Structured Settlements Broker Manual

Transcription

1 Structured Settlements Broker Manual MISSION STATEMENT We strive to be a top-level product provider to the Structured Settlements marketplace. We will achieve that goal by having close relationships with brokers and offering innovative products with competitive premium rates and by providing quality service that always meets or exceeds our brokers expectations. W C 3/12

2 Table of Contents Section 1 Legal Disclaimer... 1 Document Review... 1 Section 2 Company Profile... 2 Structured Settlement Family of Companies... 2 Credit Ratings... 2 Section 3 Information & Contacts... 3 Section 4 General Product Specifications... 4 Section 5 Medical Underwriting Guidelines... 5 Section 6 Pricing Guidelines... 6 Benefit Types/Levels... 7 Section 7 Submission of Premiums... 8 Non-New York Cases... 8 Tax ID Numbers... 8 New York Cases... 9 Tax ID Numbers... 9 Section 8 Product Types Structured Settlements Nonqualified Settlements Attorney Fees Documentation Requirements Application Proof of Age Qualified Assignments Settlement Agreements Court Orders, Minors Compromise, etc Payments to a Trust Secured Creditor Insurance products are issued by Pacific Life Insurance Company in all states except New York and in New York by Pacific Life & Annuity Company.

3 Section 9 Commutation Rider Language Section 10 Sample Documents Section 11 Broker Commissions Section 12 Benefit Administration Section 13 Quote-in-a-Box (QIB) Software Running a Quote Uninstalling the QIB System Section 14 Forms... 31

4 Section 1 Legal Disclaimer Pacific Life cannot and does not provide tax or legal advice to brokers or their clients. Nothing contained in this manual should be construed as tax or legal advice. Brokers and their clients should consult with their own legal counsel for any and all such advice. Pacific Life refers to Pacific Life Insurance Company and its affiliates, including Pacific Life & Annuity Company. Insurance products are issued by Pacific Life Insurance Company in all states except New York and in New York by Pacific Life & Annuity Company. Product availability and features may vary by state. Each company is solely responsible for the financial obligations accruing under the products it issues. Insurance product and rider guarantees are backed by the financial strength and claims-paying ability of the issuing company. Document Review Our review process is strictly limited. It is intended to fulfill the company's own business and due diligence needs by, among other things, ensuring consistency and accuracy of the data provided in all documents. Pacific Life will request and perform a limited review of any documents it deems appropriate to satisfy our business requirements from a due diligence standpoint. Review for any and all other purposes, such as legal sufficiency or advisability, is solely the responsibility of the parties and their counsel. 1

5 Section 2 Company Profile Structured Settlement Family of Companies Annuity Issuer: Domiciled in: Assignment Company: Assignment State: Guarantor1: Domiciled in: Pacific Life Insurance Company Nebraska Pacific Life & Annuity Services, Inc. Colorado Pacific LifeCorp Delaware Credit Ratings Pacific Life Insurance Company s balance sheet and capital positions remain strong. For more information on ratings, please click the following link: Pacific Life Insurance Company's Ratings that will redirect you to our website. Pacific Life Insurance Company and Pacific Life & Annuity Company Ratings FINANCIAL STRENGTH A.M. Best Financial Size Category A+ Superior Class XV Second highest of 16 ratings; Ratings range: A++ to S (Superior to Suspended) Standard & Poor s A+ Strong Fitch A+ Strong Moody s A1 Good Ratings as of December 2011 Fifth highest of 21 ratings; Ratings range: AAA to R (Extremely Strong to Regulatory Action) Fifth highest of 21 ratings; Ratings range: AAA to C (Exceptionally Strong to Very Weak) Fifth highest of 21 ratings; Ratings range: Aaa to C (Exceptional to Lowest) 2

6 Section 3 Information & Contacts Main Number: (877) Hours: 8:00 a.m. 7:30 p.m. ET (5:00 a.m. 4:30 p.m. PT) Submit: Quotes, Lock-ins, & Sales Questions Fax Number: (877) Structures@PacificLife.com Submit: Documents & Pre-Issuance Questions Fax Number: (949) StructuresNB@PacificLife.com Submit: Medical Records & Rated Age Inquiries Fax Number: (877) Meds@PacificLife.com Changes and Inquiries after Policy Issuance Toll-free Number: (888) Fax Number: (402) Documents & Correspondence Mailing Address Pacific Life Structured Settlements RSD/4th Floor P.O. Box 9000 Newport Beach, CA Overnight Mailing Address Pacific Life Structured Settlements RSD/4th Floor 700 Newport Center Drive Newport Beach, CA Sales: Quotes & Lock-ins Prem Balani, FLMI, Sr. Internal Sales Associate, West Prem.Balani@PacificLife.com Claudia Schab, Sr. Internal Sales Associate, East Claudia.Schab@PacificLife.com Danielle Ruiz-Vela, CSSC, Lead Internal Sales Associate Danielle.Ruiz-Vela@PacificLife.com Abbey Hudson, CSSC, Internal Sales Associate Abbey.Hudson@PacificLife.com Marketing Ravi Vaswani, CSSC, Regional Vice President, West Cell Phone: (949) Ravi.Vaswani@PacificLife.com John Meaney, CSSC, Regional Vice President, East Cell Phone: (860) John.Meaney@PacificLife.com Licensing & Appointments Dean May, Business Development Coordinator Dean.May@PacificLife.com New Business: Document Submission, Pending Contracts, & Commissions Linda Davis, CSSC, Coordinator Tracy Westoby, CSSC, Coordinator Belinda Smith, Coordinator Virginia Acosta, Specialist Roderick Gatlin, Specialist Judy Lim, Specialist Jason Berlin, Specialist Ed Larios, Manager Direct Phone: (949) Ed.Larios@PacificLife.com 3

