EXHIBIT 3(b)
METROPOLITAN LIFE INSURANCE COMPANY
SALES AGREEMENT
TABLE OF CONTENTS
I. DEFINITIONS
II. AGREEMENTS, REPRESENTATIONS, AND COVENANTS
A. AGREEMENTS AND COVENANTS OF METLIFE
B. REPRESENTATIONS AND COVENANTS OF BROKER
III. COMPLIANCE WITH APPLICABLE LAWS
IV. PRINCIPLES OF ETHICAL MARKET CONDUCT
V. COMPENSATION
VI. COMPLAINTS AND INVESTIGATIONS
VII. RECORDS AND ADMINISTRATION
VIII. PRIVACY INFORMATION
A. PROPRIETARY INFORMATION
B. RECEIPT OF CUSTOMER NONPUBLIC PERSONAL INFORMATION FROM BROKER BY
METLIFE
C. TREATMENT OF NONPUBLIC PERSONAL INFORMATION DISCLOSED TO BROKER BY
METLIFE
D. CONFIDENTIAL INFORMATION
E. PROTECTED HEALTH INFORMATION
IX. INDEMNIFICATION
X. GENERAL PROVISIONS
A. TERM AND TERMINATION
B. ASSIGNABILITY
C. AMENDMENTS
D. NOTICES
E. ARBITRATION
F. GOVERNING LAW
G. ENTIRE UNDERSTANDING
H. NO THIRD PARTY BENEFICIARIES
I. NON-EXCLUSIVITY
J. NO-HIRE
K. WAIVER
L. COUNTERPARTS
M. SEVERABILITY
Enterprise Selling Agreement
MetLife Version - September 2003
METROPOLITAN LIFE INSURANCE COMPANY
SALES AGREEMENT
This Agreement, including the Exhibits attached hereto (collectively the
"Agreement") dated ______________________________, 2002, ("Effective Date") by
and among Metropolitan Life Insurance Company, a New York corporation,
______________________, a New York life insurance company (collectively
"MetLife") and______________________, a ____________________corporation that,
for the distribution of traditional fixed rate insurance products only, is or is
affiliated with one or more validly licensed insurance agencies, or for the
distribution of registered products, is registered as a broker dealer with the
Securities and Exchange Commission ("SEC") under the Securities Exchange Act of
1934, as amended, (the "1934 Act") and a member of the National Association of
Securities Dealers ("NASD") and is also either licensed as or is affiliated with
one or more validly licensed insurance agencies (collectively "Broker").
WITNESSETH:
WHEREAS, MetLife and its Affiliates issue or provide access to certain
insurance and financial products, including but not limited to, fixed rate
annuities, variable annuities, variable life insurance policies, fixed rate life
insurance policies, variable riders on such fixed rate products, and other
insurance products as identified on Exhibits A and B hereto (together, the
"Contracts");
WHEREAS, MetLife, on behalf of itself and each Affiliate that issues or
provides access to the Contracts identified on Exhibits A and B hereto, is
authorized to enter into selling agreements with unaffiliated broker dealers or
selling groups, as the case may be, to distribute the Contracts; and
WHEREAS, MetLife proposes to compensate Broker for the sale and servicing
of Contracts in accordance with the Compensation Schedules set forth in Exhibits
A and B.
NOW, THEREFORE, in consideration of the mutual promises contained herein,
the parties hereto agree as follows:
I. DEFINITIONS
Enterprise Selling Agreement
MetLife Version - September 2003
1) Affiliate - Any entity that directly or indirectly controls,
is controlled by or is under common control with MetLife
including, without limitation, any entity that owns 25% or
more of the voting securities of any of the foregoing and
any entity that is a subsidiary of any of the foregoing.
2) Agency - One or more associated insurance agency of Broker,
identified on Exhibit D hereto, which are properly licensed
to participate in the business of insurance.
3) Applicable Laws - Shall have the meaning given to such term
as in accordance with Section II of this Agreement.
4) Confidential Information - Shall have the meaning given to
such term as described in Section VIII(D) of this Agreement.
5) Fixed Contracts - Contracts that are not variable and
include, without limitation, fixed rate annuities, fixed
rate life insurance and other fixed insurance contracts,
issued by MetLife or its Affiliates, as more fully described
in Exhibit B, which may be amended by MetLife in its sole
discretion from time to time.
6) General Agent - Shall have the meaning given to such term as
described in Section III(B)(20) of this Agreement.
7) Nonpublic Personal Information - Nonpublic personal
information means financial or health related information by
which a financial institution's consumers and customers are
individually identifiable, including but not limited to
nonpublic personal information as defined by Title V of the
Xxxxx-Xxxxx-Xxxxxx Act and regulations adopted pursuant to
the Act.
8) Prospectus - The prospectuses and Statements of Additional
Information included within the Registration Statements
referred to herein or filed pursuant to the Securities Act
of 1933 and the Investment Company Act of 1940, as amended.
9) Registration Statements - Registration statements and
amendments thereto filed with the SEC relating to the
Variable Contracts, including those for any underlying
investment vehicle or variable insurance rider.
Enterprise Selling Agreement
MetLife Version - September 2003
10) Variable Contracts - Variable life insurance policies,
variable annuity contracts, variable insurance riders and
other variable insurance contracts, issued by MetLife or its
Affiliates, as more fully described in Exhibit A, which may
be amended by MetLife in its sole discretion from time to
time.
11) Representatives - those individuals, accepted by MetLife or
its Affiliates to solicit and sell Contracts under the terms
of this Agreement, who are duly licensed and appointed as a
life insurance agent of MetLife or its Affiliates, and with
respect to registered products, are also duly registered,
individually, with the NASD in compliance with 1934 Act.
12) Protected Health Information or PHI - Individually
identifiable information that is transmitted or maintained
in any medium and relates to the past, present or future
physical or mental health or condition of an individual; the
provision of health care to an individual; or future payment
for the provision of health care to the individual. PHI
includes demographic information about individuals,
including names; addresses; dates directly related to an
individual, including but not limited to birth date;
telephone numbers; fax numbers; E-mail addresses; Social
Security numbers; policy numbers; medical records numbers;
account numbers; and any other unique identifying number,
characteristic, or code. PHI includes, but is not limited
to, information provided by an individual on an application
for a long term care insurance policy or other health care
plan issued by MetLife or an affiliate of MetLife;
information related to the declination or issuance of, or
claim under, a long term care insurance policy issued by
MetLife or an affiliate; or information derived therefrom.
II. AUTHORIZATIONS, REPRESENTATIONS, AND COVENANTS
A. AUTHORIZATIONS, REPRESENTATIONS AND COVENANTS OF METLIFE
1) MetLife represents that it is duly authorized, on behalf of
itself and each Affiliate that issues or provides access to
the Contracts identified on Exhibits A and B hereto, to
enter into this Agreement with Broker to distribute such
Contracts.
2) MetLife, subject to the terms and conditions of the
Agreement, hereby appoints Broker, on behalf of itself and
each Affiliate, to solicit, sell and provide service to the
Contracts which are set forth on the applicable Exhibits A
and B on a non-exclusive basis.
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MetLife Version - September 2003
3) MetLife authorizes Broker through its Representatives to
solicit applications for the Fixed Contracts listed in
Exhibit B, provided that (a) Broker shall not solicit
applications for Fixed Contracts except in those states
where it and its Representatives are appropriately licensed
and, in which, the Fixed Contracts are qualified for sale
under Applicable Laws; and (b) Broker complies in all other
respects with the published policies and procedures of
MetLife or its Affiliates, as applicable, and with the terms
of this Agreement.
4) MetLife authorizes Broker through its Representatives to
offer and sell the Variable Contracts listed in Exhibit A,
provided that (a) Broker shall not solicit applications for
Variable Contracts except in those states where it is and
its Representatives are appropriately licensed; (b) there is
an effective Registration Statement relating to such
Variable Contracts; (c) such Variable Contracts are
qualified for sale under Applicable Laws in such state in
which the sale or solicitation is to take place; and (d)
Broker complies in all other respects with the published
policies and procedures of MetLife and its Affiliates, and
with the terms of the Agreement. MetLife shall notify Broker
or its designee of the issuance by the SEC of any stop order
with respect to a Registration Statement or the initiation
of any proceeding by the SEC relating to the registration
and/or offering of Variable Contracts and of any other
action or circumstances that makes it no longer lawful for
MetLife or its Affiliates to offer or issue one or more of
Variable Contracts listed in Exhibit A. MetLife shall advise
Broker of any revision of or supplement to any Prospectus
related to the Variable Contracts or underlying investments
of such Variable Contracts.
5) The performance or receipt of services pursuant to this
Agreement shall in no way impair the absolute control of the
business and operations of each of the parties by its own
Board of Directors. Pursuant to the foregoing, MetLife and
its Affiliates shall specifically retain ultimate authority,
including but not limited to:
a. to refuse for any reason to appoint a Representative
and cancel any existing appointment at any time;
b. to direct the marketing of its insurance products and
services;
c. to review and approve all advertising concerning, its
insurance products and services;
d. to underwrite all insurance policies issued by it;
e. to cancel risks;
f. to handle all matters involving claims adjusting and
payment;
g. to prepare all policy forms and amendments;
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MetLife Version - September 2003
h. to maintain custody of, responsibility for and
control of all investments; and
i. to withdraw a Contract from sale or to change or
amend a Contract for any reason.
6) Exhibits A, B and the Compensation Schedules may be amended
by MetLife in its sole discretion from time to time to
include additional Contracts, including fixed rate
annuities, variable annuities, variable life insurance
policies, fixed rate life insurance policies, variable
riders on such fixed rate products, and other insurance
products issued by MetLife or its Affiliates. The provisions
of this Agreement shall apply with equal force to such
additional contracts unless the context otherwise requires.
Exhibits A, B and the Compensation Schedules may be amended
by MetLife in its sole discretion from time to time to
delete one or more of the Contracts.
7) During the term of this Agreement, MetLife will provide
Broker, without charge, with as many copies of the Contract
prospectus(es), current underlying mutual fund
prospectus(es), statements of additional information and
applications for the Contracts, as Broker may reasonably
request. Upon receipt from MetLife of update copies of the
Contract prospectus(es), current underlying mutual fund
prospectus(es), statements of additional information and
applications for the Contracts, Broker will promptly discard
or destroy all copies of such documents previously provided
to them, except such copies as are needed for purposes of
maintaining proper records. Upon termination of this
Agreement, Broker will promptly return to MetLife all
Contract prospectus(es), current underlying mutual fund
prospectus(es), statements of additional information,
Contract applications and other materials and supplies
furnished by MetLife to Broker or to its Representatives,
except for copies required for maintenance of records.
8) During the term of this Agreement, MetLife or its Affiliates
will be responsible for providing and approving all
promotional, sales and advertising material to be used by
Broker. MetLife will file such materials or will cause such
materials to be filed with the SEC, NASD, and any state
securities regulatory authorities, as appropriate.
9) MetLife or its Affiliate will compile periodic marketing
reports summarizing sales results to the extent reasonably
requested by Broker.
B. REPRESENTATIONS AND COVENANTS OF BROKER
Enterprise Selling Agreement
MetLife Version - September 2003
1) Broker represents and warrants that it will only offer
Contracts in those states where it or its Agency is
appropriately licensed and that it has obtained any other
appointments, approvals, licenses, authorizations, orders or
consents which are necessary to enter into this Agreement
and to perform its duties hereunder. Broker further
represents that its Representatives who will be soliciting
applications for Contracts will at all times be
appropriately licensed under Applicable Laws and such
solicitation is in accordance with Applicable Law, including
without limitation the NASD Rules of Fair Practice, and all
insurance replacement regulations and regulations
prohibiting the rebating of commission.
