Lincoln National Corporation
Encyclopedia
Lincoln National Corporation is a Fortune 200 American holding company
, which operates multiple insurance
and investment management businesses through subsidiary companies. Lincoln Financial Group is the marketing name for LNC and its subsidiary companies.
LNC was organized under the laws of the state of Indiana
in 1968, and maintains its principal executive offices in Radnor, Pennsylvania
. The company traces its roots to its earliest predecessor founded in 1905.
In addition, LNC is the naming rights
sponsor of Lincoln Financial Field
in Philadelphia, home field of the Philadelphia Eagles
of the National Football League
.
At December 31, 2009, LNC had consolidated assets of $141 billion and consolidated shareholders’ equity of $11.7 billion.
, as the Lincoln National Life Insurance Company. Perry Randall, a Fort Wayne attorney and entrepreneur, suggested the name "Lincoln," arguing that the name of Abraham Lincoln
would powerfully convey a spirit of integrity. In August, 1905 Robert Todd Lincoln
provided a photograph of his father, along with a letter authorizing the use of his father's likeness and name for company stationery and advertising.
In 1928, LNC president Arthur Hall hired Dr. Louis A. Warren, a Lincoln scholar, and in 1929, LNC acquired one of the largest collections of books about Abraham Lincoln in the United States. The Lincoln Museum in Fort Wayne was the second largest Lincoln museum in the country. The Abraham Lincoln Presidential Library and Museum in Springfield, Illinois
is now the world's largest museum dedicated to the life and times of Abraham Lincoln, after the closing of the Fort Wayne Lincoln Museum June 30, 2008.
Ian Rolland started with Lincoln in 1956, and became president of Lincoln National Life in 1977. When he retired in 1998, new president Jon A. Boscia moved LNC to Philadelphia and started using the Lincoln Financial Group name for marketing. Lincoln National Life, the largest subsidiary, and the Lincoln Museum remained in Fort Wayne.
company; it was sold to Swiss Re
in 2001. K&K Insurance Specialties was the first to insure events like NASCAR
races; it was sold to AON
in 1993. Safeco
bought American States, a property/casualty insurance business because Lincoln was primarily in life/health. However, LNC even sold a block of disability income business to MetLife in 1999, as it narrowed its focus.
Lincoln moved its headquarters from Indiana to Philadelphia in 1999. In Philadelphia Lincoln was headquartered in the West Tower of Centre Square
in Center City
.
Lincoln Financial Group purchased the Administrative Management Group, Inc. based in Arlington Heights, Illinois in August 2002. Previously, AMG was a strategic partner of LFG for four years, providing recordkeeping services for the Lincoln Alliance product, a turnkey solution for "employer retirement and employee benefit programs, including investment choices, recordkeeping, plan design, compliance and employee retirement counseling and education."
In 2007 the company moved 400 employees, including its top executives, to Radnor Township from Philadelphia.
company based in Greensboro, North Carolina
founded in 1968 from the merger of Jefferson Standard Insurance (founded 1907) and Pilot Life Insurance (founded 1903). The two companies' association actually dated to 1945, when Jefferson Standard bought majority control of Pilot Life.
Lincoln Financial also acquired Jefferson-Pilot's television and radio operations, which were renamed Lincoln Financial Media. The group owns 18 radio stations in Miami, Florida
, San Diego, California
, Denver, Colorado
, and Atlanta, Georgia
. It also owned WBTV
, the CBS
affiliate in Charlotte; WCSC-TV
, the CBS affiliate in Charleston, South Carolina
and WWBT
, the NBC
affiliate in Richmond, Virginia
. In June 2007, the company publicly announced it would explore a sale of this division, and hired Merrill Lynch to assess its strategic options. It was announced on November 12 that Raycom Media
purchased the three TV stations http://www.broadcastingcable.com/article/CA6500245.html, including its sports production division, which was the co-holder to football and basketball games in the Atlantic Coast Conference
with Raycom and sole rightsholders to the Southeastern Conference
until 2009, when ESPNPlus and CBS Sports
acquired the rights. The Raycom Sports brand was merged with LFS as of January 1, 2008.
