Equitable Novation Overview

Depending on the block of inforce contracts (as detailed below), Equitable Financial will be replaced by:

• Equitable Financial Life Insurance Company of America (“Equitable America” or EFLOA): our insurance legal entity domiciled in Arizona and wholly-owned by Equitable Holdings, the parent company of Equitable Financial ; or
• Equitable Financial Life and Annuity Company (“Equitable Colorado” or EFLA): our insurance legal entity domiciled in Colorado and wholly-owned by Equitable Holdings; or
• Venerable Insurance and Annuity Company (“VIAC”): an insurance legal entity domiciled in Iowa and wholly-owned by Venerable Holdings, the company with which we engaged in our $12bn reinsurance transaction in 2021. VIAC specializes in variable annuity inforce management and administration, and in addition to its own annuity block of business, it currently administers policies issued by other insurance entities. Equitable Holdings has a 9.1% equity stake in the parent company of Venerable Holdings and a seat on its Board of Directors.

Equitable America

The following products issued on or before September 30, 2022 (except as noted below), out of Equitable Financial (excluding New York issued and resident contracts, Virgin Islands resident contracts, externally reinsured contracts, contracts with non-US mailing addresses, annuitized contracts, and some additional exceptions):

Annuities

• Retirement Cornerstone^® (RC): All Series (excluding RC 15 Series E)
• Structured Capital Strategies^®(SCS): All Series
• Investment Edge^®: All Series (excluding the original product series launched in November 2013)
• EQUI-VEST^®: All Series/Markets (issued on or before January 31, 2023)
  • Excludes EQUI-VEST Vantage and EQUI-VEST Strategies Group plans 

Equitable Colorado

Accumulator^®: Series 02, 04, 06, 07, 7.5, 8.1, 8.2 and 09 variable annuity contracts

• Excluding Series 06, 07, and 8.1 contracts that are reinsured by Venerable.
• Excluding New York, Virgin Islands and Puerto Rico issued and resident contracts, contracts with Fixed Maturity Options (FMOs), contracts with non-US mailing addresses, externally reinsured contracts, annuitized contracts, and some additional minor exceptions.

VIAC

Accumulator^®: Series 06, 07, and 8.1 contracts reinsured by Venerable

• Excluding Alaska and Puerto Rico issued contracts, New York issued and resident contracts, contracts with FMOs, and contracts with non-US mailing addresses.
• Contracts that are annuitized beginning June 1, 2021, and later are included in the novation. Contracts annuitized prior to this date are not included in the novation.

Based on the jurisdiction and the replacement insurance entity, there will be three different client consent requirements. Only one of the options below will apply to a contract:

• Opt-in (Affirmative) Consent: clients in certain states will receive an offer letter and need to return the enclosed response form, accepting the offer. If the client does not respond, the contract will not be transferred and will remain with Equitable Financial.
• Opt-out (Negative) Consent: in other states, the client will receive an offer letter indicating that the contract will be transferred by default, unless the client returns the enclosed response form rejecting the offer. If the client does not respond, the contract will be transferred.
• Automatic (No) Consent: for contracts being transferred to Equitable America in certain jurisdictions, the client will receive a notification letter indicating that the contract will be transferred. There is no action the client can take. 

The state consent chart provides you with greater details on the applicable consent requirement for each jurisdiction based on the replacement insurance entity.

For offers requiring either Opt-in consent or Opt-out consent, at least 2 notices may be sent to the client with the response deadline ranging from 3 months to up to 30 months, depending on the state requirements, which are detailed in the chart referenced above.

An owner with multiple Equitable Financial products will be mailed a package for each contract. 

Our planned implementation is outlined below. Please note that the dates represent current estimates, are subject to change, and are contingent on receipt of required regulatory approvals:

• No. All features and benefits applicable to the respective contracts will continue to operate as stated per the terms of the contracts.

• Equitable America & Equitable Colorado: There will be no changes to the contract forms as of the novation date and contract numbers will remain unchanged. When a contract is novated, the contract owner will receive a “Certificate of Assumption” that will append their annuity contract. Contracts will not be re-issued.
• VIAC: When contracts are novated to VIAC, VIAC will issue a Certificate of Assumption with a new contract number and VIAC will be the insurer without any changes to the features and benefits as of the novation date.

• An Exchange Offer Prospectus Supplement and either an Initial Summary Prospectus (ISP) or Statutory Prospectus (as applicable) will accompany the novation offer. 
  • The exchange offer prospectus supplement for Equitable Colorado references Accumulator 11, 13 and 13A. Please note that these product series are not included in the novation offer.
• After a contract is novated to Equitable America or Equitable Colorado, contract owners will begin to receive inforce prospectuses that are co-branded to reflect all issuing companies.
• After a contract is novated to VIAC, contract owners will begin to receive inforce prospectuses from VIAC.

• Yes; The transaction has been approved by the New York State Department of Financial Services and the insurance departments of Arizona, Colorado, and Iowa (the domiciliary states of Equitable America, Equitable Colorado and VIAC, respectively).
• Nationwide filings for the respective novations to VIAC, Equitable America and Equitable Colorado are currently in progress with a substantial number of approvals received to date. 
• The transaction has been filed with the Securities and Exchange Commission (SEC) for the variable annuity products.

