved for by LLANY that LLANY determines result
from the operations of the Separate Account; and
3. The result of (2) is divided by the number of Variable
Accumulation Units outstanding at the beginning of the
Valuation Period.
The daily charge imposed on a Sub-Account for any Valuation
Period is equal to the daily mortality and expense risk
charge multiplied by the number of calendar days in the
Valuation Period. The amount of Monthly Deduction allocated
to each Sub-Account will result in the cancellation of
Accumulation Units that have an aggregate value on the date
of such deduction equal to the total amount by which the
Sub-Account is reduced.
The number of Variable Accumulation Units credited to a
Policy will not be changed by any subsequent change in the
value of a Variable Accumulation Unit. Such value may vary
from Valuation Period to Valuation Period to reflect the
investment experience of the Fund used in a particular
Sub-Account and fees and charges under the Policy.
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FIXED ACCOUNT AND LOAN ACCOUNT VALUE
The Fixed Account Value and the Loan Account Value reflect
amounts allocated to LLANY's General Account through payment
of premiums or through transfers from the Separate Account
or loans and interest charged. LLANY guarantees the Fixed
Account Value.
NET ACCUMULATION VALUE
The "Net Accumulation Value" is the Accumulation Value less
the Loan Account Value. The Net Accumulation Value
represents the net value of the Policy and is the basis for
calculating the Surrender Value.
FUNDS
Each of the Sub-Accounts of the Separate Account is invested
solely in the shares of one of the Funds available under the
Policies. Each of the Funds, in turn, is an investment
portfolio of one of the trusts or corporations listed below.
A given Fund may have a similar investment objective and
principal investment strategy to those for another mutual
fund managed by the same investment advisor or subadvisor.
However, because of timing of investments and other
variables we cannot guarantee that there will be any
correlation between the two investments. Even though the
management strategy and the objectives of the funds are
similar, the investment results may vary.
The portfolios, their investment advisers and distributors,
and the Funds within each that are available under the
Policies:
AIM VARIABLE INSURANCE FUNDS, managed by A I M
Advisors, Inc., and distributed by A I M Distributors Inc.,
11 Greenway Plaza, Suite 100, Houston, TX 77046-1173
AIM V.I. Growth Fund
AIM V.I. International Equity Fund
AIM V.I. Value Fund
AMERICAN FUNDS INSURANCE SERIES (ALSO KNOWN AS AMERICAN
VARIABLE INSURANCE SERIES), managed by Capital Research and
Management Company and distributed by American Funds
Distributors, Inc., 333 South Hope Street, Los Angeles, CA
90071
AFIS Global Small Capitalization Fund -- Class 2
AFIS Growth Fund -- Class 2
AFIS Growth-Income Fund -- Class 2
BARON CAPITAL FUNDS TRUST, managed by BAMCO, Inc. and
distributed by Baron Capital Inc., 767 Fifth Avenue, New
York, NY 10153
Baron Capital Asset Fund -- Insurance Shares
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DELAWARE GROUP PREMIUM FUND, managed by Delaware Management
Company, One Commerce Square, Philadelphia, PA 19103 and for
International and Emerging Markets, Delaware International
Advisers, Ltd., 80 Cheapside, London, England ECV2 6EE, and
distributed by Delaware Distributors, L.P., 1818 Market
Street, Philadelphia, PA 19103
Devon Series -- Standard Class
Emerging Markets Series -- Standard Class
High Yield Series -- Standard Class (formerly Delchester
Series)
REIT Series -- Standard Class
Small Cap Value Series -- Standard Class
Trend Series -- Standard Class
DEUTSCHE ASSET MANAGEMENT VIT FUNDS TRUST (FORMERLY BT
INSURANCE FUNDS TRUST), managed by Bankers Trust Company,
130 Liberty Street (One Bankers Trust Plaza), New York, NY
10006 and distributed by Provident Distributors, Inc., Four
Falls Corporate Center, West Conshohocken PA 19428
EAFE-Registered Trademark- Equity Index Fund
Equity 500 Index Fund
Small Cap Index Fund
FIDELITY VARIABLE INSURANCE PRODUCTS FUND, FIDELITY VARIABLE
INSURANCE PRODUCTS FUND II, AND FIDELITY VARIABLE INSURANCE
PRODUCTS FUND III, managed by Fidelity Management & Research
Company and distributed by Fidelity Distributors
Corporation, 82 Devonshire Street, Boston, MA 02109
Fidelity VIP Growth -- Service Class
Fidelity VIP High Income -- Service Class
Fidelity VIP II Contrafund Portfolio -- Service Class
Fidelity VIP III Growth Opportunities Portfolio --
Service Class
FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST,
managed by Templeton Investment Counsel, Inc. Broward
Financial Centre, STE 2100 Fort Lauderdale FL 33394 and its
Templeton and Franklin affiliates and distributed by
Franklin Templeton Distributors, Inc. 777 Mariners Island
Blvd. San Mateo CA 94403-7777
Templeton Growth Securities Fund -- Class 2 (formerly
Templeton Stock Fund)
Templeton International Securities Fund -- Class 2
(formerly Templeton International Fund)
JANUS ASPEN SERIES, managed by Janus Capital and distributed
by Janus Distributors, Inc., 100 Fillmore Street, Denver, CO
80206-4928.
Janus Aspen Series Balanced Portfolio -- Institutional
Shares
Janus Aspen Series Global Technology Portfolio --
Service Shares
Janus Aspen Series Worldwide Growth Portfolio --
Institutional Shares
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LINCOLN NATIONAL FUNDS, managed by Lincoln Investment
Management, Inc., 200 East Berry Street, Fort Wayne IN
46802, and distributed by Lincoln Financial
Advisors, Corp., 350 Church Street, Hartford, CT 06103.
Sub-advisors are also noted.
LN Bond Fund, Inc.
LN Capital Appreciation Fund, Inc. (Sub-advised by Janus
Capital Corp.)
LN Equity-Income Fund, Inc. (Sub-advised by Fidelity
Management Trust Co.)
LN Global Asset Allocation Fund, Inc. (Sub-advised by
Putnam Investment Management, Inc.)
LN Money Market Fund, Inc.
LN Social Awareness Fund, Inc. (Sub-advised by Vantage
Investment Advisors Inc.)
Lincoln Investment Management, Inc. (Lincoln Investment) has
informed the funds to which it provides advisory services
that it intends to merge into a newly created series of its
affiliate, Delaware Management Business Trust, during the
second or third quarter of 2000. Lincoln Investment does not
expect the merger to result in any change in the level of
advisory services that it currently provides to these funds,
although there may be some changes in, and additions to,
personnel. See the prospectuses for these funds for more
information.
MFS-REGISTERED TRADEMARK- VARIABLE INSURANCE TRUST, managed
by Massachusetts Financial Services Company and distributed
by MFS Fund Distributors, Inc., 500 Boylston Street, Boston,
MA 02116
MFS Emerging Growth Series
MFS Total Return Series
MFS Utilities Series
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST, managed and
distributed by Neuberger Berman Management Inc., 605 Third
Avenue, 2nd Floor, New York, NY 10158-0006
NB AMT Mid-Cap Growth Portfolio
NB AMT Partners Portfolio
The investment advisory fees charged the Funds by their
advisers are shown listed under "Fund Expenses" in this
Prospectus.
Below is a brief description of the investment objective and
program of each Fund. There can be no assurance that any of
the stated investment objectives will be achieved.
AIM V.I. GROWTH FUND: Seeks growth of capital primarily by
investing in seasoned and better capitalized companies
considered to have strong earnings momentum. Focus is on
companies that have experienced above-average growth in
earnings and have excellent prospects for future growth.
AIM V.I. INTERNATIONAL EQUITY FUND: Seeks to provide
long-term growth of capital by investing in a diversified
portfolio of international equity securities whose issuers
are considered to have strong earnings momentum.
AIM V.I. VALUE FUND: Seeks to achieve long-term growth of
capital by investing primarily in equity securities judged
by its investment advisor to be undervalued relative to the
investment advisor's appraisal of 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 a secondary objective.
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<PAGE>
AFIS GLOBAL SMALL CAPITALIZATION FUND -- CLASS 2: Seeks to
make your investment grow over time by investing primarily
in stocks of smaller companies located around the world that
typically have market capitalization of $50 million to $1.5
billion. The fund is designed for investors seeking capital
appreciation through stocks. Investors in the fund should
have a long-term perspective and be able to tolerate
potentially wide price fluctuations.
AFIS GROWTH FUND -- CLASS 2: Seeks to make you investment
grow over time by investing primarily in common stocks of
companies that appear to offer superior opportunities for
growth of capital. The fund is designed for investors
seeking capital appreciation through stocks. Investors in
the fund should have a long-term perspective and be able to
tolerate potentially wide price fluctuations.
AFIS GROWTH-INCOME FUND -- CLASS 2: Seeks to make your
investment grow and provide you with income over time by
investing primarily in common stocks or other securities
which demonstrate the potential for appreciation and/or
dividends. The fund is designed for investors seeking both
capital appreciation and income.
BARON CAPITAL ASSET FUND -- INSURANCE SHARES: Seeks to
purchase stocks judged by the advisor to have the potential
of increasing their value at least 50% over two subsequent
years, although that goal may not be achieved.
DELAWARE GROUP DEVON SERIES -- STANDARD CLASS: Seeks growth
and income by investing primarily in income-producing stocks
that the manager believes have the potential for
above-average dividend increases over time. This fund blends
traditional growth and value investment styles.
DELAWARE GROUP EMERGING MARKETS SERIES -- STANDARD CLASS:
Seeks long-term growth by investing primarily in stocks of
companies located or operating in emerging or developing
countries.
DELAWARE GROUP HIGH YIELD SERIES -- STANDARD CLASS (FORMERLY
DELCHESTER SERIES): Seeks total return and as a secondary
objective, high current income. The Series invests in rated
and unrated corporate bonds, (including high-risk, high
yield bonds commonly known as junk bonds), foreign bonds,
U.S. government securities and commercial paper. An
investment in this Series may involve greater risks than an
investment in a portfolio comprised primarily of investment
grade bonds.
DELAWARE GROUP REIT SERIES -- STANDARD CLASS: Seeks to
achieve maximum long-term total return by investing
primarily in the securities of real estate investment trusts
and real estate operating companies.
DELAWARE GROUP SMALL CAP VALUE SERIES -- STANDARD CLASS:
Seeks growth by investing primarily in stocks of small cap
companies whose market values appear low relative to
underlying value or future earnings and growth potential.
DELAWARE GROUP TREND SERIES -- STANDARD CLASS: Seeks
long-term growth by investing primarily in stocks of small
companies and convertible securities of emerging and other
growth-oriented companies.
DEUTSCHE VIT EAFE-Registered Trademark- FUND: Seeks to
replicate as closely as possible (before the deduction of
Expenses) the total return of the Europe, Australia, Far
East Index (the EAFE-Registered Trademark- Index), a
capitalization-weighted index containing approximately 1,100
equity securities of companies located outside of the United
States.
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<PAGE>
DEUTSCHE VIT EQUITY 500 FUND: Seeks to replicate as closely
as possible the performance of the Standard & Poor's 500
Composite Price Index, before the deduction of the Fund
expenses.
DEUTSCHE VIT SMALL CAP INDEX FUND: Seeks to replicate as
closely as possible (before the deduction of expenses) the
total return of the Russell 2000 Small Stock Index (the
"Russell 2000"), an index consisting of approximately 2,000
small capitalization common stocks.
FIDELITY VIP GROWTH PORTFOLIO -- SERVICE CLASS: Seeks
long-term capital appreciation. The portfolio normally
purchases common stocks.
FIDELITY VIP HIGH INCOME PORTFOLIO -- SERVICE CLASS: Seeks
high current income by investing at least 65% of total
assets in income-producing debt securities, with an emphasis
on lower quality securities.
FIDELITY VIP II CONTRAFUND PORTFOLIO -- SERVICE CLASS: Seeks
capital appreciation by investing primarily in securities of
companies whose value the advisor believes is not fully
recognized by the public.
FIDELITY VIP III GROWTH OPPORTUNITIES PORTFOLIO -- SERVICE
CLASS: Seeks capital growth by investing primarily in common
stocks.
JANUS ASPEN SERIES BALANCED PORTFOLIO -- INSTITUTIONAL
SHARES: Seeks long term growth of capital, consistent with
the preservation of capital and balanced by current income.
The Portfolio normally invests 40-60% of its assets in
securities selected primarily for their growth potential and
40-60% of its assets in securities selected primarily for
their income potential.
JANUS ASPEN SERIES GLOBAL TECHNOLOGY PORTFOLIO -- SERVICE
SHARES: Seeks long-term growth of capital. The Portfolio
invests primarily in equity securities of U.S. and foreign
companies, selected for their growth potential. Normally, it
invests at least 65% of its total assets in securities or
companies that the portfolio manager believes will benefit
significantly from advancements or improvements in
technology.
JANUS ASPEN SERIES WORLDWIDE GROWTH PORTFOLIO --
INSTITUTIONAL SHARES: Seeks long-term growth of capital in a
manner consistent with the preservation of capital by
investing primarily in common stocks of companies of any
size throughout the world. The Portfolio normally invests in
insurers from at least 5 different countries, including the
U.S. The Portfolio may at times invest in fewer than five
countries or even a single country.
LINCOLN NATIONAL BOND FUND: Seeks maximum current income
consistent with prudent investment strategy. The fund
invests primarily in medium-and long-term corporate and
government bonds.
LINCOLN NATIONAL CAPITAL APPRECIATION FUND: Seeks long-term
growth of capital in a manner consistent with preservation
of capital. The fund primarily buys stocks in a large number
of companies of all sizes if the companies are competing
well and if their products and services are in high demand.
It may also buy some money market securities and bonds,
including junk bonds.
LINCOLN NATIONAL EQUITY-INCOME FUND: Seeks reasonable income
by investing primarily in income-producing equity
securities. The fund invests mostly in high-income stocks
with some high-yielding bonds (including junk bonds)
23
<PAGE>
LINCOLN NATIONAL GLOBAL ASSET ALLOCATION FUND: Seeks
long-term total return consistent with preservation of
capital. The fund allocates its assets among several
categories of equity and fixed-income securities, both of
U.S. and foreign insurers.
LINCOLN NATIONAL MONEY MARKET FUND: Seeks maximum current
income consistent with the preservation of capital. The fund
invests in short term obligations issued by U.S.
corporations, the U.S. government, and federally-chartered
banks and U.S. branches of foreign banks.
LINCOLN NATIONAL SOCIAL AWARENESS FUND: Seeks to achieve
long-term capital appreciation, by investing in stocks of
established companies which adhere to certain specific
social criteria.
MFS EMERGING GROWTH SERIES: Seeks to provide long-term
growth of capital.
MFS TOTAL RETURN SERIES: Seeks primarily to provide
above-average income (compared to a portfolio invested
entirely 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: Seeks capital growth and current
income (income above that available from a portfolio
invested entirely in equity securities).
NB AMT MID-CAP GROWTH PORTFOLIO: Seeks capital appreciation
by investing primarily in common stocks of
medium-capitalization companies, using a growth-oriented
investment approach.