Though billed as a merger of equals, the merged company carries the LNC name, operates from the LNC offices, with current LNC stockholders holding 61% of the stock, and current LNC directors controlling the new board. The insurance division is based in Greensboro, North Carolina.
In January 2009, Lincoln sold its Delaware Investments
subsidiary to Macquarie Group
. Delaware Investments was integrated into Macquarie's global asset management arm, Macquarie Funds Group effective January 5, 2010.
New York Kramer Decision
After three years of contentious litigation in the federal and New York courts in a case receiving national attention, Lincoln finally agreed in April, 2011 to dismiss its lawsuit that sought to avoid paying a $10 million death benefit on a life insurance policy insuring the life of New York attorney Arthur Kramer, one of the founding partners of the New York City law firm Kramer Levin Naftalis & Frankel. See Kramer v. Phoenix Life Insurance Company, 2010 N.Y. Slip Opinion 8376, 2010 N.Y. LEXIS 3281 (Ct. App., Nov. 17, 2010). Although Mr. Kramer's death in 2008 occurred over two years after the policy's issuance in 2005, Lincoln unsuccessfully sought to overturn longstanding precedent in New York that requires insurance companies doing business in New York to pay death benefits once a policy has been in force for two years even if an insurable interest violation may have occurred at the time of policy inception. See New England Mutual v. Caruso, 73 N.Y. 2d 74 (1989). The New York Court of Appeals in Kramer also rejected Lincoln's primary argument that an insurance policy that is voluntarily obtained by an insured for the purpose of re-selling the policy to investors and without a good faith intent of benefiting a person with an insurable interest somehow violated Section 3205(b)(1) of the New York State insurable interest statute and therefore was void. If Lincoln had been successful in these arguments, it would have been able to deny the payment of death benefits under hundreds of insurance policies Lincoln willingly issued to insureds who were looking to avail themselves of the life settlement market. After finding that there was "overwhelming textual and historical evidence that the New York Legislature intended to allow the immediate assignment of a policy by an insured to one lacking an insurable interest", the Kramer Court concluded that "it is not our role.....to engraft an intent or good faith requirement onto a statute that so manifestly permits an insured to immediately and freely assign such a policy." The Kramer decision was hailed throughout the country as a victory for the life settlement industry and as a blow to insurance companies seeking to avoid their obligations under life insurance policies.
California Teren Decision
Lincoln’s national campaign to rescind hundreds of life insurance policies it willingly issued during 2004-2008 to seniors looking to take advantage of the life settlement market suffered another disappointing setback on May 17, 2011 when the California Court of Appeals reversed a lower court’s decision that had been issued in favor of Lincoln. The lower court had ruled in 2009 that $20 million of life insurance on the life of Jack Teren was issued in violation of California insurable interest law thereby permitting Lincoln to void the policies without having to return $1.6 million of premiums that an investor group had paid. Lincoln Life and Annuity Company v. Jonathan S. Berck (unpublished opinion). In an analysis that was similar to the New York Kramer decision discussed above, the appellate court held that the California insurable interest law in effect when the policy was issued permitted an insured to apply for life insurance with the intent of transferring the policy to a person with no insurable interest in the insured. The appellate court decision also cites extensively and with approval from another recent federal court case that Lincoln lost involving insurable interest and its ability to rescind policies. See Lincoln National v. Gordon Fishman, 638 F. Supp. 1170, (C.D. Cal. 2009). The Fishman court concluded that “[U]nfortunately for Lincoln, the law as it presently exists allows this kind of insurance arrangement to be valid". The decision is a financial blow for Lincoln since it had hoped to confiscate $1.6 million of premium payments that an investor group had paid on two $10 million insurance policies on Jack Teren that Lincoln had claimed was void at the outset. Lincoln was represented in the unsuccessful litigation in the Fishman, Teren and Kramer cases by Stephen Baker and Charles Vinicombe of the Philadelphia law firm, Drinker, Biddle and Reath.
