FUND PARTICIPATION AGREEMENT
Ex-8(cc)
THIS AGREEMENT is executed as of February 1, 2011, and effective as of April 1, 2011 by and
among BLACKROCK VARIABLE SERIES FUNDS, INC., an open-end management investment company organized as
a MaryLand corporation (the “Fund”), BLACKROCK INVESTMENTS, LLC (“BRIL”), a broker-dealer
registered as such under the Securities Exchange Act of 1934, as amended (the “Underwriter”), and
ANNUITY INVESTORS LIFE INSURANCE COMPANY, a life insurance company organized under the laws of the
state of Ohio (“Company”), on its own behalf and on behalf of each separate account of the Company
set forth on Schedule A, as may be amended from time to time (each, an “Account,” and,
collectively, the “Accounts”).
W I T N E S S E T H:
WHEREAS, the Fund has filed a registration statement with the Securities and Exchange
Commission (“SEC”) to register itself as an open-end management investment company under the
Investment Company Act of 1940, as amended (the “1940 Act”), and to register the offer and sale of
its shares under the Securities Act of 1933, as amended (the “1933 Act”); and
WHEREAS, the Fund desires to act as an investment vehicle for separate accounts established
for variable life insurance policies and variable annuity contracts to be offered by insurance
companies that have entered into participation agreements with the Fund (the “Participating
Insurance Companies”); and
WHEREAS, the Underwriter is registered as a broker-dealer with the SEC under the Securities
Exchange Act of 1934, as amended (the “1934 Act”), is a member in good standing of the Financial
Industry Regulatory Authority (“FINRA”) and acts as principal underwriter of the shares of the
Fund; and
WHEREAS, the capital stock of the Fund is divided into several series of shares, each series
representing an interest in a particular managed portfolio of securities and other assets; and
WHEREAS, the several series of shares of the Fund offered by the Fund to the Company and the
Accounts are set forth on Schedule B, as may be amended from time to time (each, a “Portfolio,”
and, collectively, the “Portfolios”); and
WHEREAS, the Fund has received an order from the SEC granting Participating Insurance
Companies and their separate accounts exemptions from the provisions of sections 9(a), 13(a), 15(a)
and 15(b) of the 1940 Act, and rules 6e-2(b)(15) and 6e-3(T)(b)(15) thereunder, to the extent
necessary to permit shares of the Fund to be sold to and held by variable annuity and variable life
insurance separate accounts of both affiliated and unaffiliated life insurance companies (the
“Shared Fund Exemptive Order”); and
WHEREAS, BlackRock Advisors, LLC (“BAL”) is duly registered as an investment adviser under the
Investment Advisers Act of 1940, as amended, and is the Fund’s investment adviser; and
WHEREAS, the Company has registered or will register under the 1933 Act certain variable life
insurance policies and/or variable annuity contracts funded or to be funded through one or more of
the Accounts (the “Contracts”); and
WHEREAS, the Company has registered or will register each Account as a unit investment trust
under the 1940 Act; and
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WHEREAS, to the extent permitted by applicable insurance laws and regulations, the Company
intends to purchase shares in one or more of the Portfolios (the “Shares”) on behalf of the
Accounts to fund the Contracts, and the Fund intends to sell such Shares to the relevant Accounts
at such Shares’ net asset value.
NOW, THEREFORE, in consideration of their mutual promises, the parties agree as follows:
ARTICLE
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Sale of the Fund Shares
Sale of the Fund Shares
1.1 (a) Subject to Sections 1.2 and 1.3, the Fund shall make shares of the Portfolios
available to the Accounts at the most recent net asset value provided to the Company prior to
receipt of such purchase order by the Fund (or the Fund’s transfer agent), in accordance with the
operational procedures mutually agreed to by the Fund and the Company from time to time and the
provisions of the then current prospectuses of the Portfolios. Shares of a particular Portfolio of
the Fund shall be ordered in such quantities and at such times as determined by the Company to be
necessary to meet the requirements of the Contracts. The Directors of the Fund (the “Directors”)
may refuse to sell shares of any Portfolio to any person (including the Company and the Accounts),
or suspend or terminate the offering of shares of any Portfolio, if such action (1) is required by
law or by regulatory authorities having jurisdiction or (2) is, in the sole discretion of the
Directors acting in good faith and in light of their fiduciary duties under federal and any
applicable state laws, necessary in the best interests of the shareholders of such Portfolio.
(b) Subject to Sections 1.2 and 1.3, the Fund will redeem any full or fractional shares of
any Portfolio when requested by the Company on behalf of an Account at the most recent net asset
value provided to the Company prior to receipt by the Fund (or the Fund’s transfer agent) of the
request for redemption, in accordance with the operational procedures mutually agreed to by the
Fund and the Company from time to time and the provisions of the then current prospectuses of the
Portfolios. The Fund shall make payment for such shares in accordance with Section 1.2, but in no
event shall payment be delayed for a greater period than is permitted by the 1940 Act (including
any Rule or order of the SEC thereunder).
1.2 (a) Fund/SERV Transactions. If the parties choose to use the National Securities
Clearing Corporation’s Mutual Fund Settlement, Entry and Registration Verification (“Fund/SERV”)
system, the following provisions shall apply:
Application of NSCC Rules. The Company and the Fund or its designee will be bound by
the rules of the National Securities Clearing Corporation (“NSCC”). Without limiting the generality
of the following provisions of this section, the Company and the Fund or its designee each will
perform any and all duties, functions, procedures and responsibilities assigned to it and as
otherwise established by the NSCC applicable to Fund/SERV and the Networking Matrix Level utilized.
Transmission of Information Through NSCC’s Networking System. Any information
transmitted through NSCC’s Networking system (“Networking”) by any party to the other and pursuant
to this Section 1.2(a) will be accurate, complete, and in the format prescribed by the NSCC. Each
party will adopt, implement and maintain procedures reasonably designed to ensure the accuracy of
all transmissions through Networking and to limit the access to, and the inputting of data into,
Networking to persons specifically authorized by such party.
Next Day Transmission of Orders. On each Business Day, the Company shall aggregate and
calculate the net purchase and redemption orders for each Account received by the Company prior to
the Close of Trading on such Business Day. The Company shall communicate to the
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Fund or its designee, by Fund/SERV, the net aggregate purchase or redemption orders for that
Business Day (if any) for each Account received by the Close of Trading on such Business Day (the
“Trade Date”) no later than 5:00 a.m. Eastern Time on the Business Day following the Trade Date.
All orders received by the Company after the Close of Trading on a Business Day shall not be
transmitted to NSCC prior to the following Business Day. The Fund or its designee shall treat all
orders communicated to the Fund or its designee in accordance with this provision as if received
prior to the Close of Trading on the Trade Date.