7 Section 4 General Product Specifications Locations Licensed Assignment Fee Product Basics Rated Cases All states. $250 for all assigned cases. All cases that qualify under IRC Section 104(a)(1) Workers Compensation (for claims filed after 8/5/1997) Section 104(a)(2) Personal Injury Substandard age ratings valid for 12 months. Maximum Age Rated or standard is 80. Deferral Period Benefit Cost Lump-Sum Payments COLAs Commutation Rider Nonqualified Settlement Attorney Fees 468B Trust Premium Guidelines Daily Rates Book-Rate Guarantee Small-Case Fee New York Cases Payees without an SSN Maximum of 20 years. Minimum premium cost of $100 per benefit stream. Lump-sum payments, guaranteed or life contingent, can be quoted from our software. Home-office approval must be obtained for payments greater than $1,000,000. No more than a 50-year deferral. Single lump-sum payments are not acceptable. Available up to 5.00%. Quote from the Quote-in-a-Box (QIB) software. Available to address estate tax issues (assigned and unassigned), elimination of liability (unassigned only) and remarriage (unassigned only). No additional cost. Available for settlement-based annuities. Assignment not available. May be quoted on software. Home-office approval is required prior to sale. Payments must begin within one year of funding and payment streams must be substantially equal. Assignment of attorney fees as part of the claimant s settlement and stand alone. For more information, please see Section 8. Contact home office. Not available for situations involving a single claimant. Minimum case size is $10,000. Brokers may quote up to $1,500,000. On cases greater than $1,500,000, contact our home office for approval. Offered on cases with premiums greater than $100,000. Please call or our home office for the best rate possible. Seven calendar days or the last day the rate is available before a rate change. Applied to cases between $10,000 $25,000. The fee is the lesser of $500 or the amount to bring the premium up to $25,000. New York Regulation 60 Disclosure Form required. Contracts not available for 50(A) and 50(B) Judgments. See New York Cases subsection for details. Life-contingent benefits are not available. Payments must be mailed to a U.S. address or deposited into a U.S. bank account, and cases must be under U.S. jurisdiction. 4

8 Section 5 Medical Underwriting Guidelines Medical Evaluations Turnaround Time Multiple Brokers Required Information Preferred Medical Records Response with No Rated Age Valid for 12 months. 24 hours Response will be issued to all brokers with valid rated age submission based on the most current information evaluated. Broker s name and location Claimant s full name, correctly spelled Claimant s date of birth Claimant s gender Most current, typed valid medical records completed by a medical professional, such as: Independent medical evaluations less than two years old Typed evaluations and follow-up visit reports from treating physicians Hospital admittance and discharge summaries Neurological evaluations, especially brain injuries Surgical and pathology reports for cancer cases Rehabilitative reports Age of medicals Greater than three years old for all medical conditions Medicals that are handwritten and/or difficult to read Medical Summary or Chronological Summary prepared by non-medical professionals Court/Deposition reports Rated Age Extension Reevaluation of a Medical File Updated Medical Records No Additional Medical Records Within three months of its expiration Upon receipt of current medicals Please do not request prior to this time frame. Pacific Life will reevaluate the case considering the new information and provide an updated age rating, if appropriate. Expires 12 months from new evaluation date. With no new information, a conservative evaluation of the existing records will be completed based on: Nature and severity of the impairment Age of the claimant Age of the medical information 5

9 Section 6 Pricing Guidelines Small-Case Fee Valid Rates Lock-In Daily Rates Rate Changes Assignment Fee This $500 fee is applied to small-premium cases. The smallcase fee is the lesser of $500 or the amount needed to bring the premium to $25,000. The minimum acceptable case size is $10,000. Pacific Life s quoting software will calculate the appropriate fee. Book rates are guaranteed for seven calendar days from quote date, unless notified of a rate change. If funding is provided within seven calendar days, submit the premium to the home office Lock-ins are available for a period of up to 12 months on settled cases. Upon announcement of new rate series, up to seven calendar days are allowed from the date of the notice to submit the premium under the expiring rates. If unable to fund in this time frame, please submit an executed lock-in form to secure the rates. Pacific Life does not charge lock-in fees for the first six months of the lock-in period. If funding is deferred more than six months, a lock-in fee of 10 basis points per month will be assessed. Funding must be received no more than 12 months from lock-in date. Execution of Lock-Ins: Complete the lock-in letter with the signature of the appointed broker of record and quote illustration. Pacific Life must receive the lock-in letter before or on the quote expiration date. Lock-in is valid upon written acceptance from Pacific Life. Daily rates are offered on cases with premiums greater than $100,000 (when available). Rates provided may be valid through the next business day or as indicated by the home office. Contact the home office for the best rate. Pacific Life will announce rate changes via and fax on the day of the change. The premium under the expiring rate must be submitted by the expiration date unless a completed lock-in form has been submitted and approved by the home office. In order for Pacific Life to provide prompt notification of rate changes, please inform us of any changes in fax numbers, addresses, addresses, and telephone numbers A $250 assignment fee will be charged on all assigned cases. If the case is not assigned, please choose the appropriate state of ownership and submit the state-specific application available in the quoting software. Appropriate premium tax will be applied to unassigned cases. 6

