ACORD 1035 Form – Exchange / Rollover / Transfer PDF
Exchange / Rollover / Transfer eForm
The standardized ACORD 1035 eForm used to initiate a 1035 exchange, direct rollover, or non-qualified transfer of funds between life insurance and annuity contracts
Form Type: Exchange / Rollover / Transfer
Edition: 2024/01
Category: Life and Annuity
Pages: 04
Download ACORD 1035 Form
Free fillable PDF – Current edition
What is the ACORD 1035 Exchange Form?
ACORD 1035 is the standardized eForm used to initiate a 1035 exchange, direct rollover, or fund transfer between life insurance policies and annuity contracts. Named after Internal Revenue Code Section 1035, which allows certain insurance policy exchanges to occur without triggering immediate tax liability, this eForm gives policyholders and financial professionals a single consistent document to move funds from one contract to another across different carriers.
The eForm handles three distinct transaction types within one document. A 1035 exchange moves funds from one life insurance or annuity contract to another on a tax-favored basis. A direct rollover transfers qualified retirement funds such as IRA or 403(b) assets directly between financial institutions. A non-qualified transfer of funds moves money between annuity contracts outside of the 1035 rules, with different tax treatment. One completed ACORD 1035 eForm is required for each surrendering company and contract involved in the transaction.
The current edition in use is the 2024/01 version, a four-page document that walks from surrendering company information through transfer instructions, disclosures, taxpayer certification, and both owner and receiving company signatures.
What Makes a 1035 Exchange Tax-Favored
Under IRC Section 1035(a), certain exchanges of insurance and annuity contracts are treated as non-recognition events for tax purposes. This means the owner does not recognize a taxable gain at the time of the exchange, even if the surrendered contract has grown significantly above its original cost basis. The gain is preserved inside the new contract and becomes taxable only when the owner eventually takes distributions.
The permitted exchanges under Section 1035 are specific. A life insurance policy can be exchanged for another life insurance policy, an endowment contract, or an annuity contract. An annuity contract can be exchanged for another annuity contract. Moving from an annuity to a life insurance policy does not qualify for tax-free treatment under Section 1035. Understanding which direction the exchange is moving before completing the 1035 exchange form prevents costly errors.
Transaction Types the ACORD 1035 eForm Covers
🔄 Full 1035 Exchange
The entire value of the surrendering contract transfers to the receiving company. The surrendering contract is fully terminated. The cost basis of the original contract carries forward to the new contract. The receiving company surrenders the assigned contract and uses the proceeds as the purchase payment for the new contract.
📊 Partial 1035 Exchange
A portion of the annuity contract value transfers while the remainder stays in the original contract. Cost basis is allocated between the two contracts in proportion to the value transferred versus the value retained. Revenue Ruling 2003-76 governs how the basis split is calculated. Withdrawals within 180 days of a partial exchange can affect the tax-free status of the transaction.
📋 Direct Rollover
Qualified retirement funds such as IRA, Roth IRA, or 403(b) assets move directly from one financial institution to another. Because the funds go directly between institutions without passing through the owner’s hands, the transaction is not treated as a distribution and withholding does not apply. The owner must confirm the plan type and product type in the surrendering company information section.
💼 Non-Qualified Transfer
A transfer of funds that does not meet the requirements of a 1035 exchange. The receiving company applies the funds to an annuity contract but assumes no responsibility for the tax treatment. The owner is responsible for all federal, state, and local taxes arising from the liquidation. Earnings on the new contract begin to accrue when the receiving company receives the proceeds in good order.
⚠️ Always Consult a Tax Advisor First
The receiving company makes no representations about the tax treatment of any transaction initiated through this eForm and assumes no responsibility for tax consequences. Before completing the ACORD transfer form, the owner should speak with a qualified tax advisor to confirm the proposed transaction qualifies for the intended treatment and that the timing will not create unintended tax consequences.
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Who Uses the ACORD 1035 eForm
The ACORD Transfer form is used by a specific set of participants in every exchange or rollover transaction. Understanding the role of each party helps agents and owners complete it correctly and set realistic expectations for the processing timeline.