2) Broker represents and warrants that it is a registered
broker-dealer under the 1934 Act, has all necessary
broker-dealer licenses, is a member in good standing with
the NASD, and is licensed as an insurance broker and has
obtained any other approvals, licenses, authorizations,
orders or consents which are necessary to enter into this
Agreement and to perform its duties hereunder. Broker
further represents that its Representatives who will be
soliciting applications for Variable Contracts, whether
alone or jointly with representatives of MetLife or its
designee, will at all times as required by Applicable Laws
be appropriately registered and/or licensed under such laws
and shall comply with all requirements of the NASD, the 1934
Act and all other federal and/or state laws applicable to
the solicitation and service of the Variable Contracts
including without limitation the NASD Rules of Fair
Practice.
3) Broker represents that neither it nor any of its
Representatives are currently under investigation by any
insurance regulator, the NASD or SEC, any other
self-regulatory organization or other governmental authority
(except for any investigations of which it has notified
MetLife in writing). Broker further agrees that, if a formal
or informal investigation of Broker or any of its agents is
commenced by any insurance regulator, the NASD or SEC, any
other self regulatory organization or other governmental
authority, in connection with the sale of the Contracts,
Broker will notify MetLife of the existence and subject
matter of such investigation. The Agency further agrees that
no subagent shall be appointed to solicit and procure
Contracts of MetLife if the subagent has been convicted of
any felony prohibited by the Federal Violent Crime Control
and Law Enforcement Act of 1994.
4) Commencing at such time as MetLife and Broker shall agree
upon, Broker shall find suitable purchasers for the
Contracts for which Representatives are licensed and
authorized under
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MetLife Version - September 2003
Applicable Laws. In meeting its obligation to solicit
applications for the Contracts, Broker agrees as follows:
a) Broker shall use only those training, sales,
advertising, and promotional materials with respect
to the Contracts that have been pre-approved in
writing by MetLife for use at that time;
b) Broker shall establish and implement reasonable
procedures for periodic inspection and supervision of
sales practices of its Representatives, and will,
upon a reasonable written request from MetLife,
provide a report to MetLife on the results of such
inspections and the compliance with such procedures;
provided, however, that Broker shall retain sole
responsibility for the supervision, inspection and
control of its Representatives;
c) Broker shall take reasonable steps to ensure that its
Representatives shall not make recommendations to an
applicant to purchase a Contract in the absence of
reasonable grounds to believe that the purchase of a
Contract is suitable for such applicant to the extent
required by Applicable Laws. Broker shall be solely
responsible for determining the suitability of
recommendations to purchase a Contract made by its
agents or other representatives; and Notwithstanding
the foregoing, Broker may offer the Contracts in
addition to offering other life insurance and annuity
products to customers of Broker. Furthermore, Broker
understands that no territory is exclusively assigned
to Broker hereunder. Broker acknowledges and agrees
that MetLife may distribute the Contracts through its
own employee's agent and Representatives, including
those of its Affiliates, or through any other
distribution method or system including (but not
limited to) agreements with other insurance agencies
regarding the sale of such Contracts in the
territories, markets or distribution channels covered
by this Agreement.
d) Broker shall review diligently all Contract
applications for accuracy and completeness and for
compliance with the conditions herein, including the
suitability and prospectus delivery requirements, and
shall take all reasonable and appropriate measures to
assure that applications submitted to MetLife are
accurate, complete, compliant with the conditions
herein, and approved by a qualified registered
principal. With respect to variable Contracts
distributed jointly by Broker and representatives of
MetLife or its designee, Broker shall ensure that all
applications relating thereto have been provided to
Broker for its review and approval by a qualified
registered principal of Broker.
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MetLife Version - September 2003
5) To the extent permitted by Applicable Laws, only the initial
purchase payments for the Contracts shall be collected by
Representatives of Broker. All such purchase payments shall
be remitted promptly in full (and in no event later than the
time permitted under applicable law or the rules of the
NASD), together with any related application, forms and any
other required documentation to MetLife or the appropriate
Affiliate. The Broker shall make such remittances in
accordance with any and all policies and procedures
described in the Contract, insurance policy, prospectus, if
appropriate, or as otherwise adopted by MetLife and its
Affiliates.
6) Broker acknowledges that MetLife, on behalf of itself and
its Affiliates, shall have the unconditional right to
reject, in whole or in part, any application for a Contract.
If MetLife rejects an application, MetLife or its Affiliate
will immediately return any purchase payments received
directly to the Broker and Broker will be responsible for
promptly returning such payments to the purchaser. If any
purchaser of a Contract elects to return such Contract
pursuant to any law or contractual provision, any purchase
payment made or such other amount, as the Contract or
Applicable Laws shall specify, will be returned by MetLife
or its Affiliates to the Broker and the Broker will be
responsible for promptly returning such payments to the
purchaser. Except as otherwise may be provided in Exhibit A,
B or the Compensation Schedules, if a purchase payment is
either refunded or returned to the purchaser, no commission
will be payable to Broker hereunder, and any commission
received by Broker will be returned promptly to MetLife.
MetLife may, at its option, offset any such amounts against
any amounts payable to Broker.
7) Except as otherwise required by Applicable Laws, Broker is
not a principal, underwriter or agent of MetLife or its
Affiliates, or any separate account of MetLife or its
Affiliates. Broker shall act as an independent contractor,
and nothing herein contained shall constitute Broker, nor
its agents or other representatives, including
Representatives as employees of MetLife or its Affiliates in
connection with the solicitation of applications for
Contracts or other dealings with the public. Broker, its
agents and its other representatives, shall not hold
themselves out to be employees of MetLife or its Affiliates
in this connection or in any dealings with the public.
8) Broker agrees that any material it develops, approves or
uses for sales, training, explanatory or other purposes in
connection with the solicitation of applications for the
Contracts hereunder, other than generic advertising material
which does not make specific reference to MetLife, its
Affiliates or the Contracts, will not be used without the
prior written consent of MetLife.
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MetLife Version - September 2003
9) Broker shall ensure that solicitation and other activities
undertaken by Broker or its Representatives shall be
undertaken only in accordance with Applicable Laws. Broker
represents no commissions, or portions thereof, or other
compensation for the sale of the Contracts will be paid to
any person or entity that is not duly licensed and appointed
by MetLife or its Affiliates in the appropriate states as
required by Applicable Laws. Broker shall ensure that
Representatives fulfill any training requirements necessary
to be licensed or otherwise qualified to sell the Contracts.
Broker understands and acknowledges that neither it, nor any
of its Representatives, is authorized by MetLife to give any
information or make any representation in connection with
this Agreement or the offering of the Contracts other than
those contained in the contract, policy, prospectus, or
solicitation material authorized for use in writing by
MetLife or its Affiliates. Broker shall not make any
representations or give information that is not contained in
the contract, policy, prospectus or solicitation material of
the Contracts.
10) Neither Broker nor its agents, designees or other
representatives shall have authority on behalf of MetLife or
its Affiliates to alter or amend any Contract or any form
related to a Contract to adjust or settle any claim or
commit MetLife or its Affiliates with respect thereto, or
bind MetLife or its Affiliates in any way; or enter into
legal proceedings in connection with any matter pertaining
to MetLife's business without its prior written consent.
Broker shall not expend, nor contract for the expenditure
of, funds of MetLife or its Affiliates nor shall Broker
possess or exercise any authority on behalf of MetLife other
than that expressly conferred on Broker by this Agreement.
11) Broker and Agency shall be solely responsible for the
accuracy and propriety of any instruction given or action
taken by a Representative on behalf of an owner or
prospective owner of a Contract. MetLife shall have no
responsibility or liability for any action taken or omitted
by it in good faith in reliance on or by acceptance of such
an instruction or action.
12) Broker shall prepare any forms necessary to comply with
Applicable Laws or otherwise required in connection with the
sale of the Contracts, either as an initial transaction or
as a replacement for other insurance or annuity products,
and Broker shall send such forms to MetLife or the
appropriate Affiliate. In the alternative, if such forms are
not required, but information with respect to a transaction
or replacement is required, Broker will transmit such
information in writing to MetLife or the appropriate
Affiliate. Broker further shall notify MetLife or the
appropriate Affiliate when sales of the Contracts are
replacement contracts. Such notification shall not be later
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MetLife Version - September 2003
than the time that Broker submits applications for such
Contracts to MetLife or the appropriate Affiliate.
13) Broker shall furnish MetLife and any appropriate regulatory
authority with any information, documentation, or reports
prepared in connection with or related to this Agreement
which may be requested by MetLife or an appropriate
regulatory authority in order to ascertain whether the
operations of MetLife or Broker related to the Contracts are
being conducted in a manner consistent with Applicable Laws.
14) Broker will adhere to state insurance replacement
regulations, before it receives or solicits any applications
for Contracts.
15) Broker represents that it has full authority to enter into
this Agreement and that by entering into this Agreement it
will not impair any other of its contractual obligations
with respect to sales of any Contract.
16) Insurance Coverage.
a) Fidelity Bond. Broker shall secure and maintain a
fidelity bond (including coverage for larceny and
embezzlement), issued by a reputable bonding company,
covering all of its directors, officers, agents,
Representatives, associated persons and employees who
have access to funds of MetLife or its Affiliates.
This bond shall be maintained at Broker's expense in
at least the amount prescribed under Rule 3020 of the
NASD Conduct Rules or future amendments thereto.
Broker shall provide MetLife with satisfactory
evidence of said bond upon MetLife's reasonable
request. Broker hereby assigns any proceeds received
from a fidelity bonding company, or other liability
coverage, to MetLife, for itself or on behalf of its
Affiliates as their interest may appear, to the
extent of its loss due to activities covered by the
bond, policy or other liability coverage.
b) Plan of Insurance. Broker shall maintain in full
force and effect during the term of this Agreement a
plan of insurance, which may be a plan of
self-insurance, which shall provide coverage for
errors and omissions of the Broker, its Agency,
representatives and agents, including Representatives
in an amount reasonably acceptable to MetLife. If
such insurance plan terminates for any reason during
the term of the Agreement, Broker shall immediately
notify MetLife of such termination. If requested by
MetLife, Broker shall provide satisfactory
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evidence of coverage under such insurance policy
satisfactory to MetLife showing the amount and scope
of coverage provided.
c) Loss of coverage. The authority of any Representative
to solicit and procure Contracts hereunder shall
terminate automatically upon the termination of such
Representative's coverage under the Broker's fidelity
bond or plan of insurance as referenced herein.
d) Broker represents that all of its directors, officers
and representatives are and shall be covered by
blanket fidelity bonds, including coverage for
larceny and embezzlement, issued by a reputable
bonding company in an amount reasonably acceptable to
MetLife. These bonds shall be maintained at Broker's
expense and shall be at least, of the form type and
amount required under the NASD Rules of Fair
Practice. Upon request, Broker shall give evidence
satisfactory to MetLife that such coverage is in
force. Furthermore, Broker shall give prompt written
notice to MetLife of any notice of cancellation or
change of such coverage. Broker hereby assigns any
proceeds received from a fidelity bonding company, or
other liability coverage, to MetLife, for itself of
its Affiliates as their interest may appear, to the
extent of their loss due to activities covered by the
bond, policy or other liability coverage.
16) In such cases where Broker intends to distribute the
Variable Contracts through an Agency, Broker further
represents that:
a) Broker will operate and be responsible for all
securities-related services provided by Agency
arising from the offer, sale and/or servicing by its
registered Representatives of the Variable Contracts;
b) Agency will engage in the offer or sale of Variable
Contracts only through persons who are registered
Representatives of the Broker. Unregistered employees
will not engage in any securities activities, nor
receive any compensation based on transactions in
securities or the provision of securities advice;
c) Broker will be responsible for the education,
training, supervision, and control of its registered
Representatives as required under the 1934 Act and
other applicable laws, including, but not limited to,
principal review and approval of all sales literature
and advertisements, periodic compliance audits, and
maintaining ability to appoint and terminate
registered persons.