NB AMT PARTNERS PORTFOLIO: Seeks capital growth by investing
mainly in common stocks of mid-to-large capitalization
established companies, using the value-oriented investment
approach. Neuberger Berman Management Inc. serves as the
Fund's investment adviser. Neuberger Berman, LLC serves as
the Fund's investment sub-adviser.
TEMPLETON GROWTH SECURITIES FUND -- CLASS 2 (FORMERLY
TEMPLETON STOCK FUND): Seeks long-term capital growth.
Invests primarily in stocks of companies in various nations
throughout the world including the U.S. and emerging
markets. Templeton Global Advisors Limited serves as the
Fund's investment advisor.
TEMPLETON INTERNATIONAL SECURITIES FUND -- CLASS 2 (FORMERLY
TEMPLETON INTERNATIONAL FUND): Seeks long-term capital
growth. It invests primarily in stocks of companies outside
the United States, including emerging markets. Templeton
Investment Counsel, Inc. serves as Fund's investment
advisor.
Several of the Funds may invest in non-investment grade,
high-yield, high-risk debt securities (commonly referred to
as "junk bonds"), as detailed in the individual Fund
Prospectuses. Please review the prospectuses carefully.
There is no assurance that the investment objective of any
of the Funds will be met. You assume all of the investment
performance risk for the Sub-Accounts you select. There is
investment performance risk in each of the Sub-Accounts,
although the amount of such risk varies significantly among
the Sub-Accounts. Owners should read each Fund's prospectus
carefully and understand the risks before making or changing
investment choices. Additional Funds may, from time to time,
be made available as underlying investments with prior
approval of the New York Insurance Department. The right to
select among Funds will be limited by the terms and
conditions imposed by LLANY (See Allocation of Net Premium
Payments).
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<PAGE>
SUBSTITUTION OF SECURITIES
If the shares of any Fund should no longer be available for
investment by the Separate Account or if, in the judgment of
LLANY, further investment in such shares should cease to be
appropriate in view of the purpose of the Separate Account
or in view of legal, regulatory or federal income tax
restrictions, LLANY may substitute shares of another Fund.
There will be no substitution of securities in any
Sub-Account without prior approval of the Commission.
Substitute Funds may have higher charges than the Funds
being replaced.
VOTING RIGHTS
LLANY will vote the shares of each Fund held in the Separate
Account at special meetings of the shareholders of the
particular Fund in accordance with instructions received by
the Administrative Office in proper written form from
persons having a voting interest in the Separate Account.
LLANY will vote shares for which it has not received
instructions in the same proportion as it votes shares in
the Separate Account for which it has received instructions.
The Funds do not hold regular meetings of shareholders.
To determine how many votes each policy owner is entitled to
direct with respect to a Fund, first we will calculate the
dollar amount of your account value attributable to that
Fund. Second, we will divide that amount by $100.00. The
result is the number of votes you may direct.
The number of shares which a person has a right to vote will
be determined as of a date to be chosen by the appropriate
Fund not more than sixty (60) days prior to the meeting of
the particular Fund. Voting instructions will be solicited
by written communication at least fourteen (14) days prior
to the meeting.
FUND PARTICIPATION AGREEMENTS
LLANY has entered into agreements with the various trusts or
corporations and their advisers or distributors under which
LLANY makes the Funds available under the Policies and
performs certain administrative services. In some cases, the
advisers or distributors may compensate LLANY at annual
rates of between .10% and .25% of assets in a particular
Fund attributable to the Policies.
CHARGES AND FEES
The investment advisor for each of the Funds deducts a daily
charge as a percent of the net assets in each fund as an
asset management charge. See "Fund Expenses".
LLANY deducts charges in connection with the Policy to
compensate it for providing the insurance benefit set forth
in the Policy, administering the Policy, assuming certain
risks in connection with the Policy and for incurring
expenses associated with the distribution of the Policy.
The nature and amount of these charges are as follows:
DEDUCTIONS FROM PREMIUM PAYMENTS
We deduct a premium charge of 5% from each Premium Payment.
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DEDUCTIONS MADE MONTHLY
We make various expense deductions monthly. The Monthly
Deductions, including administrative expenses, including the
Cost of Insurance Charge and charges for supplemental riders
or benefits, if any, are deducted proportionately from the
Net Accumulation Value of each underlying investment subject
to the charge. For Sub-Accounts, Variable Accumulation Units
are canceled and the value of the canceled Units withdrawn
in the same proportion as their respective values have to
the Net Accumulation Value. The Monthly Deductions are made
on the "Monthly Anniversary Day", the Date of Issue and the
same day of each month thereafter, or if there is no such
date in a given month, then the first Valuation Day of the
next month. If the day that would otherwise be a Monthly
Anniversary Day is not a Valuation Day, then the Monthly
Anniversary Day is the next Valuation Day.
If the Net Accumulation Value is insufficient to cover the
current Monthly Deduction, you have a 61-day period (Grace
Period) to make a payment sufficient to cover that
deduction. (See LAPSE AND REINSTATEMENT Lapse of a Policy).
If the Insured attains Age 100 with the Policy still in
effect, no further Monthly Deductions will be made, the
Separate Account Value will be transferred to the Fixed
Account, and Policy will then remain in force until
surrender or the Insured's death.
ADMINISTRATIVE EXPENSES
There is a flat dollar Monthly Deduction of $10.
In addition, during the first two Policy Years, and for 24
months after any increase in Specified Amount, there is a
monthly charge per $1000 of Specified Amount, or increase
therein, based on the Insured's age nearest birthday at the
Policy's issue date and the date of any increase. That
charge is $0.0283 for ages 15 through 30 (or $2.83 per month
for a Policy with a $100,000 Specified Amount) and rises
gradually to $0.07 for age 40, $0.12 for age 52, $0.2075 for
age 64, $0.32 for age 76, and $0.4242 for ages 81 and older.
A complete table is in Appendix 1.
These charges compensate us for administrative expenses
associated with Policy issue and ongoing Policy maintenance
including premium billing and collection, policy value
calculation, confirmations, periodic reports and other
similar matters.
COST OF INSURANCE CHARGE
The Cost of Insurance is the portion of the Monthly
Deduction designed to compensate LLANY for the anticipated
cost of paying Death Benefits in excess of the Accumulation
Value, not including riders, supplemental benefits or
monthly expense charges.
The Cost of Insurance charge depends on the Age, policy
duration, underwriting category and gender of the Insured
and the current Net Amount at Risk. The Net Amount at Risk
is the Death Benefit minus the Accumulation Value. The rate
on which the Monthly Deduction for the Cost of Insurance is
based will generally increase as the Insured ages. The Cost
of Insurance charge could decline if the Net Amount at Risk
drops relatively faster than the Cost of Insurance Rate
increases.
The Cost of Insurance charge is determined by dividing the
Death Benefit at the beginning of the Policy Month by
1.0032737 (the monthly equivalent of an annual rate of 4%),
subtracting the Accumulation Value at the beginning of the
Policy Month and multiplying the result (the Net Amount at
Risk) by the applicable Cost of Insurance Rate as determined
by LLANY. The Guaranteed Cost of Insurance Rates are in
Appendix 2.
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MORTALITY AND EXPENSE RISK CHARGE
LLANY deducts a daily charge as a percentage of the assets
of the Separate Account as a mortality and expense risk
charge. The mortality risk assumed is that insureds may live
for a shorter period than estimated, and therefore, a
greater amount of death benefit will be payable. The expense
risk assumed is that expenses incurred in issuing and
administering the policies will be greater than estimated.
The mortality and expense risk charge is guaranteed at an
annual rate of 0.90% in Policy Years 1-19 and 0.20% in
Policy Years 20 and beyond.
SURRENDER CHARGES
A generally declining "Surrender Charge" may apply if the
Policy is totally surrendered or lapses during the first
fifteen years following the Date of Issue or the first
fifteen years following an increase in Specified Amount. The
Surrender Charge varies by Age of the Insured, the number of
years since the Date of Issue, and Specified Amount.
The charge is in part a deferred sales charge and in part a
recovery of certain first year administrative costs and is
retained by LLANY. The maximum Surrender Charge is included
in each Policy and is in compliance with New York's
nonforfeiture law. Examples of the Surrender Charge can be
seen in Appendix 3.
The Surrender Charge under a Policy is proportional to the
face amount of the Policy. Expressed as a percentage of face
amount, it is higher for older than for younger issue ages.
The Surrender Charge cannot exceed Policy value. All
Surrender Charges decline to zero over the 15 years
following issuance of the Policy. See, for example, the
illustrations in Appendix 5.
If the Specified Amount is increased, a new Surrender Charge
will be applicable, in addition to any existing Surrender
Charge. The Surrender Charge applicable to the increase
would be equal to the Surrender Charge on a new Policy whose
Specified Amount was equal to the amount of the increase.
Supplemental Policy Specifications will be sent to the Owner
upon an increase in Specified Amount reflecting the maximum
additional Surrender Charge in the Table of Surrender
Charges. The minimum allowable increase in Specified Amount
is $1,000. LLANY may change this at any time.
If the Specified Amount is decreased while the Surrender
Charge applies, the Surrender Charge will remain the same.
No Surrender Charge is imposed on a partial surrender, but
an administrative fee of $25 (not to exceed 2% of the amount
surrendered) is imposed, allocated pro-rata among the
Sub-Accounts from which the partial surrender proceeds are
taken.
Any surrender may result in tax implications. (SEE TAX
ISSUES)
Based on its actuarial determination, LLANY does not
anticipate that the Surrender Charge, together with the
portion of the premium load attributable to sales expense,
will cover all sales and administrative expenses which LLANY
will incur in connection with the Policy. Any such
shortfall, including but not limited to payment of sales and
distribution expenses, would be available for recovery from
the General Account of LLANY, which supports insurance and
annuity obligations.
REDUCTION OF CHARGES -- PURCHASES ON A CASE BASIS; EXCHANGES
This Policy is available for purchases by corporations and
other groups or sponsoring organizations on a case basis.
LLANY reserves the right to reduce premium loads or
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any other charges on certain cases, where it is expected
that the amount or nature of such cases will result in
savings of sales, underwriting, administrative or other
costs. Eligibility for these reductions and the amount of
reductions will be determined by a number of factors,
including but not limited to, the number of lives to be
insured, the total premiums expected to be paid, total
assets under management for the policy owner, the nature of
the relationship among the insured individuals, the purpose
for which the Policies are being purchased, the expected
persistency of the individual policies and any other
circumstances which LLANY believes to be relevant to the
expected reduction of its expenses. Some of these reductions
may be guaranteed and others may be subject to withdrawal or
modification by LLANY on a uniform Case basis. Reductions in
these charges will not be unfairly discriminatory against
any person, including the affected Policy Owners funded by
Account M.
TRANSACTION FEE FOR EXCESS TRANSFERS
LLANY reserves the right to impose a charge for each
transfer request in excess of 12 in any Policy Year. A
single transfer request, either in writing or by telephone
may consist of multiple transactions.
DEATH BENEFITS
The Death Benefit Proceeds is the amount payable to the
Beneficiary upon the death of the Insured, in accordance
with the Death Benefit Option elected. Loans (if any) and
overdue deductions are deducted from the Death Benefit
Proceeds prior to payment.
The applicant must select the Specified Amount of the Death
Benefit, which may not be less than $100,000, and the Death
Benefit Option. The two Death Benefit Options are described
below. The applicant must consider a number of factors in
selecting the Specified Amount, including the amount of
proceeds required when the Insured dies and the Owner's
ability to make Premium Payments. The ability of the Owner
to support the Policy, particularly in later years, is an
important factor in selecting between the Death Benefit
Options, because the greater the Net Amount at Risk at any
time, the more that will be deducted each month from the
value of the Policy to pay the Cost of Insurance.
DEATH BENEFIT OPTIONS
Two different Death Benefit Options are available under the
Policy. The Death Benefit Proceeds payable under the Policy
is the greater of (a) the Corridor Death Benefit or (b) the
amount determined under the Death Benefit Option in effect
on the date of the Insured's Death, less (in each case) any
indebtedness under the Policy. In the case of Death Benefit
Option 1, the Specified Amount is reduced by the amount of
any partial surrender. The Corridor Death Benefit is the
applicable percentage (the Corridor Percentage) of the
Accumulation Value (rather than by reference to the
Specified Amount) required to maintain the Policy as a "life
insurance contract" for Federal income tax purposes. The
Corridor Percentage is 250% through the time the insured
reaches age 40 and decreases in accordance with the table in
Appendix 3 to 100% when the Insured reaches age 95.
Death Benefit Option 1 provides Death Benefit Proceeds equal
to the Specified Amount (a minimum of $100,000). If
Option 1 is selected, the Policy pays level Death Benefit
Proceeds unless the Minimum Death Benefit exceeds the
Specified Amount. (See DEATH BENEFITS, Federal Income Tax
Definition of Life Insurance).
Death Benefit Option 2 provides Death Benefit Proceeds equal
to the sum of the Specified Amount plus the Net Accumulation
Value as of the date of the Insured's death,
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less any loan interest accrued but not yet charged. If
Option 2 is selected, the Death Benefit Proceeds increase or
decrease over time, depending on the amount of premium paid
and the investment performance of the underlying
Sub-Accounts.
If for any reason the applicant fails to affirmatively elect
a particular Death Benefit Option, Death Benefit Option 1
shall apply until changed as provided below.
Owners who prefer insurance coverage that generally does not
vary in amount and generally has lower Cost of Insurance
Charges should elect Option 1. Owners who prefer to have
favorable investment experience reflected in increased
insurance coverage should elect Option 2. Under Option 1,
any Surrender Value at the time of the Insured's Death will
revert to LLANY.
CHANGES IN DEATH BENEFIT OPTIONS AND SPECIFIED AMOUNT
All requests for changes between Death Benefit Options and
changes in the Specified Amount must be submitted in proper
written form to the Administrative Office. The minimum
increase in Specified Amount currently permitted is $1,000.
If requested, a supplemental application and evidence of
insurability must also be submitted to LLANY.
In a change from Death Benefit Option 1 to Death Benefit
Option 2, the Specified Amount shall be reduced so it
thereafter equals (a) the amount payable under the Death
Benefit Option in effect immediately before the change,
minus (b) the Accumulation Value immediately before the
change. In a change from Death Benefit Option 2 to Death
Benefit Option 1, the Specified Amount shall be increased so
that it thereafter equals the amount payable under the Death
Benefit Option in effect immediately before the change.
Any reductions in Specified Amount will be made against the
initial Specified Amount and any later increase in the
Specified Amount on a last in, first out basis. Any increase
in the Specified Amount will increase the amount of the
Surrender Charge applicable to the Policy.
LLANY may at its discretion decline any request for a change
between Death Benefit Options or increase in the Specified
Amount. LLANY may at its discretion decline any request for
change of the Death Benefit Option or reduction of the
Specified Amount if, after the change, the Specified Amount
would be less than the minimum Specified Amount or would
reduce the Specified Amount below the level required to
maintain the Policy as life insurance for purposes of
Federal income tax law.