👤 Policy or Contract Owner
The individual or entity that owns the life insurance policy or annuity contract being exchanged. The owner initiates the transaction, provides all identifying information in Section 1, and signs the form in Section 5. Joint owners must also sign. The owner is ultimately responsible for confirming with the surrendering company that all paperwork requirements are satisfied before the transfer date.
🏦 Receiving Company
The insurance carrier that will receive the exchanged or transferred funds and issue the new contract. The receiving company provides the ACORD 1035 transfer form to the owner, accepts the assignment of the original contract, and surrenders it for the cash value to use as the purchase payment on the new contract. The receiving company signs Section 6 to accept the exchange.
📤 Surrendering Company
The carrier currently holding the policy or contract being exchanged. The surrendering company processes the liquidation of the existing contract based on the instructions in Section 2 and sends the proceeds directly to the receiving company. The owner is responsible for confirming the surrendering company’s processing guidelines, particularly when requesting a specific transfer date.
💼 Financial Professional or Agent
The licensed agent or financial advisor who facilitates the transaction on behalf of the owner. The agent guides the owner through completing the 1035 exchange form, confirms that both the receiving and surrendering companies accept the transaction type, and ensures all required signatures and supporting documents are gathered before submission.
🏛️ Employer or Third Party Administrator
For TSA or 403(b) to TSA or 403(b) transfers only. The employer or their third party administrator must authorize and sign the transfer in Section 5. The employer confirms that the transfer is authorized under the employer’s 403(b) plan and that all information provided is accurate.
👫 Joint Owner or Spouse
A joint owner must sign alongside the primary owner in Section 5. In community property states including Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin, a spouse signature is required even if the spouse is not listed as a joint owner. Agents working in these states should confirm spousal signature requirements before submitting.
How to Complete the ACORD 1035 Exchange Form
Completing the eForm in good order is the single most important factor in getting the transaction processed without delays. Most exchanges that are returned to the agent come back because of missing information, mismatched names, or missing signatures, all of which are preventable with a careful review before submission.
Step 1: Confirm the Transaction Type and Tax Treatment
Before filling in a single field, confirm with the owner’s tax advisor that the proposed transaction qualifies for the intended treatment. Confirm whether this is a full or partial 1035 exchange, a direct rollover, or a non-qualified transfer. Confirm that the product types involved qualify for the exchange direction being requested. Starting the paperwork before this step is confirmed risks completing a form for a transaction that cannot be processed as intended.
Step 2: Confirm Requirements With Both Companies
Call or check the websites of both the receiving and surrendering companies to confirm their specific requirements. Many carriers require additional state-specific disclosure forms, carrier-specific replacement forms, or original ink signatures. Some carriers will not accept the ACORD 1035 transfer form by itself and require their own proprietary transfer paperwork alongside it. Knowing this before gathering signatures prevents having to go back to the owner a second time.
Step 3: Complete the Receiving Company Information
Enter the receiving company name, business address, mailing address, and overnight address at the top of the form. Enter the new or existing contract number if the owner already has a contract with the receiving company. If this is a brand new contract, leave the contract number blank and note that the funds will be applied to a new contract. Enter the receiving carrier DTCC number if electronic fund settlement will be used.
Step 4: Complete Section 1 in Full
Enter every field in Section 1 for the surrendering company. Use the exact name on the surrendering contract for the owner name field. Pull the contract number directly from the surrendering company’s most recent statement rather than relying on the owner’s memory. Confirm the plan type and product type carefully because these determine which ACORD 1035 disclosures in Section 3 apply and which tax rules govern the transaction.
Step 5: Complete Section 2 Transfer Instructions
Check Full or Partial. If partial, enter the specific dollar amount or percentage clearly. If the owner wants to transfer only the penalty free amount, check that box and note that the surrendering company must verify the current penalty free amount before processing. Select the timing option and, if a specific date is needed, remind the owner to confirm the surrendering company can accommodate a date-specific request.
⚠️ Do Not Estimate the Penalty Free Amount
The penalty free amount on any statement is subject to change based on the product provisions. Never fill in a penalty free amount from memory or an old statement. The surrendering company must verify the current figure. If the owner requests the penalty free amount be transferred, note that on the form and let the surrendering company determine and process the correct amount at the time of transfer.