New York Janis Decision
Stephen Baker and Charles Vinicombe also represented Lincoln in Drinker Biddle's unsuccessful attempt to validate Lincoln's practice in New York of suing for rescission of a life insurance policy and seeking to confiscate all premiums paid while at the same time continuing to bill and collect additional premiums during the course of the litigation for the insurance coverage it was disavowing. In entering a summary judgment motion against Lincoln, the New York Supreme Court held that the policyowner has made a prima facie case that Lincoln has waived its right to rescind the policy through its demand for and acceptance of premiums after it filed for rescission. The Court concluded that Lincoln's attempt to simultaneously accept premiums and assert its right to rescission are unenforceable. Messrs. Baker and Vinicombe rightly elected not to appeal this decision to New York's Appellate Division. See Lincoln Life and Annuity Co. of New York v. Jonathan Berck, as Trustee of the Rosamond Janis Insurance Trust, No. 17362/08 (N.Y. Sup. Ct., Westchester Cty. 2009).
In September 2006, Lincoln filed a patent infringement
lawsuit against Transamerica Life Insurance Company
for allegedly infringing its insurance patent
. A similar lawsuit was filed against Jackson National Life
in October 2007.
On Feb. 19, 2009, a jury found the Lincoln patent valid and infringed by Transamerica et al. Damages were assessed at the "reasonable royalty rate" and Transamerica et al. were ordered to pay Lincoln $13 million, or 0.11% of the over $12 billion in assets they had under management by virtue of infringing the patent.
and its National Speech and Debate Tournament
.
Holding company
A holding company is a company or firm that owns other companies' outstanding stock. It usually refers to a company which does not produce goods or services itself; rather, its purpose is to own shares of other companies. Holding companies allow the reduction of risk for the owners and can allow...
, which operates multiple insurance
Insurance
In law and economics, insurance is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for payment. An insurer is a company selling the...
and investment management businesses through subsidiary companies. Lincoln Financial Group is the marketing name for LNC and its subsidiary companies.
LNC was organized under the laws of the state of Indiana
Indiana
Indiana is a US state, admitted to the United States as the 19th on December 11, 1816. It is located in the Midwestern United States and Great Lakes Region. With 6,483,802 residents, the state is ranked 15th in population and 16th in population density. Indiana is ranked 38th in land area and is...
in 1968, and maintains its principal executive offices in Radnor, Pennsylvania
Radnor, Pennsylvania
Radnor is a wealthy Main Line township. It is an unincorporated community in Radnor Township of Delaware County and Tredyffrin Township of Chester County in the U.S. state of Pennsylvania. It lies near the communities of Villanova and St...
. The company traces its roots to its earliest predecessor founded in 1905.
In addition, LNC is the naming rights
Naming rights
In the private sector, naming rights are a financial transaction whereby a corporation or other entity purchases the right to name a facility, typically for a defined period of time. For properties like a multi-purpose arena, performing arts venue or an athletic field, the term ranges from three...
sponsor of Lincoln Financial Field
Lincoln Financial Field
Lincoln Financial Field is the home stadium of the National Football League's Philadelphia Eagles. It has a seating capacity of 68,532 . It is located in South Philadelphia on Pattison Avenue between 11th and 10th streets, also aside I-95 as part of the South Philadelphia Sports Complex...
in Philadelphia, home field of the Philadelphia Eagles
Philadelphia Eagles
The Philadelphia Eagles are a professional American football team based in Philadelphia, Pennsylvania. They are members of the East Division of the National Football Conference in the National Football League...
of the National Football League
National Football League
The National Football League is the highest level of professional American football in the United States, and is considered the top professional American football league in the world. It was formed by eleven teams in 1920 as the American Professional Football Association, with the league changing...