Any change is effective on the first Monthly Anniversary Day
on or after the date of approval of the request by LLANY,
unless the Monthly Deduction Amount would increase as a
result of the change. In that case, the change is effective
on the first Monthly Anniversary Day on which the
Accumulation Value is equal to or greater than the Monthly
Deduction Amount, as increased.
FEDERAL INCOME TAX DEFINITION OF LIFE INSURANCE
The amount of the Death Benefit must satisfy certain
requirements under the 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 Code to
maintain the Policy as life insurance under each of the
Death Benefit Options (see DEATH BENEFITS, Death Benefit
Options) is equal to the product of the Accumulation Value
and the applicable Corridor Percentage. A table of Corridor
Percentages is in Appendix 4.
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NOTICE OF DEATH OF INSURED
Due Proof of Death must be furnished to LLANY at the
Administrative Office as soon as reasonably practical after
the death of the Insured, the person whose life is insured
under the Policy. Due Proof of Death must be in proper
written form and includes 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 LLANY.
PAYMENT OF DEATH BENEFIT PROCEEDS
The Death Benefit Proceeds under the Policy will ordinarily
be paid within seven days, if in a lump sum, or in
accordance with any Settlement Option selected by the Owner
or the Beneficiary, after receipt at the Administrative
Office of Due Proof of Death of the Insured. See Settlement
Options. The amount of the Death Benefit Proceeds under
Option 2 will be determined as of the date of the Insured's
death. Payment of the Death Benefit Proceeds may be delayed
if the Policy is contested or if Separate Account values
cannot be determined.
SETTLEMENT OPTIONS
There are several ways in which the Beneficiary may receive
the Death Benefit Proceeds or in which the Owner may choose
to receive payments upon the surrender of the Policy.
The Owner may elect or change a Settlement Option while the
Insured is alive. If the Owner has not irrevocably selected
a Settlement Option, the Beneficiary may do so within 90
days after the Insured dies. If no Settlement Option is
selected, the Death Benefit Proceeds will be paid in a lump
sum.
If the Policy is assigned as collateral security, LLANY will
pay any amount due the assignee in one lump sum. Any
remaining Death Benefit Proceeds will be paid as elected.
A request to elect, change, or revoke a Settlement Option
must be received in proper written form by the
Administrative Office before payment of the lump sum or
under any Settlement Option. The first payment under the
Settlement Option selected will become payable on the date
proceeds are settled under the option. Payments after the
first payment will be made on the first day of each month.
Once payments have begun, the Policy cannot be surrendered
and neither the payee nor the Settlement Option may be
changed.
There are at least four Settlement Options:
The first Settlement Option is an annuity for the
lifetime of the payee.
The second Settlement Option is an annuity for the
lifetime of the payee, with monthly payments guaranteed
for 60, 120, 180, or 240 months.
Under the third Settlement Option, LLANY makes monthly
payments for a stated number of years, at least five but
no more than thirty.
Under the fourth Settlement Option, LLANY pays at least
3% interest annually on the sum left on deposit, and pays
the amount on deposit on the payee's death.
Any other Settlement Option offered by LLANY at the time of
election may also be selected.
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POLICY LIQUIDITY
The accumulated value of the Policy is available for loans
or withdrawals. Subject to certain limitations, the Owner
may borrow against the Surrender Value of the Policy, may
make a partial surrender of some of the Surrender Value of
the Policy and may fully surrender the Policy for its
Surrender Value.
POLICY LOANS
The Owner may at any time borrow in the aggregate up to 100%
of the Surrender Value at the time a Policy Loan is made.
LLANY may, however, limit the amount of the loan so that the
total Policy indebtedness will not exceed 90% of the amount
of the Accumulation Value less any Surrender Charge that
would be imposed on a full surrender. The Owner must execute
a loan agreement and assign the Policy to LLANY free of any
other assignments. The Loan Account is the account in which
Policy indebtedness (outstanding loans and interest) accrues
once it is transferred out of the Fixed Account or the
Sub-Accounts. Interest on Policy Loans accrues at an annual
rate of 8%, and is payable to LLANY (for its account) once a
year in arrears on each Policy Anniversary, or earlier upon
full surrender or other payment of proceeds of a Policy.
The amount of a loan, plus any accrued but unpaid interest,
is added to the outstanding Policy Loan balance. Unless paid
in advance, any loan interest due will be transferred
proportionately from the values in the Fixed Account and
each Sub-Account, and treated as an additional Policy Loan,
and added to the Loan Account Value.
LLANY credits interest to the Loan Account Value of 7% per
year, so the net cost of a Policy Loan is 1%.
If the Net Accumulation Value is distributed among more than
one of the Sub-Accounts (including for this purpose the
Fixed Account), transfers from each for loans and loan
interest charged will be made in proportion to the assets in
each such Sub-Account at that time, unless LLANY is
instructed otherwise in proper written form at the
Administrative Office. Repayments on the loan and interest
credited on the Loan Account Value will be allocated
according to the most recent Premium Payment allocation at
the time of the repayment.
A Policy Loan, whether or not repaid, affects the proceeds
payable upon the Death and the Accumulation Value. The
longer a Policy Loan is outstanding, the greater the effect
is likely to be. While an outstanding Policy Loan reduces
the amount of assets invested, depending on the investment
results of the Sub-Accounts, the effect could be favorable
or unfavorable.
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 Charges,
the Policy will terminate without value subject to the
conditions in the Grace Period Provision, unless the No
Lapse Provision is in effect. (SEE LAPSE AND REINSTATEMENT,
Lapse of a Policy)
If a Policy lapses while a loan is outstanding, adverse tax
consequences may result.
PARTIAL SURRENDER
You may make a partial surrender at any time while the
Insured is alive by request to the Administrative Office in
proper written form or by telephone, if you have authorized
telephone transactions. A $25 transaction fee (not to exceed
2% of the amount
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surrendered) is charged for each partial surrender. Total
partial surrenders may not exceed 90% of the Surrender Value
of the Policy. Each partial surrender may not be less than
$500. Partial surrenders are subject to other limitations as
described below.
Partial surrenders may reduce the Specified Amount and, in
each case, reduce the Death Benefit Proceeds. To the extent
that a requested partial surrender would cause the Specified
Amount to be less than $100,000, the partial surrender will
not be permitted by LLANY. In addition, if following a
partial surrender and the corresponding decrease in the
Specified Amount, the Policy would not comply with the
maximum premium limitations required by federal tax law, the
surrender may be limited to the extent necessary to meet the
federal tax law requirements.
The effect of partial surrenders on the Death Benefit
Proceeds depends on the Death Benefit Option elected under
the Policy. If Death Benefit Option 1 has been elected, a
partial surrender would reduce the Accumulation Value and
the Specified Amount. The reduction in the Specified Amount,
which would reduce any past increases on a last in, first
out basis, reduces the amount of the Death Benefit Proceeds.
If Death Benefit Option 2 has been elected, a partial
surrender would reduce the Accumulation Value, but would not
reduce the Specified Amount. The reduction in the
Accumulation Value reduces the amount of the Death Benefit
Proceeds.
If the Net Accumulation Value is distributed among more than
one of the Sub-Accounts, surrenders from each will be made
in proportion to the assets in each Sub-Account at the time
of the surrender, unless LLANY is instructed otherwise in
proper written form at the Administrative Office. LLANY may
at its discretion decline any request for a partial
surrender.
SURRENDER OF THE POLICY
You may surrender the Policy at any time. On surrender of
the Policy, LLANY will pay you, or your assignee, the
Surrender Value next computed after receipt of the request
in proper written form at the Administrative Office. If the
owner makes a full surrender, all coverage under the policy
will automatically terminate and may not be reinstated.
SURRENDER VALUE
The "Surrender Value" of a Policy is the amount you can
receive in a lump sum by surrendering the Policy. The
Surrender Value is the Net Accumulation Value, less any loan
interest accrued but not yet charged, less the Surrender
Charge (SEE CHARGES AND FEES, Surrender Charges). All or
part of the Surrender Value may be applied to one or more of
the Settlement Options. Surrender Values are illustrated in
Appendix 4.
DEFERRAL OF PAYMENT AND TRANSFERS
Payment of loans or of the Surrender Value from any of the
Sub-Accounts will generally be made within seven days.
Payment or transfer from the Fixed Account may be deferred
up to six months at LLANY's option. If LLANY exercises its
right to defer any payment from the Fixed Account, interest
will accrue and be paid as required by law from the date the
recipient would otherwise have been entitled to receive the
payment.
ASSIGNMENT; CHANGE OF OWNERSHIP
While the Insured is living, you may assign your rights in
the Policy, including the right to change the beneficiary
designation. The assignment must be in proper written form,
signed by you and recorded at the Administrative Office. No
assignment will affect, or
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<PAGE>
prejudice LLANY as to, any payment made or action taken by
LLANY before it was recorded. LLANY is not responsible for
any assignment not submitted for recording, nor is LLANY
responsible for the sufficiency or validity of any
assignment. Any assignment is subject to any indebtedness
owed to LLANY at the time the assignment is recorded and any
interest accrued on such indebtedness after recordation of
any assignment.
Once recorded, the assignment remains effective until
released by the assignee in proper written form. So long as
an effective assignment remains outstanding, you will not be
permitted to take any action with respect to the Policy
without the consent of the assignee in proper written form.
So long as the Insured is living, you may name a new Owner
by recording a change in ownership in proper written form at
the Administrative Office. On recordation, the change will
be effective as of the date of execution of the document of
transfer or, if there is no such date, the date of
recordation. No such change of ownership will affect, or
prejudice LLANY as to, any payment made or action taken by
LLANY before it was recorded. LLANY may require that you
submit the Policy for endorsement before making a change.
LAPSE AND REINSTATEMENT
LAPSE OF A POLICY
If at any time the Net Accumulation Value is insufficient to
pay the Monthly Deduction, or if the amount of indebtedness
exceeds the Accumulation Value less the Surrender Charge(s),
unless the No Lapse Provision is in effect, the Policy is
subject to lapse and automatic termination of all Policy
coverage. The Net Accumulation Value may be insufficient
(1) because it has been exhausted by earlier deductions,
(2) due to poor investment performance, (3) due to partial
surrenders, (4) due to indebtedness for policy loans, or
(5) because of some combination of the foregoing factors.
If LLANY has not received a Premium Payment or payment of
indebtedness on Policy Loans necessary so that the Net
Accumulation Value is sufficient to pay the Monthly
Deduction Amount on a Monthly Anniversary Day, LLANY will
send a written notice to the Owner and any assignee of
record. The notice will state the amount of the Premium
Payment or payment of indebtedness on Policy Loans necessary
such that the Net Accumulation Value is at least equal to
two times the Monthly Deduction Amount. If the minimum
required amount set forth in the notice is not paid to LLANY
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
date of the Monthly Anniversary Day with respect to which
such notice was sent (together, the Grace Period), then the
policy shall terminate and all coverage under the policy
shall lapse without value.
NO LAPSE PROVISION
The No Lapse Premium is the cumulative premium required to
have been paid by each Monthly Anniversary Day to prevent
the Policy from lapsing during the first ten Policy Years.
If this Policy has a No Lapse Premium shown on the
specifications, this Policy will not lapse during the first
ten Policy Years if, at each Monthly Anniversary Day, the
sum of all Premium Payments less any policy loans (including
any accrued loan interest) and partial surrenders is at
least equal to the sum of the No Lapse Premiums (as
indicated in the Policy Specifications) due since the Date
of Issue of the Policy. A
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Grace Period will be allotted after each Monthly Anniversary
Day on which insufficient premiums have been paid (see
preceding paragraph). The payment of sufficient additional
premiums during the Grace Period will keep the No Lapse
Provision in force.
The No Lapse Provision will be terminated after ten years or
earlier if you fail to meet the premium requirements, if
there is an increase in Specified Amount or if you change
the Death Benefit Option. Once the No Lapse Provision
terminates, it cannot be reinstated.
REINSTATEMENT OF A LAPSED POLICY
After the Policy has lapsed due to the failure to make a
necessary payment before the end of an applicable Grace
Period, it may be reinstated provided (a) it has not been
surrendered, (b) there is an application for reinstatement
in proper written form, (c) evidence of insurability of the
insured is furnished to LLANY and it agrees to accept the
risk, (d) LLANY receives a payment sufficient to keep the
Policy in force for at least two months, and (e) any accrued
loan interest is paid. The effective date of the reinstated
Policy shall be the Monthly Anniversary Day after the date
on which LLANY approves the application for reinstatement.
Surrender Charges will be reinstated as of the Policy Year
in which the Policy lapsed.
If the Policy is reinstated, such reinstatement is effective
on the Monthly Anniversary Day following LLANY approval. The
Accumulation Value at reinstatement will be the Net Premium
Payment then made less all Monthly Deductions due.
If the Surrender Value is not sufficient to cover the full
Surrender Charge at the time of lapse, the remaining portion
of the Surrender Charge will also be reinstated at the time
of Policy reinstatement.
COMMUNICATIONS WITH LLANY
PROPER WRITTEN FORM
Whenever this Prospectus refers to a communication "in
proper written form," it means a written document, in form
and substance reasonably satisfactory to LLANY, received at
the Administrative Office.
TELEPHONE TRANSACTION PRIVILEGES
LLANY will allow telephone transactions authorized in proper
written form by you or the applicant. To effect a permitted
telephone transaction, you or your authorized representative
must call the Administrative Office and provide, as
identification, your policy number, a requested portion of
your Social Security number, and such other authenticating
information as we may require. LLANY disclaims all liability
for losses resulting from unauthorized or fraudulent
telephone transactions, but acknowledge that if we do not
follow these procedures, which we believe to be reasonable,
we may be liable for such losses.
OTHER POLICY PROVISIONS
ISSUANCE
A Policy may only be issued upon receipt of satisfactory
evidence of insurability, and generally only when the
Insured is at least age 18 and at most age 80.
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DATE OF COVERAGE
The date of coverage will be the Date of Issue, provided the
Insured is alive and prior to any change in the health and
insurability of the Insured as represented in the
application.
INCONTESTABILITY
LLANY will not contest payment of the Death Benefit Proceeds
based on the initial Specified Amount after the Policy has
been in force during the Insured's lifetime for two years
from the Date of Issue. For any increase in Specified Amount
requiring evidence of insurability, LLANY will not contest
payment of the Death Benefit Proceeds based on such an
increase after it has been in force for two years from its
effective date.
MISSTATEMENT OF AGE OR GENDER
If the age or gender of the Insured has been misstated, the
affected benefits will be adjusted. The amount of the Death
Benefit Proceeds will be 1. multiplied by 2. and then the
result added to 3. where:
1. is the Net Amount at Risk at the time of the Insured's
Death;
2. is the ratio of the monthly Cost of Insurance applied in
the Policy month of death to the monthly Cost of
Insurance that should have been applied at the true age
and gender in the Policy month of death; and
3. is the Accumulation Value at the time of the Insured's
Death.
SUICIDE
If the Insured dies by suicide, while sane or insane, within
two years from the Date of Issue, LLANY will pay no more
than the sum of the premiums paid, less any indebtedness and
the amount of any partial surrenders. If the Insured dies by
suicide, while sane or insane, within two years from the
date an application is accepted for an increase in the
Specified Amount, LLANY will pay no more than a refund of
the monthly charges for the cost of such additional benefit.