Price Corrections. Any correction to a Portfolio’s share price will be submitted
through the Mutual Fund Profile with the correct price and applicable date. If a correction is
dated later than trade date plus one, a facsimile shall be sent to the Company in addition to the
Mutual Fund Profile submission.
Acceptance; Delayed Settlement. All orders are subject to acceptance by the Fund or
its designee and become effective only upon confirmation by the Fund or its designee. Upon
confirmation, the Fund or its designee will verify total purchases and redemptions and the closing
share position for each Account. In the case of delayed settlement, the Fund or its designee shall
make arrangements for the settlement of redemptions by wire no later than the time permitted for
settlement of redemption orders by the 1940 Act. Such wires should be sent to:
PNC Bank, Xxxxxxxxxx, XX 00000
ABA#: 000000000
Account Title: Annuity Investors Life Insurance Company
Depository Account
Account No.: 4206146281
ABA#: 000000000
Account Title: Annuity Investors Life Insurance Company
Depository Account
Account No.: 4206146281
(b) Manual Transactions. If the parties choose not to use Fund/SERV, if there are
technical problems with Fund/SERV, or if the parties are not able to transmit or receive
information through Fund/SERV, the following provisions shall apply:
Next Day Transmission of Orders. On each Business Day, the Company shall aggregate and
calculate the net purchase and redemption orders for each Account received by the Company prior to
the Close of Trading on such Business Day. The Company shall communicate to the Fund or its
designee by facsimile, by telephone or by any other method agreed upon by the parties, the net
aggregate purchase or redemption orders (if any) for each Account received by the Close of Trading
on such Business Day (the “Trade Date”) no later than 9:00 a.m. Eastern Time (or such other time as
may be agreed upon by the parties from time to time) on the Business Day following the Trade Date.
The Fund or its designee shall treat all orders communicated to the Fund or its designee in
accordance with this provision as if received prior to the Close of Trading on the Trade Date.
Order Form. The Company will use its best efforts to transmit net purchase and
redemption orders to the Fund or its designee in accordance with written instructions previously
provided by the Fund or its designee to the Company.
Price Corrections. Any correction to a Portfolio’s share price shall be communicated
to the Company as soon as practicable by facsimile or by electronic transmission, and will include
the incorrect price, the correct price, the applicable date, and, to the extent communicated to
Fund shareholders, the reason for the adjustment.
Settlement. With respect to net purchase orders communicated by the Company to the
Fund or its designee by 9:00 a.m. Eastern Time (or such other time as may be agreed by the parties
from time to time) on the Business Day following the Trade Date, the Company will use its best
efforts to initiate by wire transfer to the Fund or its designee payment for such purchases by
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1:00 p.m. Eastern Time on the Business Day following the Trade Date. Unless otherwise informed in
writing, purchase wires should be sent to:
PNC Bank, Xxxxxxxxxx, XX 00000
ABA#: 000000000
Account Title: Annuity Investors Life Insurance Company
Depository Account
Account No.: 4206146281
ABA#: 000000000
Account Title: Annuity Investors Life Insurance Company
Depository Account
Account No.: 4206146281
With respect to net redemption orders communicated by the Company to the Fund or its designee
by 9:00 a.m. Eastern Time (or such other time as may be agreed by the parties from time to time) on
the Business Day following the Trade Date, the Fund or its designee will use its best efforts to
initiate by wire transfer to the Company proceeds of such redemptions by 1:00 p.m. Eastern Time on
the Business Day following the Trade Date. Unless otherwise informed in writing, redemption wires
should be sent to:
PNC Bank, Xxxxxxxxxx, XX 00000
ABA#: 000000000
Account Title: Annuity Investors Life Insurance Company
Depository Account
Account No.: 4206146281
ABA#: 000000000
Account Title: Annuity Investors Life Insurance Company
Depository Account
Account No.: 4206146281
(c) “Business Day” shall mean any day on which the New York Stock Exchange is open for trading
and on which the Fund calculates its net asset value pursuant to the rules of the SEC. “Close of
Trading” shall mean the close of the New York Stock Exchange (generally, 4:00 p.m. Eastern Time).
1.3 (a) The Company will not aggregate orders received from its Contract owners after Close
of Trading with orders received before Close of Trading. Orders received by Company before Close of
Trading will receive that day’s net asset value and orders received by Company after Close of
Trading will receive the next day’s net asset value.
(b) The Fund may reject purchase and redemption orders that do not comply with the applicable
provisions of Sections 1.1 and 1.2.
(c) In the event that the Company and the Fund agree to use a form of written or electronic
communication that is not capable of recording the time, date and recipient of any communication
and confirming good transmission, the Company agrees that it shall be responsible for confirming
that any communication sent by the Company was in fact received by the Fund or its designee, in
accordance with the terms of this Agreement.
(d) The Fund and its designees shall be entitled to rely upon, and shall be fully protected
from all liability in acting upon, the instructions of persons designated by the Company as
individuals authorized to give instructions with respect to the purchase and redemption of shares
of the Portfolios.
1.4 In the event that the Company shall fail to pay in a timely manner for any purchase order
validly received by the Fund or its designee pursuant to Sections 1.1 and 1.2, the Company shall
hold the Fund or its designee harmless from any losses reasonably sustained by the Fund or its
designee as the result of acting in reliance on such purchase order. In the event that the Fund or
its designee shall fail to pay in a timely manner for any redemption order validly received by the
Fund or its designee pursuant to Sections 1.1 and 1.2, the Fund shall hold the Company harmless
from any
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losses reasonably sustained by the Company as the result of acting in reliance on such redemption
order.
1.5 Issuance and transfer of shares of the Portfolios will be by book entry only. Share
certificates will not be issued to the Company or the Accounts. Shares ordered from the Fund will be recorded in the appropriate title for each Account or the appropriate sub-account of each
Account.
1.6 The Fund or its designee shall furnish prompt written notice to the Company of any
income, dividends or capital gain distribution payable on Shares. The Company hereby elects to
receive all such income, dividends and capital gain distributions as are payable on a Portfolio’s
Shares in additional Shares of that Portfolio. The Fund shall notify the Company in writing of the
number of Shares so issued as payment of such income, dividends and distributions. Any material
error in the calculation or reporting of income, dividends or capital gain distributions shall be
reported to the Company in writing promptly upon discovery.
1.7 The Fund shall make the net asset value per share for each Portfolio available to the
Company on a daily basis as soon as reasonably practical after the net asset value per share is
calculated and shall use its best efforts to make such net asset value per share available by 7:00
p.m. Eastern Time. If the Fund provides materially incorrect share net asset value information, it
shall make an adjustment to the number of shares purchased or redeemed for any affected Account to
reflect the correct net asset value per share. Any material error in the calculation or reporting
of a Portfolio’s net asset value per share shall be reported to the Company in writing promptly
upon discovery.