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d) Registered Representatives will be licensed under the
insurance laws of the states in which they do
business and will be appointed agents by Agency for
which the representatives may solicit applications in
connection with the offer and sale of insurance
securities;
e) Broker and Agency, as applicable, will maintain the
books and records relating to the sale of Variable
Contracts and the receipt and disbursement of
insurance commissions and fees thereon. Such books
and records will be maintained and preserved in
conformity with the requirements of Section 17(a) of
the 1934 Act and the Rules thereunder, to the extent
applicable, and will at all times be compiled and
maintained in a manner that permits inspection by
supervisory personnel of the Broker, the SEC, the
NASD, and other appropriate regulatory authorities;
and
f) All premiums derived from the sale of the Variable
Contracts will be made payable to and sent directly
to MetLife or the appropriate Affiliate or will be
sent by customers to the Broker for forwarding to
MetLife or the appropriate Affiliate. Agency will not
receive, accumulate, or maintain custody of customer
funds.
17) In such cases where Broker intends to distribute Fixed
Contracts through an Agency, Broker agrees that before a
subagent is permitted to solicit Contracts, Broker or its
Agency shall have entered into a written agreement with the
subagent pursuant to which the subagent: (a) is authorized
to deliver policies only upon the payment to it of the
premiums due thereon and upon compliance with the terms,
conditions and provisions of such policies; (b) shall
promptly remit to the Broker or Agency all funds collected
on MetLife's or its Affiliates' behalf; (c) shall otherwise
act only pursuant to the limited authority granted to the
Agency hereunder and shall comply with all of the duties and
obligations of the Broker hereunder and the rules of MetLife
or its Affiliates; and (d) agrees to MetLife's right to
offset from any compensation due the subagent any
indebtedness due from the subagent to MetLife or its
Affiliates and to chargeback compensation under MetLife's or
its Affiliates' rules. The Broker further agrees that it
shall promptly remit to MetLife all funds collected on the
behalf of MetLife or its Affiliates.
18) Broker agrees to comply with the policies and procedures of
MetLife and its Affiliates with respect to the solicitation,
sales and administration of Contracts and services Broker
and Representatives are authorized to sell and service under
the Agreement, including, but not limited to, privacy
policies and procedures, as those policies and procedures
may be provided to Broker by MetLife from time to time.
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MetLife Version - September 2003
19) For a period of 12 months after termination of the
Agreement, the Broker and Agency shall not, directly or
indirectly, on a systematic basis, contact the policyholders
of MetLife or its Affiliates or condone such contact for the
purpose of inducing any such policyholders to lapse, cancel,
and fail to renew or replace any Contract. If the Agency, in
the judgment of MetLife is determined to have engaged in
such prohibited activity, then MetLife shall have the right
to declare the Agency's claims for compensation or any other
benefit under the Agreement shall be forfeited and void.
MetLife, on behalf of itself and its Affiliates, may also
pursue all remedies, including injunction, to assure
compliance with the covenants in this section and shall, if
successful, be entitled to recover from the Agency all costs
and expenses incurred in pursuing such remedies, including
reasonable attorneys' fees.
20) In such cases where Broker shall distribute Contracts with
the assistance of the general agency distribution system of
MetLife ("General Agent"), the following additional terms
shall apply:
a) Broker hereby acknowledges and consents to in advance
the participation of every General Agent, designated
by MetLife, as a participating general agency under
this Agreement.
b) Broker agrees that both it and its Representatives
shall work cooperatively with the General Agent(s)
located in the particular territory where a Contract
is sold and through which the sale is processed on
behalf of MetLife or its Affiliates. Broker further
agrees that with respect to each such Contract, it
will rely solely upon the General Agent(s) for
Contract issuance, servicing, the forwarding of
commissions, and other related matters.
Notwithstanding the foregoing, the Broker agrees that
it shall look solely to MetLife and not to General
Agent(s) for payment of any commissions or other
compensation payable pursuant to the terms of this
Agreement.
III. COMPLIANCE WITH APPLICABLE LAWS
1) MetLife and Broker agree to comply with all applicable state
and federal statutes, laws, rules, and regulations including
without limitation, state insurance laws, rules and
regulations, and federal and state securities laws, rules
and regulations. Applicable state and federal statutes,
laws, rules and regulations may also include, applicable
guidelines, policies, and rulings of federal and state
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regulatory organizations and agencies, including without
limitation state insurance departments, the SEC and the
NASD, consumer privacy laws, HIPAA and any other state or
federal laws, rules or regulations and decisions, orders and
rulings of state and federal regulatory agencies that are
now or may hereafter become applicable to the parties hereto
and the transactions that are the subject of this Agreement
("Applicable Laws").
2) Broker agrees to comply with all applicable anti-money
laundering laws, regulations, rules and government guidance,
including the reporting, recordkeeping and compliance
requirements of the Bank Secrecy Act ("BSA"), as amended by
The International Money Laundering Abatement and Financial
Anti-Terrorism Act of 2002, Title III of the USA PATRIOT Act
("the Act"), its implementing regulations, and related SEC
and SRO rules. These requirements include requirements to
identify and report currency transactions and suspicious
activity, to implement a customer identification program to
verify the identity of customers, and to implement an
anti-money laundering compliance program. As required by the
Act, Broker certifies that it has a comprehensive anti-money
laundering compliance program that includes, policies,
procedures and internal controls for complying with the BSA;
policies, procedures and internal controls for identifying,
evaluating and reporting suspicious activity; a designated
compliance officer or officers; training for appropriate
employees; and an independent audit function.
Further Broker certifies, and will certify to MET annually
hereafter, that it has established and implemented a
Customer Identification Program, in compliance with
applicable regulations, as part of its anti-money laundering
compliance program that, at a minimum, requires (i) the
verification of the identity of any customer seeking to open
an account; (ii) the retention of a record of the
information used to verify each customer's identity; and
(iii) the determination, within a reasonable time before or
after the account is opened, as to whether the customer
appears on any lists of known or suspected terrorists or
terrorist organizations as provided to it by any government
agency.
Broker hereby agrees that it will verify the identity of
each customer that it introduces MET, whether through
documentary or non-documentary means, and that MET will rely
upon such verification, as prescribed by the regulations
promulgated under Section 326 of the Act in accordance with
the safe-harbor provided in Section 103.122(b)(6) of the
regulations under the Act.
IV. PRINCIPLES OF ETHICAL MARKET CONDUCT
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MetLife Version - September 2003
As a member of the American Council of Life Insurance's
Insurance Marketplace Standards Association (IMSA), MetLife
expects that the Agency and its subagents will abide by the
six principles of ethical market conduct set forth by IMSA
in connection with all Contracts sold pursuant to this
Agreement. The six principles are as follows: (a) to conduct
business according to high standards of honesty and fairness
and to render that service to its customers which in the
same circumstances, it would apply to or demand for itself;
(b) to provide competent and customer focused sales and
service; (c) to engage in active and fair competition; (d)
to provide advertising and sales material that are clear as
to purpose and honest and fair as to content; (e) to provide
fair and expeditious handling of customer complaints and
disputes; and (f) to maintain a system of supervision and
review that is reasonably designed to achieve compliance
with these principles of ethical market conduct. Broker
shall furnish information, documentation and reports to
MetLife as it may reasonably request in order to permit
MetLife to ascertain whether Broker is conducting its
operations in accordance with the Principles of Ethical
Market Conduct.
V. COMPENSATION
1) MetLife shall pay Broker compensation for the sale of each
Contract sold by Representative of Broker as set forth in
Exhibits A, B and Compensation Schedule(s) attached between
MetLife and either Broker or Agency, as the case may be.
MetLife shall identify to Broker with each such payment the
name or names of the Representative(s) of Broker who
solicited each Contract covered by the payment. Broker will
be responsible for issuing checks, statements or forms for
tax purposes and other administrative duties connected with
compensation of such Representatives. Unless otherwise
agreed upon by the parties, MetLife shall have no obligation
to any of the employees, agents or Representatives of Broker
or Agency for the payment of any compensation. Unless
otherwise provided in Exhibits A, B or in the Compensation
Schedules, Exhibits A or B and the Compensation Schedules,
including the commissions and fees therein, may be amended
by MetLife at any time, in any manner, and without prior
notice. Any amendment to Exhibits A, B or in the
Compensation Schedules will be applicable to any Contract
for which any application or premium is received by MetLife
on or after the effective date of such amendment. However,
MetLife reserves the right to amend such Exhibits and
Schedules with respect to subsequent premiums and renewal
commissions and the right to amend such Exhibits and
Schedules pursuant to this subsection even after termination
of this Agreement.
2) MetLife may at any time offset against any compensation
payable to (a) the Agency or its successors or assigns, any
indebtedness due from the Agency to MetLife or its
Affiliates, and (b)
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MetLife Version - September 2003
the subagents or their successors or assigns any
indebtedness due from the subagent to MetLife or its
Affiliates. Nothing contained herein shall be construed as
giving Agency or representative the right to incur any
indebtedness on behalf of MetLife or its Affiliates. Any
remaining indebtedness of Broker to MetLife or its
Affiliates arising under this Agreement shall be a first
lien against any monies payable hereunder. The right of
Broker, or any person claiming through Broker to receive any
compensation provided by this Agreement shall be subordinate
to the right of MetLife to offset such compensation against
any such indebtedness of the Broker to MetLife or its
Affiliates.
3) Neither Broker nor any of its Representatives shall have any
right to withhold or deduct any part of any premium or other
purchase payment it shall receive with respect to the
Contracts covered by this Agreement for purposes of payment
of commission or otherwise.
4) No compensation shall be payable, and any compensation
already paid shall be returned to MetLife on request, under
each of the following conditions:
a) if MetLife or its Affiliates, in their sole
discretion, determine not to issue the Contract
applied for,
b) if MetLife or its Affiliates refund the premium paid
by the applicant, upon the exercise of applicant's
right of withdrawal pursuant to any "free-look"
privilege,
c) if MetLife or its Affiliates refund the premium paid
by applicant as a result of the resolution of a
consumer complaint, recognizing that MetLife and its
Affiliates have sole discretion to refund premiums
paid by applicants, or
d) if MetLife or its Affiliates determine that any
person signing an application who is required to be
registered and/or licensed or any other person or
entity receiving compensation for soliciting
purchases of the Contracts is not duly registered
and/or licensed to sell the Contracts in the
jurisdiction of such attempted sale.
5) MetLife shall pay the compensation to Agency for Contracts
credited prior to the termination date of this Agreement to
the Agency under the Agreement, as set forth in Exhibits A,
B or any Compensation Schedule, attached, while it is in
effect. Such
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Compensation shall be payable when the premium is due and
paid to MetLife subject to the provisions of this Agreement
and of the Schedule(s).
6) Agency and Broker hereby agree and acknowledge that
compensation attributable to the sale of any Contract issued
by an Affiliate may be payable directly by MetLife, in its
discretion, to Agency or Broker where permitted, and not by
the Affiliate. Agency and Broker further agree and
acknowledge that such payment of compensation by MetLife
attributable to the sale of such Contracts shall constitute
a complete discharge of the obligation to pay compensation
by the Affiliate issuer under this Agreement. The foregoing
manner of payment shall not affect the right of offset or
chargeback as referred to in Sections V (2) and V (4) of
this Agreement, or other compensation rules as may be set
forth in this Agreement, Compensation Schedules(s), or rules
of the MetLife or its Affiliates.
7) MetLife shall not be obligated to pay any compensation,
which would violate the applicable laws of any
jurisdictions, anything in this Agreement notwithstanding.
8) Unless otherwise agreed to by MetLife, Broker, either
directly or by reimbursing MetLife on request, shall pay for
expenses incurred by such Broker in connection with the
solicitation, offer and sale of the Contracts.
9) In addition to the conditions and limitations elsewhere
contained in the Agreement and the Compensation Schedule(s),
no first year commission shall be payable on replacements or
switches of any Contract with another Contract, which are
undisclosed, and which otherwise requires disclosure by
either state regulation or MetLife's or its Affiliates'
rules on replacement transactions; the replacement or
switching rules of each applicable Affiliate are described
on Exhibit C attached hereto.