.
Operations
LNC divides operations into four business segments: 1) Lincoln Retirement, 2) Life Insurance, 3) Investment Management, 4) Lincoln Financial Media. The principal Lincoln subsidiaries are- Lincoln Financial Advisors and Sagemark Consulting
- Lincoln Financial Distributors
- Lincoln National Life Insurance Company
- Lincoln Life & Annuity Company of New York
- First Penn-Pacific Life Insurance Company
- Lincoln Financial MediaLincoln Financial MediaLincoln Financial Media is a subsidiary of Lincoln National Corporation that owns radio stations in the United States.-History:In April 2006, Lincoln Financial acquired Jefferson-Pilot's television and radio operations, which were renamed Lincoln Financial Media. The group owns 14 radio stations in...
At December 31, 2009, LNC had consolidated assets of $141 billion and consolidated shareholders’ equity of $11.7 billion.
Founding and early history
Lincoln traces its origin to June 12, 1905, in Fort Wayne, IndianaFort Wayne, Indiana
Fort Wayne is a city in the US state of Indiana and the county seat of Allen County. The population was 253,691 at the 2010 Census making it the 74th largest city in the United States and the second largest in Indiana...
, as the Lincoln National Life Insurance Company. Perry Randall, a Fort Wayne attorney and entrepreneur, suggested the name "Lincoln," arguing that the name of Abraham Lincoln
Abraham Lincoln
Abraham Lincoln was the 16th President of the United States, serving from March 1861 until his assassination in April 1865. He successfully led his country through a great constitutional, military and moral crisis – the American Civil War – preserving the Union, while ending slavery, and...
would powerfully convey a spirit of integrity. In August, 1905 Robert Todd Lincoln
Robert Todd Lincoln
Robert Todd Lincoln was an American lawyer and Secretary of War, and the first son of President Abraham Lincoln and Mary Todd Lincoln...
provided a photograph of his father, along with a letter authorizing the use of his father's likeness and name for company stationery and advertising.
In 1928, LNC president Arthur Hall hired Dr. Louis A. Warren, a Lincoln scholar, and in 1929, LNC acquired one of the largest collections of books about Abraham Lincoln in the United States. The Lincoln Museum in Fort Wayne was the second largest Lincoln museum in the country. The Abraham Lincoln Presidential Library and Museum in Springfield, Illinois
Springfield, Illinois
Springfield is the third and current capital of the US state of Illinois and the county seat of Sangamon County with a population of 117,400 , making it the sixth most populated city in the state and the second most populated Illinois city outside of the Chicago Metropolitan Area...
is now the world's largest museum dedicated to the life and times of Abraham Lincoln, after the closing of the Fort Wayne Lincoln Museum June 30, 2008.
Ian Rolland started with Lincoln in 1956, and became president of Lincoln National Life in 1977. When he retired in 1998, new president Jon A. Boscia moved LNC to Philadelphia and started using the Lincoln Financial Group name for marketing. Lincoln National Life, the largest subsidiary, and the Lincoln Museum remained in Fort Wayne.
1990-2007
Many of the jewels of Lincoln National Corporation have been shed in recent years. Lincoln Reinsurance was the first US reinsuranceReinsurance
Reinsurance is insurance that is purchased by an insurance company from another insurance company as a means of risk management...
company; it was sold to Swiss Re
Swiss Re
Swiss Reinsurance Company Ltd , generally known as Swiss Re, is a Swiss reinsurance company. It is the world’s second-largest reinsurer, after having acquired GE Insurance Solutions. The company has its headquarters in Zurich...
in 2001. K&K Insurance Specialties was the first to insure events like NASCAR
NASCAR
The National Association for Stock Car Auto Racing is a family-owned and -operated business venture that sanctions and governs multiple auto racing sports events. It was founded by Bill France Sr. in 1947–48. As of 2009, the CEO for the company is Brian France, grandson of the late Bill France Sr...
races; it was sold to AON
Aon Corp.