1.8 The Company agrees that it will not take any action to operate an Account as a management
investment company under the 1940 Act without the Fund’s and the Underwriter’s prior written
consent.
1.9 The Fund agrees that its Shares will be sold only to Participating Insurance Companies and
their separate accounts. No Shares of any Portfolio will be sold directly to the general public.
The Company agrees that Shares will be used only for the purposes of funding the Contracts and
Accounts listed in Schedule A, as amended from time to time.
1.10 The Fund agrees that all Participating Insurance Companies shall have the obligations and
responsibilities regarding conflicts of interest corresponding to those contained in Article 4 of
this Agreement.
1.11 The Fund reserves the right to reject any purchase orders, including exchanges, for any
reason, including if the Fund, in its sole opinion, believes the Company’s Contract owner(s) is
engaging in short-term or excessive trading into and out of a Portfolio or otherwise engaging in
trading that may be disruptive to a Portfolio (“Market Timing”). The Company agrees to cooperate
with the Underwriter and the Fund (a) to monitor for Market Timing by its Contract owners, and (b)
to prevent Market Timing from occurring by or because of Contract owners. Failure of the Fund to
reject any purchase orders that might be deemed to be Market Timing shall not constitute a waiver
of the Fund’s rights under this section. Pursuant to Rule 22c-2 of the 1940 Act, the Fund, the
Underwriter and the Company agree to comply with the terms included in Schedule C attached hereto.
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ARTICLE 2
Obligations of the Parties
Obligations of the Parties
2.1 The Fund shall prepare and be responsible for filing with the SEC and any state securities
regulators requiring such filing, all shareholder reports, notices, proxy materials (or similar
materials such as voting instruction solicitation materials), prospectuses and statements of
additional information of the Fund required to be so filed. The Fund shall bear the costs of
registration and qualification of its Shares, preparation and filing of the documents listed in
this Section 2.1 and all taxes to which an issuer is subject on the issuance and transfer of its
Shares.
2.2 (a) The Underwriter or its designee shall provide the Company, free of charge, with as
many copies of the current prospectuses for the Shares as the Company may reasonably request for
distribution to existing Contract owners whose Contracts are funded by such Shares. The Underwriter
or its designee shall provide the Company, at the Company’s expense, with as many copies of the
current prospectuses for the Shares as the Company may reasonably request for distribution to
prospective purchasers of Contracts.
(b) The Underwriter or its designee shall provide the Company, free of charge, with as many
copies of prospectus supplements for the Shares as the Company may reasonably request for
distribution to existing Contract owners whose Contracts are funded by such Shares. The Underwriter
or its designee shall provide the Company, at the Company’s expense, with as many copies of such
supplements as the Company may reasonably request for distribution to prospective purchasers of
Contracts.
2.3 The prospectuses for the Shares shall state that the statement of additional information
for the Shares is available from the Fund or its designee. The Fund or its designee, at its
expense, shall print and provide such statement of additional information to the Company (or a
master of such statement suitable for duplication by the Company) for distribution to any owner of
a Contract funded by the Shares. The Fund or its designee, at the Company’s expense, shall print
and provide such statement to the Company (or a master of such statement suitable for duplication
by the Company) for distribution to a prospective purchaser who requests such statement.
2.4 The Underwriter or its designee shall provide the Company free of charge copies, if and to
the extent applicable to the Shares, of the Fund’s proxy materials, reports to shareholders and
other communications to shareholders in such quantity as the Company shall reasonably request for
distribution to Contract owners.
2.5 If requested by the Company, in lieu of providing a paper copy of a prospectus, a
prospectus supplement or a shareholder report, the Underwriter or its designee shall provide such
document to the Company, free of charge, in a camera ready format or an electronic format agreed
upon by the parties. In the event that the Company requests that the Underwriter or its designee
provide a document in a “camera ready” format or an electronic format, (a) the Underwriter or its
designee shall be responsible solely for providing such document in the format in which it is
accustomed to formatting the document and shall bear the expense of providing the document in such
format, and (b) the Company shall bear the expense of any adjustments or changes to such format.
2.6 The costs of typesetting and printing Fund prospectuses (including supplements thereto),
Fund statements of additional information (including supplements thereto), Fund proxy materials,
annual reports and other communications with shareholders of the Fund and the costs of distributing
such documents to existing contract owners and prospective contract owners shall be allocated
between the Fund and the Company pursuant to the terms set out in Schedule D, as may be amended
from time to time.
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2.7 The Company shall furnish, or cause to be furnished, to the Fund or its designee, a copy
of language that would be used in any prospectus for the Contracts or statement of additional
information for the Contracts in which the Fund, the Underwriter or BAL (“Fund Parties”) is named
at least ten Business Days prior to the designated effective date of such prospectus or statement
of additional information. Upon request, the Company shall furnish, or shall cause to be furnished,
to the Fund or its designee, each prospectus supplement and each piece of sales literature or other
promotional material in which the Fund, the Underwriter or BAL is named, at least ten Business Days
prior to its use. No such prospectus, statement of additional information, prospectus supplement or
sales literature or other promotional material shall be used if any of the Fund Parties reasonably
objects to such use within five Business Days after receipt of the document.
2.8 If any of the following materials have been distributed to Contract owners, at the
reasonable request of the Fund or its designee, the Company shall furnish, or shall cause to be
furnished, as soon as practical, to the Fund or its designee copies of such materials:
| (a) | the Company’s annual financial report, if any; |
| (b) | the Company’s quarterly or other financial reports, if any; and |
| (c) | any proxy statement or other materials related to a meeting of the Contract owners. |
2.9 The Company shall not give any information or make any representations or statements on
behalf of the Fund or Underwriter or concerning the Fund, the Underwriter or BAL in connection with
the Contracts other than information or representations contained in or accurately derived from the
registration statement or prospectuses for the Shares (as such registration statement and
prospectuses may be amended or supplemented from time to time), reports of the Fund, Fund-sponsored
proxy statements, or sales literature or other promotional material approved by the Fund or
Underwriter, except with the written permission of the Fund or Underwriter.
2.10 Neither the Fund nor the Underwriter shall give any information or make any
representations or statements on behalf of the Company or concerning the Company, the Accounts or
the Contracts other than information or representations contained in or accurately derived from the
registration statements or prospectuses for the Contracts (as such registration statements or
prospectuses may by amended or supplemented from time to time), except with the written permission
of the Company.
2.11 The Company shall amend the registration statements of the Contracts under the 1933 Act and registration statements for each Account under the 1940 Act from time to time as
required in order to effect the continuous offering of the Contracts or as may otherwise be
required by applicable law. The Company shall register and qualify the Contracts for sale to the
extent required by applicable securities laws and insurance laws of the various states.
