Updated New York Regulation 60 Replacement Forms

DATE: TO:

SUBJECT:

July 1, 2015 Life Insurance Producers, Management and Office Administrators Updated New York Regulation 60 Replacement Forms

Category Administration Compliance Marketing Product Risk Selection Miscellaneous

Pacific Life & Annuity's New York Regulation 60 Replacement forms have been updated to reflect the new versions of the several forms required by the New York Department of Financial Services. The updated forms are as follows:

? Disclosure Statement (85-21776-08 is being replaced by 85-21776-09) ? Important Notice Regarding Replacement (85-21775-07 is being replaced by 85-

21775-08)

Beginning July 21, 2015, Pacific Life & Annuity Company will no longer accept the older versions of the above forms. The new versions of these forms may be used immediately.

Please note that our Regulation 60 Replacement procedures are otherwise unchanged. For complete procedures, please refer to the New York Regulation 60 Replacement Procedures (8521956). Please be sure you are using the updated New York Regulation 60 Replacement forms and that you discard any kits with outdated materials.

If you have questions about the New York Regulation 60 replacement procedures, please contact your PL&A representative.

Attachments:

? Disclosure Statement (85-21776-09) ? Important Notice Regarding Replacement (85-21775-08) ? New York Regulation 60 Replacement Procedures (85-21956)

For Life Insurance Producer Use Only. Not For Use With the Public.

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Pacific Life Insurance Company is licensed to issue insurance products in all states except New York. Product availability and features vary by state. Individual life insurance and annuity products are available in New York through Pacific Life & Annuity Company. Each insurance company is solely responsible for the financial obligations accruing under the products it issues. Insurance products and their guarantees, including optional benefits and any crediting rates, are backed by the financial strength and claims-paying ability of the issuing insurance company. Look to the strength of the life insurance company with regard to such guarantees as these guarantees are not backed by the broker-dealer, insurance agency or their affiliates from which products are purchased. Neither these entities nor their representatives make any representation or assurance regarding the claims-paying ability of the life insurance company.

BT-44077-00

PACIFIC LIFE & ANNUITY COMPANY

Life Insurance Division P.O. Box 2030 ? Omaha, NE 68103-2030 (888) 595-6997 ? Fax (866) 964-4860

NEW YORK REGULATION 60 REPLACEMENT PROCEDURES

INTRODUCTION

The Department of Financial Services of the State of New York Insurance Regulation 60, entitled Replacement of Life Insurance Policies and Annuity Contracts, impacts not only replacements but also each new life insurance or annuity application/ticket taken in the state of New York.

If you have any questions or comments regarding your compliance with these procedures, or if you wish to obtain any of the forms discussed below, please contact your Pacific Life & Annuity (PL&A) Representative or Regulation 60 Coordinator.

Note: Please remember that PL&A must approve all sales material prior to its first use. This is an important step in complying with Regulation 60 as well as New York sales material review requirements. For more information on PL&A's sales material review procedures, refer to the Compliance Reference Guide ? Form 15-21003. PL&A's general statement on replacements may also be found in the Compliance Reference Guide.

PRIOR TO TAKING THE APPLICATION/TICKET

DETERMINING IF A REPLACEMENT IS INVOLVED

To determine if a life insurance policy or annuity contract is to be replaced, prior to taking the

application/ticket the producer must review the Definition of Replacement ? Form 85-21774, with the proposed applicant (the "applicant"). The form must be signed by the applicant(s) and producer for every application/ticket taken in the state of New York. The producer must provide the applicant with a signed copy of the Definition of Replacement ? Form 85-21774 at the initial meeting immediately after it is signed by both the producer and the applicant.

DEFINITION OF REPLACEMENT ? FORM 85-21774

As part of your purchase of a new life insurance policy, this form asks the applicant(s) if existing coverage has been, or is likely to be:

1. Lapsed, surrendered, partially surrendered, forfeited, assigned to the insurer replacing the life insurance policy or annuity contract, or otherwise terminated

2. Changed or modified into paid-up insurance; continued as extended term insurance or under another form of nonforfeiture benefit; or otherwise reduced in value by the use of nonforfeiture benefits, dividend accumulations, dividend cash values, or other cash values

3. Changed or modified so as to effect a reduction either in the amount of the existing life insurance or annuity benefit or in the period of time the existing life insurance or annuity benefits will continue in force

4. Reissued with a reduction in amount such that any cash values are released, including all transactions wherein an amount of dividend accumulations or paid-up additions is to be released on one or more of the existing policies

5. Assigned as collateral for a loan or made subject to borrowing or withdrawal of any portion of the loan value, including all transactions wherein any amount of dividend accumulations or paid-up additions is to be borrowed or withdrawn on one or more existing policies

6. Continued with a stoppage of premium payments or reduction in the amount of premium paid

NY-Reg. 60

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85-21956-08 02/2015

DETERMINING IF A REPLACEMENT IS INVOLVED, CONTINUED

IF

THEN

Each of the six questions on the Definition of Replacement ? Form 85-21774, is answered "No"

No replacement is involved and an application/ticket may be taken at that time. The application/ticket may then be submitted, along with the signed Definition of Replacement ? Form 85-21774, and the additional submission requirements.

Any question on the Definition of Replacement ? Form 8521774, is answered "Yes"

A replacement is involved and an application/ticket may not be taken at

that time. The New York Regulation 60 Authorization to Release Information ? Form 85-21957, is required. (See the following Preparing the Disclosure Statement section.)

