DISTRIBUTION AGREEMENT
AGREEMENT made this _______ day of _______________, 1997, between ReliaStar
Bankers Security Life Insurance Company, a New York corporation, (ReliaStar
Bankers) on its own behalf and on behalf of the ReliaStar Bankers Security
Variable Life Separate Account I (Variable Account) and Washington Square
Securities, Inc. (WSSI) which is a member of the National Association of
Securities Dealers, Inc. (NASD) and is registered as a broker-dealer with the
Securities and Exchange Commission pursuant to the Securities Exchange Act of
1934 (the "1934 Act").
WHEREAS, ReliaStar Bankers sells variable life insurance contracts
(Contracts), assets for which are allocated to the Variable Account, a separate
investment account. ReliaStar Bankers proposes to sell additional Contracts to
commence after the effectiveness of the Registration Statement relating to the
Contract and Variable Account filed with the Securities and Exchange Commission
on Form S-6 pursuant to the Securities Act of 1933, as amended (the "1933 Act");
and
WHEREAS, the Variable Account is registered as a unit investment trust
under the Investment Company Act of 1940 (the "1940 Act"); and
WHEREAS, WSSI is an affiliate of ReliaStar Bankers, and ReliaStar Bankers
desires to retain WSSI as the General Distributor and Principal Underwriter to
distribute and sell to the public the Contracts issued by ReliaStar Bankers and
WSSI is willing to render such services.
NOW, THEREFORE, in consideration of the mutual promises and covenants
hereinafter set forth, the parties agree as follows:
1. PRINCIPAL UNDERWRITER.
ReliaStar Bankers hereby appoints WSSI, during the term of this Agreement,
subject to the registration requirements of the 1933 Act and the 1940 Act to be
the General Distributor and Principal Underwriter for the sale of Contracts to
the public in each state and other jurisdictions in which the contracts may be
lawfully sold. WSSI shall offer the Contracts for sale and distribution at
prices set by ReliaStar Bankers, through its own representatives and through
other broker dealers contracted under a Selling Agreement as described in
Paragraph 2 of this Agreement.
2. SELLING AGREEMENTS.
WSSI is hereby authorized to enter into separate written agreements, on
such terms and conditions as WSSI and ReliaStar Bankers determine are not
inconsistent with this Agreement, with other broker-dealers that agree to
participate as a broker-dealer in the distribution of the Contracts and to use
their best efforts to solicit applications for Contracts. Any such broker-dealer
(hereinafter "Broker"), shall be registered as a broker-dealer under the 1934
Act and shall be a member of the NASD. ReliaStar Bankers shall undertake to
appoint Broker's qualified agents or representatives as life insurance agents of
ReliaStar Bankers, provided that ReliaStar Bankers reserves the right to refuse
to appoint any proposed representative or agent, or once appointed, to terminate
such appointment.
3. SUITABILITY.
ReliaStar Bankers desires to ensure that Contracts will be sold to purchasers
for whom the Contract will be suitable. WSSI shall take reasonable steps to
ensure that the registered representatives of WSSI shall not make
recommendations to an applicant to purchase a Contract in the absence of
reasonable grounds to believe the purchase of the Contract is suitable for such
applicant, and shall impose similar obligations upon Brokers.
4. CONFORMITY WITH REGISTRATION STATEMENT AND APPROVED SALES MATERIALS.
In performing its duties as General Distributor, WSSI will act in conformity
with the Prospectus and with the instructions and directions of ReliaStar
Bankers, the requirements of the 1933 Act, the 1940 Act, the 1934 Act, and all
other applicable federal and state laws and regulations. WSSI shall not give any
information nor make any representations, concerning any aspect of the Contract
or of ReliaStar Banker's operations to any persons or entity unless such
information or representations are contained in the Registration Statement and
the pertinent prospectus filed with the Securities and Exchange Commission, or
are contained in sales or promotional literature approved by ReliaStar Bankers.
WSSI will not use and will take reasonable steps to ensure by representatives
will not use any sales promotion material and advertising which has not been
previously approved by ReliaStar Bankers. WSSI shall impose similar obligations
upon Brokers contracted under a Selling Agreement as described in Paragraph 2 of
this Agreement.
2
5. APPLICATIONS.
Completed applications for Contracts solicited by WSSI through its agents or
representatives shall be transmitted directly to ReliaStar Bankers. All payments
under the Contracts shall be made by check payable to ReliaStar Bankers or by
other method acceptable to ReliaStar Bankers, and if received by WSSI, shall be
held at all times in a fiduciary capacity and remitted promptly to ReliaStar
Bankers.
6. STANDARD OF CARE.
WSSI shall be responsible for exercising reasonable care in carrying out the
provisions of this Agreement.
7. RECORDS AND REPORTS.
ReliaStar Bankers shall maintain and preserve such records as are required of
it, WSSI and the Variable Account, by applicable laws and regulations with
regard to the offer and sale of variable life insurance. The books, accounts,
and records of ReliaStar Bankers, the Variable Account and WSSI shall be
maintained by ReliaStar Bankers so as to clearly and accurately disclose the
nature and details of the transactions. ReliaStar Bankers agrees that it will
maintain and preserve all such records in conformity with the requirements of
the 1934 Act, to the extent such requirements are applicable to variable life
insurance. ReliaStar Bankers further agrees that all such records shall be and
are maintained and held in conformity with the 1934 Act and said records are and
shall remain at all times available to WSSI.