2.12 The Fund shall amend its registration statement under the 1933 Act and the 1940 Act from
time to time as required in order to effect the continuous offering of its shares. If the Fund
determines that notice filings are appropriate, the Fund shall use its best efforts to make such
notice filings in accordance with the laws of such jurisdictions reasonably requested by the
Company.
2.13 Solely with respect to Contracts and Accounts that are subject to the 1940 Act, so long
as, and to the extent that the SEC interprets the 1940 Act to require pass-through voting
privileges for variable Contract owners: (a) the Company will provide pass-through voting
privileges to owners of Contracts whose cash values are invested, through the Accounts, in Shares
of the Fund; (b) the Fund shall require all Participating Insurance Companies to calculate voting
privileges in the same manner and the Company shall be responsible for assuring that the Accounts
calculate voting
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privileges in the manner established by the Fund; (c) with respect to each Account, the Company
will vote Shares of the Fund held by the Account and for which no timely voting instructions from
Contract owners are received, as well as Shares held by the Account that are owned by the Company
for their general accounts, in the same proportion as the Company votes Shares held by the Account
for which timely voting instructions are received from Contract owners; and (d) the Company and its
agents will in no way recommend or oppose or interfere with the solicitation of proxies for Fund
Shares held by Contract owners without the prior written consent of the Fund, which consent may be
withheld in the Fund’s sole discretion.
ARTICLE 3
Representations and Warranties
Representations and Warranties
3.1 The Company represents and warrants that it is an insurance company duly organized and in good
standing under the laws of the State of Ohio, with full power, authority and legal right to
execute, deliver and perform its duties and comply with its obligations under this Agreement and
has established each Account as a separate account under such law and the Accounts comply in all
material respects with all applicable federal and state laws and regulations.
3.2 The Company represents and warrants that it has registered or, prior to any issuance or sale of
the Contracts, will register each Account as a unit investment trust in accordance with the
provisions of the 1940 Act to serve as a separate account for the Contracts. The Company further
represents and warrants that the Contracts will be registered under the 1933 Act prior to any
issuance or sale of the Contracts; the Contracts will be issued in compliance in all material
respects with all applicable federal and state laws.
3.3 The Company represents and warrants that the Contracts are currently and at the time of
issuance will be treated as annuity contracts or life insurance policies, whichever is appropriate,
under applicable provisions of the Internal Revenue Code of 1986, as amended (“Code”), and
represents that it will use its best efforts to maintain such treatment. The Company will notify
the Fund and the Underwriter immediately in writing upon having a reasonable basis for believing
that the Contracts have ceased to be so treated or that they might not be so treated in the future.
3.4 The Fund represents and warrants that it is duly organized and validly existing and in good
standing under the laws of the State of Maryland, with full power, authority and legal right to
execute, deliver and perform its duties and comply with its obligations under this Agreement and
has established each Portfolio as a series of the Fund under such law and the Fund and the
Portfolios comply in all material respects with all applicable federal and state laws and
regulations.
3.5 The Fund represents and warrants that it has registered as a management investment trust in
accordance with the provisions of the 1940 Act. The Fund further represents and warrants that the
Fund Shares offered and sold pursuant to this Agreement will be registered under the 1933 Act prior
to any offer or sale of such Fund shares; the Fund shares will be offered and sold in compliance in
all material respects with all applicable federal and state laws.
3.6 The Underwriter represents and warrants that it is duly organized and validly existing and in
good standing under the laws of the State of Delaware, with full power, authority and legal right
to execute, deliver and perform its duties and comply with its obligations under this Agreement and
is a member in good standing of the FINRA and complies in all material respects with all applicable
federal and state laws and regulations and all applicable FINRA rules.
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3.7 The Fund represents and warrants that each Portfolio currently complies with the
diversification requirements set forth in Section 817(h) of the Code and Section 1.817-5 of the
regulations under the Code, and represents that it will use its best efforts to maintain each
Portfolio’s compliance with such requirements. The Fund will notify the Company immediately in
writing upon having a reasonable basis for believing that a Portfolio has ceased to so comply or
that a Portfolio might not so comply in the future. In the event of a breach of this Section 3.7 by
the Fund, it will take all reasonable steps to adequately diversify the Portfolio so as to achieve
compliance within the grace period afforded by Section 1.817-5 of the regulations under the Code.
3.8 The Fund represents and warrants that each Portfolio is currently qualified as a regulated
investment company (“RIC”) under Subchapter M of the Code, and represents that it will use its best
efforts to maintain qualification of each Portfolio as a RIC. The Fund will notify the Company
immediately in writing upon having a reasonable basis for believing that a Portfolio has ceased to
so qualify or that it might not so qualify in the future. In the event of a breach of this Section
3.8 by the Fund, it will take all reasonable steps so as to achieve compliance.
3.9 The Company hereby certifies that it has established and maintains an anti-money
laundering (“AML”) program that includes written policies, procedures and controls reasonably
designed to prevent the Accounts from being used to launder money or finance terrorist activity and
reasonable and practicable risk-based procedures to identify its Contract owners and has undertaken
appropriate due diligence efforts to “know its customers” in accordance with all applicable
anti-money laundering regulations in its jurisdiction including, but not limited to, the USA
PATRIOT Act of 2001 (the “Patriot Act”). The Company further confirms that it will monitor for
suspicious activity in accordance with the requirements of the Patriot Act and any other applicable
regulations. The Company agrees to provide the Fund with such information as it may reasonably
request, including but not limited to, the filling out of questionnaires, attestations and other
documents, to enable the Fund to fulfill its obligations under the Patriot Act, and, upon its
request, to file a notice pursuant to Section 314 of the Patriot Act and the implementing
regulations related thereto to permit the voluntary sharing of information between the parties
hereto. Upon filing such a notice the Company agrees to forward a copy to the Fund, and further
agrees to comply with all requirements under the Patriot Act and implementing regulations
concerning the use, disclosure, and security of any information that is shared.
3.10 The Company acknowledges and agrees that it is the responsibility of the Company to
determine investment restrictions under state insurance law applicable to any Portfolio as a result
of the Accounts’ investment therein, and that the Fund shall bear no responsibility to the Company
for any such determination or the correctness of such determination. The Company has determined
that the investment restrictions set forth in the current Fund Prospectuses are sufficient to
comply with all investment restrictions under state insurance laws that are currently applicable to
the Portfolios as a result of the Accounts’ investment therein. The Company shall inform the Fund
of any additional investment restrictions imposed by state insurance law after the date of this
agreement that may become applicable to the Fund or any Portfolio from time to time as a result of
the Accounts’ investment therein. Upon receipt of any such information from the Company, the Fund
shall determine whether it is in the best interests of shareholders to comply with any such
restrictions. If the Fund determines that it is not in the best interests of shareholders to comply
with a restriction determined to be applicable by the Company, the Fund shall so inform the
Company, and the Fund and the Company shall discuss alternative accommodations in the circumstances
and shall use their best efforts to reach a mutually agreed upon accommodation.