10) With respect to compensation under this Agreement, in the
event that anything contained in this Section V conflicts
with the terms of the compensation described in the attached
Exhibits A, B or the Compensation Schedule(s), the terms
contained in such schedules attached will prevail.
VI. COMPLAINTS AND INVESTIGATIONS
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MetLife Version - September 2003
1) Broker and MetLife jointly agree to cooperate fully in any
regulatory investigation or proceeding or judicial
proceeding arising in connection with the offer, sale,
and/or servicing of the Contracts.
2) Both the Broker and MetLife jointly agree to investigate any
customer complaint in connection with the Contracts. The
term customer complaint shall mean an oral or written
communication either directly from the purchaser of or
applicant for Contract covered by this Agreement or his/her
legal representative, or indirectly from a regulatory agency
to which he/she or his/her legal representative has
expressed a grievance.
3) Such cooperation referred to in Sections VI (1) and VI (2)
of this Agreement shall include, but is not limited to, each
party promptly notifying the other of the receipt of notice
of any such investigation or proceeding, forwarding to the
other party a copy of any written materials in connection
with the matter and such additional information as may be
necessary to furnish a complete understanding of same. In
the case of a customer complaint, promptly refer such
complaint to the other party for handling where appropriate
and provide the other party with customer complaint
information and documentation upon request. A complaint is
defined as a written or documented verbal communication
received by a company or its distributors, which primarily
expresses a grievance.
4) MetLife reserves the right to settle on behalf of itself,
and on behalf of itself and Broker collectively if Broker
agrees, any claims, complaints or grievances made by
applicants, policyholders or others in connection with the
Contracts, and concerning any conduct, act or omission by
the Broker or its agents or representatives with respect to
the Contracts or any transactions arising out of this
Agreement. If Broker does not agree to a collective
settlement with MetLife and MetLife, on behalf of itself,
settles the matter, Broker shall indemnify and hold harmless
MetLife from any and all claims, complaints or grievances
made by Broker or any applicant, policyholder or other made
in connection with such matter.
VII. RECORDS AND ADMINISTRATION
1) To the extent requested by Broker and agreed to by MetLife,
once a Contract has been issued, it will be delivered after
review by Broker to the applicant, accompanied by any
applicable Notice of Withdrawal Right and any additional
appropriate documents. MetLife will confirm or cause to be
confirmed to customers all Contract transactions, as to the
extent legally required, and will administer the Contracts
after they have been delivered, but may from time to time
require
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MetLife Version - September 2003
assistance from Broker. Consistent with its administrative
procedures, MetLife will assume that a Contract issued by it
will be promptly delivered by Broker to the purchaser of
such Contract. As a result, if a purchaser exercises the
free look rights under a Contract, Broker shall indemnify
MetLife for any loss incurred by MetLife or its Affiliates
that results from Broker's failure to promptly deliver such
Contract to its purchaser.
2) Broker will maintain all books and records as required by
Rules 17a-3 and 17a-4 under the 1934 Act, except to the
extent that MetLife may agree to maintain any such records
on Broker's behalf. Records subject to any such agreement
shall be maintained by MetLife as agent for Broker in
compliance with said rules, and such records shall be and
remain the property of Broker and be at all times subject to
inspection by the SEC in accordance with Section 17(a) of
that Act. Nothing contained herein shall be construed to
affect MetLife's or its Affiliates' right to ownership and
control of all pertinent records and documents pertaining to
its business operations including, without limitation, its
operations relating to the Contracts, which right is hereby
recognized and affirmed. MetLife and Broker agree that each
shall retain all records related to this Agreement as
required by the 1934 Act, and the rules and regulations
thereunder and by any other applicable law or regulation, as
Confidential Information as described in Section VIII(D) of
this Agreement, and neither party shall reveal or disclose
such Confidential Information to any third party unless such
disclosure is authorized by the party affected thereby or
unless such disclosure is expressly required by applicable
federal or state regulatory authorities. However, nothing
contained herein shall be deemed to interfere with any
document, record or other information, which by law, is a
matter of public record.
VIII. PRIVACY INFORMATION
A. PROPRIETARY INFORMATION
Any and all account records developed by MetLife or its
Affiliates, or provided to MetLife or its Affiliates by
Broker or Broker's affiliates, including but not limited to
customer files, sales aides, computer software, customer
names, addresses, telephone numbers and related paperwork,
literature, authorizations, manuals and supplies of every
kind and nature relating to the Contracts and the servicing
of the Contracts are and shall remain the property of
MetLife or its Affiliates. Such proprietary information and
materials shall be treated as nonpublic personal information
and/or confidential information, as appropriate pursuant to
Sections VIII(A), (B), (C), and (D) of this Agreement.
Enterprise Selling Agreement
MetLife Version - September 2003
Any and all proprietary information and material developed
and provided by MetLife and its Affiliates shall be returned
to MetLife (including all copies made by the Broker or its
affiliates) upon termination of this Agreement. Any
materials developed by the Broker or its affiliates in
support of the marketing, sales, advertising or training
related to MetLife or its Contracts shall be destroyed upon
the termination of the Agreement.
B. RECEIPT OF CUSTOMER NONPUBLIC PERSONAL INFORMATION FROM
BROKER BY METLIFE
1) MetLife and its Affiliates will treat nonpublic personal
information regarding Broker's customers provided to it by
Broker under this Agreement as Confidential Information
under Section VIII(D) of this Agreement, except that such
provisions shall not apply to such information regarding
customers of Broker who were, are or become policyholders or
customers of MetLife or its Affiliates other than by reason
of the services provided by Broker under this Agreement.
2) Notwithstanding the foregoing, MetLife and its Affiliates
shall have the right to use or disclose such nonpublic
personal information: (a) to the full extent required to
comply with Applicable Laws or requests of regulators; (b)
as necessary in connection with any of MetLife or its
Affiliates' audit, legal, compliance or accounting
procedures; (c) as necessary or permitted by Applicable Laws
in the ordinary course of business, for example to
administer Contracts and provide customer service to
purchasers of Contracts under this Agreement; (d) as
authorized by such customer; and (e) to protect against or
prevent fraud.
3) MetLife and its Affiliates may market, offer, sell or
distribute insurance products, including, but not limited
to, the Contracts, or any of their other products and
related services, outside of this Agreement to customers of
Broker provided they do not use nonpublic personal
information regarding Broker's customers provided by Broker
to specifically target customers, and such marketing,
offering, selling or distributing by MetLife and its
Affiliates of insurance (including but not limited to the
Contracts) or any of their other products or services shall
not be subject to the terms of this Agreement.
C. TREATMENT OF NONPUBLIC PERSONAL INFORMATION DISCLOSED TO
BROKER BY METLIFE
Broker will treat nonpublic personal information regarding
Broker's customers provided to it by MetLife or its
Affiliates under this Agreement as Confidential Information
and shall use such
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MetLife Version - September 2003
information only to solicit sales of and to provide service
with respect to Contracts sold pursuant to this Agreement.
Notwithstanding the foregoing, Broker shall have the right
to use or disclose nonpublic personal information provided
to it by MetLife or its Affiliates to the extent permitted
by Applicable Laws and MetLife's or its Affiliates' privacy
policy, for example, to comply with Applicable Laws or
requests of regulators, in connection with Broker's audit
procedures, as authorized by such customers, and to protect
against or prevent fraud.
D. CONFIDENTIAL INFORMATION
1) MetLife and its Affiliates and Broker will maintain the
confidentiality of Confidential Information disclosed by
either party to the other party under the terms of this
Agreement. Except as otherwise provided in Sections VIII(A)
and VIII(B), neither MetLife and its Affiliates nor Broker
shall disclose any Confidential Information that is covered
by this Agreement, and shall only disclose such information
if authorized in writing by the affected party or if
expressly required under the terms of a valid subpoena or
order issued by a court of competent jurisdiction or
regulatory body or applicable laws and regulations.
"Confidential Information" means: (a) any information that
this Agreement specifies will be treated as "Confidential
Information" under this Section VIII(B); (b) any information
of Broker and its affiliates disclosed by Broker to MetLife
or its Affiliates through the course of business during the
term of this Agreement, or any information of MetLife and
its Affiliates that is disclosed by MetLife or its
Affiliates to Broker through the course of business during
the term of this Agreement, in each such case if such
information is clearly identified as and marked
"confidential" by the disclosing party, such information
includes, but is not limited to, new products, marketing
strategies and materials, development plans, customer
information, client lists, pricing information, rates and
values, financial information and computer systems; (c)
nonpublic personal information; and (d) information required
to be treated as confidential under Applicable Laws.
2) "Confidential Information" does not include (i) information
which is now generally available in the public domain or
which in the future enters the public domain through no
fault of the receiving party; (ii) information that is
disclosed to the receiving party by a third party without
violation by such third party of an independent obligation
of confidentiality of which the receiving party is aware; or
(iii) information that the disclosing party consents in
writing that the receiving party may disclose.
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3) The disclosing party warrants that it has the right to
provide access to, disclose and use, the Confidential
Information to be provided hereunder. The receiving party
shall not be liable to the other for:
a) inadvertent use, publication, or dissemination of the
Confidential Information received hereunder provided
that: (i) it uses the same degree of care in
safeguarding such information as it used for its own
information of like importance; (ii) it has complied
with Applicable Laws; and (iii) upon discovery of
such, it shall take steps to prevent any further
inadvertent use, publication, or dissemination;
and/or
b) unauthorized use, publication or dissemination of the
Confidential Information received hereunder by
persons who are or have been in its employ unless it
fails to safeguard such information with the same
degree of care as it uses for its own proprietary
information of like importance and provided that the
receiving party uses such Confidential Information in
accordance with Applicable Laws.
4) Any similarity between the Confidential Information and any
other information, regardless of medium, whether verbal or
written, as well as contracts and/or services acquired from
third parties or developed by the receiving party, or
Affiliates independently through its or their own efforts,
thought, labor and ingenuity shall not constitute any
violation of this Agreement and shall not subject the
receiving party to any liability whatsoever.
5) The receiving party shall use the Confidential Information
solely for purposes contemplated by this Agreement and shall
not disclose the Confidential Information except as
expressly provided herein.
6) The receiving party understands that neither the disclosing
party nor any of its representatives or designees have made
or make any representation or warranty as to the accuracy or
completeness of the Confidential Information.
E. PROTECTED HEALTH INFORMATION
To the extent that Broker and its Representatives receive, create,
has access to or uses PHI, as that term is defined in Section I of
the Agreement, regarding individuals who are applicants for, owners
of or eligible for benefits under certain health insurance products
and optional riders offered by or through MetLife or any of its
Affiliates, in accordance with the requirements of the federal
Health Insurance
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MetLife Version - September 2003
Portability and Accountability Act of 1996 and related regulations
("HIPAA"), as may be amended from time to time, Broker agrees:
1) Not to use or disclose PHI except (i.) to perform functions,
activities, or services for, or on behalf of, MetLife or its
Affiliates as specified in the Agreement and consistent with
applicable laws, or (ii.) to the extent that such use or
disclosure is required by law. Any such use or disclosure
shall be limited to that required to perform such services
or to that required by relevant law.
2) To use appropriate safeguards to prevent use or disclosure
of PHI other than as permitted by this Agreement.
3) To promptly report to MetLife any use or disclosure of PHI
not permitted by this Agreement of which Broker becomes
aware and to mitigate any harmful effect of any use or
disclosure that is made by Broker or its Representatives in
violation of the requirements of this Agreement.
4) T ensure that any third party with whom Broker contracts or
is hired under that arrangement, receives or has access to
PHI agrees to the same restrictions and conditions that
apply to Broker with respect to PHI under this Agreement.
5) To, within 15 days of MetLife's request, provide MetLife
with any PHI or information relating to PHI as deemed
necessary by MetLife to provide individuals with access to,
amendment of, and an accounting of disclosures of their PHI.