• If your client novates to VIAC, you’ll need to register with VIAC to access client information, using the new VIAC contract numbers, which can be found on the Equitable Client Portal. For more information, see question 15 and the Welcome to Venerable Website guide.
• If your client novates to Equitable America or Equitable Colorado, the contract number and access to the client information remains unchanged.

• No, a temporary redirecting message will be shown that the client’s contract has been transferred and that the contract information can be found on VIAC’s online portal. Clients who novate to Venerable will receive a welcome kit including details on how to access their information. 
• The Equitable Client Portal will display the new VIAC-issued Contract Number, which is required to access contract information on VIAC’s online portal. Please ensure that the “dash” within the new VIAC contract number is included when entering the contract number on the Venerable portal. If the dash is omitted, users will encounter error messages. 

• Equitable America and Equitable Colorado:
  • Contracts transferred to Equitable America and Equitable Colorado will continue to be serviced and administered by Equitable Service Centers as they are today.
• VIAC:
  • Contracts transferred to VIAC will be serviced and administered by the Venerable Customer Experience Center at www.venerable.com or by calling 800-366-0066.¹ Prior to a contract being transferred, the Venerable Customer Experience Center will not be able to assist with contracts.
  • The VIAC portal will continue to offer dynamic solutions to users, including pre-populated forms and a variety of self-service options for financial and non-financial transactions.
  • If you have contracts that will transfer to VIAC, your broker dealer may be required to either update your current selling and service agreements with VIAC or enter into a new agreement if you do not currently have one.
  • For annuitized contracts that novate to VIAC, FPs may be required to complete paperwork with VIAC to be re-associated with the contract.

• Equitable America: All FPs who have sold at least one variable annuity since January 1, 2019, are already appointed with Equitable America and nothing further is required after a contract serviced by the FP is novated to Equitable America. For FPs servicing novated contracts who do not fall into the above category, appointments will be on an “as needed” basis.
• Equitable Colorado & VIAC: All contracts novating to Equitable Colorado or VIAC no longer accept additional contributions in most jurisdictions and do not require an appointment for the FP servicing such contracts. For FPs in jurisdictions where contributions are permitted into the contract, appointments will be on an “as needed” basis.

• Current commission payments remain unchanged for the corresponding products regardless of whether contracts are novated to VIAC, Equitable America or Equitable Colorado.
• Note that for contracts novated to VIAC, the payor will change from Equitable Distributors to Directed Services LLC. If you service contracts in this block, your broker dealer may be required to either update your current selling and service agreements with VIAC or enter into a new agreement if you do not currently have one. Note also that the frequency of payment may change to align with the frequency that VIAC currently pays commissions.

• There will be no impact to recurring distributions that are being taken out of contracts.
• For contracts transferred to Equitable America and Equitable Colorado, distributions will be made according to the existing cadence and paid in the manner as requested by the client.
• For contracts transferred to VIAC:
  • Distributions will continue to be made according to the existing cadence and paid in the manner as originally requested by the client. However, the payor of the distributed amount will now be VIAC instead of Equitable Financial.
  • Venerable and Equitable differ in their methods for calculating payments under the preserve benefit base withdrawal program. Venerable’s calculation is based on the exact number of days in each month, while Equitable uses a standard average of 30 days per month. Annually, Venerable's approach tends to yield a higher withdrawal amount due to the greater number of 31-day months compared to 30-day months. Specifically, Venerable's method results in increased payments for seven months, equivalent 30-day payments to Equitable's for four months, and a slightly reduced payment in only one month. Both methods provide clients with a steady income stream while preserving the benefit base, relieving clients and advisors from managing benefit base preservation. It's important to note that this withdrawal program is a service offered by both companies and is not contractual. The payment calculation is also not contractual, and clients have the option to discontinue the program at any time if it does not align with their specific needs.

• Equitable America & Equitable Colorado: Contracts novated to Equitable America or Equitable Colorado may receive 2 of each of the required tax forms: one from Equitable Financial for any distributions taken while the contract was insured by Equitable Financial, and one from either Equitable America or Equitable Colorado (as applicable) for any distributions taken after the contract was transferred.
• VIAC: Contracts novated to VIAC may receive 2 of each of the required tax forms: one from Equitable Financial for any distributions taken while the contract was insured by Equitable Financial, and one from VIAC for any distributions taken after the contract was transferred. Tax forms for contracts transferred to VIAC will be available on Venerable’s web portal. They will also be available on the Equitable Client Portal for 3 years after the transfer date.

• The novation transaction is not a taxable event and a 1099 will not be sent to the client when the insurer/event of the contract is changed.

• Equitable America & Equitable Colorado: Contracts transferred to Equitable America or Equitable Colorado will continue to be accessible in an FPs book of business dashboard/detailed contract reports via www.equitable.com. There will be no change in the contract details shown in the “book of business”.
• VIAC: Details of contracts transferred to VIAC will no longer be accessible in an FPs book of business dashboard/detailed contract reports via www.equitable.com. Instead, for 1 year after the novation, there will be a notice in the FP’s book of business indicating that the contract has been novated to VIAC. 