10 Benefit Types/Levels Single Life Joint Life Certain Only Lump Sums Installment Refund Cash Refund COLAs, Step, or Flat Dollar Maximum Age Deferred Benefits All benefit streams must begin within 20 years of funding. With or without Certain Period. Deferred period plus the guaranteed period cannot exceed 50 years. All benefit streams must begin within 20 years of funding. With or without Certain Period. Payments payable jointly to measuring lives. Survivorship benefits offered from 0% 300%. Available for attorney fee structures. Deferred period plus the guaranteed period cannot exceed 50 years. All benefit streams must begin within 20 years of funding. Deferred period plus the guaranteed period cannot exceed 50 years. Guaranteed and life contingent lump-sum payments available. Single lump-sum payments are not acceptable. Lump sums must start within 50 years of funding. Single-life cases without assignment. Single-life cases without assignment. Increases can be made annually or less frequently. Available up to 5.00%. First payment must begin by the earlier of natural age 80 or rated age 80. All benefit streams must begin within 20 years of funding. Deferred period plus the guaranteed period cannot exceed 50 years. 7

11 Section 7 Submission of Premiums Non-New York Cases The following items are required with submission of premium: Premium check Completed Premium Transmittal Sheet Quote illustration Application Assigned Cases Check payable to: Pacific Life & Annuity Services, Inc. Mail to: Express mail: KeyBank KeyBank c/o First Data Lockbox Pacific Life & Annuity Services, Inc. Pacific Life & Annuity Services, Inc. P.O. Box 1857 Attn: Lockbox 1857 Englewood, CO South Quebec St., Suite 160 Greenwood Village, CO Unassigned Cases Check payable to: Pacific Life Insurance Company Mail to: Pacific Life Insurance Company Attn: Kelly Gibbs/Treasury Dept./First Floor 700 Newport Center Drive Newport Beach, CA Wire Instructions: Contact home office Tax ID Numbers Pacific Life Insurance Company (PLIC) Pacific Life & Annuity Services, Inc. (PLASI) Pacific LifeCorp (PLC)

12 Submission of Premiums (cont.) New York Cases Pacific Life & Annuity Company will issue annuity policies if ANY of the following occurs inside the state of New York: solicitation, sales, court/legal action, claimant/payee residence, insurer/defendant residence. New York Case Decision Chart Location NY Case? Need Reg. 60 Form? Claimant NY Yes Yes Owner NY Yes Yes Insurer/Defendant NY Yes Yes Court/Legal Action NY Yes Yes The following items are required with submission of premium: Premium check Completed Premium Transmittal Sheet Quote illustration Application Assigned Cases Check payable to: Pacific Life & Annuity Services, Inc. Mail to: Express mail: KeyBank Pacific Life & Annuity Services, Inc. KeyBank c/o First Data Lockbox Pacific Life & Annuity Services, Inc. P.O. Box Attn: Lockbox 6095 Denver, CO South Quebec St., Suite 160 Greenwood Village, CO Unassigned Cases Check payable to: Pacific Life & Annuity Company Mail to: Pacific Life & Annuity Company Attn: Kelly Gibbs/Treasury Dept./First Floor 700 Newport Center Drive Newport Beach, CA Wire Instructions: Contact home office Tax ID Numbers Pacific Life & Annuity Company (PL&A) Pacific Life & Annuity Services, Inc. (PLASI) Pacific LifeCorp (PLC)

13 Section 8 Product Types 1 Structured Settlements All cases must qualify under IRC Section 104(a)(1) and 104(a)(2). The following products are available in all states: Workers Compensation - Section 104(a)(1) assigned claims after 8/5/97: unassigned all Personal Injury - Section 104(a)(2) assigned and unassigned 2 Nonqualified Settlements Pacific Life offers annuities for taxable payments resulting from a settlement. Contracts on a nonqualified basis are only available for: Discrimination settlements Divorce settlements Harassment cases Wrongful termination Punitive damages Cases where funds from a qualified case have already been paid to claimant or their attorneys (Constructive Receipt). Features Available to quote on software. Home-office approval required. Rated age not available Available to U.S. citizens only Available in most states Tax withholding and reporting provided COLAs up to 5.00% Payment must conform to 72(u) corporate owned or 72(q) individual owned: - Substantially equal, immediate payments (commencing within one year of purchase) - Payee must be a natural person (possible exception can be made for individual or family trusts) Ownership Owned by purchaser or payee Payee must be a natural person Assignment not available 10

14 Product Types (cont.) 3 Attorney Fees Pacific Life accepts attorney fees under the following circumstances: Available as assigned to Pacific Life Annuity Services, Inc. (PLASI). Available as unassigned (must be owned by defendant/insurer). Available as nonqualified (owned by the attorney). Tax reporting sent to owner. Owner is responsible for tax reporting to the attorney. Payments to the attorney must be for the convenience of the claimant. Attorney can be the Measuring Life. Payments can be life contingent (Joint Life acceptable). Available with plaintiff s annuity or as a stand-alone payment stream. Payments may be made to the firm. Attorney can change the beneficiary (if payments are being made to the attorney as an individual and not to a firm). Use the following guidelines when placing an attorney fee payment stream with Pacific Life: Acceptance Guidelines Use the current book rates (up to $1.5 million) or daily rates available for cases greater than $100,000 Use the same underwriting guidelines as plaintiff s annuity except for: o Not available for Secured Creditor o Not available for Commutation Rider o Not available for Rated Ages Attorney must sign a Pacific Life Hold Harmless Agreement. Attorney fee convenience language must be included in the Qualified Assignment and Release (QAR) and the Settlement Agreement and Release (SAR). If assigned, all parties must enter into a Qualified Assignment and Release.* If the claimant uses a Pledge Agreement, an additional QAR must be obtained. The attorney must submit a W-9 form. * Enter the plaintiff s name as Claimant on the QAR and NOT the attorney s name; this is true even if the plaintiff is not choosing to structure. 11