6) To make Broker's records relating to use or disclosure of
PHI available to the Secretary of the United States
Department of Health and Human Services at his/her request
to determine MetLife's, or one of its Affiliate's,
compliance with HIPAA.
7) To, upon termination of this Agreement, in accordance with
MetLife's wishes either return or destroy all PHI Broker
maintains in any form and retain no copies. If MetLife
agrees that such return or destruction is not feasible,
Broker shall extend these protections to the PHI beyond the
termination of the Agreement, in which case any further use
or disclosure of the PHI will be solely for the purposes
that make return or destruction infeasible. Destruction
without retention of copies is deemed "infeasible" if
prohibited by the terms of the Agreement or by applicable
law, including record retention requirements of various
state insurance laws.
IX. INDEMNIFICATION
1) Except with respect to matters relating to the joint
distribution of Contracts, the following indemnification
provisions shall apply:
a. MetLife will indemnify and hold harmless
Broker from any and all losses, claims, damages or
liabilities (or actions in respect thereof), to which
Broker may become subject, insofar as
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such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement
of any material fact contained in the Prospectus,
Registration Statements or any other sales or
offering materials furnished or approved in writing
by MetLife for any of the Contracts or any relevant
funding vehicle or any amendments or supplements
thereto, or arise out of or are based upon the
omission or alleged omission to state therein a
material fact required to be stated therein or
necessary to make the statements therein not
misleading; and will reimburse Broker for any legal
or other expenses reasonably incurred by it in
connection with investigating or defending against
such loss, claim, damage, liability or action in
respect thereof; provided, however, that MetLife
shall not be liable in any such case to the extent
that any such loss, claim, damage, liability or
action arises out of or is based upon an untrue
statement or alleged untrue statement or omission or
alleged omission made by Broker when referring to or
explaining such Prospectus, amendment, Registration
Statement or any other sales or offering materials.
MetLife shall not indemnify Broker for any action
where an applicant for any of the Contracts was not
furnished or sent or given, at or prior to written
confirmation of the sale of a Contract, a copy of the
appropriate Prospectus (es), any Statement of
Additional Information, if required or requested, and
any supplements or amendments to either furnished to
Broker by MetLife. The foregoing indemnities shall,
upon the same terms and conditions, extend to and
inure to the benefit of each director, trustee and
officer of Broker and any person controlling it.
b. Broker will indemnify and hold harmless
MetLife and its Affiliates against any losses,
claims, damages or liabilities (or actions in respect
thereof), to which MetLife or its Affiliates may
become subject, insofar as such losses, claims,
damages, or liabilities (or actions in respect
thereof) arise out of or are based upon any
negligent, improper, fraudulent or unauthorized acts
or omissions by Broker, its employees, agents,
representatives, officers or directors, including but
not limited to improper or unlawful sales practices,
any statement or alleged untrue statement of any
material fact, any omission or alleged omission, any
unauthorized use of sales materials or
advertisements, and any oral or written
misrepresentations; and will reimburse MetLife or its
Affiliates for any legal or other expenses reasonably
incurred by them in connection with investigating or
defending against any such loss, claim, damage,
liability or action. The foregoing indemnities shall,
upon the same terms and conditions, extend to and
inure to the benefit of each director, trustee and
officer of MetLife and its Affiliates, and any person
controlling either MetLife or its Affiliates.
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c. Broker shall indemnify and hold harmless
MetLife and its Affiliates from any and all losses,
claims, damages or liabilities (or actions in respect
thereof) to which MetLife or its Affiliates may be
subject, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out
of or result from any breach of any representation or
warranty, covenant, agreement, obligation or
undertaking in this Agreement by Broker or its
directors, officers, employees or other
representatives or by any other person or entity
acting on behalf of or under control of Broker; and
will reimburse MetLife or its Affiliates for any
legal or other expenses reasonably incurred by them
in connection with investigating or defending against
any such loss, claim, damage, liability or action.
The foregoing indemnities shall, upon the same terms
and conditions, extend to and inure to the benefit of
each director, trustee and officer of MetLife and its
Affiliates, and any person controlling either MetLife
or its Affiliates.
d. Broker shall indemnify and hold MetLife and
its Affiliates harmless for any penalties, losses or
liabilities resulting from MetLife improperly paying
any compensation under this Agreement, unless such
improper payment was caused by MetLife's or its
Affiliates' negligence or willful misconduct; and
will reimburse MetLife or its Affiliates for any
legal or other expenses reasonably incurred by them
in connection with investigating or defending against
any such loss, claim, damage, liability or action.
The foregoing indemnities shall, upon the same terms
and conditions, extend to and inure to the benefit of
each director, trustee and officer of MetLife or its
Affiliates, and any person controlling either MetLife
or its Affiliates.
2) With respect to matters relating to the joint distribution
of Contracts, the following indemnification provision shall
apply:
a) MetLife, and General Agent, where applicable, jointly
and severally, agree to indemnify Broker and Agency
against and hold them harmless from any and all
claims, damages, lawsuits, administrative
proceedings, liabilities and expenses (including
reasonable attorneys' fees) against Broker or Agency
arising or resulting directly or indirectly from acts
or omissions of MetLife or General Agent(s),
including, but not limited to, breach of any
representation, warranty, covenant or obligation of
MetLife or General Agent(s) under the Agreement, or
of any of their officers or employees in connection
with performance under the Agreement. For purposes of
this Section only, Broker shall be deemed to include
its "controlling persons" as defined in Section 15 of
the 1933 Act and Section 20(a) of the 1934 Act.
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b) Broker and Agency, where applicable, jointly and
severally, agree to indemnify MetLife, its Affiliates
and General Agent(s) against and hold them harmless
from any and all claims, damages, lawsuits,
administrative proceedings, liabilities and expenses
(including reasonable attorneys' fees) against
MetLife, its Affiliates or General Agent(s) arising
or resulting directly or indirectly from acts or
omissions of Broker or Agency, including, but not
limited to, breach of any representation, warranty,
covenant or obligation of Broker or Agency under the
Agreement, or of any of their officers or employees
in connection with performance under the Agreement.
For purposes of this Section only, MetLife shall be
deemed to include its "controlling persons" as
defined in Section 15 of the 1933 Act and Section
20(a) of the 0000 Xxx.
3) Promptly after receipt by an indemnified party of notice of
the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against
the indemnifying party, notify the indemnifying party in
writing of the commencement thereof; but the omission to
notify the indemnifying party shall not relieve it from any
liability which it may otherwise have to any indemnified
party. In case any such action shall be brought against any
indemnified party, it shall notify the indemnifying party of
the commencement thereof. The indemnifying party shall be
entitled to participate in, and, to the extent that it shall
wish, jointly with any other indemnifying party, similarly
notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party. After notice from
the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying
party shall not be liable to such indemnified party for any
legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof
other than reasonable costs of investigation.
X. GENERAL PROVISIONS
A. TERM AND TERMINATION
1) This Agreement shall continue in force for a term of one
year from the Effective Date and thereafter shall
automatically be renewed each year for a further one-year
period, provided that any party may unilaterally terminate
this Agreement with or without cause upon thirty (30) days
prior written notice of termination to the other parties.
2) Change in Status.
Enterprise Selling Agreement
MetLife Version - September 2003
a) Broker-Dealer Status. The Agreement shall terminate
immediately upon MetLife or Broker ceasing to be a
registered broker-dealer or a member of the NASD.
b) Legal Status. The Agreement shall terminate
immediately upon the termination of the legal
existence of Selling Broker-Dealer or the Agency, or
the merger, consolidation, reorganization,
dissolution, receivership or bankruptcy of either, or
whenever the Agency is no longer licensed under law
to solicit and procure applications for Contracts,
unless the Agency notifies the other parties in
writing at least thirty (30) days' prior to the
occurrence of any of the above events and obtains
written permission to continue on a basis approved by
the other parties.
3) Upon termination of this Agreement, all authorizations,
rights and obligations shall cease except (a) the agreements
contained in Sections, VI, VIII, IX, X(E), X(F), and X(J)
hereof; and (b) the obligation to settle accounts hereunder.
Except with respect to records required to be maintained by
Broker pursuant to Rules 17a-3 and 17a-4 under the 1934 Act,
Broker shall return to MetLife, within 30 days after the
Effective Date of termination, any and all records in its
possession which have been specifically maintained in
connection with MetLife's operations related to the
Contracts.
B. ASSIGNABILITY
This Agreement shall not be assigned by either party without
the written consent of the other; provided, however, that
MetLife may assign this Agreement to its Affiliates at any
time. Any purported assignment in violation of this Section
shall be void.
C. AMENDMENTS
No oral promises or representations shall be binding nor
shall this Agreement be modified except by agreement in
writing, executed on behalf of the Parties by a duly
authorized officer of each of them.
D. NOTICES
Notices to be given hereunder shall be addressed to:
_____________ _____________
_____________ _____________
_____________ _____________
Enterprise Selling Agreement
MetLife Version - September 2003
_____________ _____________
E. ARBITRATION
1) All disputes and differences between the parties, other than
those arising with respect to the use of nonpublic personal
information under Section VIII must be decided by
arbitration, regardless of the insolvency of either party,
unless the conservator, receiver, liquidator or statutory
successor is specifically exempted from an arbitration
proceeding by applicable state law.
2) Either party may initiate arbitration by providing written
notification to the other party. Such written notice shall
set forth (i) a brief statement of the issue(s); (ii) the
failure of the parties to reach agreement; and (iii) the
date of the demand for arbitration.
3) The arbitration panel shall consist of three arbitrators.
The arbitrators must be impartial and must be or must have
been officers of life insurance and or securities companies
other than the parties or their affiliates.
4) Each party shall select an arbitrator within thirty (30)
days from the date of the demand. If either party shall
refuse or fail to appoint an arbitrator within the time
allowed, the party that has appointed an arbitrator may
notify the other party that, if it has not appointed its
arbitrator within the following ten (10) days, an arbitrator
will be appointed on its behalf. The two (2) arbitrators
shall select the third arbitrator within thirty (30) days of
the appointment of the second arbitrator. If the two
arbitrators fail to agree on the selection of the third
arbitrator within the time allowed, each arbitrator shall
submit to the other a list of three (3) candidates. Each
arbitrator shall select one name from the list submitted by
the other and the third arbitrator shall be selected from
the two names chosen by drawing lots.
5) The arbitrators shall interpret this Agreement as an
honorable engagement rather than merely as a legal
obligation and shall consider practical business and
equitable principles as well as industry custom and practice
regarding the applicable insurance and securities business.
The arbitrators are released from judicial formalities and
shall not be bound by strict rules of procedure and
evidence.
Enterprise Selling Agreement
MetLife Version - September 2003
6) The arbitrators shall determine all arbitration schedules
and procedural rules. Organizational and other meetings will
be held in New York, unless the arbitrators select another
location. The arbitrators shall decide all matters by
majority vote.
7) The decisions of the arbitrators shall be final and binding
on both parties. The arbitrators may, at their discretion,
award costs and expenses, as they deem appropriate,
including but not limited to legal fees and interest. The
arbitrators may not award exemplary or punitive damages.
Judgment may be entered upon the final decision of the
arbitrators in any court of competent jurisdiction.
8) Unless the arbitrators shall provide otherwise, each party
will be responsible for (a) all fees and expenses of its
respective counsel, accountants, actuaries and any other
representatives in connection with the arbitration and (b)
one-half (1/2) of the expenses of the arbitration, including
the fees and expenses of the arbitrators
F. GOVERNING LAW
This Agreement shall be governed by and construed in
accordance with the laws of the State of New York without
regard to New York choice of law provisions.
G. ENTIRE UNDERSTANDING
This Agreement and any reference incorporated herein
constitute the complete understanding of the parties and
supersedes in its entirety any and all prior and
contemporaneous agreements among the parties with respect to
the subject matter discussed herein. No oral agreements or
representations shall be binding.
H. THIRD PARTY BENEFICIARIES
MetLife's Affiliates shall be third party beneficiaries of
this Agreement, entitled to enforce the provision hereof as
if they were a party to this Agreement. Except as otherwise
provided in the preceding sentence, nothing in the Agreement
shall convey any rights upon any person or entity, which is
not a party to the Agreement.
I. NON-EXCLUSIVITY
Broker and Agency agree that no territory or product is
assigned exclusively hereunder and that MetLife reserves the
right in its discretion to enter into selling agreements
with other
Enterprise Selling Agreement
MetLife Version - September 2003
broker-dealers, and to contract with or establish one or
more insurance agencies in any jurisdiction in which Broker
transacts business hereunder.
J. NO-HIRE
For purposes of this Section J only, the term "agent" shall
include all appointed agents and Representatives. The
parties to this Agreement acknowledge that each may have
access to the names and identities of agents of each party
as a result of performing their respective obligations under
this Agreement, and that each may establish close working
relationships with such persons. Therefore, Broker and
Agency on the one hand (for purposes of this Section J,
"Selling Group"), and MetLife on the other hand, agree that
while an agent maintains his/ her affiliation with each and
for twelve (12) months after his/ her termination of the
affiliation:
a) Selling Group will not hire any agent of MetLife. In
addition Selling Group acknowledges that its agents
hold important contractual and business relationships
with it and agree that it shall not interfere in any
way with the relationships, contractual or otherwise,
between MetLife and its agents. Selling Group shall
not induce or encourage, or attempt to induce or
encourage, any agent of MetLife to terminate or change
his/ her relationship with MetLife.
b) MetLife will not hire any agent of Selling Group. In
addition MetLife acknowledges that its agents hold
important contractual and business relationships with
it and agree that it shall not interfere in any way
with the relationships, contractual or otherwise,
between Selling Group and its agents. MetLife shall
not induce or encourage, or attempt to induce or
encourage, any agent of Selling Group to terminate or
change his/ her relationship with Selling Group.
K. WAIVER
The failure of either party to strictly enforce any
provision of this Agreement shall not operate as a waiver of
such provision or release either party from its obligation
to perform strictly in accordance with such provision.
L. COUNTERPARTS
This Agreement may be executed in counterparts, with the
same force and effect as if executed in one complete
document.
M. SEVERABILITY
Enterprise Selling Agreement
MetLife Version - September 2003
If any provision of this Agreement is declared null, void or
unenforceable in whole or in part by any court, arbitrator
or governmental agency, said provision shall survive to the
extent it is not so declared and all the other provisions of
the Agreement shall remain in full force and effect unless,
in each case, such declaration shall serve to deprive any of
the parties hereto of the fundamental benefits of this
Agreement.
In reliance on the representations set forth and in consideration of the
undertakings described, the parties represented below do hereby contract and
agree.
METROPOLITAN LIFE INSURANCE COMPANY
(BROKER-DEALER)
By__________________________________
____________________________________
Print Name & Title
Date________________________________
METROPOLITAN LIFE INSURANCE COMPANY
(ISSUER)
By__________________________________
____________________________________
Print Name & Title
Date________________________________
BROKER
(SELLING BROKER-DEALER)
By__________________________________
____________________________________
Print Name & Title
Date________________________________
Enterprise Selling Agreement
MetLife Version - September 2003
EXHIBIT A
SCHEDULE OF VARIABLE PRODUCT AND COMPENSATION
Enterprise Selling Agreement
MetLife Version - September 2003
EXHIBIT B
SCHEDULE OF FIXED PRODUCT AND COMPENSATION
Enterprise Selling Agreement
MetLife Version - September 2003
EXHIBIT C
REWRITTEN BUSINESS (RWB) COMMISSION RULES
(formerly, Replacement Commission Rules)
EFFECTIVE JUNE 1, 2002
REVISED MAY 9, 2003
GUIDING PRINCIPLES FOR REWRITTEN BUSINESS
The objective of this document is to provide information on MetLife's
enterprise-wide Rewritten Business (RWB) Rules. These rules were designed based
the following guiding principles:
1. Support SUITABLE CHANGE THAT IS DRIVEN BY THE BEST INTEREST AND NEEDS OF
THE CUSTOMER.
2. ENTERPRISE CONSISTENCY - Apply the same rules for all business done by all
producers in the MetLife family of distribution franchises.
3. Generally pay full compensation for increase in premium and reduced
compensation for replaced premium, regardless of source.
4. FAIRNESS - Provide fair compensation for internal, Enterprise-wide
replacement transactions that are done with the best interest and needs of
the client in mind and in accordance with industry practices and regulatory
requirements.
These rules were designed to provide for all known situations that an agent
might encounter with suitability and fairness for the client in mind. At the
time of the writing of this document, they are believed to cover all situations,
BUT it is recognized that our business is not static and a situation may arise
where these Rewritten Business Rules will not clearly address the issue.
These new rules apply to payment of First Year Compensation. In general, Asset
Trail, TLP and renewal commissions will not be affected.
SUITABILITY, FIRST & FOREMOST
The rules for Rewritten Business are in place to support suitable transactions
that are in the best interest of the customer. Simply stated, all Rewritten
Business must be suitable for the customer. A product replacement or switch can
only be recommended if it is in the customer's best interest. In general, when
you and your customer are considering rewriting a product to better serve the
customer's financial goals, the following guidelines should be followed. For a
detailed review of MetLife's suitability guidelines, please refer to the
Suitability Tutorial and Replacement Tutorial in the Ethics & Compliance section
of the LearnNow website, or the Suitability document posted in the Reference
Works section of the Ask Me/Tell Me/Read Me database.
- The recommendation should be supported by a thorough fact-find and
needs analysis.
- The new product should clearly meet the customer's financial and
personal goals, and this should be readily evident to the customer.
- The benefits of the new product should clearly outweigh the costs and
consequences of replacing or switching the existing product.
Enterprise Selling Agreement
MetLife Version - September 2003
- The pros and cons of the proposed transaction should be discussed
completely with the customer.
- Proper disclosure of the replacement or switch must be made to the
customer and ALL Company and state requirements must be strictly
adhered to with regard to Rewritten Business.
WHEN DO THE REWRITTEN BUSINESS RULES APPLY?
When a client gives up ALL OR PART OF THE BENEFIT PROVIDED BY AN EXISTING
PRODUCT (either by ceasing to pay required premiums or deposits on the product
or by appropriating the product's cash value) to fund the purchase of a New
Product or the rollover into an Existing Product, these Rewritten Business rules
will apply. These rules govern the commissions paid on the sale of the second
product.
These rules apply in the following circumstances as defined by key terms and
definitions presented in the following section of this document:
- When an Existing Product is rewritten by New Product; or
- When funds from an Existing Product are used to fund a deposit into
another Existing Product; or
- When an Existing Product is rewritten by a non-enterprise New Product
sponsored by, or sold through the enterprise (e.g., products available
through the MetLife General Agency.)
For PROTECTION PRODUCTS, and INVESTMENT PRODUCTS, any transaction identified as
occurring within the respective Rewritten Business Window (see definition in
next section of this document), may trigger the application of these Rewritten
Business Rules.
Enterprise Selling Agreement
MetLife Version - September 2003
KEY TERMS & DEFINITIONS AS APPLIED TO REWRITTEN BUSINESS RULES
EXISTING PRODUCT or PRODUCT BEING REWRITTEN is any "existing" enterprise
protection or investment product used to fund the purchase of a new enterprise
protection or investment product or to fund a deposit into an Existing
Enterprise protection or investment Product.
NEW PRODUCT is any protection or investment product, policy or contract, which
rewrites, in whole or part, an Existing Product.
NEW PREMIUM or NEW DEPOSIT is the amount of first-year premium or the initial
deposit paid on a New Product. With respect to flexible premium life products,
any amount paid in excess of the (base commissionable) premium amount -
sometimes referred to as "excess premium" - is excluded.
OLD PREMIUM LEVEL is an amount equal to the first-year premium on an Existing
Product. With respect to flexible premium life products, "Old Premium Level"
does not include any amount previously paid in excess of the (base
commissionable) premium amount - sometimes referred to as "excess premium."
OLD MONEY is the net cash value released (excluding dividend accumulations) from
an Existing Product, either as cash build up, accumulation, or policy values,
and subsequently appropriated or used to pay any part of a New Premium or
Deposit. Appropriation or use of Old Money to pay any part of a New Premium or
Deposit may be implied if the use or appropriation occurs within the Rewritten
Business Window and the criteria for deeming the money to have been used for
that purpose have been met. This will apply whether that cash value is
explicitly rolled into the new policy or not. In addition, a full or partial
surrender of PUAR/VABR values (or of a paid-up or non-forfeiture policy) on the
same life is considered rollover money if it falls within the RWB window, even
if the old policy is not otherwise changed or "rewritten."
NEW MONEY is any amount used to pay premium or deposits on a New or Existing
Product that is not Old Money. In essence, New Money is any money paid by the
client that has not come from an existing enterprise product within the
Rewritten Business Window as defined in this document.
REWRITTEN BUSINESS WINDOW is the time frame in which transactions on an Existing
Product will trigger the application of these Rewritten Business rules with
regard to the issue of a New Product or deposit into an Existing Product. If
within this time frame, an Existing Product lapses, is fully or partially
surrendered for the cash value, or the annualized premium is reduced by a policy
change, these Rewritten Business rules will apply to the commissions on the New
Product.
1) For PROTECTION PRODUCTS, the REWRITTEN BUSINESS WINDOW is 6 months
prior to and 12 months after the Date of Part A of a New Product.
2) For INVESTMENT PRODUCTS, the REWRITTEN BUSINESS WINDOW is 3 months
prior to and 3 months after the issue date of a New Product or a
deposit into an Existing contract.
Enterprise Selling Agreement
MetLife Version - September 2003
RULES FOR MONEY COMING INTO A NEW LIFE POLICY
PERMANENT TO PERMANENT / TERM TO TERM / PERMANENT TO TERM LIFE
FULL FIRST-YEAR COMMISSIONS will be paid on the part of the New premium in the
New Product that exceeds the premium level of the Old Product.
- PARTIAL FIRST-YEAR COMMISSIONS will be paid on premium dollars in the New
Product up to the premium level of the Old Product. The partial commission
payable will be determined based on the age of the old policy being
rewritten. This applies to "roll-overs" directly into the Cash Value and
Paid-Up Riders. Please refer to the table below.
-----------------------------------------------------------
PERCENT OF NORMAL FYC
-----------------------------------------------------------
YEARS
OLD POLICY HAS UP TO OLD PREMIUM ABOVE OLD PREMIUM
BEEN IN-FORCE LEVEL (1) LEVEL
-----------------------------------------------------------
Less Than 5 0% 100%
-----------------------------------------------------------
5 but less than 6 25% 100%
-----------------------------------------------------------
6 but less than 7 30% 100%
-----------------------------------------------------------
7 but less than 8 35% 100%
-----------------------------------------------------------
8 but less than 9 40% 100%
-----------------------------------------------------------
9 but less than 10 45% 100%
-----------------------------------------------------------
10 or more 50% 100%
-----------------------------------------------------------
(1) Also applies to old money rolled over into an accumulation fund (e.g,
Excess Premium), or whole life riders (e.g, VABR).
- FOR EXISTING TERM INSURANCE SOLD AFTER 01/01/2001. When existing term
insurance that was sold AFTER 01/01/2001 is replaced by a new term policy,
the "UP TO Old Premium Level" percentages in the table above would be
doubled.
- PREMIUM DOUBLING RULE. Should the New Policy base premium at least double
that of the Old Policy base premium AND the Old Policy is at least 5 years
old, full commission will be paid on all premium dollars related to the
base premium of the New Policy. Any Old Money rolled over into an
accumulation fund (e.g, Excess Premium), or whole life riders (e.g, VABR)
will be commissioned based on the above table.
- NORMAL RENEWALS will be paid based on published schedules of renewals for
the New Policy being written.
- A PERSISTENCY ADJUSTMENT will apply to offset the "lapse" of the Old
Product that is being rewritten under the Traditional Life Persistency
(TLP) arrangement. This adjustment will apply if the Old Product being
rewritten is a traditional life policy, has been in force for 5 years or
more, and the commissions on the New Product are adjusted under the
Rewritten Business Rules.
- No Commissions are paid for "SAVING" cases.
Enterprise Selling Agreement
MetLife Version - September 2003
- TERM INSURANCE receives the "Percent of Normal FYC" scale if rewritten,
unless it is in the last 2 years of the level premium guarantee period, in
which case 100% of normal FYC is payable.
TERM TO PERMANENT
- Term-to-permanent commission payments are determined by the conversion
rules of the Old Product. For a replacement of a term policy by a permanent
policy, where no term conversion is available, full commissions will be
paid on the permanent policy.
ANNUITIES/MUTUAL FUND/WRAP ACCOUNT TO LIFE
FULL FIRST-YEAR COMMISSIONS will be paid when money is coming from an Old
Investment Product and going towards a New Protection Product, EXCEPT for
Annuities with surrender/withdrawal charges.
Enterprise Selling Agreement
MetLife Version - September 2003
RULES FOR MONEY COMING INTO AN NEW ANNUITY
FIXED TO FIXED ANNUITY / FIXED TO VARIABLE ANNUITY / VARIABLE TO FIXED ANNUITY
- FULL COMMISSIONS will be paid on New Money included within the New Deposit.
- ONE-HALF OF THE NORMAL FIRST-YEAR COMMISSION will be paid on the Old Money
included within the New Deposit. The commission is only payable if the old
annuity contract is beyond the surrender/withdrawal charge period.
- NO COMMISSIONS will be paid on the Old Money included within the New
Deposit if a surrender/withdrawal charge was assessed on the old contract.
VARIABLE ANNUITY TO VARIABLE ANNUITY
- FULL COMMISSIONS will be paid on New Money included within the New Deposit.
- NO COMMISSIONS will be paid on any Old Money included within the New
Deposit.
MUTUAL FUND OR WRAP ACCOUNT TO FIXED OR VARIABLE ANNUITY
- FULL COMMISSIONS will be paid on all money being deposited.
PERMANENT LIFE INSURANCE TO FIXED OR VARIABLE ANNUITY
- FULL COMMISSIONS will be paid on New Money included within the New Deposit.
- FULL FIRST-YEAR COMMISSION will be paid on Old Money included within the
New Deposit if the life insurance policy has been in force at least 10
years.
- NO FIRST YEAR COMMISSION paid on Old Money included in the New Deposit if
the life insurance policy has been in force for less than 10 years.
SPECIAL RULES APPLICABLE TO ANNUITIES
- NO COMMISSIONS will be payable on company-sponsored exchanges or similar
exchanges sponsored by MetLife affiliates.
- STRETCH/ DECEDENT XXX. If the annuity is an XXX contract and the
beneficiary elects a stretch/decedent XXX, NO COMMISSIONS will be paid or
credited.
- ANNUITIZATION. One-half (50%) of the normal commissions/GDC will be
credited on an annuitization from a deferred annuity which has been in
place for at least two contract years AND on an annuitization using life
insurance accumulation amounts or death benefit proceeds under the terms of
the policy.
- SPOUSAL TRANSFERS. If the spouse is the primary beneficiary of the annuity
death claim, and he/she elects to retain the proceeds in his/her name and
become the annuitant/owner of the existing contract, no commission will be
paid or credited. If the annuity death proceeds are moved to a new annuity,
instead of using the spousal assumption/continuation provisions, the same
RWB Rules for Old Money coming into a new Annuity will apply. Full
first-year commission will be paid on New Money.
Enterprise Selling Agreement
MetLife Version - September 2003
RULES FOR MONEY COMING INTO A NEW MUTUAL FUND/WRAP
ONE MUTUAL FUND FAMILY/WRAP TO ANOTHER MUTUAL FUND FAMILY/WRAP
- FULL FIRST-YEAR COMMISSIONS will be paid, provided a properly executed
"Mutual Fund Switch Letter," signed by the client, the Financial Services
Representative and his or her manager, is submitted as part of the
transaction.
EXCHANGES WITHIN THE SAME MUTUAL FUND FAMILY
- FULL FIRST-YEAR COMMISSION will be paid on any amount of New Money.
- NO FIRST-YEAR COMMISSION will be paid when Old Money from a mutual fund
family is used to fund a mutual fund from the same family of funds. There
is generally no sales charge to the client for this exchange, and as such,
there is no commission payable.
ANNUITY TO MUTUAL FUND/WRAP ACCOUNT
- FULL COMMISSION will be paid on New Money.
- FULL FIRST-YEAR COMMISSION will be paid when a mutual fund or WRAP account
rewrites an annuity that is out of the surrender charge period.
- NO COMMISSION will be paid on the Old Money if the annuity is subject to a
surrender/withdrawal charge.
PERMANENT LIFE INSURANCE TO MUTUAL FUNDS/WRAP ACCOUNTS
- FULL COMMISSIONS will be paid on New Money included within the New Deposit.
- FULL FIRST-YEAR COMMISSION will be paid on Old Money included within the
New Deposit if the life insurance policy has been in force at least 10
years.
- NO FIRST YEAR COMMISSION paid on Old Money included in the New Deposit if
the life insurance policy has been in force for less than 10 years.
Enterprise Selling Agreement
MetLife Version - September 2003
ADDITIONAL RULES THAT APPLY
The Company reserves the right to apply the rewritten business rules in special
situations. Listed here is information regarding several special situations, and
the names of individuals you should contact if you encounter a situation where
it is unclear how these rules apply.
POLICY LOANS. It is against company rules to recommend policy loans to help fund
a New or Existing Products. The date of a policy loan check may be used as the
"date of lapse" in determining whether a new policy will be considered a
"rewritten policy," if, within the Rewritten Business Window:
1) a loan is taken out on an Existing Policy resulting in the total
outstanding loan on that policy to be equal to 80% or more of the
total loan value on that policy, AND
2) the existing policy lapses, is surrendered for the cash value, or
the annualized premium is reduced by policy change, with three or
less months additional premiums having been paid 31 days after the
date of the policy loan check.
Remember that it is against Company policy to recommend policy loans to help
fund the purchase of an equity product.
OWNERSHIP CHANGES. When a change in ownership occurs involving a corporation, a
qualified retirement plan or an irrevocable trust, the New Policy will not be
considered Rewritten Business for RWB commission rule purposes, even though the
insured is the same. Neither will an individually-owned policy sold after a
corporate-owned policy is terminated because of business failure or bankruptcy.
MATURED ENDOWMENTS. If the funds of an endowment policy, which has matured or is
within 3 years of maturity, are deposited into a new or existing life insurance
policy, annuity, or mutual fund, all the funds will be considered New Money for
commission purposes, and full FYCs will be paid.
JUVENILE POLICIES. Full commissions will be credited when a juvenile policy
owned by parents, guardians or a trust is rewritten by a New Policy on the same
life that also owns the New Policy and the owner of the New Policy is an adult
(age 18 or older).
QUALIFIED DOMESTIC RELATIONS ORDER. When a life policy is cancelled because of a
court ordered settlement and is rewritten by another life policy on the same
life, full commissions will be credited.
Enterprise Selling Agreement
MetLife Version - September 2003
When the assets of an annuity are required to be split because of a Domestic
Relations Order or Qualified Domestic Relations Order, no commissions will be
paid or credited.
PRODUCT EXCHANGES. The company sometimes sponsors special exchange programs
(known as a "company-sponsored exchange") designed to encourage clients to
replace an older product with a newer one, typically because the newer product
has features the older one lacks that are considered advantageous to the client.
The company often provides some incentive to the client to make the sponsored
exchange. Special commission provision may also apply. If they do, these special
commission provisions will supersede the rules published here.
TERM CONVERSIONS. On a term conversion in the first policy year, the term
writer's first-year commissions are protected. The writer of the permanent
policy will receive first-year commissions on the new policy less the FYC paid
on the term policy, and will receive full renewal commissions. A term policy in
its second or later policy year may be converted, and full commissions will be
credited to the writer effecting the term conversion.
Enterprise Selling Agreement
MetLife Version - September 2003
EXAMPLES
It's important to note at this point that the examples below show the net FYC
you would receive given the assumptions shown. Remember, AS CURRENTLY IS THE
BUSINESS PROCESS, Full FYC may well be paid out in one pay cycle AND the
relative Rewritten Business Rule adjustments, may come 1 or more pay cycles
later.
EXAMPLE OF HOW THE TABLE WORKS:
-----------------------------------------------------------------------------
PERCENT OF NORMAL FYC
-----------------------------------------------------------------------------
YEARS
OLD POLICY HAS UP TO OLD PREMIUM ABOVE OLD PREMIUM
BEEN IN-FORCE LEVEL (1) LEVEL
-----------------------------------------------------------------------------
Less Than 5 0% 100%
-----------------------------------------------------------------------------
5 but less than 6 25% 100%
-----------------------------------------------------------------------------
6 but less than 7 30% 100%
-----------------------------------------------------------------------------
7 but less than 8 35% 100%
-----------------------------------------------------------------------------
8 but less than 9 40% 100%
-----------------------------------------------------------------------------
9 but less than 10 45% 100%
-----------------------------------------------------------------------------
10 or more 50% 100%
-----------------------------------------------------------------------------
(1) Also applies to old money rolled over into an accumulation fund (e.g, Excess
Premium), or whole life riders (e.g, VABR).
Assumptions:
- New Policy FYC Rate is 50%
- Old Policy in-force for 7 1/2 years (cross table at "7 but less than 8"
years in-force row)
Results:
- FYC Rate on New Premium up to the Old Premium level = 17.5% (which is
normal FYC Rate 50% x 35% - the % from the chart above)
- FYC Rate for New Premium above Old Premium level = 50% (New Money, gets
full FYC)
Enterprise Selling Agreement
MetLife Version - September 2003
EXAMPLES OF A LIFE TO LIFE REWRITTEN POLICY
EXAMPLE 1: Old policy and New Policy have same premium.
Old Policy New Policy
- In-force for 9 years - New Premium of $1,000
- Premium of $1,000 - Normal FYC rate of 50%
- $0 net cash value
Results:
- FYC on New Premium up to Old Premium level = 50% x 45% x $1000 = $225.00
- FYC on New Premium above Old Premium level = 50% x ($1,000 - $1,000) = $ 0.00
-------
TOTAL FYC = $225.00
How did we get there?
- Look Up applicable FYC adjustment rate from table (9 years inforce) = 45%
- Multiply as shown above for New Premium up to Old Premium level ($1,000)
- No FYC on New Premium above Old Premium level because New Premium minus Old
Premium is $0.
EXAMPLE 2: New Policy has $500 more premium than old policy.
Old Policy New Policy
- In-force for 9 years - New Premium of $1,500
- Premium of $1,000 - Normal FYC rate of 50%
- $0 net cash value
Results:
- FYC on New Premium up to Old Premium level = 50% x 45% x $1000 = $225.00
- FYC on New Premium above Old Premium level = 50% x ($1,500 - $1,000) = $250.00
-------
TOTAL FYC = $475.00
How did we get there?
- Look Up applicable FYC adjustment rate from table (9 years inforce) = 45%
- Multiply as shown above for New Premium up to Old Premium level ($1,000)
- FYC on New Premium above Old Premium calculated as above because New
Premium minus Old Premium is $500.
Enterprise Selling Agreement
MetLife Version - September 2003
EXAMPLE 3: New Policy has $500 more premium than old policy, and additional
$10,000 of Old Policy Cash Value also being rolled over into new policy.
Old Policy New Policy
- In-force for 9 years - New Premium of $1,500
- Premium of $1,000 - Normal FYC rate of 50%
- $10,000 net cash value (Rolled Over to New
Policy)
Results:
- FYC on New Premium up to Old Premium level = 50% x 45% x $1000 = $225.00
- FYC on New Premium above Old Premium level = 50% x ($1,500 - $1,000) = $250.00
- FYC on net Cash Value from Old Policy =2% x 45% x $10,000 = $ 90.00
-------
TOTAL FYC = $565.00
How did we get there?
- Look Up applicable FYC adjustment rate from table (9 years inforce) = 45%
- Multiply as shown above for New Premium up to Old Premium level ($1,000)
- FYC on New Premium above Old Premium calculated as above because New
Premium minus Old Premium is $500.
- Multiply as shown above for Old Money ($10,000) rolled over to new policy.
EXAMPLE 4: Same as example 3, BUT assume $10,000 of Old Policy Cash Value is
surrendered by owner (i.e., not rolled over into the new policy.)
Old Policy New Policy
- In-force for 9 years - New Premium of $1,500
- Premium of $1,000 - Normal FYC rate of 50%
- $10,000 net cash value (NOT rolled over)
Results:
- FYC on New Premium up to Old Premium level = 50% x 45% x $1,000 = $ 225.00
- FYC on New Premium above Old Premium level = 50% x ($1,500 - $1,000) = $ 250.00
- FYC on net Cash Value from Old Policy ("Old Money") = $ 0.00
--------
TOTAL FYC = $ 475.00
How did we get there?
- Look Up applicable FYC adjustment rate from table ( 9 years inforce) = 45%
- Multiply as shown above for New Premium up to Old Premium level ($1,000)
- FYC on New Premium above Old Premium calculated as above because New
Premium minus Old Premium is $500.
- Since the owner of the contract surrendered the policy, no premium dollars
came into the new Policy from "Old Money." Hence, No FYC would be paid on
Old Money.
Enterprise Selling Agreement
MetLife Version - September 2003
EXAMPLE 5: Same as example 3, BUT $2,500 New Policy Premium. This would cause
the Premium Doubling Rule to take effect.
Old Policy New Policy
- In-force for 9 years - New Premium of $2,500
- Premium of $1,000 - Normal FYC rate of 50%
- $10,000 net cash value (Rolled over into New
Policy)
Results:
- FYC on All New Premium = 50% x $2,500 = $1,250.00
- FYC on net Cash Value from Old Policy ("Old Money") = 2% x 45% x $10,000 = $ 90.00
---------
TOTAL FYC = $1,340.00
How did we get there?
- The New base premium is at least double that of the Old base premium,
therefore the Premium Doubling Rule applies and Full FYC will be paid on
the New Policy base premium.
- The Old Money rolled into the New Policy will receive FYC based on the
Table.
EXAMPLE 6 - ANNUITY/MUTUAL FUND/WRAP TO LIFE: $20,000 from an annuity is rolled
over into the PUAR of a new life policy, which has a premium of $500.
Old Contract New Policy
- $20,000 in Old Contract (Rolled into PUAR) - $500 New Premium
- No Surrender Charges - FYC is 50%
Results:
- FYC Rate of new premium is 50% (50% x 500 = $250) = $250.00
- FYC on PUAR is 3% ($20,000 x 3% = $600) = $600.00
-------
TOTAL FYC = $850.00
How did we get there?
- Full FYC is paid when money is coming from an "old" Investment & Income
product into a "new" Protection product.
- Old contract was out of the surrender charge period.
Enterprise Selling Agreement
MetLife Version - September 2003
EXAMPLES OF AN ANNUITY TO REWRITTEN ANNUITY CONTRACT
EXAMPLE 7: Old annuity is out of the surrender charge period.
Old Contract New Contract
- $100,000 Old Contract Surrender - $100,000 New Contract Deposit
- No Surrender Charges - GDC Rate of 6%
- FYC is 35% of GDC
Results:
- GDC is 6% of New Deposit ($100,000 x 6% = $6,000)
- FYC Rate of GDC is 35% of $6,000 = $2,100
- 1/2 FYC on entire deposit = 50% x $2,100 = $1,050.00
---------
TOTAL FYC = $1,050.00
How did we get there?
- Since there were no surrender charges and no New Money deposited, half the
FYC is paid on the deposit.
--
EXAMPLE 8: Same as Example 7, but assume additional $10,000 new deposit.
Old Contract New Contact
- $100,000 Old Contract Surrender - $110,000 New Contract Deposit
- No Surrender Charges - GDC Rate of 6%
- FYC is 35% of GDC
Results:
- GDC is 6% of New Deposit
- FYC Rate of GDC is 35%
- Full FYC on "New Money" ($10,000 x 6% x 35% = $210) = $ 210.00
- 1/2 FYC on rollover deposit ($100,000 x 6% x 35% x 50% = $1,050) = $1,050.00
---------
TOTAL FYC = $1,260.00
How did we get there?
- Since there were no surrender charges and there was New Money deposited
along with the deposit rolled over from the old annuity, full FYC (35% of
the GDC) is paid on the "New Money" and half the FYC (50% of the 35% of the
GDC) is paid on the deposit rolled over. The amount will be paid in the
current year and
Enterprise Selling Agreement
MetLife Version - September 2003
EXAMPLE 9: Same as Example 7, but old contract is still in the surrender charge
period.
Old Contract New Contact
- $100,000 Old Contract Surrender - $100,000 New Contract Deposit
- Surrender Charges - GDC Rate of 6%
- FYC is 35% of GDC
Results:
- GDC is 6% of New Deposit
- FYC Rate of GDC is 35%
- FYC on rollover deposit ($100,000 x 6% x 35% x 0% = $0) = $ 0.00
--------
TOTAL FYC = $ 0.00
How did we get there?
- Since the old contract was still in the surrender charges no FYC will be
paid.
EXAMPLE 10: Same as Example 8, but old contract is still in the surrender charge
period.
Old Contract New Contact
- $100,000 Old Contract Surrender - $110,000 New Contract Deposit
- Surrender Charges - GDC Rate of 6%
- FYC is 35% of GDC
Results:
- GDC is 6% of New Deposit
- FYC Rate of GDC is 35%
- Full FYC on "New Money" ($10,000 x 6% x 35% = $210) = $ 210.00
- FYC on rollover deposit ($100,000 x 6% x 35% x 0% = $0) = $ 0.00
----------
TOTAL FYC = $ 210.00
How did we get there?
- Since the old contract was still in the surrender charge period, no FYC
will be paid on the "Old Money" included in the deposit to the new
contract. Full FYC (35% of the GDC) is paid on the "New Money."
Enterprise Selling Agreement
MetLife Version - September 2003
EXAMPLES OF A MUTUAL FUND/WRAP TO A REWRITTEN MUTUAL FUND/WRAP
EXAMPLE 11: Old fund is from ABC Family. New fund is from XYZ Family, and a
properly executed "Mutual Fund Switch Letter" signed by the client, the FSR and
his/her manager, has been submitted as part of the transaction.
Old Fund New Fund
- $3,000 in Old Fund - $3,000 New Fund Deposit
- GDC Rate of 6%
- FYC is 35% of GDC
Results:
- GDC is 6% of New Deposit ($3,000 x 6% = $180)
- FYC Rate of GDC is 35%
- FULL FYC ON FUND FAMILY CHANGE $3,000 X6% X35% = $63.00
How did we get there?
- Since the old and new funds were from different fund families, full FYC is
paid.
U. IMPORTANT NOTE
- If, in this example, the new fund family was THE SAME AS THE OLD FAMILY, NO
FYC would be payable.
EXAMPLE 12: Same as Example 11, but additional $1,000 "New Money," where new
fund is from the same fund family as old fund.
Old Fund New Fund
- $3,000 in Old Fund - $4,000 New Contract Deposit
- GDC Rate of 6%
- FYC is 35% of GDC
Results:
- GDC is 6% of New Deposit
- FYC Rate of GDC is 35%
- No FYC on "Old Money"
- FULL FYC ON "NEW MONEY" ($4,000 - $3,000) X 6% X 35% = $21.00
How did we get there?
- Full FYC is paid on "New Money" only.
Enterprise Selling Agreement
MetLife Version - September 2003
EXAMPLES OF A LIFE TO ANNUITY, MUTUAL FUND, OR WRAP
EXAMPLE 13: Life policy in-force 10 or more years, no New Money. Full FYC is
paid on "Old Money."
Old Policy New Contract/Fund
- $2,000 cash surrender value in Old - $2,000 New Contract/Fund Deposit
Policy
- Policy in-force 12 years - GDC Rate of 6%
- FYC is 35% of GDC
Results:
- GDC is 6% of New Deposit
- FYC Rate of GDC is 35%
- FULL FYC ON DEPOSIT INTO NEW FUND/CONTRACT ($2,000 X 6% X 35% = $42)
EXAMPLE 14: Life policy in-force less than 10 years, no New Money. No FYC is
paid on Old Money.
Old Policy New Contract/Fund
- $2,000 cash surrender value in Old Policy - $2,000 New Contract Deposit
- Policy In-force 8 years - GDC Rate of 6%
- FYC is 35% of GDC
Results:
- GDC is 6% of New Deposit
- FYC Rate of GDC is 35%
- NO FYC ON "OLD MONEY" ($2,000 - $2,000) X 6% X 35% X 0% = $0.00
Enterprise Selling Agreement
MetLife Version - September 2003
EXAMPLE 15: Life policy in-force less than 10 years, $1,000 New Money deposited
into contract/fund. Full FYC is paid on "New Money" only.
Old Policy New Contract/Fund
- $2,000 cash surrender value in Old Policy - $3,000 New Contract Deposit
- Policy In-force 8 years - GDC Rate of 6%
- FYC is 35% of GDC
Results:
- GDC is 6% of New Deposit
- FYC Rate of GDC is 35%
- FULL FYC ON "NEW MONEY" ($3,000 - $2,000) X 6% X 35% = $21.00
- $0 GDC on old policy cash surrender value.
EXAMPLE 16: Life policy in-force 10 or more years, $1,000 of New Money deposited
into contract/fund. Full FYC is paid on the "Old Money" AND "New Money."
Old Policy New Contract/Fund
- $2,000 cash surrender value in Old Policy - $3,000 New Contract Deposit
- Policy In-force 12 years - GDC Rate of 6%
- FYC is 35% of GDC
Results:
- GDC is 6% of New Deposit
- FYC Rate of GDC is 35%
- FULL FYC ON DEPOSIT INTO NEW CONTRACT/FUND $3,000 X 6% X 35% = $63.00
Enterprise Selling Agreement
MetLife Version - September 2003
EXHIBIT D
AFFILIATED INSURANCE AGENCY
The Broker/Dealer named below ("Broker"), having executed a Sales
Agreement (the "Agreement") by and among Broker and_____________________________
("MetLife") dated _____________ that, among other things, provides for sales of
Variable and Fixed Contracts through a designated affiliated insurance agency or
agencies, hereby designates the affiliated insurance agency (the "Affiliated
Insurance Agency") named below as its Agency (as that term is defined in the
Agreement) pursuant to Section III(B) of the Agreement. By signing this Exhibit
D, each of Broker and the Affiliated Insurance Agency hereby represent and
warrant that the Affiliated Insurance Agency is and will be remain qualified to
serve as an Agency in accordance with the terms of the Agreement, and the
Affiliated Insurance Agency hereby agrees to be bound by and subject to the
terms of the Agreement.
__________________________________
Broker/Dealer
By: ______________________________________
________________________________________
Print Name & Title
________________________________________
(Tax Identification Number)
________________________________________
Affiliated Insurance Agency Name
By: ______________________________________
________________________________________
Print Name & Title
________________________________________
Enterprise Selling Agreement
MetLife Version - September 2003
(Tax Identification Number)
Enterprise Selling Agreement
MetLife Version - September 2003