Aon Corporation is an American public multinational corporation headquartered in Chicago, Illinois, USA that provides risk management services, insurance and reinsurance brokerage, human capital and management consulting, and specialty insurance underwriting...
in 1993. Safeco
Safeco
Safeco Insurance, a member of Liberty Mutual Group, is a national U.S. insurance company. It holds naming rights to the Seattle Mariners' baseball stadium, Safeco Field.- History :...
bought American States, a property/casualty insurance business because Lincoln was primarily in life/health. However, LNC even sold a block of disability income business to MetLife in 1999, as it narrowed its focus.
Lincoln moved its headquarters from Indiana to Philadelphia in 1999. In Philadelphia Lincoln was headquartered in the West Tower of Centre Square
Centre Square
Centre Square is an office complex located in Center City, Philadelphia, Pennsylvania, United States. The complex consists of two high-rise towers: the Centre Square I and the Centre Square II. The concrete towers are the twenty-fourth and fifteenth tallest buildings in Philadelphia,...
in Center City
Center City, Philadelphia
Center City, or Downtown Philadelphia includes the central business district and central neighborhoods of the City of Philadelphia, Pennsylvania, United States. As of 2005, its population of over 88,000 made it the third most populous downtown in the United States, after New York City's and Chicago's...
.
Lincoln Financial Group purchased the Administrative Management Group, Inc. based in Arlington Heights, Illinois in August 2002. Previously, AMG was a strategic partner of LFG for four years, providing recordkeeping services for the Lincoln Alliance product, a turnkey solution for "employer retirement and employee benefit programs, including investment choices, recordkeeping, plan design, compliance and employee retirement counseling and education."
In 2007 the company moved 400 employees, including its top executives, to Radnor Township from Philadelphia.
Jefferson-Pilot acquisition
Following the acquisition of Jefferson-Pilot Corporation in March 2006, Lincoln Financial acquired group life, disability, and dental insurance divisions. Jefferson-Pilot Corporation was a Fortune 500Fortune 500
The Fortune 500 is an annual list compiled and published by Fortune magazine that ranks the top 500 U.S. closely held and public corporations as ranked by their gross revenue after adjustments made by Fortune to exclude the impact of excise taxes companies collect. The list includes publicly and...
company based in Greensboro, North Carolina
Greensboro, North Carolina
Greensboro is a city in the U.S. state of North Carolina. It is the third-largest city by population in North Carolina and the largest city in Guilford County and the surrounding Piedmont Triad metropolitan region. According to the 2010 U.S...
founded in 1968 from the merger of Jefferson Standard Insurance (founded 1907) and Pilot Life Insurance (founded 1903). The two companies' association actually dated to 1945, when Jefferson Standard bought majority control of Pilot Life.
Lincoln Financial also acquired Jefferson-Pilot's television and radio operations, which were renamed Lincoln Financial Media. The group owns 18 radio stations in Miami, Florida
Miami, Florida
Miami is a city located on the Atlantic coast in southeastern Florida and the county seat of Miami-Dade County, the most populous county in Florida and the eighth-most populous county in the United States with a population of 2,500,625...
, San Diego, California
San Diego, California
San Diego is the eighth-largest city in the United States and second-largest city in California. The city is located on the coast of the Pacific Ocean in Southern California, immediately adjacent to the Mexican border. The birthplace of California, San Diego is known for its mild year-round...
, Denver, Colorado
Denver, Colorado
The City and County of Denver is the capital and the most populous city of the U.S. state of Colorado. Denver is a consolidated city-county, located in the South Platte River Valley on the western edge of the High Plains just east of the Front Range of the Rocky Mountains...
, and Atlanta, Georgia
Atlanta, Georgia
Atlanta is the capital and most populous city in the U.S. state of Georgia. According to the 2010 census, Atlanta's population is 420,003. Atlanta is the cultural and economic center of the Atlanta metropolitan area, which is home to 5,268,860 people and is the ninth largest metropolitan area in...