15 Documentation Requirements Required for Contract Issuance Application Hold Harmless Agreement Settlement Agreement and Release Qualified Assignment and Release or Uniform Qualified Assignment and Release (NSSTA version) Notes Can be printed from QIB software. Pacific Life-specific format. Including all required language. If assigned, all parties must sign. Other versions of the assignment document are not available for use on attorney fee cases. W-9 Pacific Life can provide blank copies, or the form is available on the IRS Web site. Required Language Below is the required language to be included in the Qualified Assignment and Release and the Settlement Agreement and Release for any settlement that will be including an attorney fee payment stream. The Plaintiff (Claimant) authorizes and instructs payment to be made to his/her attorney as provided herein. Such amount shall be paid from periodic payments that otherwise would be payable to the Plaintiff pursuant to this agreement. The Plaintiff acknowledges and agrees that these payment instructions are solely for the Plaintiff s convenience and do not provide the Plaintiff s attorney with any ownership interest in any portion of the annuity or the settlement other than the right to receive the fee payments from the Plaintiff in the future as more specifically set forth herein. Placement of Required Language The language can be added to the document through the software by checking the Atty Fee box on the Claimant tab. Below are other suggestions for placement of the required language in the Qualified Assignment and Release (QAR) and the Settlement Agreement and Release (SAR). Placement Payment Section (QAR & SAR) Attorney Fees Paragraph (SAR) Note: Either placement is acceptable to Pacific Life. Justification This placement will align the convenience language directly with the benefit stream as stated in the payment section. This placement will emphasize the explanation for the treatment of attorney fees and refer back to the benefits as stated in the payment section. 12

16 Documents required for the release of the first payment, policy, and commissions: Assigned Cases First Payment Policy Issue Commission Payment Sufficient premium X X X Software-generated quote X X X Completed application with all payee information. Social Security number is required for lifetime benefits. Settlement Agreement document Qualified Assignment document X X X X X Minor s Compromise/Court Order, if applicable Guardianship of Estate papers, if payments are being made to a minor or incompetent person Conservator documents, if payments are being made to an incompetent X X X X X X Trust documents, if applicable X X Order Approving Trust (if applicable) Acknowledgement and Hold Harmless for attorney fees, if applicable. Income tax withholding and substitute IRS form W-9 for attorney fees, if applicable. Regulation 60 form New York cases only Beneficiary designation X X X X X X X X Proof of age, for lifetime benefits X X Nature of physical injury X Commission Split Agreement, if applicable X 13

17 Documents required for the release of the first payment, policy, and commissions: Unassigned Cases First Payment Policy Issue Commission Payment Sufficient premium X X X Software-generated quote X X X Nature of physical injury Completed application, including all payee and owner information. X X X X Proof of age, for lifetime benefits X X Nonqualified Cases First Payment Policy Issue Commission Payment Sufficient premium X X X Software-generated quote approved by the home office Nature of settlement Completed application, including all payee and owner information. X X X X X X X Proof of age, for lifetime benefits X X 14

18 Application General Information Pacific Life quoting software includes all state-specific applications. Information included on the applications must agree with the settlement agreement, court orders, and the assignment documents (when applicable). Submitted applications require a signature from the general agent of the firm. The broker firm must be licensed and appointed by Pacific Life Insurance Company or Pacific Life & Annuity Company in the state of ownership. Measuring Lives Owner of Annuity Complete the appropriate information for the measuring life including residence address, Social Security number, and date of birth. Assigned: Pacific Life & Annuity Services, Inc. The software will automatically populate the appropriate information. Unassigned, including nonqualified: This section must include the owner s name, address, and tax ID number. Annuity Plan/ Schedule of Payments Refers to Addendum No. 1 that outlines the payee(s) name, payment address, and payment streams. Amount Paid with this Application Valuable Consideration (unless otherwise stated). Signed by Applicant/Owner Assigned: Leave blank. To be completed by Pacific Life & (sections at and on ) Annuity Services, Inc. Unassigned, including nonqualified: Where and when it was signed by the owner (state of ownership). Applicant/Owner s Signature Assigned: Leave blank. Signed by Pacific Life & Annuity Services, Inc. Unassigned, including nonqualified: Must be signed by the owner. Witness Signed by general agent of the broker firm 15

19 Proof of Age Requirements Proof of Age Requirements Evidence of date of birth is required for all life-contingent benefits. Acceptable proof of age documents: Birth certificate Passport Driver s license Naturalization records Certified translation of foreign documents is required. If none of the above-mentioned documents are available, please provide us with any two of the following: Marriage certificate School-age record Official adoption records Immigration Department records (Green Card) Military records Employment, trade union, fraternal society, church, or hospital records A vaccination record 16

