EXHIBIT 3(a)
Form of Underwriting Agreement between PHL Variable Insurance Company
and Phoenix Equity Planning Corporation
MASTER SERVICE AND DISTRIBUTION COMPLIANCE AGREEMENT
This Agreement, made this __ day of __________, 1995, by and among PHL
Variable Insurance Company ("PHL Variable"), a Connecticut stock company, PHL
Accumulation Account (the "Account"), and Phoenix Equity Planning Corporation
("PEPCO"), a Connecticut corporation.
WHEREAS, PHL Variable offers for sale variable annuity contracts funded
through Separate Accounts of PHL Variable registered as unit investment trusts
under the Investment Company Act of 1940 ("1940 Act") including, in the case of
certain variable annuity contracts, the Account, pursuant to a registration
statement filed with the Securities and Exchange Commission under the Securities
Act of 1933 ("Securities Act"), and listed on Schedule A of this Agreement (the
"Contracts"), and
WHEREAS, PEPCO is registered as a broker-dealer with the Securities and
Exchange Commission ("SEC") under the Securities Exchange Act of 1934 ("1934
Act") and is a member of the National Association of Securities Dealers, Inc.
("NASD"), and
WHEREAS, PHL Variable desires to engage PEPCO to perform certain
services with respect to the books and records to be maintained in connection
with the sale of Contracts and certain administrative and other functions as set
forth herein.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
I. Services of PEPCO
A. Appointment. PHL Variable hereby appoints PEPCO, and PEPCO hereby
accepts the appointment as, Master Service and Distributor of the Contracts.
B. Duties. PEPCO shall perform certain administrative, compliance and
other services with respect to the Contracts as described herein. PEPCO agrees
to use its best efforts in performing the activities outlined in paragraphs I. C
and I. E of this Agreement.
C. Written Agreements. PEPCO shall enter into Agreements with
broker-dealer firms whose registered representatives have been or shall be
properly licensed, including variable annuity licensed if required, and
appointed as life insurance agents of PHL Variable. PHL Variable shall pay all
fees associated with the insurance appointment of such selected representatives
as insurance agents of PHL Variable. Such written Agreements with broker-dealers
shall provide that such broker-dealer shall cause applications to be solicited
for the purchase of the Contracts. Such Agreements shall include such terms and
conditions as PEPCO may determine not inconsistent with this Agreement,
provided, however, that any broker-dealer with whom PEPCO has entered into a
written Agreement must:
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(a) be a registered broker-dealer under the 1934 Act and be a member
of the NASD; and
(b) agree that, in connection with the solicitation of applications
for the purchase of Contracts, the broker-dealer will in all
respects conform to the requirements of all state and federal
laws and the Rules of Fair Practice of the NASD relating to the
sale of the Contracts and will indemnify and hold harmless PEPCO
and PHL Variable from any damage or expense on account of the
negligence, misconduct or wrongful act of such broker-dealer or
any employee, representative or agent of such broker-dealer.
In obtaining and entering into written Agreements with broker-dealers,
PEPCO will in all respects conform to the requirements of all state and federal
law, and the Rules of Fair Practice of the NASD.
D. Recordkeeping. PEPCO shall maintain and preserve, or cause to be
maintained and preserved, such accounts, books, and other documents as are
required of it under this Agreement, the 1934 Act and any other applicable laws
and regulations, including without limitation and to the extent applicable,
Rules 17a-3 and 17a-4 under the 1934 Act. The books, accounts and records of
PEPCO as to services provided hereunder, shall be maintained so as to disclose
clearly and accurately the nature and details of the transactions.
E. Sales Assistance to Agents/Registered Representatives. PEPCO shall
provide sales assistance with respect to, and cause applications to be solicited
for the purchase of, the Contracts by agents of PHL Variable who have been
appointed by PHL Variable. PEPCO shall also prepare sales promotional materials
for the Contracts and assist the agents in utilizing the materials. In addition,
PEPCO shall provide broker-dealers and agents with reasonable quantities of
sales promotional materials, prospectuses, sample Contracts, applications and
any necessary service forms.
F. Supervision. PEPCO shall select persons associated with it who are
trained and qualified persons to solicit applications for purchase of Contracts
in conformance with applicable state and federal laws. Any such person shall be
a registered representative of PEPCO in accordance with the rules of the NASD,
be licensed to offer the Contract in accordance with the insurance laws of any
jurisdiction in which such person solicits applications, be licensed with and
appointed by PHL Variable as an insurance agent to solicit applications for the
Contracts and have entered into the appropriate Variable Contract Insurance
Commission Agreement with PHL Variable. PEPCO will train and supervise its
registered representatives to insure that the purchase of a Contract is not
recommended to an applicant in the absence of reasonable grounds to believe that
the purchase of the Contract is suitable for that applicant. PEPCO shall pay the
fees to regulatory authorities in connection with obtaining necessary securities
licenses and authorizations for its registered representatives to solicit
applications for the purchase of Contracts. PEPCO is not responsible for
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fees in connection with the appointment of registered representatives as
insurance agents of PHL Variable.
G. Sales Materials and Other Documents.
(a) PEPCO's Responsibilities. PEPCO shall be responsible for:
(i) the design, preparation and printing of all promotional
material to be used in the distribution of the Contracts:
(ii) the approval of promotional material by the SEC and the
NASD, where required; and
(iii) the prompt forwarding of all Contract applications
received by PEPCO along with other documents, if any, and
any payments received with such applications.
(b) PHL Variable's Responsibilities.
(i) PHL Variable shall provide PEPCO with sufficient
quantities of prospectuses regarding the Contracts.
(ii) PHL Variable shall be responsible for the approval of
promotional material by state and other local insurance
regulatory authorities.
(iii) PHL Variable shall, on behalf of any broker-dealer with
whom PEPCO has entered into a written Agreement, confirm
the issuance of the Contract to the Contract Owner.
(c) Right to Approve. PEPCO shall not print, publish or distribute
any advertisement, circular or any document relating to the
Contracts or relating to PHL Variable unless such advertisement,
circular or document shall have been approved in writing by PHL
Variable. Neither PHL Variable nor any of its agents or
affiliates shall print, publish or distribute any advertisement,
circular or any document relating to the Contracts or relating
to PEPCO unless such advertisement, circular or document shall
have been approved in writing by PEPCO. However, nothing herein
shall prohibit any party from advertising annuities or life
insurance in general or on a generic basis. Each party reserves
the right to require modification of any such material to comply
with applicable laws, rules and regulations and agrees to
provide timely responses regarding material submitted to it by
the other party.
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H. Payments to Broker-Dealers. PEPCO shall serve as paying agent for
amounts due broker-dealers for sales commissions. PHL Variable shall forward to
PEPCO any such amounts due broker-dealers and PEPCO shall be responsible to pay
such amounts to the persons entitled thereto as set forth in the applicable
written Agreements with such broker-dealers. PEPCO shall reflect such amounts on
its books and records as required by Paragraph D hereto.
I. Compliance. PEPCO shall, at all times, when performing its functions
under this Agreement, be registered as a securities broker-dealer with the SEC
and the NASD and be licensed or registered as a securities broker-dealer in any
jurisdiction where the performance of the duties contemplated by this Agreement
would require such licensing or registration. PEPCO represents and warrants that
it shall otherwise comply with provisions of federal and state law in performing
its duties hereunder.
J. Payment of Expenses by PEPCO. PEPCO shall pay the expenses incurred
in connection with its provision of services hereunder and the distribution of
the Contracts, including those expenses incurred in connection with the
preparation and distribution of sales literature and promotional materials for
the Contracts and the sale and delivery of the Contracts.
II. General Provisions
A. Inspection of Books and Records. PEPCO and PHL Variable agree that
all records relating to services provided hereunder shall be subject to
reasonable periodic, special or other audit or examination by the SEC, NASD, or
any state insurance commissioner or any other regulatory body having
jurisdiction. PEPCO and PHL Variable agree to cooperate fully in any securities,
insurance or judicial regulatory investigation, inspection, inquiry or
proceeding arising in connection with the services provided under this
Agreement, or with respect to PEPCO or PHL Variable or their affiliates, to the
extent related to the distribution of the Contracts. PEPCO and PHL Variable will
notify each other promptly of any customer compliant or notice of regulatory
proceeding, and, in the case of a customer complaint, will cooperate in arriving
at a mutually satisfactory response.
B. Indemnification. PEPCO will indemnify and hold harmless PHL Variable
and the Account, from expenses, losses, claims, damages or liabilities
(including attorney fees) incurred by reason of any material misrepresentation
in sales literature or promotional materials developed by PEPCO for the
Contracts and not pre-approved in writing by PHL Variable, or on account of any
other misrepresentation, wrongful or unauthorized act or omission, negligence
of, or failure of PEPCO, including any employee of PEPCO, to comply with the
terms of this Agreement, but PEPCO shall not be required to indemnify for any
expenses, losses, claims, damages or liabilities which have resulted from the
negligence, misconduct or wrongful act of the party seeking indemnification.
PEPCO shall also hold harmless and indemnify PHL Variable and Account for any
expenses, losses, claims, damages, or liability (including attorneys fees)
arising from any misrepresentation, wrongful or unauthorized act or omission,
negligence of, or failure of a broker-dealer or its employees, agents
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or registered representatives, to comply with the terms of the written agreement
entered into between PEPCO and such broker-dealer but only to the extent that
PEPCO is indemnified by the broker-dealer under the terms of the written
agreement. PHL Variable will indemnify and hold harmless PEPCO, for any
expenses, losses, claims, damages or liabilities (including attorneys fees)
incurred by reason of any material misrepresentation or omission in a
registration statement or prospectus for the Contracts, or on account of any
other misrepresentation, wrongful or unauthorized act or omission, negligence
of, or failure of PHL Variable, including any employee of PHL Variable, to
comply with the terms of this Agreement, but PHL Variable shall not be required
to indemnify for any expenses, losses, claims, damages or liabilities which have
resulted from the negligence, misconduct or wrongful act of the party seeking
indemnification.
C. Compensation. PHL Variable shall compensate PEPCO for the services
PEPCO performs hereunder as the parties shall agree from time to time and as
listed on Schedule A of this Agreement. In addition, PHL Variable shall
reimburse PEPCO for its expenses incurred under Paragraph I. J. of this
Agreement. PEPCO agrees to return promptly to PHL Variable all compensation
received for any Contract returned within the "free look" period as specified in
the Contract.
D. Termination. This Agreement shall become effective on the date of
this Agreement and shall continue to be in effect, except that:
(a) Any party hereto may terminate this Agreement on any date by
giving the other party at least thirty (30) days' prior written
notice of such termination specifying the date fixed therefor.
(b) This Agreement may not be assigned by PEPCO without the consent
of PHL Variable.
E. Registration. PHL Variable and the Account agree to use their best
efforts to effect and maintain the registration of the Contracts under the
Securities Act and the Account under the 1940 Act, and to qualify the Contracts
under the state securities and insurance laws, and to qualify the Contracts as
annuities under the Internal Revenue Code. PHL Variable will pay or cause to be
paid expenses (including the fees and disbursements of its own counsel) of the
registration and maintenance of the Contracts under the Securities Act and of
the Account under the 1940 Act, and to qualify the Contracts under the state
securities and insurance laws.
F. Authority. PEPCO shall have authority hereunder only as expressly
granted in this Agreement.
G. Miscellaneous. PHL Variable agrees to advise PEPCO immediately in
the case of an issuance by the SEC of any stop order suspending the
effectiveness of the Prospectus for the Contracts, of all action of the SEC with
respect to any amendments to the registration statement(s)
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which may from time to time be filed with the SEC and of any material event
which makes untrue any statement made in the registration statement for the
Contracts, or which requires the making of a change in the registration
statement in order to make the statement therein not misleading. PHL Variable
agrees to advise PEPCO in the event that formal administrative proceedings are
instituted against PHL Variable by the SEC, or any state securities or insurance
department or any other regulatory body regarding PHL Variable's duties under
this Agreement, unless PHL Variable determines in its sole judgment exercised in
good faith, that any such administrative proceeding will not have a material
adverse effect upon its ability to perform its obligations under this Agreement.
PEPCO agrees to advise PHL Variable in the event that formal administrative
proceedings are instituted against PEPCO by the SEC, NASD, or any state
securities or insurance department or any other regulatory body regarding
PEPCO's duties under this Agreement, unless PEPCO determines in its sole
judgment exercised in good faith, that any such administrative proceedings will
not have a material adverse effect upon its ability to perform its obligations
under this Agreement.
H. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Connecticut.
IN WITNESS WHEREOF, the parties have hereunto set their hands on the
date first above written.
PHL VARIABLE INSURANCE COMPANY
AND
PHL VARIABLE ACCUMULATION ACCOUNT
By: ______________________________________
Title:
PHOENIX EQUITY PLANNING CORPORATION
By: ______________________________________
Title:
phl\560
Schedule A
PEPCO has been appointed by PHL Variable to perform certain administrative,
compliance and other services with respect to the following variable annuity
contracts ("Contracts") issued by PHL Variable Insurance Company:
The Big Edge Choice - Individual Deferred Variable Accumulation Annuity
Contracts issued by the PHL Variable Accumulation Account of PHL
Variable Insurance Company ("PHLV"). PEPCO shall receive payments for
services performed under this Agreement equal to 6.25% of purchase or
premium payments made under The Big Edge Choice contracts. In addition,
upon the submission of documentation satisfactory to PHLV, PEPCO shall
receive reimbursement from PHLV for any payments made to broker-dealers
who act as wholesalers in introducing The Big Edge Choice to
broker-dealers or financial institutions.