Step 6: Review Section 3 Disclosures With the Owner
Walk the owner through each of the eight items in Section 3. Pay particular attention to the 180-day rule for partial exchanges, the cost basis allocation rules, and the maximum issue age provision. Owners who understand what they are signing are less likely to take actions after the transfer that could inadvertently jeopardize the tax-free status of the exchange.
Step 7: Complete Section 4 Taxpayer Certification
Confirm the owner’s Social Security number or Tax ID matches what is on the surrendering contract. If the owner has been notified by the IRS about backup withholding, check the appropriate box. If a signature guarantee is required by the receiving or surrendering company, arrange for that before the owner signs. Bank branches and brokerage offices with medallion stamp programs can provide signature guarantees.
Step 8: Collect All Required Signatures in Section 5
Gather signatures from every required party before submitting. Check whether the surrendering contract has a joint owner, an irrevocable beneficiary, or a separate insured or annuitant who must also sign. For transactions in community property states, obtain the spouse signature even if the spouse is not listed on the contract. For 403(b) transfers, the employer or third party administrator signature must be in place before submission.
Step 9: Submit and Follow Up
Submit the completed eForm along with any required attachments to the receiving company. Follow up with both companies within five business days of submission to confirm the form was received in good order. Proactive follow-up catches processing issues early and keeps the transaction moving without unnecessary delays.
Ready to Complete Your Policy Exchange or Transfer?
Download the 1035 eForm, fill in your surrendering contract details, and submit it to your receiving company today.
Frequently Asked Questions
What does ACORD 1035 stand for?
ACORD 1035 refers to the ACORD eForm designed for transactions involving Internal Revenue Code Section 1035 exchanges. The number 1035 comes directly from the IRC section that allows certain life insurance and annuity exchanges to occur without immediate tax recognition. ACORD standardized the 1035 form so that the same document is accepted by carriers across the industry rather than each company requiring its own proprietary transfer paperwork.
Can this form be used for IRA rollovers?
Yes. The ACORD 1035 eForm accommodates direct rollovers of IRA and other qualified plan assets in addition to 1035 exchanges. The owner indicates the plan type in Section 1 and completes the transfer instructions in Section 2 accordingly. Because a direct rollover moves funds directly between financial institutions without the owner taking constructive receipt, withholding does not apply to these transactions.
Is a partial 1035 exchange always tax-free?
A partial exchange of an annuity contract can qualify for tax-free treatment under IRC Section 1035(a), but it requires careful handling. The cost basis allocation must follow Revenue Ruling 2003-76, and neither the original contract nor the new contract should be surrendered or significantly changed within 180 days of the exchange. Owners should confirm with their tax advisor that the specific transaction they are planning qualifies before signing the 1035 exchange form.
How long does a 1035 exchange take to process?
Processing times vary by carrier, but most ACORD 1035 exchanges take between two and six weeks from the time the receiving company receives the eForm in good order. The largest variable is how quickly the surrendering company processes the liquidation. Submitting the form completely and correctly without missing signatures or information is the most effective way to avoid additional delays.
Does the receiving company give tax advice about the exchange?
No. The disclosures in Section 3 state explicitly that the receiving company makes no representations about the tax treatment of the transaction and assumes no responsibility for tax consequences. The receiving company provides the ACORD 1035 transfer form as an accommodation to the owner only. All tax questions should be directed to the owner’s qualified tax advisor before the form is signed.
What happens if the funds arrive after the receiving company’s maximum issue age?
If the funds are received by the receiving company after the maximum issue age for the annuity contract being applied for, the receiving company may reject the contract and return the funds to their original source. The surrendering company may or may not accept the funds back, which could result in a taxable event. This is why reviewing the maximum issue age disclosure before initiating the exchange is important, particularly for older annuitants.
What is the DTCC number and why is it needed?
The Depository Trust and Clearing Corporation number is the receiving company’s identifier in the DTCC system used for electronic fund movement between carriers. When the surrendering company sends funds electronically for money settlement, the DTCC number ensures the funds are routed to the correct receiving company. The agent should confirm with the receiving company whether a DTCC number is needed before completing the top section of the eForm.