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NY Executive Order – Insurance & Annuity Extended Grace Periods

A recent Executive Order issued by Governor Cuomo, together with recent amendments to the insurance and banking regulations (the “regulations”) issued by the New York State Department of Financial Services (“Department”), extend grace periods and give you other rights under your life insurance policy or annuity contract if you can demonstrate financial hardship as a result of the novel coronavirus (“COVID‑19”) pandemic. These grace periods and rights are currently in effect but are temporary, though they may be extended further.  Please check the Department’s website at https://www.dfs.ny.gov/consumers/coronavirus for updates.

Insurance Payments – Grace Period

If you can demonstrate financial hardship as a result of the COVID-19 pandemic, your insurer must extend to 90 days the applicable grace period for the payment of premiums and fees under your life insurance policy or annuity contract.  If you do not make a timely premium payment and can demonstrate financial hardship as a result of the COVID-19 pandemic, your insurer may not impose any late fees relating to the premium payment or report you to a credit reporting agency or a debt collection agency regarding such premium payment.

Catching up on Overdue Insurance Payments

The regulations also require your insurer to permit you to pay the overdue premium over a 12-month period if you did not make a timely premium payment due to financial hardship as a result of the COVID-19 pandemic and can still demonstrate financial hardship as a result of the COVID-19 pandemic.  This also applies if the insurer sent you a nonpayment cancellation notice prior to March 29, 2020.

Policies Financed by Premium Finance Agencies – Grace Period

If your life insurance policy or annuity contract has been financed through a premium finance agency, and you do not make an installment payment, the premium finance agency may not cancel your life insurance policy or annuity contract for a period of at least 90 days, including any contractual grace period, if you can demonstrate financial hardship as a result of the COVID-19 pandemic, and subject to the safety and soundness of the premium finance agency.  In addition, if you do not make a timely installment payment to the premium finance agency and can demonstrate financial hardship as a result of the COVID-19 pandemic, the premium finance agency must extend the due date for the installment payment by at least 90 days, may not impose any late fees relating to that installment payment, and may not report you to a credit reporting agency or a debt collection agency regarding that installment payment.

Catching up on Overdue Payments to Premium Finance Agencies

If you do not make a timely installment payment to the premium finance agency due to financial hardship as a result of the COVID-19 pandemic, the premium finance agency must permit you to pay the installment payment over a 12-month period if you can still demonstrate financial hardship as a result of the COVID-19 pandemic, subject to the safety and soundness of the premium finance agency. This also applies if the premium finance agency issued a non-payment cancellation notice prior to March 29, 2020.

How to Demonstrate Financial Hardship

If you are unable to make a timely premium payment due to financial hardship as a result of the COVID-19 pandemic, you may submit to your insurer or premium finance agency, as applicable, a statement that you swear or affirm in writing under penalty of perjury that you are experiencing financial hardship as a result of the COVID-19 pandemic, which the insurer or premium finance agency, as applicable, shall accept as satisfactory proof.  Such statement is not required to be notarized.

Questions

If you have any questions regarding your rights under the Executive Order or regulations, please contact your insurer, broker, or premium finance agency.

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GTM Periodic Table

The chart nearby is what we call a “periodic table” of asset-type returns.  Not only does the chart depict the return each calendar year of major stock and bond asset classes for the last 14 years or so, it also tracks a hypothetical diversified portfolio that is approximately 60% equities and 40% fixed income comprised of these asset classes (white boxes), a very common asset allocation.  The two columns on the right side depict the rolling long-term averages of these investment elements in terms of both return, and volatility (standard deviation).  While a 60/40 mix is not a universally appropriate asset allocation for everyone, the chart gives a pretty good indication of what a diversified portfolio return has produced historically.

Keep in mind that the asset classes and allocations are comprised of pure indexes (which investors can not invest directly in).  They are gross returns with no reflection of the costs always associated with investing.

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Important Tax Info for 2019

It’s Tax Time Again! Please see the video below presented by Lisa Comeau on important tax time information. We have also listed Frequently Asked Questions below.

Tax time FAQ’s

  • When will I get my tax documents so I can or my accountant can file my tax return?

Pershing, our clearing firm has the tax document mailings scheduled as follows, based upon the type of assets held and their reporting to Pershing:  Phase 1 on 1/31/19.  Phase 2 will be Feb 15th for any revisions from the initial mailing or 1099s that were delayed.  Phase 3 will be issued on Feb. 28th, and finally the final issuance or possible revision date will be March 15th

  • Why are the documents delayed in being issued?

Pershing, our clearing firm, uses a staggered mailing event schedule of these tax documents due to reporting of dividends & interest or asset classification from the issuers of stocks, bonds, mutual funds and other investments.  The delay in creation of the 1099 is an attempt to ensure that all of the data that is reported is accurate, and to possibly avoid any 1099 revisions. 

  • Will you provide my accountant copies of my tax information you have on file?

We will provide the documents to your CPA as long as we have that contact on file for you.  If you need to provide that authorization to us, please contact your Advisor.

  • Can you provide me with the cost basis for the investments I sold last year?

The cost basis data is reported on your 1099 under section 1099-B Proceeds.  This is the data being reported to the IRS as well. 

  • What is a 1099R and do I need to provide this to my CPA?

A 1099R tax document is issued when you have withdrawn funds from a retirement account or an IRA in that tax year.  This is reported as income to the IRS and you must provide this to your CPA as well.  They will report this on your return, along with any tax withholding payments made during the distribution.

  • Why am I receiving a 1099R if I didn’t withdrawal funds from a retirement account?  I just rolled it over to an IRA.

If you rolled funds from one retirement plan to another or to an IRA, your CPA will report it as a non taxable event as a rollover.  In the same tax year you will receive a corresponding form 5498 tax document that corresponds to this rollover being received into the other retirement account.

 The views are those of CCR Wealth Management LLC and should not be construed as specific investment advice.
Investments in securities do not offer a fixed rate of return. Principal, yield and/or share price will fluctuate with changes in
market conditions and, when sold or redeemed, you may receive more or less than originally invested. All information is
believed to be from reliable sources; however, we make no representation as to its completeness or accuracy.
Investors cannot directly invest in indices. Past performance does not guarantee future results. Securities offered through
Cetera Advisors LLC. Registered Broker/Dealer, Member FINRA/SIPC. Investment Advisor Representative,
CCR Wealth Management, LLC. Registered Investment Advisor. Cetera Advisors LLC and CCR Wealth Management,
LLC are not affiliated companies. Cetera Advisors LLC does not offer tax or legal advice.
CCR Wealth Management 1800 W. Park Drive, Ste 150, Westborough, MA 01581. PH 508-475-3880