8. COMPENSATION.
For the services rendered under this Agreement, ReliaStar Bankers shall pay WSSI
_______ percent (___%) of first year agents commissions. ReliaStar Bankers shall
arrange for the payment of commissions to those Brokers that sell Contracts
under agreements entered into pursuant to Section 2, hereof, and to wholesalers
that solicit brokers to sell Contracts under agreements entered into pursuant to
Section 2, hereof, in amounts as may be agreed to by ReliaStar Bankers and WSSI
specified in such written agreements.
9. INVESTIGATION AND PROCEEDINGS.
WSSI and ReliaStar Bankers agree to cooperate fully in any regulatory
investigation or proceeding or judicial proceeding arising in connection with
the contracts distributed under this Agreement. WSSI further agrees to furnish
regulatory authorities with any information or reports in connection with such
services which may be requested in order to ascertain whether the operations of
3
ReliaStar Bankers and the Variable Account are being conducted in a manner
consistent with Applicable laws and regulations. WSSI and ReliaStar Bankers
further agree to cooperate fully in any securities regulatory investigation or
proceeding with respect to ReliaStar Bankers, WSSI, their affiliates and their
agents or representatives to the extent that such investigation or proceeding is
in connection with Contracts distributed under this Agreement. Without limiting
the foregoing:
(a) WSSI will be notified promptly of any customer complaint or
notice of any regulatory investigation or proceeding or judicial
proceeding received by ReliaStar Bankers with respect to WSSI or
any agent or representative of a Broker which may affect
ReliaStar Banker's issuance of any Contract sold under this
Agreement; and
(b) WSSI will promptly notify ReliaStar Bankers of any customer
complaint or notice of any regulatory investigation or
proceeding received by WSSI or its affiliates with respect to
WSSI or any agent or representative a Broker in connection with
any Contract distributed under this Agreement or any activity in
connection with any such Contract.
10. EMPLOYEES.
WSSI will not employ, except with the prior written approval of the Commissioner
of Insurance of the States of California and Texas, in any material connection
with the handling of the Variable Accounts assets any person who, to the
knowledge of WSSI:
(a) in the last 10 years has been convicted of any felony or
misdemeanor arising out of conduct involving embezzlement,
fraudulent conversion, or misappropriation of funds or
securities, or involving violations of Section 1341, 1342, or
1343 of Xxxxx 00, Xxxxxx Xxxxxx Code; or
(b) within the last 10 years has been found by any state regulatory
authority to have violated or has acknowledged violation of any
provision of any state insurance law involving fraud, deceit, or
knowing misrepresentation; or
(c) within the last 10 years has been found by any federal or state
regulatory authorities to have violated or have acknowledged
violation of any revision of federal or state securities laws
involving fraud, deceit, or knowing misrepresentation.
4
11. TERMINATION.
This Agreement may be terminated at any reason, for any either party on 60 days'
written notice to the other party, without the payment of any penalty. Upon
termination of this Agreement, all authorizations, rights and obligations shall
cease except the obligation to settle accounts hereunder, including commissions
on purchase payments subsequently received for Contracts in effect at time of
termination, and the agreements contained in Sections 8 and 9 hereof.
12. ASSIGNMENT.
This Agreement is not assignable by either party.
13. REGULATION.
This Agreement shall be subject to the provisions of the 1940 Act and the 1934
Act and the rules, regulations and rulings thereunder, and of the applicable
rules and regulations of the NASD, and applicable state insurance law and other
applicable law, from time to time in effect, and the terms hereof shall be
interpreted and construed in accordance therewith.
14. NOTICES.
Notices of any kind to be given to WSSI by ReliaStar Bankers or the Variable
Account shall be in writing and shall be duly given if mailed, first class
postage prepaid, or delivery to the President of WSSI at 00 Xxxxxxxxxx Xxxxxx
Xxxxx, Xxxxxxxxxxx, XX 00000, or at such other address or to such individual as
shall be specified by WSSI. Notices of any kind to be given to ReliaStar Bankers
or the Variable Account shall be in writing and shall be duly given if mailed,
first class postage prepaid, or delivered to them at 00 Xxxxxxxxxx Xxxxxx Xxxxx,
Xxxxxxxxxxx, Xxxxxxxxx 00000, Attention: Senior Vice President, Individual
Insurance Division, or at such other address or to such individual as shall be
specified by ReliaStar Bankers.
15. SEVERABILITY.
If any provisions of this Agreement shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement shall not
be affected thereby.
16. GOVERNING LAW.
This Agreement shall be construed and enforced in accordance with and
governed by the laws of the State of New York.
5
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
RELIASTAR BANKERS SECURITY
LIFE INSURANCE COMPANY
By: ------------------------
Name: Xxxxxxx X. Xxxxx
Title: Senior Vice President and General Counsel
WASHINGTON SQUARE SECURITIES, INC.
By: -----------------------
Name: Xxxxxxx X. Xxxxxxx
Title: President
6