NONPARTICIPATING POLICIES
These are nonparticipating Policies on which no dividends
are payable. These Policies do not share in the profits or
surplus earnings of LLANY.
RIDERS
A Waiver of Monthly Deduction Rider may be added to the
Policy. Under this Rider, LLANY will maintain the Death
Benefit by paying covered monthly deductions during periods
of disability. Charges for this Rider, if elected, are part
of the Monthly Deductions. There may be a separate charge(s)
for any rider(s) that becomes part of the Policy.
TAX ISSUES
INTRODUCTION. The Federal income tax treatment of the policy
is complex and sometimes uncertain. The Federal income tax
rules may vary with your particular circumstances. This
discussion does not include all the Federal income tax
rules that may affect you and your policy, and is not
intended as tax advice. This discussion also does not
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<PAGE>
address other Federal tax consequences, or state or local
tax consequences, associated with the policy. As a result,
you should always consult a tax adviser about the
application of tax rules to your individual situation.
TAXATION OF LIFE INSURANCE CONTRACTS IN GENERAL
TAX STATUS OF THE POLICY. Section 7702 of the Code
establishes a statutory definition of life insurance for
Federal tax purposes. We believe that the policy will meet
the statutory definition of life insurance, which places
limitations on the amount of premium payments that may be
made and the contract values that can accumulate relative to
the death benefit. As a result, the death benefit payable
under the policy will generally be excludable from the
beneficiary's gross income, and interest and other income
credited under the policy will not be taxable unless certain
withdrawals are made (or are deemed to be made) from the
policy prior to the insured's death, as discussed below.
This tax treatment will only apply, however, if (1) the
investments of the Separate Account are "adequately
diversified" in accordance with Treasury Department
regulations, and (2) we, rather than you, are considered the
owner of the assets of the Separate Account for Federal
income tax purposes.
INVESTMENTS IN THE SEPARATE ACCOUNT MUST BE DIVERSIFIED. For
a policy to be treated as a life insurance contract for
Federal income tax purposes, the investments of the Separate
Account must be "adequately diversified." IRS regulations
define standards for determining whether the investments of
the Separate Account are adequately diversified. If the
Separate Account fails to comply with these diversification
standards, you could be required to pay tax currently on the
excess of the contract value over the contract premium
payments. Although we do not control the investments of the
subaccounts, we expect that the subaccounts will comply with
the IRS regulations so that the Separate Account will be
considered "adequately diversified."
RESTRICTION ON INVESTMENT OPTIONS. Federal income tax law
limits your right to choose particular investments for the
policy. Because the IRS has not issued guidance specifying
those limits, the limits are uncertain and your right to
allocate contract values among the subaccounts may exceed
those limits. If so, you would be treated as the owner of
the assets of the Separate Account and thus subject to
current taxation on the income and gains from those assets.
We do not know what limits may be set by the IRS in any
guidance that it may issue and whether any such limits will
apply to existing policies. We reserve the right to modify
the policy without your consent to try to prevent the tax
law from considering you as the owner of the assets of the
Separate Account.
NO GUARANTEES REGARDING TAX TREATMENT. We make no guarantee
regarding the tax treatment of any policy or of any
transaction involving a policy. However, the remainder of
this discussion assumes that your policy will be treated as
a life insurance contract for Federal income tax purposes
and that the tax law will not impose tax on any increase in
your contract value until there is a distribution from your
policy.
TAX TREATMENT OF LIFE INSURANCE DEATH BENEFIT PROCEEDS. In
general, the amount of the death benefit payable from a
policy because of the death of the insured is excludable
from gross income. Certain transfers of the policy for
valuable consideration, however, may result in a portion of
the death benefit being taxable. If the death benefit is not
received in a lump sum and is, instead, applied under one of
the settlement options, payments generally will be prorated
between amounts attributable to the death benefit which will
be excludable from the beneficiary's income and amounts
attributable to interest (accruing after the insured's
death) which will be includible in the beneficiary's income.
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<PAGE>
TAX DEFERRAL DURING ACCUMULATION PERIOD. Under existing
provisions of the Code, except as described below, any
increase in your contract value is generally not taxable to
you unless amounts are received (or are deemed to be
received) from the policy prior to the insured's death. If
there is a total withdrawal from the policy, the surrender
value will be includible in your income to the extent the
amount received exceeds the "investment in the contract."
(If there is any debt at the time of a total withdrawal,
such debt will be treated as an amount received by the
owner.) The "investment in the contract" generally is the
aggregate amount of premium payments and other consideration
paid for the policy, less the aggregate amount received
under the policy previously to the extent such amounts
received were excludable from gross income. Whether partial
withdrawals (or other amounts deemed to be distributed) from
the policy constitute income to you depends, in part, upon
whether the policy is considered a "modified endowment
contract" (a "MEC") for Federal income tax purposes.
POLICIES WHICH ARE MECS
CHARACTERIZATION OF A POLICY AS A MEC. A policy will be
classified as a MEC if premiums are paid more rapidly than
allowed by a "7-pay test" under the tax law or if the policy
is received in exchange for another policy that is a MEC. In
addition, even if the policy initially is not a MEC, it may
in certain circumstances become a MEC. These circumstances
would include a later increase in benefits, any other
material change of the policy (within the meaning of the tax
law), and a withdrawal or reduction in the death benefit
during the first seven contract years.
TAX TREATMENT OF WITHDRAWALS, LOANS, ASSIGNMENTS AND PLEDGES
UNDER MECS. If the policy is a MEC, withdrawals from the
policy will be treated first as withdrawals of income and
then as a recovery of premium payments. Thus, withdrawals
will be includible in income to the extent the contract
value exceeds the investment in the policy. The Code treats
any amount received as a loan under a policy, and any
assignment or pledge (or agreement to assign or pledge) any
portion of your contract value, as a withdrawal of such
amount or portion. Your investment in the policy is
increased by the amount includible in income with respect to
such assignment, pledge, or loan.
PENALTY TAXES PAYABLE ON WITHDRAWALS. A 10% penalty tax may
be imposed on any withdrawal (or any deemed distribution)
from your MEC which you must include in your gross income.
The 10% penalty tax does not apply if one of several
exceptions exists. These exceptions include withdrawals or
surrenders that: you receive on or after you reach age
59 1/2, you receive because you became disabled (as defined
in the tax law), or you receive as a series of substantially
equal periodic payments for your life (or life expectancy).
SPECIAL RULES IF YOU OWN MORE THAN ONE MEC. In certain
circumstances, you must combine some or all of the life
insurance contracts which are MECs that you own in order to
determine the amount of withdrawal (including a deemed
withdrawal) that you must include in income. For example, if
you purchase two or more MECs from the same life insurance
company (or its affiliates) during any calendar year, the
Code treats all such policies as one contract. Treating two
or more policies as one contract could affect the amount of
a withdrawal (or a deemed withdrawal) that you must include
in income and the amount that might be subject to the 10%
penalty tax described above.
37
<PAGE>
POLICIES WHICH ARE NOT MECS
TAX TREATMENT OF WITHDRAWALS. If the policy is not a MEC,
the amount of any withdrawal from the policy will generally
be treated first as a non-taxable recovery of premium
payments and then as income from the policy. Thus, a
withdrawal from a policy that is not a MEC will not be
includible in income except to the extent it exceeds the
investment in the policy immediately before the withdrawal.
CERTAIN DISTRIBUTIONS REQUIRED BY THE TAX LAW IN THE FIRST
15 POLICY YEARS.Section 7702 places limitations on the
amount of premium payments that may be made and the contract
values that can accumulate relative to the death benefit.
Where cash distributions are required under Section 7702 in
connection with a reduction in benefits during the first 15
years after the policy is issued (or if withdrawals are made
in anticipation of a reduction in benefits, within the
meaning of the tax law, during this period), some or all of
such amounts may be includible in income. A reduction in
benefits may occur when the face amount is decreased,
withdrawals are made, and in certain other instances.
TAX TREATMENT OF LOANS. If your policy is not a MEC, a loan
you receive under the policy is generally treated as your
indebtedness. As a result, no part of any loan under such a
policy constitutes income to you so long as the policy
remains in force. Nevertheless, in those situations where
the interest rate credited to the loan account equals the
interest rate charged to you for the loan, it is possible
that some or all of the loan proceeds may be includible in
your income. If a policy lapses (or if all contract value is
withdrawn) when a loan is outstanding, the amount of the
loan outstanding will be treated as withdrawal proceeds for
purposes of determining whether any amounts are includible
in your income.
OTHER CONSIDERATIONS
INSURED LIVES PAST AGE 100. If the insured survives beyond
the end of the mortality table used to measure charges under
the policy, which ends at age 100, we believe the policy
will continue to qualify as life insurance for Federal tax
purposes. However, there is some uncertainty regarding this
treatment, and it is possible that you would be viewed as
constructively receiving the cash value in the year the
insured attains age 100.
COMPLIANCE WITH THE TAX LAW. We believe that the maximum
amount of premium payments we have determined for the
policies will comply with the Federal tax definition of life
insurance. We will monitor the amount of premium payments,
and, if the premium payments during a contract year exceed
those permitted by the tax law, we will refund the excess
premiums within 60 days of the end of the policy year and
will pay interest and other earnings (which will be
includible in income subject to tax) as required by law on
the amount refunded. We also reserve the right to increase
the death benefit (which may result in larger charges under
a policy) or to take any other action deemed necessary to
maintain compliance of the policy with the Federal tax
definition of life insurance.
DISALLOWANCE OF INTEREST DEDUCTIONS. If an entity (such as a
corporation or a trust, not an individual) purchases a
policy or is the beneficiary of a policy issued after
June 8, 1997, a portion of the interest on indebtedness
unrelated to the policy may not be deductible by the entity.
However, this rule does not apply to a policy owned by an
entity engaged in a trade or business which covers the life
of an individual who is a
38
<PAGE>
20-percent owner of the entity, or an officer, director, or
employee of the trade or business, at the time first covered
by the policy. This rule also does not apply to a policy
owned by an entity engaged in a trade or business which
covers the joint lives of the 20% owner of the entity and
the owner's spouse at the time first covered by the policy.
FEDERAL INCOME TAX WITHHOLDING. We will withhold and remit
to the IRS a part of the taxable portion of each
distribution made under a policy unless you notify us in
writing at or before the time of the distribution that tax
is not to be withheld. Regardless of whether you request
that no taxes be withheld or whether the Company withholds a
sufficient amount of taxes, you will be responsible for the
payment of any taxes and early distribution penalties that
may be due on the amounts received. You may also be required
to pay penalties under the estimated tax rules, if your
withholding and estimated tax payments are insufficient to
satisfy your total tax liability.
CHANGES IN THE POLICY OR CHANGES IN THE LAW. Changing the
owner, exchanging the contract, and other changes under the
policy may have tax consequences (in addition to those
discussed herein) depending on the circumstances of such
change. The above discussion is based on the Code, IRS
regulations, and interpretations existing on the date of
this Prospectus. However, Congress, the IRS, and the courts
may modify these authorities, sometimes retroactively.
TAX STATUS OF LLANY
Under existing Federal income tax laws, LLANY does not pay
tax on investment income and realized capital gains of the
Separate Account. LLANY does not expect that it will incur
any Federal income tax liability on the income and gains
earned by the Separate Account. We, therefore, do not impose
a charge for Federal income taxes. If Federal income tax law
changes and we must pay tax on some or all of the income and
gains earned by the Separate Account, we may impose a charge
against the Separate Account to pay the taxes.
FAIR VALUE OF THE POLICY
It is sometimes necessary for tax and other reasons to
determine the "fair value" of the Policy. The fair value of
the Policy is measured differently for different purposes.
It is not necessarily the same as the Accumulation Value or
the Net Accumulation Value, although the amount of the Net
Accumulation Value will typically be important in valuing
the Policy for this purpose. For some but not all purposes,
the fair value of the Policy may be the Surrender Value of
the Policy. The fair value of the Policy may be impacted by
developments other than the performance of the underlying
investments. For example, without regard to any other
factor, it increases as the Insured grows older. Moreover,
on the death of the Insured, it tends to increase
significantly. The Owner should consult with his or her
advisors for guidance as to the appropriate methodology for
determining the fair value of the Policy for a particular
purpose.
39
<PAGE>
DIRECTORS AND OFFICERS OF LLANY
The following persons are Directors and Officers of LLANY.
Except as indicated below, the address of each is 120
Madison Street, Suite 1700, Syracuse, New York 13202 and
each has been employed by LLANY or its affiliates for more
than five years.
<TABLE>
<CAPTION>
NAME, ADDRESS AND POSITION(S)
WITH REGISTRANT PRINCIPAL OCCUPATIONS LAST FIVE YEARS
----------------------------------------------------------------------------
<S> <C>
J. PATRICK BARRETT Chairman and Chief Executive Officer,
DIRECTOR CARPAT Investments [9/87-present];
One Telergy Parkway President, Chief Operating Officer and
East Syracuse, NY 13057 Director, Telergy, Inc. [4/98-present];
Chief Executive Officer and Director,
Syracuse Executive Air Service, Inc.
[3/89-present]; Director, Bennington Iron
Works, Inc. [6/89-present]; Director,
Coyne Industrial Enterprises Corp.
[1998-present].
THOMAS D. BELL, JR. President and Chief Executive Officer,
DIRECTOR Young & Rubicam [1/00-present]. Formerly:
285 Madison Avenue President and Chief Executive Officer
New York, NY 10017 [4/95-9/98], Burson- Marstellar; Vice
Chairman [4/94-5/95], Gulfstream Aerospace
Corp.
ROBERT D. BOND Vice President, The Lincoln National Life
DIRECTOR Insurance Company [5/98-present].
1300 South Clinton Street Formerly: Senior Vice President,
Fort Wayne, IN 46801 Great-West Life Assurance Company.
JON A. BOSCIA President, Chief Executive Officer and
DIRECTOR Director, Lincoln National Corporation
Centre Square West Tower Suite [1/98-present]. Formerly: President and
3900 Chief Executive Officer [10/96-1/98],
Philadelphia, PA 19102 President and Chief Operating Officer
[5/94-10/96] The Lincoln National Life
Insurance Co.
JOANNE B. COLLINS President, Treasurer and Director, Lincoln
PRESIDENT, TREASURER Life & Annuity Company of New York
AND DIRECTOR [8/99-present]; Second Vice President
Lincoln National Corporation
[4/96-present]. Formerly: Second Vice
President [9/84-3/96] Lincoln National
Corporation-Reinsurance.
JOHN H. GOTTA Director, Second Vice President and
DIRECTOR, SECOND VICE PRESIDENT Assistant Secretary [12/99-present],
AND ASSISTANT SECRETARY Lincoln Life & Annuity Company of New
350 Church Street York; Chief Executive Officer of Life
Hartford, CT 06103 Insurance, Senior Vice President and
Assistant Secretary [12/99-present] The
Lincoln National Life Insurance Company.