20 Qualified Assignments The specific forms for Pacific Life & Annuity Services, Inc., are in the Quote-in-a Box (QIB) quoting software: Pacific Life Qualified Assignment Pacific Life Qualified Assignment & Release Pacific Life Qualified Assignment, Release & Pledge Agreement (QAR&P) Insert the following information to complete the forms: Claimant Assignor Assignee Annuity Issuer Annuity Policy Number Effective Date Settlement State Measuring life/claimant s legal name as it appears on the Application and Settlement Agreement. Legal name of defendant or insurer who is assigning its obligation to the assignee. Pacific Life & Annuity Services, Inc. Non-New York Cases Pacific Life Insurance Company New York Cases Only Pacific Life & Annuity Company Leave blank. Leave blank. Colorado is preferred. The appropriate parties must sign all signature lines and initial the addendum. Pacific Life & Annuity Services, Inc., will accept the NSSTA versions of the Uniform Qualified Assignment and Uniform Qualified Assignment and Release. No alterations to the NSSTA or Pacific Life versions of the Assignment documents are acceptable. QAR&P must be on Pacific Life & Annuity Services, Inc./Pacific Life approved form. NSSTA or any other versions of the QAR&P will not be accepted. 17

21 Settlement Agreements Please provide a full, final version of the settlement agreement that includes: A description of the physical injury/illness Payment streams and payees Payee s right to payments Assignment language Annuity purchase language Beneficiary language Assignee s discharge of obligation Signed by claimant, defendant/insurance carrier, and other applicable parties For cases where the estate is the claimant, and the settlement agreement is only signed by an executor/administrator: All payees or their legally appointed representatives shall acknowledge the receipt of benefits by signing the Qualified Assignment and Release form. Additionally, beneficiary designations must be established by the payee through the completion of a signed Beneficiary Change Request form or by court order. Court Orders, Minor s Compromise, etc. A court order is required in all cases involving a minor or incompetent adult. The order must show that the court approved all facets of the settlement. Please include any petition, addendum, or attachment referenced in the order. Court Order Motion, Petition, or Application to the Court Guardianship or Conservatorship Must be signed by the presiding judge and include the following: Payee(s) Periodic payments specific benefit type, date, and amount Insurer /Defendant s intention to transfer obligation to Pacific Life & Annuity Services, Inc., and each party s responsibility Assignee s purchase of annuity from Pacific Life Please submit if it contains details of the settlement. Guardianship of the Estate or Conservator of the Estate orders are required for all cases where payments are scheduled to be made on behalf of a minor (while a minor) or incompetent individual. It must designate the court-approved recipient of the payments and the person who has been granted responsibility to act in the best interests of the minor/incompetent. 18

22 Court Orders, Minor s Compromise, etc. (cont.) Guardianship or Conservator Documents Should contain the following: Complete name of guardian or conservator Name of the person the guardian/conservator is responsible for Period of guardianship, if applicable Stamp or signature of judge as well as the filing and execution dates Responsibilities of applicant Letters (if issued) Payments to a Trust Fully executed trust documents are required in all cases where payments are being made to a trust on behalf of the claimant. The trust must clearly state that it is: Irrevocable. Exclusively for the benefit of the claimant. An Order Approving the Trust is required in all cases where the claimant is a minor or an incompetent adult. The Order Approving the Trust must be signed by the presiding judge, and must approve the Trust by name and the appointment of the trustees. The Order Approving the Settlement will satisfy this requirement if it is clear that the terms of the trust were reviewed and approved. Beneficiary designations: If a beneficiary is not designated, the estate will be the beneficiary. All beneficiary designations made on behalf of minors or incompetent adults must be court approved. 19

23 Secured Creditor Pacific Life offers annuities on an assigned basis with Secured Creditor status using the QAR&P agreement at no extra charge. The following language may be used in the settlement agreement to reference the Secured Creditor status: If a qualified assignment as described above is made, [insert claimant s name] shall be a Secured Party of the Assignee, as defined in the Qualified Assignment, Release, and Pledge agreement executed between the Assignor and the Assignee to the effect of the assignment. The qualified funding asset or assets purchased by the Assignee to fund the obligation assumed under the Qualified Assignment shall serve as collateral for the promise of the Assignee to make such payments, as and to the extent provided in such agreement. Except for the obligation to provide such collateral, the obligation of the Assignee to make such payments shall be no greater than the obligation of the Assignor immediately preceding the assignment of the Periodic Payments Obligation. 20

24 Section 9 Commutation Rider Language The rider provides that, at the death of the measuring life and any joint measuring life, prior to the rider expiry date, a portion (called the commutation percentage ) of any remaining and unpaid Certain Payments will be commuted and paid in a lump sum to the beneficiary. The commuted value will be calculated as per contract rider. Commutation riders are available on assigned cases for estate tax or on an unassigned basis for elimination of liability and/or remarriage. Variations: Any portion of the remaining guaranteed benefits can be commuted from a minimum of 10%, up to 100%. If less than 100% is commuted, the remaining payments may not fall below $100. The rider can be set to expire at any time between the issue date and the last guaranteed payment date. After the rider expires, any remaining guaranteed benefits will NOT be commuted, but will be paid as scheduled. The rider applies to all guaranteed payments provided by the contract to which it is attached. It is not necessary to have commutation occur throughout the entire guaranteed period. Commutation of some payments but not others is not allowed in a single contract. This can be handled simply by splitting the benefits into separate contracts. The rider cannot be added after issue or changed later. The terms of the rider must be fixed as part of the settlement to insure that the payments are fixed and determinable. Language: The settlement agreement and qualified assignment documents accurately describe the provisions of the commutation rider. Please use the following model language when reviewing these documents. See page 23 for sample language and page 24 for a sample Pacific Life Benefits Commutation Rider. 21