3.11 The Company represents and warrants that each Account is a “segregated asset account” and
that interests in each Account are offered exclusively through the purchase of or transfer into a
“variable contract,” within the meaning of such terms under Section 817 of the Code and the
regulations thereunder, and represents that it will use its best efforts to continue to meet
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such definitional requirements. The Company will notify the Fund immediately in writing upon having
a reasonable basis for believing that such requirements have ceased to be met or that they might
not be met in the future.
3.12 The Company represents and warrants that its policies and procedures concerning the
processing and transmission of orders are reasonably designed to prevent or detect on a timely
basis orders received after Close of Trading from being aggregated with orders received before
Close of Trading and to minimize late transmission of orders.
ARTICLE 4
Potential Conflicts
Potential Conflicts
4.1 The parties acknowledge that the Fund’s Shares may be made available for investment to
other Participating Insurance Companies. In such event, the Directors of the Fund will monitor the
Fund for the existence of any material irreconcilable conflict between the interests of the
contract owners of all Participating Insurance Companies. An irreconcilable material conflict may
arise for a variety of reasons, including: (a) an action by any state insurance regulatory
authority; (b) a change in applicable federal or state insurance, tax, or securities laws or
regulations, or a public ruling, private letter ruling, no-action or interpretative letter, or any
similar action by insurance, tax, or securities regulatory authorities; (c) an administrative or
judicial decision in any relevant proceeding; (d) the manner in which the investments of any
Portfolio are being managed; (e) a difference in voting instructions given by variable annuity
contract and variable life insurance contract owners; or (f) a decision by an insurer to disregard
the voting instructions of contract owners. The Directors shall promptly inform the Company in
writing if they determine that an irreconcilable material conflict exists and the implications
thereof.
4.2 The Company agrees to promptly report any potential or existing conflicts of which it is
aware to the Directors. The Company will assist the Directors in carrying out their
responsibilities under the Shared Fund Exemptive Order by providing the Directors with all
information reasonably necessary for them to consider any issues raised including, but not limited
to, information as to a decision by the Company to disregard Contract owner voting instructions.
4.3 If it is determined by a majority of the Directors, or a majority of the Fund’s Directors
who are not affiliated with the Adviser or the Underwriter (the “Disinterested Directors”), that a
material irreconcilable conflict exists that affects the interests of Contract owners, the Company
shall, in cooperation with other Participating Insurance Companies whose contract owners are also
affected, at its expense and to the extent reasonably practicable (as determined by the Directors)
take whatever steps are necessary to remedy or eliminate the irreconcilable material conflict,
which steps could include: (a) withdrawing the assets allocable to some or all of the Accounts from
the Fund or any Portfolio and reinvesting such assets in a different investment medium, including
(but not limited to) another Portfolio of the Fund, or submitting the question of whether or not
such segregation should be implemented to a vote of all affected Contracts owners and, as
appropriate, segregating the assets of any appropriate group (i.e., annuity contract owners, life
insurance contract owners, or variable contract owners of one or more Participating Insurance
Companies) that votes in favor of such segregation, or offering to the affected Contract owners the
option of making such a change; and (b) establishing a new registered management investment company
or managed separate account.
4.4 If a material irreconcilable conflict arises because of a decision by the Company to
disregard Contract owner voting instructions and that decision represents a minority position or
would preclude a majority vote, the Company may be required, at the Fund’s election, to withdraw
the affected Account’s investment in the Fund and terminate this Agreement with respect to such
10
Account; provided, however, that such withdrawal and termination shall be limited to the extent
required by the foregoing material irreconcilable conflict as determined by a majority of the
Disinterested Directors. Any such withdrawal and termination must take place within 30 days after
the Fund gives written notice that this provision is being implemented, subject to applicable law
but in any event consistent with the terms of the Shared Fund Exemptive Order. Until the end of
such 30 day period, the Fund shall continue to accept and implement orders by the Company for the
purchase and redemption of Shares.
4.5 If a material irreconcilable conflict arises because a particular state insurance
regulator’s decision applicable to the Company conflicts with the majority of other state
regulators, then the Company will withdraw the affected Account’s investment in the Fund and
terminate this Agreement with respect to such Account within 30 days after the Fund informs the
Company in writing that it has determined that such decision has created an irreconcilable material
conflict; provided, however, that such withdrawal and termination shall be limited to the extent
required by the foregoing material irreconcilable conflict as determined by a majority of the
Disinterested Directors. Until the end of such 30 day period, the Fund shall continue to accept and
implement orders by the Company for the purchase and redemption of shares of the Fund.
4.6 For purposes of section 4.3 through 4.6 of this Agreement, a majority of the Disinterested
Directors shall determine whether any proposed action adequately remedies any irreconcilable
material conflict, but in no event will the Company be required to establish a new funding medium
for the Contracts if an offer to do so has been declined by vote of a majority of Contract owners
materially adversely affected by the irreconcilable material conflict. In the event that the
Directors determine that any proposed action does not adequately remedy any irreconcilable material
conflict, then the Company will withdraw the affected Account’s investment in the Fund and
terminate this Agreement with respect to such Account within 30 days after the Directors inform the
Company in writing of the foregoing determination; provided, however, that such withdrawal and
termination shall be limited to the extent required by any such material irreconcilable conflict as
determined by a majority of the Disinterested Directors.
4.7 Upon request, the Company shall submit to the Directors such reports, materials or data as
the Directors may reasonably request so that the Directors may fully carry out the duties imposed
upon them by the Shared Fund Exemptive Order.
4.8 If and to the extent that (a) Rule 6e-2 and Rule 6e-3 (T) are amended, or Rule 6e-3 is
adopted, to provide exemptive relief from any provision of the 1940 Act or the rules promulgated
thereunder with respect to mixed or shared funding (as defined in the application for the Shared
Fund Exemptive Order) on terms and conditions materially different from those contained in the
application for the Shared Fund Exemptive Order, or (b) the Shared Fund Exemptive Order is granted
on terms and conditions that differ from those set forth in this Article 4, then the Fund and/or
the Participating Insurance Companies, as appropriate, shall take such steps as may be necessary
(a) to comply with Rules 6e-2 and 6e-3 (T), as amended, and Rule 6e-3, as adopted, to the extent
such rules are applicable, or (b) to conform this Article 4 to the terms and conditions contained
in the Shared Fund Exemptive Order, as the case may be.