Formerly: Senior Vice President and
Assistant Secretary [4/98-12/99]; Senior
Vice President [2/98-4/98]; Vice President
and General Manager [1/98-2/98] The
Lincoln National Life Insurance Co; Senior
Vice President, Connecticut General Life
Insurance Company [3/96-12/97]; Vice
President, Connecticut (Massachusetts
Mutual) Mutual Life Insurance Company
[8/94-3/96].
</TABLE>
40
<PAGE>
<TABLE>
<CAPTION>
NAME, ADDRESS AND POSITION(S)
WITH REGISTRANT PRINCIPAL OCCUPATIONS LAST FIVE YEARS
----------------------------------------------------------------------------
<S> <C>
BARBARA S. KOWALCZYK Senior Vice President, Corporation
DIRECTOR Planning [5/94-present] Lincoln National
Centre Square West Tower Corporation.
1500 Market Street Suite 3900
Philadelphia, PA 19102
MARGUERITE L. LACHMAN Principal [11/99-present], Lend Lease Real
DIRECTOR Estate Investments. Formerly: Managing
437 Madison Avenue, 18th Floor Director [4/87-11/99], Schroeder Real
New York, NY 10022 Estate Associates.
LOUIS G. MARCOCCIA Senior Vice President for Business,
DIRECTOR Finance and Administrative Services
Syracuse University [1975-present], Syracuse University.
Syracuse, NY 13244
TROY D. PANNING Second Vice President and Chief Financial
SECOND VICE PRESIDENT AND CHIEF Officer [11/96-present], Lincoln Life &
FINANCIAL OFFICER Annuity Company of New York. Formerly:
Accountant [9/90-11/96] Ernst & Young LLP
JOHN M. PIETRUSKI Chairman of the Board, Texas Biotechnology
DIRECTOR Corp.
One Penn Plaza
Suite 3408
New York, NY 10119
LAWRENCE T. ROWLAND Chairman, Chief Executive Officer,
DIRECTOR President and Director [10/96-present].
1700 Magnavox Way Formerly: Senior Vice President
One Reinsurance Place [10/95-10/96], Lincoln National
Ft. Wayne, IN 46802 Reassurance Co.
MICHAEL S. SMITH Vice President [4/98-present] and
VICE PRESIDENT AND APPOINTED Appointed Actuary [6/00-present].
ACTUARY Formerly: Second Vice President
1300 South Clinton Street [5/95-4/98] The Lincoln National Life
Fort Wayne, IN 46801 Insurance Company.
LORRY J. STENSRUD Director, Executive Vice President and
DIRECTOR Chief Executive Officer of Annuities
1300 South Clinton Street [6/00-present], The Lincoln National Life
Fort Wayne, IN 46802 Insurance Company; Director, Lincoln
Financial Group Foundation, Incorporated,
[6/00-present]. Formerly: President and
Chief Executive Officer [6/95-6/00], Cova
Life Insurance.
RICHARD C. VAUGHAN Executive Vice President and Chief
DIRECTOR Financial Officer [1/95-present] The
Centre Square Lincoln National Life Insurance Company.
West Tower
1500 Market Street
Suite 3900
Philadelphia, PA 19102
</TABLE>
41
<PAGE>
DISTRIBUTION OF POLICIES
LLANY intends to offer the Policy in New York. Lincoln
Financial Advisors Corporation ("LFA"), an affiliate of
LLANY and the principal underwriter for the Policies, is
registered with the Securities and Exchange Commission under
the Securities Exchange Act of 1934 as a broker-dealer and
is a member of the National Association of Securities
Dealers ("NASD"). The principal business address of LFA is
350 Church Street, Hartford, CT 06103.
The Policy may be sold by individuals, who in addition to
being appointed as life insurance agents for LLANY, are also
registered representatives of LFA or other broker-dealers.
These representatives may receive commission and service
fees up to 98% of the first year premium, plus up to 10% of
all other premiums paid. In lieu of premium-based
commission, LLANY may pay equivalent amounts based on
Accumulation Value. The selling office receives additional
compensation on the first year premium and all additional
premiums. In some situations, the selling office may elect
to share its commission with the registered representative.
Selling representatives are also eligible for bonuses and
non-cash compensation if certain production levels are
reached. All compensation is paid from LLANY's resources,
which include sales charges made under this Policy.
CHANGES OF INVESTMENT POLICY
LLANY may materially change the investment policy of the
Separate Account. LLANY must inform the Owners and obtain
all necessary regulatory approvals. Any change must be
submitted to the New York Insurance Department, which shall
disapprove it if deemed detrimental to the interests of the
Owners or if it renders LLANY's operations hazardous to the
public. If an Owner objects, the Policy may be converted to
a substantially comparable fixed benefit life insurance
policy offered by LLANY on the life of the Insured. The
Owner has the later of 60 days from the date of the
investment policy change or 60 days from being informed of
such change to make this conversion. LLANY will not require
evidence of insurability for this conversion.
The new policy will not be affected by the investment
experience of any separate account. The new policy will be
for an amount of insurance not exceeding the Death Benefit
of the Policy converted on the date of such conversion.
OTHER CONTRACTS ISSUED BY LLANY
LLANY from time to time offers variable annuity contracts
and other variable life insurance policies with benefits
which vary in accordance with the investment experience of a
separate account of LLANY.
STATE REGULATION
LLANY is subject to the laws of New York governing insurance
companies and to regulation by the New York Insurance
Department. An annual statement in a prescribed form is
filed with the New York Insurance Department each year
covering the operation of LLANY for the preceding year and
its financial condition as of the end of such year.
Regulation by the Insurance Department includes periodic
examination to determine LLANY's contract liabilities and
reserves so that the Insurance Department may certify the
items are correct. LLANY's books and accounts are subject to
review by the Insurance Department at all times and a full
examination of its operations is conducted periodically by
the New York Department of Insurance. Such regulation does
not, however, involve any supervision of management or
investment practices or policies.
42
<PAGE>
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 LLANY.
REPORTS TO OWNERS
LLANY maintains Policy records and will mail to each Owner,
at the last known address of record, an annual statement
showing the amount of the current Death Benefit, the
Accumulation Value, and Surrender Value, premiums paid and
monthly charges deducted since the last report, the amounts
invested in each Sub-Account and any Loan Account Value.
Owners will also be sent annual reports containing financial
statements for the Variable Account and annual and
semi-annual reports of the Funds as required by the 1940
Act.
In addition, Owners will receive statements of significant
transactions, such as changes in Specified Amount, changes
in Death Benefit Option, transfers among Sub-Accounts,
Premium Payments, loans, loan repayments, reinstatement and
termination.
ADVERTISING
LLANY is also ranked and rated by independent financial
rating services, including Moody's, Standard & Poor's,
Duff & Phelps and A.M. Best Company. The purpose of these
ratings is to reflect the financial strength or
claims-paying ability of LLANY. The ratings are not intended
to reflect the investment experience or financial strength
of the Separate Account. LLANY may advertise these ratings
from time to time. In addition, LLANY may include in certain
advertisements, endorsements in the form of a list of
organizations, individuals or other parties which recommend
LLANY or the Policies. Furthermore, LLANY may occasionally
include in advertisements comparisons of currently taxable
and tax deferred investment programs, based on selected tax
brackets, or discussions of alternative investment vehicles
and general economic conditions.
We are a member of the Insurance Marketplace Standards
Association ("IMSA") and may include the IMSA logo and
information about IMSA membership in our advertisements.
Companies that belong to IMSA subscribe to a set of ethical
standards covering the various aspects of sales and services
for individually sold life insurance and annuities.
EXPERTS
The financial statements of the Separate Account and the
statutory-basis financial statements of LLANY will be filed
by amendment.
Actuarial matters included in this prospectus have been
examined by Vaughn W. Robbins, FSA as stated in the Opinion
filed as an Exhibit to the Registration Statement.
Legal matters in connection with the Policies described
herein are being passed upon by Robert O. Sheppard, Esq., as
stated in the Opinion filed as an Exhibit to the
Registration Statement.
REGISTRATION STATEMENT
A Registration Statement has been filed with the Securities
and Exchange Commission under the Securities Act of 1933, as
amended, with respect to the Policies offered hereby. This
Prospectus does not contain all the information set forth in
the Registration Statement and amendments thereto and
exhibits filed as a part thereof, to all of which reference
is hereby made for further information concerning the
Separate Account, LLANY, and the Policies offered hereby.
Statements contained in this Prospectus as to the content of
Policies and other legal instruments are summaries. For a
complete statement of the terms thereof, reference is made
to such instruments as filed.
43
<PAGE>
APPENDIX 1 MONTHLY CHARGE
<TABLE>
<CAPTION>
INSURED'S EXPENSE
AGE AT ISSUE CHARGE
(NEAREST BIRTHDAY) PER $1,000
------------------ ----------
<S> <C>
0-12 0.0158
13 0.0200
14 0.0242
15-30 0.0283
31 0.0325
32 0.0367
33 0.0408
34 0.0450
35 0.0492
36 0.0533
37 0.0575
38 0.0617
39 0.0658
40 0.0700
41 0.0742
42 0.0783
43 0.0825
44 0.0867
45 0.0908
46 0.0950
47 0.0992
48 0.1033
49 0.1075
50 0.1117
51 0.1158
52 0.1200
53 0.1242
54 0.1283
55 0.1325
56 0.1408
57 0.1492
58 0.1575
59 0.1658
60 0.1742
61 0.1825
62 0.1908
63 0.1992
64 0.2075
65 0.2158
66 0.2242
67 0.2325
68 0.2408
69 0.2492
70 0.2575
71 0.2656
72 0.2742
73 0.2825
74 0.2908
75 0.2992
76 0.3200
77 0.3408
78 0.3617
79 0.3825
80 0.4033
81+ 0.4242
</TABLE>
44
<PAGE>
APPENDIX 2
GUARANTEED MAXIMUM COST OF INSURANCE RATES
The Guaranteed Maximum Cost of Insurance Rates, per $1,000
of Net Amount at Risk, for standard risks are set forth in
the following Table based on the 1980 Commissioners Standard
Ordinary Mortality Tables, Age Nearest Birthday (1980 CSO);
or for unisex rates, on the 1980 CSO-B Table.
<TABLE>
<CAPTION>
ATTAINED AGE MALE FEMALE UNISEX
(NEAREST MONTHLY MONTHLY MONTHLY
BIRTHDAY) RATE RATE RATE
--------- -------- -------- --------
<S> <C> <C> <C>
0 0.34845 0.24089 0.32677
1 0.08917 0.07251 0.08667
2 0.08251 0.06750 0.07917
3 0.08167 0.06584 0.07834
4 0.07917 0.06417 0.07584
5 0.07501 0.06334 0.07251
6 0.07167 0.06084 0.06917
7 0.06667 0.06000 0.06584
8 0.06334 0.05834 0.06250
9 0.06167 0.05750 0.06084
10 0.06084 0.05667 0.06000
11 0.06417 0.05750 0.06250
12 0.07084 0.06000 0.06917
13 0.08251 0.06250 0.07834
14 0.09584 0.06887 0.09001
15 0.11085 0.07084 0.10334
16 0.12585 0.07601 0.11585
17 0.13919 0.07917 0.12752
18 0.14836 0.08167 0.13502
19 0.15502 0.08501 0.14085
20 0.15836 0.08751 0.14502
21 0.15919 0.08917 0.14585
22 0.15752 0.09084 0.14419
23 0.15502 0.09251 0.14252
24 0.15189 0.09501 0.14085
25 0.14752 0.09668 0.13752
26 0.11419 0.09918 0.13585
27 0.14252 0.10168 0.13418
28 0.14169 0.10501 0.13418
29 0.14252 0.10635 0.13585
30 0.14419 0.11251 0.13752
31 0.14836 0.11668 0.14169
32 0.15252 0.12085 0.14585
33 0.15919 0.12502 0.15252
34 0.16889 0.13168 0.15919
35 0.17586 0.13752 0.16836
36 0.18670 0.14669 0.17837
37 0.20004 0.15752 0.19170
38 0.21505 0.17003 0.20588
39 0.23255 0.18503 0.22338
40 0.25173 0.20171 0.24173
41 0.27424 0.22005 0.26340
42 0.29675 0.23922 0.28508
43 0.32260 0.25757 0.31010
44 0.34929 0.27674 0.33428
45 0.37931 0.29675 0.36263
46 0.41017 0.31677 0.39182
47 0.44353 0.33761 0.42268
48 0.47856 0.36096 0.45437
49 0.51777 0.38598 0.49107
<CAPTION>
ATTAINED AGE MALE FEMALE UNISEX
(NEAREST MONTHLY MONTHLY MONTHLY
BIRTHDAY) RATE RATE RATE
--------- -------- -------- --------
<S> <C> <C> <C>
50 0.55948 0.41350 0.53028
51 0.60870 0.44270 0.57533
52 0.66377 0.47523 0.62539
53 0.72636 0.51276 0.68297
54 0.79730 0.55114 0.74722
55 0.87326 0.59118 0.81566
56 0.95591 0.63123 0.88996
57 1.04192 0.66961 0.96593
58 1.13378 0.70633 1.04609
59 1.23236 0.74556 1.13211
60 1.34180 0.78979 1.22817
61 1.46381 0.84488 1.33511
62 1.60173 0.91417 1.45796
63 1.75809 1.00267 1.59922
64 1.93206 1.10539 1.75725
65 2.12283 1.21731 1.92955
66 2.32623 1.33511 2.11195
67 2.54312 1.45461 2.30614
68 2.77350 1.57247 2.50878
69 3.02328 1.69955 2.72909
70 3.30338 1.84590 2.97466
71 3.62140 2.02325 3.25640
72 3.98666 2.24419 3.58279
73 4.40599 2.51548 3.95978
74 4.87280 2.83552 4.38330
75 5.37793 3.19685 4.84334
76 5.91225 3.59370 5.33245
77 6.46824 4.01942 5.84227
78 7.04089 4.47410 6.36948
79 7.64551 4.97042 6.92851
80 8.30507 5.52957 7.54229
81 9.03761 6.17118 8.22883
82 9.86724 6.91414 9.01216
83 10.80381 7.77075 9.90124
84 11.82571 8.72632 10.87533
85 12.91039 9.76952 11.92213
86 14.03509 10.89151 13.01471
87 15.18978 12.08770 14.15507
88 16.36948 13.35774 15.33494
89 17.57781 14.70820 16.56493
90 18.82881 16.15259 17.85746
91 20.14619 17.71416 19.23699
92 21.57655 19.43814 20.76665
93 23.20196 21.40786 22.49837
94 25.28174 23.63051 24.70915
95 28.27411 27.16158 27.82758
96 33.10577 32.32378 32.78845
97 41.68476 41.21204 41.45783
98 58.01259 57.81394 57.95663
99 90.90909 90.90909 90.90909
</TABLE>
45
<PAGE>
APPENDIX 3
ILLUSTRATION OF SURRENDER CHARGES
The initial Surrender Charge is calculated as (a) plus (b),
with that result not to exceed (c), minus (d), where
(a) is 1.25 times the curtate net level premium for the
Specified Amount of insurance, calculated using the 1980
Commissioners Standard Ordinary mortality table and 4%
interest;
(b) is $10 per $1000 of Specified Amount;
(c) is $50 per $1000 of Specified Amount; and
(d) is the total of the per thousand charges assessed in the
first 24 months.
