Common use of Irreconcilable Conflicts of Interest Clause in Contracts

Irreconcilable Conflicts of Interest. (a) The Company and the Trust acknowledge that in the future, the Trust’s shares may become available for investment by separate accounts of other insurance companies, which may or may not be affiliated persons (as that term is defined in the 0000 Xxx) of the Company (collectively with the Company, “Participating Insurers”). In such event, (1) the Trust shall undertake that its Board will monitor the Trust for the existence of material irreconcilable conflicts that may arise between the contract owners of Participating Insurers, for the purpose of identifying and remedying any such conflict and (2) Paragraphs (b), (c) and (d) of this Section 11 shall apply. In discharging its responsibilities under this Section 11 hereinafter, the Company will cooperate and coordinate, to the extent necessary, with the Board and with other Participating Insurers. The Trust agrees that it will require, as a condition to participation, that all Participating Insurers shall have obligations and responsibilities regarding conflicts of interest corresponding to those that are agreed to herein by the Company pursuant to this Section 11. (b) Upon request by the Board, the Company will report to the Board any potential or existing conflicts of which it is or becomes aware between any of its Contract owners or between any of its Contract owners and contract owners of other Participating Insurers. The Company will be responsible for assisting the Board in carrying out its responsibilities to identify material conflicts by providing the Board with all information available to it that is reasonably necessary for the Board to consider any issues raised, including information as to a decision by the Company to disregard voting instructions of its Contract owners. (c) The Board‘s determination of the existence of an irreconcilable material conflict and its implications shall be made known promptly by it to the Company and other Participating Insurers. An irreconcilable material conflict may arise for a variety of reasons, including: (1) an action by any state insurance regulatory authority; (2) a change in applicable federal or state insurance tax, or securities laws or regulations, or a public ruling, private letter ruling, or any similar action by insurance, tax, or securities regulatory authorities; (3) an administrative or judicial decision in any relevant proceeding; (4) the manner in which the investments of any Portfolio are being managed; (5) a difference in voting instructions given by variable annuity contract owners and variable life insurance contract owners or by contract owners of different Participating Insurers; or (6) a decision by a Participating Insurer to disregard the voting instructions of variable contract owners. (d) If it is determined by a majority of the Board or a majority of its disinterested Trustees that a material irreconcilable conflict exists that affects the interests of the Company Contract owners, the Company shall, in cooperation with other Participating Insurers whose contract owners’ interests are also affected by the conflict, take whatever steps are necessary to remedy or eliminate the irreconcilable material conflict, which steps could include: (a) withdrawing the assets allocable to the Separate Accounts from the Trust or any portfolio and reinvesting such assets in a different investment medium, including another Portfolio of the Trust, or submitting the question of whether such segregation should be implemented to a vote of all affected contract owners and, as appropriate, segregating the assets of any particular group (e.g., annuity contract owners or life insurance contract owners) that votes in favor of such segregation, or offering to the affected contract owners of the option of making such a change; and (b) establishing a new registered management investment company or managed separate account. The Company shall take such steps at its expense if the conflict affects solely the interests of the owners of the Company Contracts, but shall bear only its equitable portion of any such expense if the conflict also affects the interest of the contract owners of one or more Participating Insurers other than the Company, provided, that this sentence shall not be construed to require the Trust to bear any portion of such expense. If a material irreconcilable conflict arises because of the Company’s decision to disregard Contract owner voting instructions and that decision represents a minority position or would preclude a majority vote, the Company may be required, at Trust’s election, to withdraw the Separate Accounts’ investment in the Trust, and no charge or penalty will be imposed against the Separate Accounts as a result of such a withdrawal. The Company agrees to take such remedial action as may be required under this Paragraph (d) with a view only to the interests of its Contract owners. For purposes of this Paragraph (d), a majority of the disinterested members of the Board shall determine whether or not any proposed action adequately remedies any irreconcilable conflict, but in no event will Trust be required to establish a new funding medium for any variable contracts. The Company shall not be required by this Paragraph (d) to establish a new funding medium for any variable contract if an offer to do so has been declined by vote of a majority of affected contract owners.