. It also owned WBTV
WBTV
WBTV, channel 3 , is the CBS affiliate in Charlotte, North Carolina. It is one of two flagship stations of Raycom Media. WBTV's studios are located off Morehead Street just west of Uptown Charlotte, and its transmitter is located in north-central Gaston County, North Carolina...
, the CBS
CBS
CBS Broadcasting Inc. is a major US commercial broadcasting television network, which started as a radio network. The name is derived from the initials of the network's former name, Columbia Broadcasting System. The network is sometimes referred to as the "Eye Network" in reference to the shape of...
affiliate in Charlotte; WCSC-TV
WCSC-TV
WCSC-TV is the CBS-affiliated television station for South Carolina's Lowcountry area licensed to Charleston. Its broadcasts a high definition digital signal on UHF channel 47 from a transmitter in Awendaw. The station can also be seen on Time Warner channel 5 as well as Comcast and Knology...
, the CBS affiliate in Charleston, South Carolina
Charleston, South Carolina
Charleston is the second largest city in the U.S. state of South Carolina. It was made the county seat of Charleston County in 1901 when Charleston County was founded. The city's original name was Charles Towne in 1670, and it moved to its present location from a location on the west bank of the...
and WWBT
WWBT
WWBT is the NBC-affiliated television station for Richmond, Virginia. It broadcasts a high definition digital signal on VHF channel 12 from a transmitter at its studios on Midlothian Turnpike in the city. Owned by Raycom Media, the station operates CW affiliate WUPV through a shared services...
, the NBC
NBC
The National Broadcasting Company is an American commercial broadcasting television network and former radio network headquartered in the GE Building in New York City's Rockefeller Center with additional major offices near Los Angeles and in Chicago...
affiliate in Richmond, Virginia
Richmond, Virginia
Richmond is the capital of the Commonwealth of Virginia, in the United States. It is an independent city and not part of any county. Richmond is the center of the Richmond Metropolitan Statistical Area and the Greater Richmond area...
. In June 2007, the company publicly announced it would explore a sale of this division, and hired Merrill Lynch to assess its strategic options. It was announced on November 12 that Raycom Media
Raycom Media
- History :Although Raycom Media dates its birth to 1996, the core of the company was formed in 1992 when Atlanta native Bert Ellis formed Ellis Communications. He eventually controlled 13 television stations and two radio stations....
purchased the three TV stations http://www.broadcastingcable.com/article/CA6500245.html, including its sports production division, which was the co-holder to football and basketball games in the Atlantic Coast Conference
Atlantic Coast Conference
The Atlantic Coast Conference is a collegiate athletic league in the United States. Founded in 1953 in Greensboro, North Carolina, the ACC sanctions competition in twenty-five sports in Division I of the National Collegiate Athletic Association for its twelve member universities...
with Raycom and sole rightsholders to the Southeastern Conference
Southeastern Conference
The Southeastern Conference is an American college athletic conference that operates in the southeastern part of the United States. It is headquartered in Birmingham, Alabama...
until 2009, when ESPNPlus and CBS Sports
CBS Sports
CBS Sports is a division of CBS Broadcasting which airs sporting events on the American television network. Its headquarters are in the CBS Building on West 52nd Street in midtown Manhattan, New York City, with programs produced out of Studio 43 at the CBS Broadcast Center on West 57th Street.CBS...
acquired the rights. The Raycom Sports brand was merged with LFS as of January 1, 2008.
Though billed as a merger of equals, the merged company carries the LNC name, operates from the LNC offices, with current LNC stockholders holding 61% of the stock, and current LNC directors controlling the new board. The insurance division is based in Greensboro, North Carolina.