Algebraically, this formula is equivalent to min{a+b,c}-d.
The Surrender Charge decreases from its initial amount
during the first 15 years. No Surrender Charge is applied in
the 16th policy year or beyond. In general terms, the
initial Surrender Charge is amortized in proportion to a
twenty year life contingent annuity due. In formulas, the
Surrender Charge at a point in time "t" years after issue is
(a) times (b), where
(a) is the initial Surrender Charge; and
(b) is the ratio of a life contingent annuity due beginning
at time t and ending 20 years after issue, divided by a
life contingent annuity due beginning at issue and
ending 20 years after issue, both calculated using the
1980 Commissioners Standard Ordinary mortality table and
4% interest.
EXAMPLE 1: A male, Age 45, purchases a policy with a
Specified Amount of $100,000.
The initial Surrender Charge is computed as follows:
curtate net level premium = $1,987.66
$10 per $1000 of Specified Amount = $1000
$50 per $1000 of Specified Amount = $5000
the total of the per thousand charges = $9.08 per month X 24
months = $217.92
initial Surrender Charge = (1.25 X $1987.66 + $1000) -
$217.92=
$3,484.57- $217.92 = $3,266.65. Note that $3,484.57 is less
than $5000.
This amount decreases as follows:
<TABLE>
<CAPTION>
YEARS INITIAL
AFTER SURRENDER ANNUITY SURRENDER
ISSUE CHARGE RATIO CHARGE
----- --------- ------- ---------
<S> <C> <C> <C>
0 3,266.65 1.00000 3,266.65
1 3,266.65 0.96609 3,155.89
2 3,266.65 0.93101 3,041.30
3 3,266.65 0.89471 2,922.71
4 3,266.65 0.85711 2,799.89
5 3,266.65 0.81818 2,672.70
6 3,266.65 0.77782 2,540.86
7 3,266.65 0.73600 2,404.26
8 3,266.65 0.69265 2,262.65
9 3,266.65 0.64769 2,115.79
10 3,266.65 0.60104 1,963.40
</TABLE>
46
<PAGE>
<TABLE>
<CAPTION>
YEARS INITIAL
AFTER SURRENDER ANNUITY SURRENDER
ISSUE CHARGE RATIO CHARGE
----- --------- ------- ---------
<S> <C> <C> <C>
11 3,266.65 0.55257 1,805.05
12 3,266.65 0.50212 1,640.25
13 3,266.65 0.44952 1,468.41
14 3,266.65 0.39456 1,288.88
15 3,266.65 0.33701 1,100.90
16 0.00
</TABLE>
EXAMPLE 2: A female, Age 75, purchases a policy with a
Specified Amount of $200,000.
The initial Surrender Charge is computed as follows:
curtate net level premium = $15,727.74
$10 per $1000 of Specified Amount = $2,000
$50 per $1000 of Specified Amount = $10,000
the total of the per thousand charges = $59.84 per month X
24 months = $1,436.16
The value (1.25 X $15,727.74 + $2,000) exceeds $10,000, so
the initial Surrender Charge = $10,000 - $1,436.16 =
$8,563.84
This amount decreases as follows:
<TABLE>
<CAPTION>
YEARS INITIAL
AFTER SURRENDER ANNUITY SURRENDER
ISSUE CHARGE RATIO CHARGE
----- --------- ------- ---------
<S> <C> <C> <C>
0 8,563.84 1.00000 8,563.84
1 8,563.84 0.95375 8,167.79
2 8,563.84 0.90821 7,777.77
3 8,563.84 0.86329 7,393.11
4 8,563.84 0.81888 7,012.72
5 8,563.84 0.77490 6,636.15
6 8,563.84 0.73145 6,264.02
7 8,563.84 0.68868 5,897.71
8 8,563.84 0.64680 5,539.10
9 8,563.84 0.60603 5,189.95
10 8,563.84 0.56635 4,850.10
11 8,563.84 0.52753 4,517.67
12 8,563.84 0.48915 4,189.03
13 8,563.84 0.45058 3,858.68
14 8,563.84 0.41088 3,518.67
15 8,563.84 0.36873 3,157.74
16 0.00
</TABLE>
47
<PAGE>
APPENDIX 4
CORRIDOR PERCENTAGES
<TABLE>
<CAPTION>
ATTAINED AGE OF
THE INSURED CORRIDOR
(NEAREST BIRTHDAY) PERCENTAGE
------------------ ----------
<S> <C>
0-40 250%
41 243%
42 236%
43 229%
44 222%
45 215%
46 209%
47 203%
48 197%
49 191%
50 185%
51 178%
52 171%
53 164%
54 157%
55 150%
56 146%
57 142%
58 138%
59 134%
60 130%
61 128%
62 126%
63 124%
64 122%
65 120%
66 119%
67 118%
68 117%
69 116%
70 115%
71 113%
72 111%
73 109%
74 107%
75-90 105%
91 104%
92 103%
93 102%
94 101%
95-99 100%
</TABLE>
48
<PAGE>
APPENDIX 5
ILLUSTRATIONS OF ACCUMULATION VALUES, SURRENDER VALUES, AND
DEATH BENEFIT PROCEEDS
The illustrations in this Prospectus have been prepared to
help show how values under the Policies change with
investment performance. The illustrations illustrate how
Accumulation Values, Surrender Values and Death Benefit
Proceeds under a Policy would vary over time if the
hypothetical gross investment rates of return were a uniform
annual effective rate of either 0%, 6% or 12%. If the
hypothetical gross investment rate of return averages 0%,
6%, or 12% over a period of years, but fluctuates above or
below those averages for individual years, the Accumulation
Values, Surrender Values and Death Benefit Proceeds may be
different. The illustrations also assume there are no Policy
Loans or Partial Surrenders, no additional Premium Payments
are made other than shown, no Accumulation Values are
allocated to the Fixed Account, and there are no changes in
the Specified Amount or Death Benefit Option.
The amounts shown for the Accumulation Value, Surrender
Value and Death Benefit Proceeds as of each Policy
Anniversary reflect the fact that charges are made and
expenses applied which lower investment return on the assets
held in the Sub-Accounts. Daily charges are made against the
assets of the Sub-Accounts for assuming mortality and
expense risks. The mortality and expense risk charges are
equivalent to an annual effective rate of 0.90% of the daily
net asset value of the Separate Account in years 1-19 and
0.20% in years 20 and later. In addition, the amounts shown
also reflect the deduction of Fund investment advisory fees
and other expenses which will vary depending on which
funding vehicle is chosen but which are assumed for purposes
of these illustrations to be equivalent to an annual
effective rate of 0.82% of the daily net asset value of the
Separate Account. This rate reflects an arithmetic average
of total Fund portfolio annual expenses for the year ending
December 31, 1999.
Considering charges for mortality and expense risks and the
assumed Fund expenses, gross annual rates of 0%, 6% and 12%
correspond to net investment experience at annual rates of
-1.70%, 4.24% and 10.19% for years 1-19 and -1.02%, 4.97%
and 10.96% in years 20 and later.
The illustrations also reflect the fact that the Company
makes monthly charges for providing insurance protection.
Current values reflect current Cost of Insurance charges and
guaranteed values reflect the maximum Cost of Insurance
charges guaranteed in the Policy. The values shown are for
Policies which are issued as preferred and standard.
Policies issued on a substandard basis would result in lower
Accumulation Values and Death Benefit Proceeds than those
illustrated.
The illustrations also reflect the fact that the Company
deducts a premium load of 5% from each Premium Payment.
The Surrender Values shown in the illustrations reflect the
fact that the Company will deduct a Surrender Charge from
the Policy's Accumulation Value for any Policy surrendered
in full during the first fifteen Policy Years. Surrender
Charges reflect, in part, age and Specified Amount, and are
shown in the illustrations.
In addition, the illustrations reflect the fact that the
Company deducts a monthly administrative charge at the
beginning of each Policy Month. This monthly administrative
expense charge is a flat dollar charge of $10 per month in
the first year. The illustrations also reflect a monthly
charge per $1,000 of Specified Amount assessed during the
first two Policy Years.
Certain fund groups waive a portion of fund expenses or
reimburse the funds for such expenses. Those waivers or
reimbursements remain in effect for varying periods of time,
are usually reviewed at least yearly by each fund group, and
are within the fund group's
49
<PAGE>
control. The effect of discontinuing a waiver or
reimbursement arrangement could result in higher expense
levels for the affected fund, as shown in the "Portfolio
Expense Table". Assuming those waivers and reimbursements
were discontinued, the arithmetic average of the "Fund
Investment Advisory Fees and Other Expenses" listed in the
"Portfolio Expense Table" would be equivalent to an annual
effective rate of 1.12% of the daily net asset value of the
Separate Account.
Upon request, the Company will furnish a comparable
illustration based on the proposed insured's age, gender
classification, smoking classification, risk classification
and premium payment requested.
50
<PAGE>
MALE AGE 55 NONSMOKER
PREFERRED -- $8,605 ANNUAL PREMIUM
FACE AMOUNT $500,000
DEATH BENEFIT OPTION 1
GUARANTEED BASIS
<TABLE>
<CAPTION>
PREMIUMS
ACCUMULATED
END OF AT DEATH BENEFIT TOTAL ACCUMULATION VALUE SURRENDER VALUE
POLICY 5% INTEREST ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF
YEAR PER YEAR GROSS 0% GROSS 6% GROSS 12% GROSS 0% GROSS 6% GROSS 12% GROSS 0% GROSS 6% GROSS 12%
------ ----------- -------- -------- --------- -------- -------- --------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 9,035 500,000 500,000 500,000 4,647 5,025 5,404 0 0 0
2 18,522 500,000 500,000 500,000 6,143 7,098 8,104 0 0 0
3 28,483 500,000 500,000 500,000 7,922 9,587 11,427 0 0 0
4 38,942 500,000 500,000 500,000 9,160 11,666 14,573 0 0 0
5 49,924 500,000 500,000 500,000 9,821 13,276 17,486 0 0 0
6 61,455 500,000 500,000 500,000 9,847 14,331 20,082 0 0 1,913
7 73,563 500,000 500,000 500,000 9,166 14,725 22,253 0 0 5,046
8 86,276 500,000 500,000 500,000 7,681 14,325 23,859 0 0 7,644
9 99,625 500,000 500,000 500,000 5,279 12,970 24,726 0 0 9,533
10 113,641 500,000 500,000 500,000 1,845 10,488 24,659 0 0 10,522
15 194,961 0 0 500,000 0 0 1,563 0 0 0
20 298,749 0 0 0 0 0 0 0 0 0
25 431,212 0 0 0 0 0 0 0 0 0
30 600,272 0 0 0 0 0 0 0 0 0
</TABLE>
Amounts are in Dollars
Where a zero value is shown, the Policy will
lapse unless sufficient additional premium is
paid.
If Premiums are paid more frequently than
annually, the Death Benefit Proceeds,
Accumulation Values and Surrender Values would
be less than those illustrated.
Assumes no policy loans or partial surrenders
have been made. Current cost of insurance
rates assumed. Current mortality and expense
risk charges, administrative fees and premium
load assumed.
These investment results are illustrative only
and should not be considered a representation
of past or future investment results. Actual
investment results may be more or less than
those shown and will depend on a number of
factors, including the Policy Owner's
allocations and the Funds' rates of return.
Accumulation Values and Surrender Values for a
Policy would be different from those shown if
the actual investment rates of return averaged
0%, 6% and 12% over a period of years, but
fluctuated above or below those averages for
individual Policy Years. No representations
can be made that these rates of return will in
fact be achieved for any one year or sustained
over a period of time.
The amounts shown in these illustrations
reflect (1) the deduction of mortality and
expense risk charges and (2) assumed Fund
total expenses of 0.82% per year.
51
<PAGE>
MALE AGE 55 NONSMOKER
PREFERRED -- $8,605 ANNUAL PREMIUM
FACE AMOUNT $500,000
DEATH BENEFIT OPTION 1
CURRENT BASIS
<TABLE>
<CAPTION>
PREMIUMS
ACCUMULATED
END OF AT DEATH BENEFIT TOTAL ACCUMULATION VALUE SURRENDER VALUE
POLICY 5% INTEREST ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF
YEAR PER YEAR GROSS 0% GROSS 6% GROSS 12% GROSS 0% GROSS 6% GROSS 12% GROSS 0% GROSS 6% GROSS 12%
------ ----------- -------- -------- ---------- -------- -------- ---------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 9,035 500,000 500,000 500,000 4,647 5,024 5,404 0 0 0
2 18,522 500,000 500,000 500,000 9,204 10,254 11,352 0 0 0
3 28,483 500,000 500,000 500,000 14,425 16,475 18,706 0 0 0
4 38,942 500,000 500,000 500,000 19,527 22,935 26,792 0 2,924 6,780
5 49,924 500,000 500,000 500,000 24,522 29,659 35,701 5,419 10,555 16,597
6 61,455 500,000 500,000 500,000 29,427 36,673 45,538 11,258 18,504 27,369
7 73,563 500,000 500,000 500,000 34,248 43,998 56,411 17,041 26,791 39,204
8 86,276 500,000 500,000 500,000 38,923 51,586 68,368 22,707 35,370 52,153
9 99,625 500,000 500,000 500,000 43,418 59,416 81,497 28,225 44,222 66,303
10 113,641 500,000 500,000 500,000 47,758 67,522 95,949 33,620 53,384 81,811
15 194,961 500,000 500,000 500,000 63,139 108,721 190,170 54,985 100,568 182,017
20 298,749 500,000 500,000 500,000 66,806 151,278 343,711 66,806 151,278 343,711
25 431,212 500,000 500,000 656,230 55,891 199,852 624,981 55,891 199,852 624,981
30 600,272 500,000 500,000 1,153,513 20,061 252,273 1,098,584 20,061 252,273 1,098,584
</TABLE>
Amounts are in Dollars
Where a zero value is shown, the Policy will
lapse unless sufficient additional premium is
paid.
If Premiums are paid more frequently than
annually, the Death Benefit Proceeds,
Accumulation Values and Surrender Values would
be less than those illustrated.
Assumes no policy loans or partial surrenders
have been made. Current cost of insurance
rates assumed. Current mortality and expense
risk charges, administrative fees and premium
load assumed.
These investment results are illustrative only
and should not be considered a representation
of past or future investment results. Actual
investment results may be more or less than
those shown and will depend on a number of
factors, including the Policy Owner's
allocations and the Funds' rates of return.
Accumulation Values and Surrender Values for a
Policy would be different from those shown if
the actual investment rates of return averaged
0%, 6% and 12% over a period of years, but
fluctuated above or below those averages for
individual Policy Years. No representations
can be made that these rates of return will in
fact be achieved for any one year or sustained
over a period of time.
The amounts shown in these illustrations
reflect (1) the deduction of mortality and
expense risk charges and (2) assumed Fund
total expenses of 0.82% per year.