ARTICLE 5
Indemnification
Indemnification
5.1 The Company agrees to indemnify and hold harmless the Fund Parties and each of their
respective Directors, officers, employees and agents and each person, if any, who controls a Fund
Party within the meaning of Section 15 of the 1933 Act (collectively, the “Indemnified Parties” for
purposes of this Article 5) against any and all losses, claims, damages, liabilities (including
11
amounts paid in settlement with the written consent of the Company) or expenses (including the
reasonable costs of investigating or defending any alleged loss, claim, damage, liability or
expense and reasonable legal counsel fees incurred in connection therewith) (collectively,
“Losses”), to which the Indemnified Parties may become subject under any statute or regulation, or
at common law or otherwise, insofar as such Losses:
(a) arise out of or are based upon any untrue statements or alleged untrue statements
of any material fact contained in the registration statements or prospectuses for the
Contracts or in the Contracts themselves or in sales literature for the Contracts or the
Accounts generated or approved by the Company (or any amendment or supplement to any of the
foregoing) (collectively, “Company Documents” for the purposes of this Article 5), or arise
out of or are based upon the omission or the alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein not
misleading, provided that this indemnity shall not apply as to any Indemnified Party if
such statement or omission or such alleged statement or omission was made in reliance upon
and was accurately derived from written information furnished to the Company by or on
behalf of the Fund or Underwriter for use in Company Documents or otherwise for use in
connection with the sale of the Contracts or Shares; or
(b) arise out of or result from statements or representations (other than statements
or representations contained in and accurately derived from Fund Documents as defined in
Section 5.2(a)) or wrongful conduct of the Company or persons under its control, with
respect to the sale or acquisition of the Contracts or Shares; or
(c) arise out of or result from any untrue statement or alleged untrue statement of a
material fact contained in Fund Documents as defined in Section 5.2(a) or 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 if such statement or omission was
made in reliance upon and accurately derived from written information furnished to the Fund
or Underwriter by or on behalf of the Company; or
(d) arise out of or result from any failure by the Company to provide the services or
furnish the materials required under the terms of this Agreement; or
(e) arise out of or result from any material breach of any representation and/or
warranty made by the Company in this Agreement or arise out of or result from any other
material breach of this Agreement by the Company.
5.2 The Underwriter and the Fund agree severally to indemnify and hold harmless the Company
and each of its directors, officers, employees and agents and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act (collectively, the “Indemnified Parties”
for purposes of this Article 5) against any and all losses, claims, damages, liabilities (including
amounts paid in settlement with the written consent of the Fund Parties) or expenses (including the
reasonable costs of investigating or defending any alleged loss, claim, damage, liability or
expense and reasonable legal counsel fees incurred in connection therewith) (collectively,
“Losses”), to which the Indemnified Parties may become subject under any statute or regulation, or
at common law or otherwise, insofar as such Losses:
12
(a) arise out of or are based upon any untrue statements or alleged untrue statements
of any material fact contained in the registration statement or prospectuses for the Fund
or the Portfolios or in sales literature for the Fund or the Portfolios generated or
approved by the Fund (or any amendment or supplement to any of the foregoing)
(collectively, “Fund Documents” for the purposes of this Article 5), or arise out of or are
based upon the omission or the alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading, provided
that this indemnity shall not apply as to any Indemnified Party if such statement or
omission or such alleged statement or omission was made in reliance upon and was accurately
derived from written information furnished to the Fund Parties by or on behalf of the
Company for use in Fund Documents or otherwise for use in connection with the sale of the
Contracts or Shares; or
(b) arise out of or result from statements or representations (other than statements
or representations contained in and accurately derived from Company Documents as defined in
Section 5.1(a)) or wrongful conduct of a Fund Party or persons under its respective
control, with respect to the sale or acquisition of the Contracts or Shares; or
(c) arise out of or result from any untrue statement or alleged untrue statement of a
material fact contained in Company Documents as defined in Section 5.1(a) or 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 if such statement or omission was
made in reliance upon and accurately derived from written information furnished to the
Company by or on behalf of the Fund Parties; or
(d) arise out of or result from any failure by the Underwriter or the Fund to provide
the services or furnish the materials required under the terms of this Agreement; or
(e) arise out of or result from any material breach of any representation and/or
warranty made by the Underwriter or the Fund in this Agreement or arise out of or result
from any other material breach of this Agreement by the Underwriter or the Fund.
5.3 Neither the Company, the Underwriter nor the Fund shall be liable under the
indemnification provisions of Section 5.1 or 5.2, as applicable, with respect to any Losses
incurred or assessed against any Indemnified Party to the extent such Losses arise out of or result
from such Indemnified Party’s willful misfeasance, bad faith or gross negligence in the performance
of such Indemnified Party’s duties or by reason of such Indemnified Party’s reckless disregard of
its obligations or duties under this Agreement.
5.4 Neither the Company, the Underwriter nor the Fund shall be liable under the
indemnification provisions of Section 5.1 or 5.2, as applicable, with respect to any claim made
against an Indemnified Party unless such Indemnified Party shall have notified the other party in
writing within a reasonable time after the summons, or other first written notification, giving
information of the nature of the claim shall have been served upon or otherwise received by such
Indemnified Party (or after such Indemnified Party shall have received notice of service upon or
other notification to any designated agent), but failure to notify the party against whom
indemnification is sought of any such claim shall not relieve that party from any liability that it
may have to the Indemnified Party in the absence of Sections 5.1 and 5.2.
13
In case any such action is brought against the Indemnified Parties, the indemnifying party shall be
entitled to participate, at its own expense, in the defense of such action. The indemnifying party
also shall be entitled to assume the defense thereof, with counsel reasonably satisfactory to the
party named in such action. After notice from the indemnifying party to the Indemnified Party of an
election to assume such defense, the Indemnified Party shall bear the fees and expenses of any
additional counsel retained by it, and the indemnifying party will not be liable to the Indemnified
Party under this Agreement for any legal or other expenses subsequently incurred by such party
independently in connection with the defense thereof other than reasonable costs of investigation.
ARTICLE 6
Termination
Termination
6.1 This Agreement may be terminated by any party for any reason by sixty (60) days’ advance
written notice delivered to the other parties.
6.2 This Agreement may be terminated at the option of the Fund or the Underwriter upon written
notice delivered to the Company if (A) the SEC, the insurance commission of any state or any other
regulatory body institutes formal proceedings against the Company regarding the Company’s duties
under this Agreement or related to the sale of the Contracts, the operation of the Accounts, the
administration of the Contracts or the purchase of the Shares, or (B) the Fund or the Underwriter
reasonably believes that an expected or anticipated ruling, judgment or outcome would materially
impair the Company’s ability to meet and perform the Company’s obligations and duties hereunder.
6.3 This Agreement may be terminated at the option of the Fund or the Underwriter upon written
notice delivered to the Company if (A) the Internal Revenue Service determines that the Contracts
cease to qualify as annuity contracts or life insurance policies, as applicable, under the Code, or
(B) the Fund or Underwriter reasonably believes that the Contracts may fail to so qualify.