Recent activity
Lincoln purchased Newton County Loan and Savings in order to restructure as a bank holding company and qualify for Troubled Asset Relief Program (TARP) funding.In January 2009, Lincoln sold its Delaware Investments
Delaware Investments
Delaware Investments is a US-based asset management firm with more than $155 billion in assets under management as of June 30, 2011.-Key Historical Years:* 1929: Business commenced* 1938: Delaware Investments introduced its first mutual fund...
subsidiary to Macquarie Group
Macquarie Group
Macquarie Group Limited is a global investment banking and diversified financial services group, providing banking, financial, advisory, investment and funds management services to institutional, corporate and retail clients and counterparties around the world...
. Delaware Investments was integrated into Macquarie's global asset management arm, Macquarie Funds Group effective January 5, 2010.
New York Kramer Decision
After three years of contentious litigation in the federal and New York courts in a case receiving national attention, Lincoln finally agreed in April, 2011 to dismiss its lawsuit that sought to avoid paying a $10 million death benefit on a life insurance policy insuring the life of New York attorney Arthur Kramer, one of the founding partners of the New York City law firm Kramer Levin Naftalis & Frankel. See Kramer v. Phoenix Life Insurance Company, 2010 N.Y. Slip Opinion 8376, 2010 N.Y. LEXIS 3281 (Ct. App., Nov. 17, 2010). Although Mr. Kramer's death in 2008 occurred over two years after the policy's issuance in 2005, Lincoln unsuccessfully sought to overturn longstanding precedent in New York that requires insurance companies doing business in New York to pay death benefits once a policy has been in force for two years even if an insurable interest violation may have occurred at the time of policy inception. See New England Mutual v. Caruso, 73 N.Y. 2d 74 (1989). The New York Court of Appeals in Kramer also rejected Lincoln's primary argument that an insurance policy that is voluntarily obtained by an insured for the purpose of re-selling the policy to investors and without a good faith intent of benefiting a person with an insurable interest somehow violated Section 3205(b)(1) of the New York State insurable interest statute and therefore was void. If Lincoln had been successful in these arguments, it would have been able to deny the payment of death benefits under hundreds of insurance policies Lincoln willingly issued to insureds who were looking to avail themselves of the life settlement market. After finding that there was "overwhelming textual and historical evidence that the New York Legislature intended to allow the immediate assignment of a policy by an insured to one lacking an insurable interest", the Kramer Court concluded that "it is not our role.....to engraft an intent or good faith requirement onto a statute that so manifestly permits an insured to immediately and freely assign such a policy." The Kramer decision was hailed throughout the country as a victory for the life settlement industry and as a blow to insurance companies seeking to avoid their obligations under life insurance policies.
California Teren Decision
Lincoln’s national campaign to rescind hundreds of life insurance policies it willingly issued during 2004-2008 to seniors looking to take advantage of the life settlement market suffered another disappointing setback on May 17, 2011 when the California Court of Appeals reversed a lower court’s decision that had been issued in favor of Lincoln. The lower court had ruled in 2009 that $20 million of life insurance on the life of Jack Teren was issued in violation of California insurable interest law thereby permitting Lincoln to void the policies without having to return $1.6 million of premiums that an investor group had paid. Lincoln Life and Annuity Company v. Jonathan S. Berck (unpublished opinion). In an analysis that was similar to the New York Kramer decision discussed above, the appellate court held that the California insurable interest law in effect when the policy was issued permitted an insured to apply for life insurance with the intent of transferring the policy to a person with no insurable interest in the insured. The appellate court decision also cites extensively and with approval from another recent federal court case that Lincoln lost involving insurable interest and its ability to rescind policies. See Lincoln National v. Gordon Fishman, 638 F. Supp. 1170, (C.D. Cal. 2009). The Fishman court concluded that “[U]nfortunately for Lincoln, the law as it presently exists allows this kind of insurance arrangement to be valid". The decision is a financial blow for Lincoln since it had hoped to confiscate $1.6 million of premium payments that an investor group had paid on two $10 million insurance policies on Jack Teren that Lincoln had claimed was void at the outset. Lincoln was represented in the unsuccessful litigation in the Fishman, Teren and Kramer cases by Stephen Baker and Charles Vinicombe of the Philadelphia law firm, Drinker, Biddle and Reath.