52
<PAGE>
MALE AGE 65 NONSMOKER
PREFERRED -- $13,988 ANNUAL PREMIUM
FACE AMOUNT $500,000
DEATH BENEFIT OPTION 1
GUARANTEED BASIS
<TABLE>
<CAPTION>
PREMIUMS
ACCUMULATED
END OF AT DEATH BENEFIT TOTAL ACCUMULATION VALUE SURRENDER VALUE
POLICY 5% INTEREST ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF
YEAR PER YEAR GROSS 0% GROSS 6% GROSS 12% GROSS 0% GROSS 6% GROSS 12% GROSS 0% GROSS 6% GROSS 12%
------ ----------- -------- -------- --------- -------- -------- --------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 14,687 500,000 500,000 500,000 6,503 7,084 7,670 0 0 0
2 30,109 500,000 500,000 500,000 4,621 5,954 7,371 0 0 0
3 46,302 500,000 500,000 500,000 2,748 4,777 7,074 0 0 0
4 63,305 0 500,000 500,000 0 2,115 5,304 0 0 0
5 81,157 0 0 500,000 0 0 1,724 0 0 0
6 99,903 0 0 0 0 0 0 0 0 0
7 119,585 0 0 0 0 0 0 0 0 0
8 140,252 0 0 0 0 0 0 0 0 0
9 161,952 0 0 0 0 0 0 0 0 0
10 184,737 0 0 0 0 0 0 0 0 0
15 316,934 0 0 0 0 0 0 0 0 0
20 485,654 0 0 0 0 0 0 0 0 0
25 700,989 0 0 0 0 0 0 0 0 0
30 975,816 0 0 0 0 0 0 0 0 0
</TABLE>
Amounts are in Dollars
Where a zero value is shown, the Policy will
lapse unless sufficient additional premium is
paid.
If Premiums are paid more frequently than
annually, the Death Benefit Proceeds,
Accumulation Values and Surrender Values would
be less than those illustrated.
Assumes no policy loans or partial surrenders
have been made. Current cost of insurance
rates assumed. Current mortality and expense
risk charges, administrative fees and premium
load assumed.
These investment results are illustrative only
and should not be considered a representation
of past or future investment results. Actual
investment results may be more or less than
those shown and will depend on a number of
factors, including the Policy Owner's
allocations and the Funds' rates of return.
Accumulation Values and Surrender Values for a
Policy would be different from those shown if
the actual investment rates of return averaged
0%, 6% and 12% over a period of years, but
fluctuated above or below those averages for
individual Policy Years. No representations
can be made that these rates of return will in
fact be achieved for any one year or sustained
over a period of time.
The amounts shown in these illustrations
reflect (1) the deduction of mortality and
expense risk charges and (2) assumed Fund
total expenses of 0.82% per year.
53
<PAGE>
MALE AGE 65 NONSMOKER
PREFERRED -- $13,988 ANNUAL PREMIUM
FACE AMOUNT $500,000
DEATH BENEFIT OPTION 1
CURRENT BASIS
<TABLE>
<CAPTION>
PREMIUMS
ACCUMULATED
END OF AT DEATH BENEFIT TOTAL ACCUMULATION VALUE SURRENDER VALUE
POLICY 5% INTEREST ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF
YEAR PER YEAR GROSS 0% GROSS 6% GROSS 12% GROSS 0% GROSS 6% GROSS 12% GROSS 0% GROSS 6% GROSS 12%
------ ----------- -------- -------- ---------- -------- -------- ---------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 14,687 500,000 500,000 500,000 6,503 7,085 7,670 0 0 0
2 30,109 500,000 500,000 500,000 12,950 14,534 16,196 0 0 0
3 46,302 500,000 500,000 500,000 20,460 23,525 26,871 625 3,690 7,036
4 63,305 500,000 500,000 500,000 27,602 32,673 38,428 8,641 13,712 19,467
5 81,157 500,000 500,000 500,000 34,624 42,237 51,228 16,547 24,161 33,151
6 99,903 500,000 500,000 500,000 41,549 52,267 65,441 24,367 35,085 48,259
7 119,585 500,000 500,000 500,000 48,328 62,738 81,182 32,051 46,461 64,904
8 140,252 500,000 500,000 500,000 54,973 73,689 98,643 39,609 58,325 83,279
9 161,952 500,000 500,000 500,000 61,393 85,056 117,943 46,951 70,614 103,501
10 184,737 500,000 500,000 500,000 67,479 96,764 139,210 53,969 83,254 125,701
15 316,934 500,000 500,000 500,000 86,745 155,746 280,842 78,419 147,420 272,516
20 485,654 500,000 500,000 551,714 77,536 211,110 525,442 77,536 211,110 525,442
25 700,989 500,000 500,000 1,012,056 32,960 276,470 963,863 32,960 276,470 963,863
30 975,816 0 500,000 1,714,439 0 360,466 1,697,465 0 360,466 1,697,465
</TABLE>
Amounts are in Dollars
Where a zero value is shown, the Policy will
lapse unless sufficient additional premium is
paid.
If Premiums are paid more frequently than
annually, the Death Benefit Proceeds,
Accumulation Values and Surrender Values would
be less than those illustrated.
Assumes no policy loans or partial surrenders
have been made. Current cost of insurance
rates assumed. Current mortality and expense
risk charges, administrative fees and premium
load assumed.
These investment results are illustrative only
and should not be considered a representation
of past or future investment results. Actual
investment results may be more or less than
those shown and will depend on a number of
factors, including the Policy Owner's
allocations and the Funds' rates of return.
Accumulation Values and Surrender Values for a
Policy would be different from those shown if
the actual investment rates of return averaged
0%, 6% and 12% over a period of years, but
fluctuated above or below those averages for
individual Policy Years. No representations
can be made that these rates of return will in
fact be achieved for any one year or sustained
over a period of time.
The amounts shown in these illustrations
reflect (1) the deduction of mortality and
expense risk charges and (2) assumed Fund
total expenses of 0.82% per year.
54
<PAGE>
FEMALE AGE 55 NONSMOKER
PREFERRED -- $6,925 ANNUAL PREMIUM
FACE AMOUNT $500,000
DEATH BENEFIT OPTION 1
GUARANTEED BASIS
<TABLE>
<CAPTION>
PREMIUMS
ACCUMULATED
END OF AT DEATH BENEFIT TOTAL ACCUMULATION VALUE SURRENDER VALUE
POLICY 5% INTEREST ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF
YEAR PER YEAR GROSS 0% GROSS 6% GROSS 12% GROSS 0% GROSS 6% GROSS 12% GROSS 0% GROSS 6% GROSS 12%
------ ----------- -------- -------- --------- -------- -------- --------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 7,271 500,000 500,000 500,000 3,492 3,788 4,085 0 0 0
2 14,906 500,000 500,000 500,000 5,311 6,074 6,876 0 0 0
3 22,922 500,000 500,000 500,000 7,680 9,061 10,580 0 0 0
4 31,340 500,000 500,000 500,000 9,814 11,981 14,470 0 0 0
5 40,178 500,000 500,000 500,000 11,703 14,818 18,553 0 0 2,953
6 49,458 500,000 500,000 500,000 13,322 17,541 22,827 0 2,705 7,991
7 59,202 500,000 500,000 500,000 14,612 20,083 27,252 569 6,040 13,209
8 69,433 500,000 500,000 500,000 15,496 22,356 31,767 2,275 9,135 18,546
9 80,176 500,000 500,000 500,000 15,867 24,236 36,278 3,498 11,866 23,909
10 91,456 500,000 500,000 500,000 15,649 25,624 40,713 4,161 14,136 29,225
15 156,901 500,000 500,000 500,000 4,461 22,888 60,453 0 16,394 53,960
20 240,428 0 0 500,000 0 0 67,729 0 0 67,729
25 347,031 0 0 500,000 0 0 19,991 0 0 19,991
30 483,087 0 0 0 0 0 0 0 0 0
</TABLE>
Amounts are in Dollars
Where a zero value is shown, the Policy will
lapse unless sufficient additional premium is
paid.
If Premiums are paid more frequently than
annually, the Death Benefit Proceeds,
Accumulation Values and Surrender Values would
be less than those illustrated.
Assumes no policy loans or partial surrenders
have been made. Current cost of insurance
rates assumed. Current mortality and expense
risk charges, administrative fees and premium
load assumed.
These investment results are illustrative only
and should not be considered a representation
of past or future investment results. Actual
investment results may be more or less than
those shown and will depend on a number of
factors, including the Policy Owner's
allocations and the Funds' rates of return.
Accumulation Values and Surrender Values for a
Policy would be different from those shown if
the actual investment rates of return averaged
0%, 6% and 12% over a period of years, but
fluctuated above or below those averages for
individual Policy Years. No representations
can be made that these rates of return will in
fact be achieved for any one year or sustained
over a period of time.
The amounts shown in these illustrations
reflect (1) the deduction of mortality and
expense risk charges and (2) assumed Fund
total expenses of 0.82% per year.
55
<PAGE>
FEMALE AGE 55 NONSMOKER
PREFERRED -- $6,925 ANNUAL PREMIUM
FACE AMOUNT $500,000
DEATH BENEFIT OPTION 1
CURRENT BASIS
<TABLE>
<CAPTION>
PREMIUMS
ACCUMULATED
END OF AT DEATH BENEFIT TOTAL ACCUMULATION VALUE SURRENDER VALUE
POLICY 5% INTEREST ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF
YEAR PER YEAR GROSS 0% GROSS 6% GROSS 12% GROSS 0% GROSS 6% GROSS 12% GROSS 0% GROSS 6% GROSS 12%
------ ----------- -------- -------- --------- -------- -------- --------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 7,271 500,000 500,000 500,000 3,492 3,788 4,085 0 0 0
2 14,906 500,000 500,000 500,000 7,450 8,279 9,147 0 0 0
3 22,922 500,000 500,000 500,000 12,083 13,731 15,521 0 0 0
4 31,340 500,000 500,000 500,000 16,596 19,374 22,508 260 3,038 6,172
5 40,178 500,000 500,000 500,000 21,018 25,248 30,203 5,418 9,648 14,603
6 49,458 500,000 500,000 500,000 25,343 31,354 38,672 10,507 16,518 23,836
7 59,202 500,000 500,000 500,000 29,553 37,685 47,981 15,510 23,642 33,938
8 69,433 500,000 500,000 500,000 33,675 44,276 58,243 20,454 31,055 45,022
9 80,176 500,000 500,000 500,000 37,687 51,117 69,538 25,318 38,748 57,169
10 91,456 500,000 500,000 500,000 41,601 58,232 81,989 30,113 46,744 70,501
15 156,901 500,000 500,000 500,000 58,581 97,240 165,367 52,088 90,746 158,874
20 240,428 500,000 500,000 500,000 68,272 140,579 300,512 68,272 140,579 300,512
25 347,031 500,000 500,000 568,989 68,215 191,830 541,894 68,215 191,830 541,894
30 483,087 500,000 500,000 998,710 48,714 247,434 951,152 48,714 247,434 951,152
</TABLE>
Amounts are in Dollars
Where a zero value is shown, the Policy will
lapse unless sufficient additional premium is
paid.
If Premiums are paid more frequently than
annually, the Death Benefit Proceeds,
Accumulation Values and Surrender Values would
be less than those illustrated.
Assumes no policy loans or partial surrenders
have been made. Current cost of insurance
rates assumed. Current mortality and expense
risk charges, administrative fees and premium
load assumed.
These investment results are illustrative only
and should not be considered a representation
of past or future investment results. Actual
investment results may be more or less than
those shown and will depend on a number of
factors, including the Policy Owner's
allocations and the Funds' rates of return.
Accumulation Values and Surrender Values for a
Policy would be different from those shown if
the actual investment rates of return averaged
0%, 6% and 12% over a period of years, but
fluctuated above or below those averages for
individual Policy Years. No representations
can be made that these rates of return will in
fact be achieved for any one year or sustained
over a period of time.
The amounts shown in these illustrations
reflect (1) the deduction of mortality and
expense risk charges and (2) assumed Fund
total expenses of 0.82% per year.
56
<PAGE>
FEMALE AGE 65 NONSMOKER
PREFERRED -- $11,501 ANNUAL PREMIUM
FACE AMOUNT $500,000
DEATH BENEFIT OPTION 1
GUARANTEED BASIS
<TABLE>
<CAPTION>
PREMIUMS
ACCUMULATED
END OF AT DEATH BENEFIT TOTAL ACCUMULATION VALUE SURRENDER VALUE
POLICY 5% INTEREST ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF
YEAR PER YEAR GROSS 0% GROSS 6% GROSS 12% GROSS 0% GROSS 6% GROSS 12% GROSS 0% GROSS 6% GROSS 12%
------ ----------- -------- -------- --------- -------- -------- --------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 12,076 500,000 500,000 500,000 6,056 6,555 7,058 0 0 0
2 24,756 500,000 500,000 500,000 7,579 8,830 10,149 0 0 0
3 38,070 500,000 500,000 500,000 9,701 11,862 14,256 0 0 0
4 52,049 500,000 500,000 500,000 11,144 14,380 18,145 0 0 0
5 66,728 500,000 500,000 500,000 11,856 16,304 21,745 0 0 3,599
6 82,140 500,000 500,000 500,000 11,726 17,488 24,917 0 263 7,691
7 98,323 500,000 500,000 500,000 10,570 17,706 27,433 0 1,424 11,151
8 115,316 500,000 500,000 500,000 8,123 16,636 28,961 0 1,318 13,643
9 133,158 500,000 500,000 500,000 4,065 13,883 29,080 0 0 14,745
10 151,892 0 500,000 500,000 0 9,010 27,311 0 0 13,977
15 260,584 0 0 0 0 0 0 0 0 0
20 399,307 0 0 0 0 0 0 0 0 0
25 576,356 0 0 0 0 0 0 0 0 0
30 802,320 0 0 0 0 0 0 0 0 0
</TABLE>
Amounts are in Dollars
Where a zero value is shown, the Policy will
lapse unless sufficient additional premium is
paid.
If Premiums are paid more frequently than
annually, the Death Benefit Proceeds,
Accumulation Values and Surrender Values would
be less than those illustrated.
Assumes no policy loans or partial surrenders
have been made. Current cost of insurance
rates assumed. Current mortality and expense
risk charges, administrative fees and premium
load assumed.
These investment results are illustrative only
and should not be considered a representation
of past or future investment results. Actual
investment results may be more or less than
those shown and will depend on a number of
factors, including the Policy Owner's
allocations and the Funds' rates of return.
Accumulation Values and Surrender Values for a
Policy would be different from those shown if
the actual investment rates of return averaged
0%, 6% and 12% over a period of years, but
fluctuated above or below those averages for
individual Policy Years. No representations
can be made that these rates of return will in
fact be achieved for any one year or sustained
over a period of time.
The amounts shown in these illustrations
reflect (1) the deduction of mortality and
expense risk charges and (2) assumed Fund
total expenses of 0.82% per year.