6.4 This Agreement may be terminated at the option of the Fund or the Underwriter upon written
notice delivered to the Company if the Fund or the Underwriter determines, in its sole judgment
exercised in good faith, that either (1) the Company has suffered a material adverse change in its
business or financial condition, (2) the Company has been the subject of material adverse publicity
that is likely to have a material adverse impact upon the business and operations of either the
Fund or the Underwriter, or (3) the Company breaches any obligation under this Agreement in a
material respect and such breach continues unremedied for thirty (30) days after receipt by the
Company of notice in writing from the Fund or Underwriter of such breach.
6.5 This Agreement may be terminated at the option of the Company upon written notice
delivered to the Fund and the Underwriter if (A) the Internal Revenue Service determines that any
Portfolio fails to qualify as a RIC under the Code or fails to comply with the diversification
requirements of Section 817(h) of the Code and the Fund, upon the Company’s written request, fails
to provide reasonable assurance that it will take action to cure such failure, or (B) the Company
determines, in its sole judgment exercised in good faith, that either (1) the Fund or the
Underwriter has suffered a material adverse change in its business or financial condition, (2) the
Fund or the Underwriter has been the subject of material adverse publicity that is likely to have a
material adverse impact upon the business and operations of the Company, or (3) the Fund or
Underwriter breaches any obligation under this Agreement in a material respect and such breach
continues unremedied for thirty (30) days after receipt of notice in writing to the Fund or the
Underwriter from the Company of such breach.
14
6.6 Notwithstanding any termination of this Agreement, the Fund will, upon the mutual
agreement of the parties hereto, continue to make available additional shares of the Fund pursuant
to the terms and conditions of this Agreement, for all existing Contracts in effect on the
effective date of termination of this Agreement (hereinafter referred to as “Existing Contracts”).
Specifically, without limitation, if the Fund and Underwriter so agree to make additional Shares
available, the owners of the Existing Contracts will be permitted to reallocate investments in the
Fund (as in effect on such date), redeem investments in the Fund and/or invest in the Fund upon the
making of additional purchase payments under the Existing Contracts.
6.7 In the event of a termination of this Agreement pursuant to this Article 6, the Fund and
the Underwriter shall promptly notify the Company in writing whether the Underwriter and the Fund
will continue to make Shares available after such termination. If the Underwriter and the Fund will
continue to make Shares so available, (A) the provisions of this Agreement shall remain in effect
except for Section 6.1 and (B) thereafter the Fund, the Underwriter or the Company may terminate
the Agreement as so continued pursuant to this Section 6.7 upon prior written notice to the other
parties, such notice to be for a period that is reasonable under the circumstances but need not be
greater than six months.
6.8 The provisions of Article 5 shall survive the termination of this Agreement, and the
provisions of Articles 2 and 4 shall survive the termination of this Agreement as Long as shares of
the Fund are held on behalf of Contract owners in accordance with Section 6.7.
ARTICLE 7
Notices
Notices
Any notice shall be sufficiently given when sent by registered or certified mail to the other
party at the address of such party set forth below or at such other address as such party may from
time to time specify in writing to the other party.
| To the Fund: | With a copy to: | |||
| BlackRock Variable Series Funds, Inc. | BlackRock, Inc. | |||
| Attention: Xxxxx Xxxxxxx | Attn: Xxxxxx Xxxxxxxx General Counsel | |||
| 00 Xxxx 00xx Xxxxxx | 00 Xxxx 00xx Xxxxxx | |||
| Xxx Xxxx, XX 00000 | Xxx Xxxx, XX 00000 | |||
| To the Underwriter: | With a copy to: | |||
| BlackRock Investments, LLC | BlackRock Investments, LLC | |||
| Attn: Xxxxx Xxxxxxxx | Attn: Xxxx Xxxxx | |||
| 00 Xxxx 00xx Xxxxxx | 00 Xxxx 00xx Xxxxxx | |||
| Xxx Xxxx, XX 00000 | Xxx Xxxx, XX 00000 | |||
| If to the Company: | With a copy to: | |||
| Annuity Investors Life Insurance Company | Great American Financial Resources, Inc. | |||
| Attn: Xxxx Xxxxxxxx | Attn: Xxxx Xxxxxx | |||
| 000 Xxxx Xxxxx Xxxxxx | 000 Xxxx Xxxxxx | |||
| Xxxxxxxxxx, XX 00000 | Xxxxxxxxxx, XX 00000 |
15
ARTICLE 8
Miscellaneous
Miscellaneous
8.1 The captions in this Agreement are included for convenience of reference only and in no
way define or delineate any of the provisions hereof or otherwise affect their construction or
effect.
8.2 This Agreement may be executed simultaneously in two or more counterparts, each of which
taken together shall constitute one and the same instrument.
8.3 If any provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of the Agreement shall not be affected thereby.
8.4 This Agreement shall be construed and the provisions hereof interpreted under and in
accordance with the laws of the State of New York without reference to the conflict of laws
provisions thereof, and shall, to the extent applicable, be subject to the provisions of the 1933,
1934, and 1940 Acts, and the rules, regulations and rulings thereunder, including such exemptions
from those statutes, rules and regulations as the SEC may grant and the terms hereof shall be
interpreted and construed in accordance therewith.
8.5 The parties to this Agreement acknowledge and agree that the Fund is a Maryland
corporation, and that all liabilities of the Fund arising, directly or indirectly, under this
Agreement, of any and every nature whatsoever, shall be satisfied solely out of the assets of the
relevant Portfolio(s) of the Fund and that no Director, officer, agent or holder of Shares of the
Fund shall be personally liable for any such liabilities.
8.6 Each party shall cooperate with each other party and all appropriate governmental
authorities (including without limitation the SEC, the FINRA and state insurance regulators) and
shall permit such authorities reasonable access to its books and records in connection with any
investigation or inquiry relating to this Agreement or the transactions contemplated hereby.
8.7 The rights, remedies and obligations contained in this Agreement are cumulative and are in
addition to any and all rights, remedies and obligations, at law or in equity, to which the parties
hereto are entitled under state and federal laws.
8.8 The parties to this Agreement acknowledge and agree that this Agreement shall not be
exclusive in any respect.
8.9 Neither this Agreement nor any rights or obligations hereunder may be assigned by either
party without the prior written approval of the other parties.
8.10 No provisions of this Agreement may be amended or modified in any manner except by a
written agreement properly authorized and executed by all parties.
8.11 Exhibits and Schedules; Entire Agreement
All Exhibits and Schedules to this Agreement, as they may be amended from time to time, are by
this reference incorporated into and made a part of this Agreement. This Agreement (including the
Exhibits and Schedules hereto), constitute the entire agreement between the parties as to the
subject matter hereof and supersedes any and all agreements, representations and warranties,
written or oral, regarding such subject matter.