New York Janis Decision
Stephen Baker and Charles Vinicombe also represented Lincoln in Drinker Biddle's unsuccessful attempt to validate Lincoln's practice in New York of suing for rescission of a life insurance policy and seeking to confiscate all premiums paid while at the same time continuing to bill and collect additional premiums during the course of the litigation for the insurance coverage it was disavowing. In entering a summary judgment motion against Lincoln, the New York Supreme Court held that the policyowner has made a prima facie case that Lincoln has waived its right to rescind the policy through its demand for and acceptance of premiums after it filed for rescission. The Court concluded that Lincoln's attempt to simultaneously accept premiums and assert its right to rescission are unenforceable. Messrs. Baker and Vinicombe rightly elected not to appeal this decision to New York's Appellate Division. See Lincoln Life and Annuity Co. of New York v. Jonathan Berck, as Trustee of the Rosamond Janis Insurance Trust, No. 17362/08 (N.Y. Sup. Ct., Westchester Cty. 2009).
Insurance patent
Lincoln National is the owner of , “Method and apparatus for providing retirement income benefits”. This patent covers methods for administering variable annuities. Lincoln's commercial products that are covered by this patent include their i4LIFE Advantage and 4LaterSM Advantage annuities.In September 2006, Lincoln filed a patent infringement
Patent infringement
Patent infringement is the commission of a prohibited act with respect to a patented invention without permission from the patent holder. Permission may typically be granted in the form of a license. The definition of patent infringement may vary by jurisdiction, but it typically includes using or...
lawsuit against Transamerica Life Insurance Company
Transamerica Corporation
Transamerica Corporation is a holding company for various life insurance companies and investment firms doing business primarily in the United States. It was acquired by the Dutch financial services conglomerate AEGON in 1999.-History:...
for allegedly infringing its insurance patent
Insurance patent
Under some patent laws, patents may be obtained for insurance-related inventions. Historically, patents could only cover the technological aspects of a new insurance invention. This is still the case in most countries. In the United States, however, recent court decisions have encouraged more...
. A similar lawsuit was filed against Jackson National Life
Jackson National Life
Jackson National Life Insurance is a U.S. company that offers life insurance and annuities. It is a subsidiary of the British insurer, Prudential Plc, who bought the company for $608 million in 1986. Founded in 1961, Jackson is headquartered in Lansing, Michigan...
in October 2007.
On Feb. 19, 2009, a jury found the Lincoln patent valid and infringed by Transamerica et al. Damages were assessed at the "reasonable royalty rate" and Transamerica et al. were ordered to pay Lincoln $13 million, or 0.11% of the over $12 billion in assets they had under management by virtue of infringing the patent.
Affiliations
Lincoln Financial Group is the grand sponsor of the National Forensic LeagueNational Forensic League
The National Forensic League is a non-partisan, non-profit educational honor society established to encourage and motivate American high school students to participate in and become proficient in the forensic arts: debate, public speaking and interpretation. NFL is the America's oldest and largest...
and its National Speech and Debate Tournament
National Speech and Debate Tournament
The National Speech and Debate Tournament is a week-long high school championship forensics competition hosted by the National Forensic League...
.
See also
- Lincoln Financial MediaLincoln Financial MediaLincoln Financial Media is a subsidiary of Lincoln National Corporation that owns radio stations in the United States.-History:In April 2006, Lincoln Financial acquired Jefferson-Pilot's television and radio operations, which were renamed Lincoln Financial Media. The group owns 14 radio stations in...
- subsidiary of Lincoln National Corporation that owns radio stations in the United States
External links
- Lincoln National Corporation (company website)
- Lincoln Financial Sports