57
<PAGE>
FEMALE AGE 65 NONSMOKER
PREFERRED -- $11,501 ANNUAL PREMIUM
FACE AMOUNT $500,000
DEATH BENEFIT OPTION 1
CURRENT BASIS
<TABLE>
<CAPTION>
PREMIUMS
ACCUMULATED
END OF AT DEATH BENEFIT TOTAL ACCUMULATION VALUE SURRENDER VALUE
POLICY 5% INTEREST ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF
YEAR PER YEAR GROSS 0% GROSS 6% GROSS 12% GROSS 0% GROSS 6% GROSS 12% GROSS 0% GROSS 6% GROSS 12%
------ ----------- -------- -------- ---------- -------- -------- ---------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 12,076 500,000 500,000 500,000 6,056 6,555 7,058 0 0 0
2 24,756 500,000 500,000 500,000 12,510 13,911 15,377 0 0 0
3 38,070 500,000 500,000 500,000 20,098 22,870 25,883 184 2,956 5,969
4 52,049 500,000 500,000 500,000 27,522 32,183 37,444 8,480 13,141 18,402
5 66,728 500,000 500,000 500,000 34,768 41,852 50,163 16,622 23,706 32,017
6 82,140 500,000 500,000 500,000 41,863 51,923 64,193 24,638 34,698 46,967
7 98,323 500,000 500,000 500,000 48,732 62,337 79,601 32,450 46,055 63,319
8 115,316 500,000 500,000 500,000 55,302 73,041 96,473 39,984 57,723 81,155
9 133,158 500,000 500,000 500,000 61,722 84,196 115,120 47,386 69,861 100,784
10 151,892 500,000 500,000 500,000 67,909 95,747 135,667 54,575 82,413 122,333
15 260,584 500,000 500,000 500,000 91,017 156,191 272,332 83,182 148,356 264,498
20 399,307 500,000 500,000 525,543 88,975 214,215 500,517 88,975 214,215 500,517
25 576,356 500,000 500,000 953,689 56,326 281,249 908,275 56,326 281,249 908,275
30 802,320 0 500,000 1,606,826 0 365,790 1,590,917 0 365,790 1,590,917
</TABLE>
Amounts are in Dollars
If Premiums are paid more frequently than
annually, the Death Benefit Proceeds,
Accumulation Values and Surrender Values would
be less than those illustrated.
Assumes no policy loans or partial surrenders
have been made. Current cost of insurance
rates assumed. Current mortality and expense
risk charges, administrative fees and premium
load assumed.
These investment results are illustrative only
and should not be considered a representation
of past or future investment results. Actual
investment results may be more or less than
those shown and will depend on a number of
factors, including the Policy Owner's
allocations and the Funds' rates of return.
Accumulation Values and Surrender Values for a
Policy would be different from those shown if
the actual investment rates of return averaged
0%, 6% and 12% over a period of years, but
fluctuated above or below those averages for
individual Policy Years. No representations
can be made that these rates of return will in
fact be achieved for any one year or sustained
over a period of time.
The amounts shown in these illustrations
reflect (1) the deduction of mortality and
expense risk charges and (2) assumed Fund
total expenses of 0.82% per year.
58
<PAGE>
LINCOLN LIFE & ANNUITY FLEXIBLE PREMIUM VARIABLE LIFE ACCOUNT M
(DECEMBER 31, 2000)
TO BE FILED BY AMENDMENT
M-1
<PAGE>
LINCOLN LIFE & ANNUITY COMPANY OF NEW YORK
BALANCE SHEETS -- STATUTORY BASIS
TO BE FILED BY AMENDMENT
See accompanying notes. S-1
<PAGE>
PART II
FEES AND CHARGES REPRESENTATION
Lincoln Life & Annuity Company of New York represents that the fees and
charges deducted under the Contracts, in the aggregate, are reasonable in
relation to the services rendered, the expenses expected to be incurred, and the
risks assumed by Lincoln Life & Annuity Company of New York.
UNDERTAKING
Subject to the terms and conditions of Section 15(d) of the Securities
Exchange Act of 1934, the undersigned registrant hereby undertakes to file with
the Securities and Exchange Commission such supplementary and periodic
information, documents, and reports as may be prescribed by any rule or
regulation of the Commission heretofore or hereafter duly adopted pursuant to
authority conferred in that section.
INDEMNIFICATION
(a) Brief description of indemnification provisions.
In general, Article VII of the By-Laws of Lincoln Life & Annuity
Company of New York (LLANY) provides that LLANY will indemnify
certain persons against expenses, judgments and certain other
specified costs incurred by any such person if he/she is made a party
or is threatened to be made a party to a suit or proceeding because
he/she was a director, officer, or employee of LLANY, as long as
he/she acted in good faith and in a manner he/she reasonably believed
to be in the best interests of, or not opposed to the best interests
of, LLANY. Certain additional conditions apply to indemnification in
criminal proceedings.
In particular, separate conditions govern indemnification of
directors, officers, and employees of LLANY in connection with suits
by, or in the right of, LLANY.
Please refer to Article VII of the By-Laws of LLANY (Exhibit No. 6(b)
hereto) for the full text of the indemnification provisions.
Indemnification is permitted by, and is subject to the requirements
of, New York law.
(b) Undertaking pursuant to Rule 484 of Regulation C under the
Securities Act of 1933.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the provisions
described in Item 28(a) above or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer,
or controlling person of the Registrant in the successful defense of
any such action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the
Act and will be governed by the final adjudication of such issue.
CONTENTS OF REGISTRATION STATEMENT
This registration statement comprises the following papers and documents:
The facing sheet;
The cross reference sheet;
1 Prospectus: (60 pages);
The fees and charges representation;
The undertaking to file reports;
Statements regarding indemnification;
The signatures
Consents of
Robert O. Sheppard, Esquire
Vaughn W. Robbins, FSA
<PAGE>
1. The following exhibits correspond to those required by paragraph A of
the instructions as to exhibits in Form N-8B-2:
(1) Resolution of the Board of Directors of Lincoln Life & Annuity
Company of New York and related documents authorizing establishment
of the Account. (2)
(2) Not applicable.
(3) (a) Revised and Amended Principal Underwriting Agreement between
Lincoln Financial Advisors Corporation and Lincoln Life &
Annuity Company of New York. (9)
(b) Selling Group Agreement. (9)
(c) Commission Schedule for Variable Life Policies. (10)
(4) Not applicable.
(5) (a) Forms of Policy and Application.
(1) Policy Form LN 680 NY.
(2) Application B 10399 NY. (10)
(b) Riders. LR 434 NY LNY and LR 435 NY LNY. (3)
(6) (a) Articles of Incorporation of Lincoln Life & Annuity Company of
New York. (1)
(b) Bylaws of Lincoln Life & Annuity Company of New York. (1)
(7) Not applicable.
(8) Fund Participation Agreements.
Agreements between Lincoln Life & Annuity Company of New York and:
(a) AIM Variable Insurance Funds, Inc. (4)
(b) American Variable Insurance Series*
(c) Baron Capital Funds Trust. (5)
(d) BT Insurance Funds Trust. (4)
(e) Delaware Group Premium Fund, Inc. (8)
(f) Fidelity Variable Insurance Products Fund. (4)
(g) Fidelity Variable Insurance Products Fund II. (4)
(h) Fidelity Variable Insurance Products Fund III (7)
(i) Janus Aspen Series. (5)
(j) Lincoln National Money Market Fund, Inc. (4)
(k) MFS-Registered Trademark- Variable Insurance Trust. (4)
(l) Neuberger & Berman Advisers Management Trust. (5)
(m) Templeton Variable Products Series Fund. (4)
(9) Not applicable.
(10) See Exhibit 1(5).
2. See Exhibit 1(5).
3. Opinion and Consent of Robert O. Sheppard, Esq.
4. Not applicable.
5. Not applicable.
6. Opinion and consent of Vaughn W. Robbins, FSA
7. Consent of Ernst & Young LLP, Independent Auditors.*
8. Not applicable.
------------------------
(1) Incorporated by reference to Registration Statement on Form N-4 (File
No. 333-38007) filed on October 16, 1997.
(2) Incorporated by reference to Registration Statement on Form N-8B-2 (File
No. 811-08651) filed on February 11, 1998.
(3) Incorporated by reference to Pre-Effective Amendment No. 1 to this
Registration Statement on Form S-6 (File No. 333-42507) filed on July 2,
1998.
(4) Incorporated by reference to Post-Effective Amendment No. 1 on Form S-6
(File No. 333-42507) filed on February 26, 1999.
(5) Incorporated by reference to Post-Effective Amendment No. 5 on Form N-4
(File No. 333-10863) filed on April 29, 1999.
<PAGE>
(6) Incorporated by reference to Post-Effective Amendment No. 4 on Form S-6
(File No. 333-42507) filed on May 13, 1999.
(7) Incorporated by reference to Post-Effective Amendment No. 5 (File No.
333-10863) filed on April 29, 1999.
(8) Incorporated by reference to Post-Effective Amendment No. 5 to this
Registration Statement on Form S-6 (File No. 333-42507) filed on April 25,
2000.
(9) Incorporated by reference to Pre-Effective Amendment No. 1 on Form N-4
(File 333-93875) filed on April 27, 2000.
(10) Incorporated by reference to Post-Effective Amendment No. 6 on Form S-6
(File No. 333-42507) filed on July 28, 2000.
* To be filed by amendment.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant, Lincoln Life & Annuity Flexible Premium Variable Life Account M, has
duly caused this initial Registration Statement on Form S-6 to be signed on its
behalf by the undersigned thereunto duly authorized, in the City of Syracuse and
State of New York on the 19th day of December, 2000.
Lincoln Life & Annuity Flexible
Premium
Variable Life Account M
(Registrant)
By: /s/ JOANNE B. COLLINS
-----------------------------------
Joanne B. Collins
PRESIDENT, TREASURER AND DIRECTOR
OF LINCOLN LIFE & ANNUITY COMPANY
OF NEW YORK
Lincoln Life & Annuity Company of New
York
(Depositor)
By: /s/ JOANNE B. COLLINS
-----------------------------------
Joanne B. Collins
PRESIDENT, TREASURER AND DIRECTOR
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, as amended, this
initial Registration Statement on Form S-6 has been signed below on
December 19, 2000, by the following persons, as officers and directors of the
Depositor, in the capacities indicated:
SIGNATURE TITLE
--------- -----
President, Treasurer and
/s/ JOANNE B. COLLINS Director
------------------------------------------- (Principal Executive
Joanne B. Collins Officer)
Second Vice President and
/s/ TROY D. PANNING* Chief Financial Officer
------------------------------------------- (Principal Financial
Troy D. Panning Officer and Principal
Accounting Officer)
/s/ JON A. BOSCIA*
------------------------------------------- Director
Jon A. Boscia
/s/ RICHARD C. VAUGHAN*
------------------------------------------- Director
Richard C. Vaughan
/s/ THOMAS D. BELL, JR.*
------------------------------------------- Director
Thomas D. Bell, Jr.
------------------------------------------- Director
Robert D. Bond
/s/ JOHN H. GOTTA*
------------------------------------------- Director
John H. Gotta
/s/ BARBARA STEURY KOWALCZYK*
------------------------------------------- Director
Barbara Steury Kowalczyk
/s/ MARGUERITE LEANNE LACHMAN*
------------------------------------------- Director
Marguerite Leanne Lachman
/s/ JOHN M. PIETRUSKI*
------------------------------------------- Director
John M. Pietruski
/s/ LAWRENCE T. ROWLAND*
------------------------------------------- Director
Lawrence T. Rowland
<PAGE>
/s/ J. PATRICK BARRETT*
------------------------------------------- Director
J. Patrick Barrett
/s/ LOUIS G. MARCOCCIA*
------------------------------------------- Director
Louis G. Marcoccia
------------------------------------------- Director
Lorry J. Stensrud
*By: /s/ JOANNE B. COLLINS
----------------------------------
Joanne B. Collins, pursuant to a
Power of Attorney filed with this
Registration Statement.
(A Majority of the Directors)
<PAGE>
POWER OF ATTORNEY
We, the undersigned directors and officers of Lincoln Life & Annuity Company
of New York, hereby severally constitute and appoint, Joanne B. Collins, Robert
O. Sheppard and Troy D. Panning, individually, our true and lawful
attorneys-in-fact, with full power to each of them to sign for us, in our names
and in the capacities indicated below, any and all Registration Statements on
Form S-6, Form N-8B-2 and/or Form N-6, or any successors to these Forms, and
amendments thereto, filed with the Securities and Exchange Commission under the
Securities Act of 1933, on behalf of the Company in its own name or in the name
of one of its Separate Accounts, hereby ratifying and confirming our signatures
as they may be signed by any of our attorneys-in-fact to any such Registration
Statement or amendment to said Registration Statement. The execution of this
document by each of the undersigned hereby revokes any and all Powers of
Attorney previously executed by said individual for this specific purpose.
WITNESS our hands and common seal on this 7th day of
February, 2000.
SIGNATURE TITLE
--------- -----
President, Treasurer and
/s/ JOANNE B.COLLINS Director
------------------------------------------- (Principal Executive
Joanne B.Collins Officer)
Second Vice President
and Chief Financial
/s/ TROY D. PANNING Officer
------------------------------------------- (Principal Financial
Troy D. Panning Officer
and Principal Accounting
Officer)
/s/ JON A. BOSCIA
------------------------------------------- Director
Jon A. Boscia
/s/ RICHARD C. VAUGHAN
------------------------------------------- Director
Richard C. Vaughan
/s/ THOMAS D. BELL, JR.
------------------------------------------- Director
Thomas D. Bell, Jr.
/s/ JOHN H. GOTTA
------------------------------------------- Director
John H. Gotta
/s/ BARBARA STEURY KOWALCZYK
------------------------------------------- Director
Barbara Steury Kowalczyk
/s/ MARGUERITE LEANNE LACHMAN
------------------------------------------- Director
Marguerite Leanne Lachman
<PAGE>
/s/ JOHN M. PIETRUSKI
------------------------------------------- Director
John M. Pietruski
/s/ J. PATRICK BARRETT
------------------------------------------- Director
J. Patrick Barrett
/s/ LOUIS G. MARCOCCIA
------------------------------------------- Director
Louis G. Marcoccia
<PAGE>
POWER OF ATTORNEY
We, the undersigned directors and officers of Lincoln Life & Annuity Company
of New York, hereby severally constitute and appoint, Joanne B. Collins, Robert
O. Sheppard and Troy D. Panning, individually, our true and lawful
attorneys-in-fact, with full power to each of them to sign for us, in our names
and in the capacities indicated below, any and all Registration Statements on
Form S-6, Form N-8B-2 and/or Form N-6, or any successors to these Forms, and
amendments thereto, filed with the Securities and Exchange Commission under the
Securities Act of 1933, on behalf of the Company in its own name or in the name
of one of its Separate Accounts, hereby ratifying and confirming our signatures
as they may be signed by any of our attorneys-in-fact to any such Registration
Statement or amendment to said Registration Statement. The execution of this
document by each of the undersigned hereby revokes any and all Powers of
Attorney previously executed by said individual for this specific purpose.
WITNESS our hands and common seal on this 4th day of
February, 2000.
SIGNATURE TITLE
--------- -----
/s/ LAWRENCE T. ROWLAND
------------------------ Director
Lawrence T. Rowland
Subscribed and sworn to before
STATE OF INDIANA ) me this
) SS: 4th day of February, 2000
COUNTY OF ALLEN )
/s/ JANET L. LINDENBERG
------------------------ Notary Public
Janet L. Lindenberg Commission Expires: 7-10-2001