25 Section 10 Sample Documents Sample Settlement Agreement Language for Commutation Rider The Insurer or its Assignee will pay the following future periodic payments to <<Claimant s Name>> $ per month guaranteed for months, beginning / / and payable for the life of <<Claimant s Name>>. Insurer or its Assignee may purchase an annuity from Pacific Life ( annuity issuer ) as a qualified funding vehicle to provide for such payments. If <<Claimant s Name>> dies on or before / /, Insurer or its Assignee will pay benefits to <<Claimant s Name>> s beneficiary as follows: Insurer or its Assignee will pay <<Claimant s Name>> s beneficiary a single lump sum. The single lump sum will be equal to 95% of the cost of an annuity contract, based on the annuity issuer s structured settlement rates in effect on the date of death, which would provide benefits equal to % of the remaining guaranteed payments. The other % of the guaranteed payments will not be commuted to a single lump sum, but will be paid as they come due. If such annuity rates are not available, the commuted value shall be the present value of the remaining guaranteed payments calculated using the following interest rate: the annual effective yield based on the current bid price as reported in the Wall Street Journal for the highest yielding U.S. Treasury Note or Bond with a maturity date not exceeding the Rider Expiry Date available at the close of business on the date of <<Claimant s Name>> s death plus one percent. If this date is not a business day, the rates reported on the next following business day will be used. If <<Claimant s Name>> dies after / /, Insurer or its Assignee will pay any remaining guaranteed payments to <<Claimant s Name>> s beneficiary as they come due. Qualified Assignment The following wording can be added on Addendum No. 1: Paragraph of the Settlement Agreement relating to the commutation of payments which may be made to the Claimant s Beneficiary are incorporated herein by reference. 22

26 Sample Documents (cont.) 23

27 Section 11 Broker Commissions For questions on commissions, please contact our home office. Commission Guidelines Requirements Payment of Commissions Mailing Commission Splits Upon receipt of the required documentation listed below, commissions will be paid. Sufficient premium Quote illustration from software Completed application Fully executed Commission Split Agreement (if applicable) Payments are due to be mailed weekly each Friday. Required documentation must be received five business days prior to the payment dates to be included in the commission payment cycle. Commissions over $50,000 will be sent via overnight mail. All others are sent via regular mail. Pacific Life requires a letter outlining the exact split arrangements signed by all brokers before any split commissions will be allocated and released. Please designate in the letter which office will take the lead for Communications Document submission Legal Disclaimer Pacific Life's sole responsibility with regard to split commissions is to pay the commissions as directed by the involved parties. All issues arising between the parties involved in the split commission arrangement must be resolved independent of Pacific Life involvement. 24

28 Section 12 Benefit Administration For questions arising after policy issue, please have the payee contact our Customer Service Department at (888) for the following inquiries: Address Changes Change of address requests must be in writing with the appropriate signature(s). If a check is returned, every effort will be made to locate a current address. If we are unable to obtain a new address, we will suspend payments until we are contacted with a valid address. Beneficiary Changes Death Notices If a beneficiary change is permitted in the settlements' supporting documentation, provide a signed letter from the person with authority to request the change upon approval. Confirmation of acceptance of the change will be sent to the appropriate party. Upon receipt of notification of the death of a payee, payments will be suspended. A certified copy of the death certificate and confirmation of the beneficiary(ies) address(es) will be requested. Once verified, the remaining guaranteed payments will be made to the designated beneficiary(ies). If a commutation rider was included in the original settlement, the commuted value will be calculated as outlined in the executed commutation rider, based on our then current annuity rates. Direct Deposit Benefits may be transmitted by direct deposit. Please encourage payee(s) to complete the Direct Deposit Agreement. Please contact your home-office analyst for the appropriate form. Bank changes must be submitted on a new Direct Deposit Agreement. Name Changes Name changes must be submitted in writing for the payee/claimant/measuring life. A copy of the legal documentation showing the change, i.e., marriage license, divorce decree, and a signature notarization of the new name is required. 25

29 Benefit Administration (cont.) Requesting Copies of Contracts/ Settlement Agreements A written and signed request must be submitted to us. Copies will only be sent if approved by the owner of the contract. Stop Payment Request must be in writing and with authorized signature from the payee. Correspondence received by mail is preferred; however, faxed requests will be accepted. A replacement check will be reissued in approximately seven business days. Income Verification/ Other Requests Written requests are required with an authorized signature from the payee. A response will be mailed to the payee. Some changes will require the owner s approval. Non-Resident Payments Payments must be sent to a U.S. address or bank in the U.S. Notarization on requests/changes may be required. 26

30 Section 13 Quote-in-a-Box (QIB) Software Running a Quote Pacific Life uses Quote-in-a-Box Structured Settlements quoting software provided by NaviSys, Inc. Below is a brief introduction on how to begin using the software and some features that are available to you. Step 1. Double-click the PL icon from your desktop. You will see a start-up dialog box that looks like the following: Step 2. Please note the following: Open Mode four choices: Quick Quote allows for quick quoting capabilities and is the default option. Full Proposal allows the use of full quoting and proposal capabilities. Quote Worksheet allows an alternative input for a more experienced user. Open an Existing Quote is only available if there are quotes that are already saved. Select Broker allows you to create your own default preferences. Choose your option, and then select OK to begin. 27