• At the time of novation, all FPs whose clients have contracts novating to VIAC will receive communication from VIAC either via email or physical mail (if VIAC has no email address on file).
• FPs with an existing book of business under VIAC will continue to have web portal access and transferred contracts will be accessible through that portal.
• FPs that are new to VIAC will be provided detailed instructions for gaining VIAC's web portal access to manage novated accounts at the time of novation. More information on registration can be found in the Welcome to Venerable Website guide.
• The VIAC portal will continue to offer dynamic solutions to users, including pre-populated forms and a variety of self-service options for financial and non-financial transactions.

• Client packages will be delivered electronically on the Equitable Client Portal for contracts that are eligible for transfer to Equitable America in states/jurisdictions where the transfer does not require consent (automatic consent) and the owner is enrolled in e-delivery. The client will receive an email notification to view the documents on the portal.
• In all other instances, the notice will be delivered via the US postal service. However, note that the packages for all contracts become viewable on the Equitable Client Portal after they are mailed to clients.

• Not in good order (NIGO) letter: A client could receive a NIGO letter for any of these reasons:
  • Neither of the two boxes (accept or reject) was checked on the consent form
  • Both boxes (accept and reject) were checked on the consent form
  • The consent form is not signed
  • For IR contracts where they reside at the same address, only one owner’s signature is received on a joint owner form.
  • The response is not legible or is missing any legally required detail.
• Correspondence for contracts that are no longer eligible for transfer: A client could receive a letter removing a contract from eligibility. For more information, see question 26.

  • To find out the specific reason why a contract is no longer eligible, the client can call our customer service center at (855) 433-4015 for novation to Equitable America and Equitable Colorado or (855) 433-4025 for novation to VIAC.

• Contract Transfer Effective Date Correspondence: A client will receive a letter with the date the contract transfer will occur if the client accepted the contract transfer after receiving the first client mailing package. In such cases, the second client package will not be sent.­
  • Note that the effective date of the transfer is included in the second client package so any client who responds to opt-in after receiving the second package will not be sent the additional effective date notification.
• Contract Transfer Effective Date Change: A client will receive this letter if a previously communicated transfer effective date is changed. If the client has already responded to the offer, the response has been recorded, and no further action is required if the client wishes to keep the initial response. However, if the previous response was not in good order or the client wishes to submit a different response, or has not yet responded, the letter will include instructions on how to proceed.
• Post Due Date Response Rejected: A client will receive this letter if the client’s response to the novation offer is received after the due date and we are unable to accept the response.

• Some of Equitable Financial's contracts are not receiving the transfer offer right now. There are different factors that exclude some contracts from the offer, such as (but not limited to) the state/jurisdiction of an owner's residence. We regularly check the contracts that are marked for transfer and will take out any contract that is no longer eligible if they become ineligible due to recent contract actions. Here are some additional reasons a contract could become ineligible:
  • Report of death / death claim processing
  • Surrendered/Inactive
  • Annuitized
  • Ownership Change
• If a contract is no longer eligible for transfer, the client does not have to take any action. The contract will stay with Equitable Financial and will not be transferred.
  • The client can call our customer service center for specific reasons why the contract is no longer eligible. Customer Service may be reached at (855) 433-4015 for novation to Equitable America and Equitable Colorado or (855) 433-4025 for novation to VIAC.

• Prior to novation, all contracts that are in-scope for novation will display the novation status on the client portal with a link to the letter sent to the client.
• Equitable America and Equitable Colorado: After novation, contracts novated to Equitable America or Equitable Colorado will continue to display on the client portal with no changes. All tools that are currently accessible to the client will remain unchanged.
• VIAC: After novation, contracts novated to VIAC will no longer be displayed on the client portal. Instead, for 1 year after the novation, there will be a notice to clients indicating that the contract has been novated to VIAC with a link to VIAC’s website.

• Due to the regulatory nature of this transaction, clients must complete the provided response forms included in their package and return it back to Equitable in the colored business reply envelope (postage paid). 
• The service centers will not be able to accept instructions from you or your clients regarding the transfer.

If a client contacts you that they never received a package, and their address on file is correct (i.e., not a bad address) below are actions to assist. Note: Due to the complexity of the transfer offer package, replacement packages cannot be sent.

• Direct the client to log into their account through equitable.com and navigate to My Documents. The transfer offer package and all related content provided to the client will be available to view, download and print.
• Copies of all client transfer packages are available through the Advisor Portal. You can download and forward package content individually to your clients if they are unable to access equitable.com.
• Have the client contact the appropriate service center and the service center will assist the client in obtaining their documents electronically.

• Upon submission of the client’s completed response in good order, please allow up to 28 days for it to be updated in both the client portal and in your online book of business platform, taking into consideration both mail delivery and processing periods.
• If we receive the client’s response but find it is not in good order, Equitable will send the client a letter asking for an updated submission.