Irreconcilable Conflicts of Interest. (a) The Company and the Trust acknowledge that in the future, the Trust’s shares may become available for investment by separate accounts of other insurance companies, which may or may not be affiliated persons (as that term is defined in the 0000 Xxx) of the Company (collectively with the Company, “Participating Insurers”). In such event, (1) the Trust shall undertake that its Board will monitor the Trust for the existence of material irreconcilable conflicts that may arise between the contract owners of Participating Insurers, for the purpose of identifying and remedying any such conflict and (2) Paragraphs (b), (c) and (d) of this Section 11 shall apply. In discharging its responsibilities under this Section 11 hereinafter, the Company will cooperate and coordinate, to the extent necessary, with the Board and with other Participating Insurers. The Trust agrees that it will require, as a condition to participation, that all Participating Insurers shall have obligations and responsibilities regarding conflicts of interest corresponding to those that are agreed to herein by the Company pursuant to this Section 11. (b) Upon request by the Board, the Company will report to the Board any potential or existing conflicts of which it is or becomes aware between any of its Contract owners or between any of its Contract owners and contract owners of other Participating Insurers. The Company will be responsible for assisting the Board in carrying out its responsibilities to identify material conflicts by providing the Board with all information available to it that is reasonably necessary for the Board to consider any issues raised, including information as to a decision by the Company to disregard voting instructions of its Contract owners. (c) The Board‘s Board’s determination of the existence of an irreconcilable material conflict and its implications shall be made known promptly by it to the Company and other Participating Insurers. An irreconcilable material conflict may arise for a variety of reasons, including: (1) an action by any state insurance regulatory authority; (2) a change in applicable federal or state insurance tax, or securities laws or regulations, or a public ruling, private letter ruling, or any similar action by insurance, tax, or securities regulatory authorities; (3) an administrative or judicial decision in any relevant proceeding; (4) the manner in which the investments of any Portfolio are being managed; (5) a difference in voting instructions given by variable annuity contract owners and variable life insurance contract owners or by contract owners of different Participating Insurers; or (6) a decision by a Participating Insurer to disregard the voting instructions of variable contract owners. (d) If it is determined by a majority of the Board or a majority of its disinterested Trustees that a material irreconcilable conflict exists that affects the interests of the Company Contract owners, the Company shall, in cooperation with other Participating Insurers whose contract owners’ interests are also affected by the conflict, take whatever steps are necessary to remedy or eliminate the irreconcilable material conflict, which steps could include: (a) withdrawing the assets allocable to the Separate Accounts from the Trust or any portfolio and reinvesting such assets in a different investment medium, including another Portfolio of the Trust, or submitting the question of whether such segregation should be implemented to a vote of all affected contract owners and, as appropriate, segregating the assets of any particular group (e.g., annuity contract owners or life insurance contract owners) that votes in favor of such segregation, or offering to the affected contract owners of the option of making such a change; and (b) establishing a new registered management investment company or managed separate account. The Company shall take such steps at its expense if the conflict affects solely the interests of the owners of the Company Contracts, but shall bear only its equitable portion of any such expense if the conflict also affects the interest of the contract owners of one or more Participating Insurers other than the Company, provided, that this sentence shall not be construed to require the Trust to bear any portion of such expense. If a material irreconcilable conflict arises because of the Company’s decision to disregard Contract owner voting instructions and that decision represents a minority position or would preclude a majority vote, the Company may be required, at Trust’s election, to withdraw the Separate Accounts’ investment in the Trust, and no charge or penalty will be imposed against the Separate Accounts as a result of such a withdrawal. The Company agrees to take such remedial action as may be required under this Paragraph (d) with a view only to the interests of its Contract owners. For purposes of this Paragraph (d), a majority of the disinterested members of the Board shall determine whether or not any proposed action adequately remedies any irreconcilable conflict, but in no event will Trust be required to establish a new funding medium for any variable contracts. The Company shall not be required by this Paragraph (d) to establish a new funding medium for any variable contract if an offer to do so has been declined by vote of a majority of affected contract owners.