31 QIB Software (cont.) Step 3. Here is an example of Quick Quote mode. The following screen will appear: Notes: All the above information is preset based on the broker defaults. You can set up your own defaults in QIB by selecting File, then New Broker. To change existing defaults, select File, then Open Broker, and make the appropriate changes to quote defaults. To give Quick Quote a Quote ID, select Save, then enter a Quote Name, and select OK. Use the Tab key to move from field to field or use the mouse. Selecting Quit means you are finished inputting data. 28

32 QIB Software (cont.) Step 4. Select Preview ; this allows you to review the quote illustration. By selecting (left-click when the hand appears) any of the input fields, i.e., Benefit Type, Mode, or Amount, QIB will take you directly to the input screen to allow you to make any changes. Notes: Explore the menu and toolbars. You can also use Edit Full or Edit Quick to go back to the input screens. From the Quote Illustration, you can right-click to choose an action from the list as well, i.e., Edit Full, Edit Quick, Print. Click the Quote Illustration to enter a Quote ID. 29

33 Uninstalling the QIB System To remove the QIB system from your computer, follow these steps: 1. Back up or copy all your data files from your folder, C:\qibpc\Cases. 2. Uninstall QIB in: Windows XP Click the Start button Settings Control Panel. Double-click the Add/Remove Programs icon. On the Uninstall tab, find the item for Pacific Life and click to highlight. Click YES to all subsequent questions. When the statement Remove Programs From Your Computer appears, click OK. Close the Control Panel window. Click OK to close the Add/Remove program window. Vista or Windows 7 Click the Start button Control Panel. Click the Programs and Features icon. Select the item for Pacific Life. Click Uninstall and follow the instructions. 3. Deleting QIB version contents: Windows XP Go to: Start Programs Windows Explorer. Find and select the directory where the qibpc folder and its contents are stored (usually stored on the C: drive). A question will appear asking if you want to remove file; select Yes. Close the local disk window. Vista or Windows 7 Click the Start button. Type qibpc and right-click the qibpc file folder. Click Delete. This document is adapted from Getting Started Installation Instructions 1999 by NaviSys. All rights reserved (reproduction permission received from NaviSys). 30

34 Section 14 Forms Available in software: Premium Transmittal Form Annuity Application State-Specific Applications PL Qualified Assignment (PL QA) PL Qualified Assignment & Release (PL QA&R) Qualified Assignment & Release, and Pledge Agreement (QAR&P) Lock-in Form Attached (click each to access): Statement of Irrevocable Guarantee (Sample) Specimen Contract Assigned Specimen Contract Unassigned Blank Lock-In Form W-9 Form PLIC W-9 Form PL&A W-9 Form PLASI Regulation 60 Form Available at Click here Address/Name Change Request Beneficiary Change Request Direct Deposit Request Editable Qualified Assignment Documents Ratings Publications: A.M. Best Standard & Poor s Fitch Moody s Pacific Life refers to Pacific Life Insurance Company and its affiliates, including Pacific Life & Annuity Company. Insurance product and rider guarantees are backed by the financial strength and claims-paying ability of Pacific Life. W A Exp. 1/14 31

35 No. Statement of Irrevocable Guarantee Claimant: Date of Qualified Assignment: Pacific LifeCorp (PLC), a stock holding company domiciled in the State of Delaware, hereby states and represents as follows: Whereas, PLC has created Pacific Life & Annuity Services, Inc. (PLASI), a wholly-owned subsidiary domiciled in the State of Colorado, to act as assignee and third-party owner with respect to Qualified Assignments as provided in Section 130(c) of the Internal Revenue Code; Whereas, PLASI has entered into a Qualified Assignment in the above referenced case; and Whereas, PLC guarantees all of the obligations of PLASI, including the above referenced obligation. Now, therefore, PLC states that if PLASI shall fail to make any payment as assumed under said Qualified Assignment, then PLC, by virtue of said guarantee of all of the obligations of PLASI, shall make such payment as and when due. This statement is executed and signed this day of, Pacific LifeCorp Jane M. Guon Vice President and Secretary

36 Pacific Life Insurance Company 700 Newport Center Drive Newport Beach, CA INDIVIDUAL SINGLE PREMIUM SETTLEMENT ANNUITY CONTRACT Annuity Payments to be Made to Owner s Designee Pacific Life Insurance Company, a stock company, ( Pacific Life ) will pay annuity payments to the contract Owner, or such person(s) as the contract Owner may designate, subject to the provisions of this and the following pages which are made a part of this contract, according to the attached Contract Data page(s). READ YOUR CONTRACT CAREFULLY. This contract is a legal contract between the contract Owner and Pacific Life. Pacific Life is a stockholder owned company. As such, purchasing and owning a Pacific Life contract does not confer any membership rights nor ownership rights in Pacific Life or any other company affiliated with Pacific Life. Free Look Right At any time within 10 days after you receive this contract, you may return it to us or the broker through whom you bought it. We will refund any premium paid less any annuity payments made. This Contract is issued in consideration of the application and payment of premium. This contract is executed for Pacific Life at Newport Beach, California, to be effective as of the Contract Date. PACIFIC LIFE INSURANCE COMPANY Chairman and Chief Executive Officer Secretary Single Premium Settlement Annuity Immediate Annuity No Cash Value Non-Participating No Annual Dividends Annuity Payments Specified in Contract Data Annuities Payable in Fixed Dollar Amounts ICC11:

37 TABLE OF CONTENTS CONTRACT DATA... 1 GENERAL PROVISIONS ICC11:

38 CONTRACT DATA Contract Number: Contract Date: April 1, 2012 Owner: PACIFIC LIFE & ANNUITY SERVICES, INC. SCHEDULE OF BENEFITS Measuring Life: JOHN DOE Payee Name: JOHN DOE Contract/Certificate No.: Benefits paid: (Please see Application.) END NO BENEFITS, INCLUDING ANY DEATH BENEFITS, ARE PAYABLE EXCEPT ON THE DATES AND IN THE AMOUNTS SET FORTH ABOVE. SERVICE CENTER Send Forms and written requests to: Pacific Life Insurance Company P.O. Box Lincoln, NE Hours: Between 6:00 am and 5:00 pm, Pacific Standard Time. Toll-Free Number for Contract Owners: Please use our toll-free number to present inquiries or obtain information about your coverage and for us to provide assistance in resolving complaints or you may call your state insurance department at Page 1 ICC11:

39 GENERAL PROVISIONS Cash Values This Contract does not have cash or surrender values and cannot be surrendered in exchange for a lump sum. Owner of Contract - The Owner of this Contract will be entitled to the rights granted by this contract or allowed by Pacific Life under this Contract. If the owner is a partnership, the rights belong to the partnership as it exists when a right is exercised. If the owner is an individual, upon the death of the owner, the rights belong to the executor or administrator of the owner s estate unless otherwise provided in this contract. Change of Designation - The owner has the right at any time to designate to whom annuity payments will be made. A change of designation may only be made by filing a satisfactory written notice with Pacific Life. A change of designation will not be in effect until recorded at the administrative office of Pacific Life. The change of designation shall be effective on the date the notice of change is signed by the owner, unless otherwise specified by the owner. Any payment made before Pacific Life records a change of designation will not be changed. Change of Owner - A change in owner shall be effective on the date the notice of change is signed by the owner, unless otherwise specified by the owner, subject to any payments made or actions taken by Pacific Life prior to its receipt of the notice of change. However, assignment of this contract will not be binding on Pacific Life until it is recorded at its administrative office. Pacific Life assumes no responsibility for the sufficiency or validity of any assignment. However, when an assignment is filed with Pacific Life and recorded at the administrative office, the Owner s rights will be subject to it. Measuring Life The Measuring Life is a natural person on whose life the benefit payments are based. There may be more than one Measuring Life under the Contract. Beneficiary Any annuity payments to be made after the death of any Measuring Life shall be made to such party as shall have been designated as Beneficiary in the Application or, if the Application does not provide for such designation, then to the Beneficiary designated in conformity with this provision. If no Beneficiary is living at the time of the death of a Measuring Life, payment shall be made to the decedent s estate. No designation or change of designation of a Beneficiary shall be effective unless such change (i) is requested in a written request submitted to Pacific Life in accordance with Pacific Life s customary procedures for processing such requests; and (ii) is confirmed by Pacific Life. The change of designation of Beneficiary shall be effective on the date the notice of change is signed by the owner, unless otherwise specified by the owner, subject to any payments made or actions taken by Pacific Life. Except for a designation that has been expressly identified in the Application as irrevocable, any designation of a Beneficiary shall be deemed to be revocable; and no party that is designated as a Beneficiary (other than a party irrevocably designated as a Beneficiary in the Application) shall, solely by virtue of its designation as a Beneficiary, be deemed to have any cognizable interest in any annuity payments. Incontestability Pacific Life will not contest the validity of this Contract. Payment of Proceeds - If the Schedule of Benefits provides for the payment of benefits as long as a Measuring Life shall live, Pacific Life has the right before any payment is made to require due proof that the Measuring Life is living on the payment date, but may not require this proof more than once in any twelve-month period. For such benefits, no fractional payment will be made for the period from a payment date to the date of death of a Measuring Life. If the Schedule of Benefits provides for payment of any benefits by reason of the death of a Measuring Life, due proof of death of the Measuring Life must be submitted to the administrative office of Pacific Life before such payment is made. Misstatement of Age or Sex - If the age and/or sex of a Measuring Life has been incorrectly stated, any amount payable under this contract shall be such as the premium paid would have purchased at the correct age and/or sex according to the rate used by Pacific Life to originally purchase the benefits. Any underpayments or overpayments made by Pacific Life shall be added to or deducted from the payments to be made after the adjustment with interest at 3% per annum. Page 2 ICC11:

40 General Provisions - continued Non-Participating This Contract is classified as a non-participating contract. It does not participate in our profits or surplus, and therefore no dividends are payable. The Contract - This Contract is issued in consideration of the application and payment of the premium. This Contract and the application for it, a copy of which is attached to and made a part of this Contract, constitute the entire Contract. All statements made by or for the applicant will be considered representations and not warranties. No statement shall void this Contract or be used in defense of a claim unless it is contained in the written application and a copy of the application is attached to this Contract when issued. Who is Authorized to Make Changes in this Contract - No agent has authority to change this contract or to waive any of its provisions. No change, modification, or addition to this contract shall be valid unless evidenced by written endorsement hereon or written amendment hereto signed by the president and secretary of Pacific Life. Conformity with Interstate Insurance Product Regulation Commission Standards This contract was approved under the authority of the Interstate Insurance Product Regulation Commission and issued under the Interstate Insurance Product Regulation Commission standards. If there is any Contract provision that is in conflict with any Interstate Insurance Product Regulation Commission standards applicable to this Contract when this Contract was issued, the provision is amended to conform to that standard. Any such amendment is effective on the Contract Date. Page 3 ICC11: