[SBL LOGO]
SECURITY BENEFIT LIFE INSURANCE COMPANY
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A Member of The Security 000 XX Xxxxxxxx Xx.
Xxxxxxx Group of Companies Topeka, Kansas 66636-0001
000-000-0000
MARKETING ORGANIZATION AGREEMENT
SECURITY BENEFIT LIFE INSURANCE COMPANY
SECURITY DISTRIBUTORS, INC.
PRODUCT AUTHORIZATION
Fixed Products |_|
Variable Products |_|
MARKETING ORGANIZATION: ________________________________________________
This Agreement is entered into between Security Benefit Life Insurance Company,
a Kansas mutual life insurance company, Security Distributors, Inc. (solely in
its capacity as underwriter of the Variable Products), collectively referred to
herein as "SBL," and the undersigned, referred to herein as the "Marketing
Organization."
I. APPOINTMENTS AND DUTIES
A. APPOINTMENT. Subject to the terms and conditions of this contract,
Marketing Organization is appointed to solicit, and to recommend for
appointment Agents/Representatives and Marketing Organizations
(referred to herein as "Marketer(s)") to solicit applications for the
fixed annuity and fixed life insurance contracts ("Fixed Products")
and/or variable annuity and variable life insurance contracts
("Variable Products") more specifically described in the Commission
Schedule(s) attached hereto from time to time and incorporated by
reference (collectively referred to as the "Products"), to deliver the
contracts, to collect the initial premiums thereon, and to service the
business.
Marketing Organization hereby accepts such appointment and confirms
that it will abide by the terms and conditions of this Agreement and
any sales manuals and/or rules and practices of SBL. Marketing
Organization will endeavor to promote SBL's interests and those mutual
interests of Marketing Organization and SBL as contemplated by this
Agreement and shall at all times conduct itself, and insure that its
employees and Marketers conduct themselves so as not to adversely
affect the business reputation or good standing of either the
Marketing Organization or SBL.
B. SALES FORCE. Marketing organization shall have the authority to
recruit, train and supervise Marketers for the sale of the Products.
Appointment of any Marketer shall be subject to prior approval of SBL.
SBL reserves the right to require termination of any Marketer's right
to sell any of the Products and to cancel the appointment of any
Marketer. Marketing Organization shall be responsible for any Marketer
appointed hereunder complying with the terms, conditions, and
limitations as set forth in this Agreement and any sales manuals
and/or rules and practices of SBL.
With respect to sales of Fixed Products, unless otherwise agreed in
writing by the parties, any and all agreements with Marketers shall be
made directly with SBL in writing on SBL's form and shall not become
effective until they are approved and executed by SBL and the Marketer
is licensed in accordance with Section III of this Agreement.
Marketing Organization shall not have authority to modify or amend any
such agreements. With respect to sales of Variable Products, any and
all agreements with Marketers shall be made between the Marketing
Organization and its Marketers, provided however, that SBL reserves
the right to require any Marketer to sign an agreement acknowledging
that no compensation is payable by SBL to the Marketer. SBL may, at
SBL's option, refuse to contract with any proposed Marketer and may at
any time terminate any agreement with any Marketer.
C. INDEPENDENT CONTRACTOR. Marketing Organization will be an independent
contractor and nothing contained herein shall be construed as creating
the relationship of employer-employee between SBL and Marketing
Organization. Marketing Organization will be acting as an independent
contractor only, and not as a partner, associate, or affiliate of SBL.
Marketing Organization will be free to exercise its own judgment as to
the time and manner of performing the services authorized by this
Agreement subject to such rules and regulations as may be adopted from
time to time by SBL.
D. LIMITATIONS OF AUTHORITY. Marketing Organization's authority shall
extend no further than as is stated in this Agreement. Marketing
Organization shall not (1) make, alter, modify, waive or change any
question, statement or answer on any application for insurance, the
terms of any receipt given thereon, or the terms of any policy or
contract; (2) extend or waive any provision of any policy or contract
or the time for payment of premiums; (3) guarantee dividends; (4)
deliver any policy unless the applicant is at the time in good health
and insurable condition; (5) incur any debts or liability for or
against SBL; or (6) receive any money for SBL except as herein stated.
9482 (R7-97) 00-00000-00
E. COLLECTION OF MONEY. Marketing Organization is not authorized to
accept any premium for SBL except initial policy premiums, unless SBL
provides otherwise in writing. All customer checks should be made
payable directly to SBL. Receipts for premiums must be on the forms
furnished by SBL for that purpose. Marketing Organization shall
immediately remit to SBL all money received or collected on SBL's
behalf, and such money shall be considered as SBL's funds held in
trust by Marketing Organization. SBL will not accept premium payments
in the form of checks drawn on Marketing Organization or Marketer
accounts.
F. RECORDS. Marketing Organization agrees to maintain proper records and
accounts of business transacted under this contract, including but not
limited to, records of all written sales proposals made, applications
taken, money collected, policies issued and delivered, and all service
to policy owners on SBL's behalf. All such records shall be made
available to SBL or SBL's representatives, with or without prior
notice, during business hours.
II. COMPENSATION
A. COMPENSATION TO MARKETING ORGANIZATION. As full compensation, SBL will
pay Marketing Organization or its affiliated insurance agency (if
applicable) commissions as described in the attached Commission
Schedule(s) for policies sold by Marketers assigned to Marketing
Organization. There shall be no additional compensation or
reimbursement to Marketing Organization for services performed or
expenses incurred. Marketing Organization shall be responsible for and
shall pay all expenses Marketing Organization incurs in the
performance of this Agreement. Further, SBL may amend any Commission
Schedule at any time by giving Marketing Organization written notice
of such change. Any changes SBL may make to the Commission Schedule
will apply only to those policies issued on or after the effective
date of the changes.
The rate of commissions or right to receive compensation on any policy
or contract (1) not listed in this Agreement, (2) requiring special
underwriting, or (3) obtained through a lead furnished by SBL, shall
be governed by SBL's rules and practices in effect at that time and
shall eventually be covered by a separate agreement between Marketing
Organization and SBL, by written amendment to this Agreement, or by
written notice to Marketing Organization.
B. COMPENSATION TO MARKETERS. This Agreement is not intended to benefit
in any manner whatsoever the Marketers or any other entity as a
third-party beneficiary. With respect to sales of Fixed Products,
payment of compensation by SBL to Marketers will be made only pursuant
to the terms of a separate written Agreement between SBL and Marketer.
With respect to the sales of Variable Products, SBL will pay no
compensation to Marketers; payment of compensation to Marketers, if
any, will be made only pursuant to the terms of a separate written
Agreement between the Marketing Organization and Marketer.
C. PROVISIONS RELATING TO COMPENSATION. Neither Marketing Organization
nor any Marketer assigned to Marketing Organization shall withhold
compensation from any premiums or contributions submitted to SBL. No
commissions will be payable on premiums or contributions which shall
be refunded for any reason, and Marketing Organization shall refund to
SBL any commission paid to Marketing Organization on any such premiums
or contributions. SBL shall not, under any circumstances whatsoever,
pay or allow any rebate of commissions in any manner, directly or
indirectly.
III. COMPLIANCE
A. GENERAL REQUIREMENTS. Marketing Organization agrees to abide by all
applicable local, state and federal laws and regulations as well as
the rules and regulations of the National Association of Securities
Dealers, Inc. (NASD) and the Securities and Exchange Commission in
conducting business under this Agreement. Marketing Organization shall
insure that all of its Marketers comply with all such rules, laws, and
regulations.
B. LICENSING. Marketing Organization agrees that neither it nor its
Marketers will solicit or submit applications for any of the Products
unless Marketing Organization, its affiliated insurance agency (if
applicable), and its Marketers are properly licensed under all
applicable state insurance laws. Marketing Organization shall be
responsible for each Marketer becoming so licensed and shall notify
SBL if any Marketer ceases to be so licensed.
WITH RESPECT TO SALES OF VARIABLE PRODUCTS: (1) Marketing Organization
hereby confirms that it is a member in good standing of the National
Association of Securities Dealers, Inc., hereinafter called "NASD,"
and further agrees to notify SBL if it ceases to be a member of the
NASD, (2) Marketing Organization agrees to abide by the applicable
Rules of Fair Practice of the NASD which rules are incorporated herein
as if set forth in full, (3) Marketing Organization represents that
the signing of this agreement is a representation to SBL that
Marketing Organization is a properly registered Broker/Dealer under
the Securities Exchange Act of 1934, and (4) Marketing Organization
shall insure that all Marketers recruited by Marketing Organization to
sell the Variable Products shall be duly registered pursuant to
applicable state and federal securities laws and regulations and shall
notify SBL if any Marketer ceases to be so registered.
Marketing Organization will be responsible to secure and provide to
SBL adequate proof of any licenses, securities registration, bonds or
other requirements or qualifications as may be required by SBL or the
state or states where Marketing Organization and its affiliated
insurance agency (if applicable) is authorized to solicit insurance
and securities.
C. PRINTED MATTER. SBL will furnish Marketing Organization all
prospectuses, reports, applications and other printed matter necessary
to conduct the business anticipated hereunder with respect to SBL's
Products. Advertising material of any nature not supplied by SBL shall
be used by Marketing Organization only after Marketing Organization
has received SBL's written approval. Likewise, Marketing Organization
may use SBL's name and trademark, or those of any affiliated
companies, only with SBL's written approval.
IV. SBL'S RIGHT OF ACTION
A. CHANGES. SBL may at any time and from time to time (1) change or
modify this Agreement, (2) modify or amend any prospectus, policy
form, or contract, (3) change sales charges, (4) modify or alter the
conditions or terms under which any Product may be sold or regulate
its sale in any way, (5) discontinue or withdraw any Product from any
state, without prejudice to continue such Product elsewhere or (6)
cease doing business in any state.
B. RIGHTS OF REJECTION AND SETTLEMENT. SBL reserves the right to reject
any application or refund any money submitted by Marketers assigned to
Marketing Organization. In the event of such rejection or refund,
Marketing Organization's commission on such shall be refunded as
described previously by being charged against Marketing Organization's
earnings or, upon demand, by payment directly to SBL. It is the
intention of the parties to this Agreement that Marketing Organization
shall be entitled to receive commissions only upon premiums or
contributions received in cash and retained by SBL.
C. RIGHT OF OFFSET OF INDEBTEDNESS. Any advance, loan, annualization of
compensation, or extension of credit from SBL to Marketing
Organization and to Marketers appointed by or assigned to Marketing
Organization, or any loss or liability incurred by SBL as a result of
the actions of Marketing Organization or its affiliated insurance
agency (if applicable) shall constitute a general indebtedness of
Marketing Organization to SBL. The entire indebtedness, as shown in
SBL's ledger accounts, may be deemed due and payable at any time and
SBL may exercise any rights or remedies to collect such indebtedness,
including but not limited to, charging to Marketing Organization all
attorney's fees or other collection expenses, as permitted by law.
SBL may deduct any amounts Marketing Organization owes SBL now or in
the future, as a result of this or any other contract with the
Company, from any compensation due Marketing Organization. Marketing
Organization hereby assigns, transfers and sets over to SBL any monies
that from time to time may become due to Marketing Organization from
SBL under this contract or otherwise to secure any debt to SBL.
V. TERMINATION
A. VOLUNTARY TERMINATION. Either of the parties hereto may terminate this
Agreement, without stating any cause, by mailing to the other party at
their last known address a notice of termination which shall be
effective fifteen days from mailing.
B. AUTOMATIC TERMINATION. This Agreement terminates automatically (1) if
Marketing Organization is an individual, upon Marketing Organization's
death, (2) if a partnership, upon the death of any partner or change
in the partners composing the firm, or dissolution of the partnership
for any reason, (3) if a corporation, upon Marketing Organization's
dissolution or disqualification to perform the duties anticipated
hereunder, (4) upon revocation, termination, suspension or nonrenewal
of Marketing Organization's securities registration or insurance
licenses by any state in which Marketing Organization is required by
law to maintain such a license in order to perform its duties under
this Agreement, (5) with respect to the Variable Products, upon
Marketing Organization's ceasing to be an NASD registered
broker/dealer in good standing (this includes any suspension of
Marketing Organization's membership), or (5) upon Marketing
Organization's filing a petition for bankruptcy or one being filed for
Marketing Organization, upon Marketing Organization being adjudged
bankrupt, or upon Marketing Organization's executing a general
assignment for the benefit of creditors.
C. TERMINATION FOR CAUSE. Marketing Organization's rights under this
contract, including the right to any further payment of any type of
compensation, either during or after the termination of this contract,
shall automatically and completely cease if any of the following occur
at any time: (1) Marketing Organization violates any of the terms
hereof, (2) Marketing Organization violates any law or regulation
relating to the activities anticipated hereunder, (3) Marketing
Organization induces or attempts to induce any Marketer and/or person
under contract with SBL to terminate the contractual relationship or
cease doing business or producing for SBL, (4) Marketing Organization
initiates or induces any misappropriation or commingling of Marketing
Organization's and SBL's funds, or (5) Marketing Organization engages
in any fraudulent act or misrepresentation. In determining cause for
termination, SBL shall use its sole discretion and shall notify
Marketing Organization in writing of SBL's decision.
D. RETURN OF SBL PROPERTY. Upon termination of this contract, Marketing
Organization agrees to return any equipment, supplies, printed
materials or other property, including, but not limited to,
policyholder lists and policyholder records SBL has furnished
Marketing Organization. Marketing Organization acknowledges that any
policyholder lists or records in Marketing Organization's possession
are SBL's property, and that the Company has a continuing proprietary
interest in the lists and records relating to its policyholders.
VI. THIRD PARTY COMPLAINTS AND LITIGATION
A. NOTIFICATION AND COOPERATION. SBL and Marketing Organization will
promptly notify the other if either of them becomes aware of any
arbitration, litigation, judicial proceeding, insurance department or
other governmental agency inquiry or complaint, regulatory or
administrative investigation or proceeding, or customer complaint or
demand, which directly or indirectly involves the rights and
obligations of the parties under this Agreement. SBL and Marketing
Organization each agree to cooperate fully with the other with respect
to any matter referred to in this Section VI.
B. DEFENSE OF ACTIONS. If any legal action is brought by a third party
against SBL or Marketing Organization, or both, which is based in
whole or in part on any alleged act, fault or failure of Marketing
Organization in connection with this Agreement, SBL may require
Marketing Organization to defend SBL in such action, or, SBL may
defend any such action and expend such sums, including attorneys'
fees, to be reimbursed by Marketing Organization in accordance with
Section VI.E. below.
C. SERVICE OF PROCESS. Marketing Organization shall transmit to the
attention of SBL's Legal Counsel at 000 Xxxxxxxx, Xxxxxx, Xxxxxx
00000, by certified mail within 24 hours after receipt, any paper
served upon Marketing Organization in connection with any proceeding,
hearing or action, whether legal or otherwise, by or against SBL. Any
failure on Marketing Organization's part to comply with this provision
which causes additional loss or expense to SBL shall be reimbursed by
Marketing Organization to SBL.
D. SETTLEMENT. SBL has the right to settle any claim against SBL, and any
claim made against SBL and Marketing Organization jointly, arising out
of this Agreement or any other agreement between SBL and Marketing
Organization now or hereafter existing, and SBL's determination as to
any such matter will be final and binding. In any action brought
jointly against SBL and Marketing Organization which is based in whole
or in part on any alleged act, fault or failure of Marketing
Organization, Marketing Organization shall not settle such action or
any portion thereof except with the express, written consent of SBL.
E. INDEMNIFICATION. Marketing Organization shall indemnify and hold SBL
harmless from any liability, loss, cost, claim or damaged caused by
the negligence or misconduct of Marketing Organization, its affiliated
insurance agency (if applicable), Marketers and/or either of their
officers, directors and employees. Marketing Organization shall
reimburse SBL for any legal or other expenses reasonably incurred by
SBL in connection with its investigation and defense of any such loss,
cost, claim, damage or liability, or of any proceeding or action
resulting from those matters.
VII. GENERAL PROVISIONS
A. CONFIDENTIALITY. Marketing Organization will treat all matters
relating to SBL's business as confidential information, and not
divulge any information in any way to other entities during or after
the term of this contract.
B. WAIVER. SBL's forbearance or failure to exercise any rights hereunder
or insist upon strict compliance herewith shall not constitute a
waiver of any right, condition, or obligation of Marketing
Organization under this Agreement.
C. PRIOR AGREEMENTS. This Agreement shall supersede any and all prior
agreement(s) between Marketing Organization and SBL in relation to
sales of Products after this Agreement becomes effective; it being
understood, however, that all obligations to SBL previously incurred
or assumed by SBL and liens created in connection therewith still
exist and shall attach hereto.
D. ASSIGNMENT. Neither this Agreement nor any of the benefits to accrue
hereunder shall be assigned or transferred, either in whole or in
part, without SBL's prior written consent. Any assignments shall be
subject to a first lien to SBL for any indebtedness owed to SBL.
E. NOTICES. All notices required or permitted to be given under this
contract shall be in writing and shall be delivered personally or
mailed to an officer of the party receiving such notice at its home
office at the address set forth above.
F. GOVERNING LAW. This contract shall be construed to be in accordance
with the laws of the State of Kansas.
H. ENTIRE AGREEMENT. The foregoing provisions, the attached Commission
Schedules and any rate books, manuals, or bulletins issued by SBL in
connection with this Agreement constitute the entire agreement between
the parties and SBL shall not be bound by any other promise,
agreement, understanding or representation unless it is made by an
instrument in writing, signed by all of the parties or is in the form
of a written notice from SBL to Marketing Organization which expresses
by its terms an intention to modify this Agreement.
I. SEVERABILITY. If it should appear that any term of this contract is in
conflict with any rule of law, statute, or regulation in effect in any
state where Marketing Organization writes or solicits business for
SBL, then any such term shall be deemed inoperative and null and void
insofar as it may be in conflict therewith and shall be deemed
modified to conform to such rule of law, statute or regulation. The
existence of any such apparent conflict shall not invalidate the
remaining provisions of this contract.
J. EFFECTIVE DATE. This Agreement shall take effect shown below, if
Marketing Organization has been duly licensed in the appropriate
jurisdiction(s) to perform the functions anticipated herein.
MARKETING ORGANIZATION SECURITY BENEFIT LIFE INSURANCE COMPANY
______________________________________ By ____________________________________
Print Name of Marketing Organization
|_| Individual |_| Partnership
|_| Corporation Title _________________________________
______________________________________ Date __________________________________
Print Name of Principal Officer
if a Partnership or Corporation
SECURITY DISTRIBUTORS, INC.
By ___________________________________
Signature of Individual
or Principal Officer By ____________________________________
Date _________________________________ Title _________________________________
APPROVED BY: Date __________________________________
______________________________________
Print Name of Sponsoring Marketing
Organization (if applicable)
By ___________________________________
Signature of Principal Officer
Effective Date of Agreement __________
00-00000-00
[SBL LOGO]
SECURITY BENEFIT LIFE INSURANCE COMPANY
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A Member of The Security 000 XX Xxxxxxxx Xx.
Xxxxxxx Group of Companies Topeka, Kansas 66636-0001
000-000-0000
MARKETING ORGANIZATION AGREEMENT
COMMISSION SCHEDULE
VARIFLEX ES VARIABLE ANNUITY
Individual and Group Allocated
Broker/Dealer:
EFFECTIVE DATE OF COMMISSION SCHEDULE:
COMMISSIONS - This Commission Schedule is hereby made part of and amends the SBL
Variable Products Agreement (the "Agreement") with Security Benefit Life
Insurance Company and Security Distributors, Inc. (hereinafter jointly called
"SBL"), and commissions payable hereunder are subject to the provisions
contained in the Agreement and this Commission Schedule. Minimum Purchase
Payments are as set out in the applicable prospectus and contract. Commissions
to a Broker/Dealer are equal to a percentage of Purchase Payments written by
that Broker/Dealer, as follows:
1. The rate of commission paid on Purchase Payments made with respect to each
particular Variflex ES Contract during all Contract Years for all regular
installment payments, lump sums and other irregular payments added to an
individual installment payment contract or certificate of a group contract:
Commission Rate: 4.00%
*No Commission will be paid on Purchase Payments made which are less than
the minimum amount specified in the prospectus and contract.
2. ASSET BASED COMMISSIONS: SBL will pay an asset based commission at the end
of each calendar month on the aggregate Contract Value of Variflex ES
Contracts as of that date for which Broker/Dealer is listed on SBL's records
as the broker of record. On an annual basis, the asset based commission will
be equal to the amounts set forth below. The amount of the asset based
commission and its beginning date with respect to assets under a Contract
will vary based upon whether assets are allocated to the separate account
("Variable Assets") or the fixed account ("Fixed Assets"). No asset based
commission will be paid on Contracts which have annuitized under a life
contingent option. An Annuitization Fee may be available as discussed in
paragraph 5.
ANNUAL BEGINNING DATE
RATE (MEASURED FROM CONTRACT DATE)
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Aggregate Value of Variable Assets .25% 1st month
Aggregate Value of Fixed Assets .15% 61st month
3. CONTRACT YEAR: For the purpose of this Commission Schedule, the "Contract
Year" shall be measured from the "Contract Date" which is the date the first
Purchase Payment is credited to a Contract.
4. TRANSFER OF SBL CONTRACT VALUES: No commission (including asset based
commission) is paid on the transfer of cash, loan or surrender value of a
life insurance or annuity contract issued by SBL or other members of The
Security Benefit Group of Companies applied to a Variflex ES Contract under
this Commission Schedule.
Death Benefit Applied to an Annuity Option: In the event that a beneficiary
under a Variflex ES Contract under this Commission Schedule applies the
death benefit to one of the annuity forms under the Contract, no commission
will be payable upon such application. An Annuitization Fee may be available
as discussed in paragraph 5.
5. ANNUITIZATION: An Annuitization Fee will be paid to Broker/Dealers who
secure from the Contract Owner (or his or her beneficiary) the proper forms
and information to commence an immediate life contingent annuity option and
has significantly assisted the client and SBL in such settlement. The
Annuitization Fee will be equal to 4% of the amount applied to a fixed life
contingent annuity option and 2% of the amount applied to a variable life
contingent annuity option.
6. CHANGE OF COMMISSION SCHEDULE: Notwithstanding any other provision of the
Agreement to the contrary, the following provisions shall apply. SBL
reserves the right at any time, with or without notice, to change, modify or
discontinue the commissions, asset based commissions or any other
compensation payable under this Commission Schedule. However, any such
change will not apply to the commissions or asset based commissions
applicable to Contracts issued before the effective date of such change.
7. CHANGE OF DEALER: A Contract Owner shall have the right to designate a new
broker/dealer, or terminate a broker/dealer without designating a
replacement, by sending written notice of such designation to SBL. Upon
written notice to SBL by the owner of the designation of a new
broker/dealer, all the commissions and asset based commissions shall be
payable to the new broker/dealer. Upon written notice to SBL by the owner of
termination of Broker/Dealer, without designating a new broker/dealer, SBL
shall cease paying commissions and asset based commissions to Broker/Dealer.
8. TERMINATION OF THE AGREEMENT/VESTING: In the event of termination of the
Agreement for any reason, all rights to receive commissions, asset based
commissions or other compensation under this Commission Schedule shall be
terminated, unless each of the following requirements is met: (i) the
Agreement has been in force for at least one year; (ii) Broker/Dealer is at
the time such commissions are payable properly licensed to receive such
commissions; (iii) Broker/Dealer is providing service to the Contract Owner
and performing its duties in a manner satisfactory to SBL; (iv) commissions
paid to Broker/Dealer in the previous calendar year amounted to at least
$500; and (v) Broker/Dealer has not been terminated, nor a new broker/dealer
designated, by the Contract Owner as set forth in paragraph 7 above.
THIS COMMISSION SCHEDULE replaces any previous Commission Schedule for the
Variable Annuity Contract listed above as of the Effective Date set forth above.
SECURITY DISTRIBUTORS, INC. SECURITY BENEFIT LIFE INSURANCE COMPANY
By: XXXXXXX X XXXX By: XXXXXXX X XXXX
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Title: PRESIDENT Title: SENIOR VICE PRESIDENT - SALES
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