Note: Every application/ticket for life insurance taken in New York and submitted to PL&A's Life Insurance Division must be accompanied by the Definition of Replacement ? Form 85-21774, signed by the applicant(s) and producer, even when no replacement is involved.

PREPARING THE DISCLOSURE STATEMENT

OBTAINING THE INFORMATION

PRODUCER OBTAINS INFORMATION

The producer has either of the following options to obtain the information for preparing the Disclosure Statement ? Form 85-21776: ? Request the information directly from the proposed replaced insurer

? Utilize the service provided by PL&A to obtain the information

The following describes each party's responsibility when the producer obtains the information to complete the Disclosure Statement ? Form 85-21776.

The producer is responsible to submit the following to the proposed replaced insurer:

? The New York Regulation 60 Authorization to Release Information For Disclosure Statement ? Form 85-21957 signed by the applicant allowing the producer to obtain the information necessary to complete the Disclosure Statement ? Form 85-21776

? A list of policies proposed to be replaced

Note: For tracking purposes, we suggest use of express mail to the proposed replaced insurer, Attn: Reg. 60.

The proposed replaced insurer is responsible to provide the information requested to complete the Disclosure Statement ? Form 85-21776, within 20 days of receiving the request.

Note: PL&A is required to report to the Department of Financial Services of the State of New York any incident of the proposed replaced insurer failing to provide the information within 20 days. For tracking purposes, the producer should submit to the Life Insurance Division a copy of the New York Regulation 60 Authorization to Release Information For Disclosure Statement ? Form 85-21957, indicating the following:

? Date the form was sent to the proposed replaced insurer

? Date the producer received the information to complete the Disclosure Statement ? Form 85-21776 from the proposed replaced insurer

IF

THEN

Within 20 Days

The producer will complete the Disclosure Statement ? Form 8521776.

Not Within 20 Days

The producer will complete the Disclosure Statement ? Form 8521776, by using good faith approximations from the policy information received from the applicant, i.e., in-force illustration(s) and recent Annual Statements.

NY-Reg. 60

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85-21956-08 02/2015

PREPARING THE DISCLOSURE STATEMENT (CONTINUED)

PL&A OBTAINS INFORMATION

The following describes each party's responsibility when PL&A obtains the information to complete the Disclosure Statement ? Form 85-21776.

The producer is responsible to submit the following to the Regulation 60 coordinator at the Life Insurance Division:

? The New York Regulation 60 Authorization to Release Information For Disclosure Statement ? Form 85-21957, signed by the applicant, authorizing PL&A to obtain the information necessary to complete the Disclosure Statement ? Form 85-21776

? Information regarding the policy(ies) to be replaced, including any other supporting information, i.e., in-force illustration(s) and recent Annual Statements

The proposed replaced insurer is responsible to provide the information requested to complete the Disclosure Statement ? Form 85-21776, within 20 days of receiving the request.

Note: The replacing insurer is required to report to the Department of Financial Services of the state of New York if the proposed replaced insurer fails to provide the information within 20 days.

IF

THEN

Within 20 Days

PL&A will complete the sections on the policies to be replaced in the Disclosure Statement ? Form 85-21776.

Not Within 20 Days

PL&A will complete the sections on the policies to be replaced in the Disclosure Statement ? Form 85-21776, by using good faith approximations from the policy information received from the

applicant, i.e., in-force illustration(s) and recent Annual Statements.

PL&A will send the partially completed Disclosure Statement ? Form 85-21776, to the producer.

The producer will complete the blank portions of the Disclosure Statement ? Form 85-21776, including but not limited to the following:

SECTION 1

DESCRIPTION OF TRANSACTION (PAGE 2) ? Proposed Policy/Contract information ? Existing Coverage To Be Changed By information

SECTION 2

SUMMARY RESULTS COMPARISON (PAGE 3) ? Proposed With Existing Coverage Changed

SECTION 3

PRODUCER'S STATEMENT (PAGE 3)

NY-Reg. 60

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85-21956-08 02/2015

PROCEDURES ON TAKING THE APPLICATION/TICKET

TAKING THE APPLICATION/TICKET

(Producer's Responsibility)

The producer must review the completed Disclosure Statement ? Form 85-21776, with the applicant. If the applicant concludes that the proposed replacement is in his/her best interest, the application/ticket can be taken.

STEP

ACTION REQUIRED

1

The producer must have the applicant acknowledge and sign that he/she has

received and read the following forms:

? IMPORTANT Notice Regarding Replacement or Change of Life Insurance Policies or Annuity Contracts ? Form 85-21775

? Completed Disclosure Statement ? Form 85-21776

? Definition of Replacement ? Form 85-21774

Note: A copy of each of these forms must be left with the applicant for his/her records.

2

The producer completes the Application/Ticket with the applicant.

3

The producer must submit the following to the Life Insurance Division:

? Signed Definition of Replacement ? Form 85-21774

? Signed Authorization to Release Information ? Form 85-21957

? Completed and signed Disclosure Statement ? Form 85-21776, with sections 1, 2, and 3 completed by the producer as noted previously

? Copy of the signed IMPORTANT Notice Regarding Replacement or Change of Life Insurance Policies or Annuity Contracts ? Form 85-21775

? Completed and signed Application/Ticket

? Additional submission requirements

? Copy of any sales illustration

? Non-PL&A-generated sales material used in the sale of the proposed life insurance policy

? New York Regulation 60 Sales Material Checklist ? Form 85-21958

Note: If the replacement is also intended to qualify as tax-free under Internal Revenue Code Section 1035, you must also follow PL&A's tax-free

exchange procedures.

NY-Reg. 60

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85-21956-08 02/2015

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