16
IN WITNESS WHEREOF, the parties have caused their duly authorized officers to execute this
Fund Participation Agreement as of the date and year first above written.
| BLACKROCK VARIABLE SERIES FUNDS, INC. |
||||
| By: | /s/ Xxx Xxxxxxxxx | |||
| Name: | XXX XXXXXXXXX | |||
| Title: | Assistant Secretary | |||
| BLACKROCK INVESTMENT, LLC |
||||
| By: | /s/ Xxxxx Xxxxxxxx | |||
| Name: | XXXXX XXXXXXXX | |||
| Title: | MANAGING DIRECTOR | |||
| ANNUITY INVESTORS LIFE INSURANCE COMPANY |
||||
| By: | /s/ Xxxx X. Xxxxxx | |||
| Name: | XXXX X. XXXXXX | |||
| Title: | SENIOR VICE PRESIDENT | |||
17
Schedule A
Separate Accounts of Annuity Investors Life Insurance Company participating in Portfolios of
BlackRock Variable Series Funds, Inc.
A-1
Schedule B
Portfolios and Classes of BlackRock Variable Series Funds, Inc. offered to Separate Accounts
of Annuity Investors Life Insurance Company
Available share classes of:
| FUND NAME | CLASS | CUSIP | TICKER | |||
BlackRock Balanced Capital V.I. Fund
|
I | 00000X000 | AMBLI | |||
BlackRock Basic Value V.I. Fund
|
I | 00000X000 | XXXXX | |||
BlackRock Basic Value V.I. Fund
|
II | 00000X000 | BAVII | |||
BlackRock Basic Value V.I. Fund
|
III | 00000X000 | BVIII | |||
BlackRock Fundamental Growth V.I. Fund
|
I | 00000X000 | FDGRI | |||
BlackRock Global Allocation V.I. Fund
|
I | 00000X000 | GLALI | |||
BlackRock Global Allocation X.X. Xxxx
|
XX | 00000X000 | XXXXX | |||
BlackRock Global Allocation V.I. Fund
|
III | 00000X000 | GAIII | |||
BlackRock Global Growth V.I. Fund
|
I | 00000X000 | GLGRI | |||
BlackRock Global Growth V.I. Fund
|
III | 00000X000 | GGIII | |||
BlackRock International Value V.I. Fund
|
I | 00000X000 | IVVVI | |||
BlackRock Large Cap Core V.I. Fund
|
I | 00000X000 | LGCCI | |||
BlackRock Large Cap Core V.I. Fund
|
II | 00000X000 | LGCII | |||
BlackRock Large Cap Core X.X. Xxxx
|
XXX | 00000X000 | LCIII | |||
BlackRock Large Cap Growth V.I. Fund
|
I | 00000X000 | LGGGI | |||
BlackRock Large Cap Growth X.X. Xxxx
|
XXX | 00000X000 | XXXXX | |||
BlackRock Large Cap Value V.I. Fund
|
I | 00000X000 | LCATT | |||
BlackRock Large Cap Value V.I. Fund
|
II | 00000X000 | LCBTT | |||
BlackRock Large Cap Value V.I. Fund
|
III | 00000X000 | LVIII | |||
BlackRock Total Return V.I. Fund
|
I | 00000X000 | CRBDI | |||
BlackRock Government Income V.I. Fund
|
I | 00000X000 | GVBDI | |||
BlackRock High Income V.I. Fund
|
I | 00000X000 | HICUI | |||
BlackRock Total Return V.I. Fund
|
I | 00000X000 | CRBDI | |||
BlackRock S&P 500 Index V.I. Fund
|
I | 00000X000 | IDXVI | |||
BlackRock S&P 500 Index V.I. Fund
|
II | 00000X000 | IXVII | |||
BlackRock Money Market V.I. Fund *
|
I | 00000X000 | DMMKI |
| • | No Distribution Plan fees or Administrative Service fees shall be paid for the BlackRock Money Market V.I. Fund |
B-1
Schedule C
For Schedule C, the following terms shall have the following meanings, unless a different meaning
is clearly required by the contexts:
The term “Intermediary” shall mean Annuity Investors Life Insurance Company, which is an insurance
company separate account.
The term “Fund” shall mean BlackRock Variable Series Funds, Inc., and includes (i) an investment
adviser to or administrator for the Fund; and (ii) the transfer agent for the Fund. The term not
does include any “excepted funds” as defined in SEC Rule 22c-2(b) under the Investment Company Act
of 1940.1
The term “Shares” means the interests of Shareholders corresponding to the redeemable securities of
record issued by the Fund under the Investment Company Act of 1940 that are held by the
Intermediary.
The term “Shareholder” means the holder of interests in a variable annuity or variable life
insurance contract issued by the Intermediary (“Contract”), or a participant in an employee benefit
plan with a beneficial interest in a Contract.
The term “Shareholder-Initiated Transfer Purchase” means a transaction that is initiated or
directed by a Shareholder that results in a transfer of assets within a Contract to a Fund, but
does not include the following: (i) transactions that are executed automatically pursuant to a
contractual or systematic program or enrollment such as transfer of assets within a Contract to a
Fund as a result of “dollar cost averaging” programs, insurance company approved asset allocation
programs, or automatic rebalancing programs; (ii) transactions that are executed pursuant to a
Contract death benefit; (iii) one-time step-up in Contract value pursuant to a Contract death
benefit; (iv) allocation of assets to a Fund through a Contract as a result of payments such as
loan repayments, scheduled contributions, retirement plan salary reduction contributions, or
planned premium payments to the Contract; or (v) prearranged transfers at the conclusion of a
required free look period.
The term “Shareholder-Initiated Transfer Redemption” means a transaction that is initiated or
directed by a Shareholder that results in a transfer of assets within a Contract out of a Fund, but
does not include transactions that are executed: (i) automatically pursuant to a contractual or
systematic program or enrollments such as transfers of assets within a Contract out of a Fund as a
result of annuity payouts, loans, systematic withdrawal programs, insurance company approved asset
allocation programs and automatic rebalancing programs; (ii) as a result of any deduction of
charges or fees under a Contract; (iii) within a Contract out of a Fund as a result of scheduled
withdrawals or surrenders from a Contract; or (iv) as a result of payment of a death benefit from a
Contract.
1. Agreement to Provide Information. Intermediary agrees to provide the Fund or its designee, upon
written request of BRIL or the Fund, (A) the taxpayer identification number (“TIN”), the
Individual/International Taxpayer Identification Number (“ITIN”), or other government issued
identifier (“GII”) and the Contract owner number or participant account number associated with the
Shareholder, if known, of any or all Shareholder(s) of the account, and (B) the amount, date, and
transaction type (purchase, redemption, transfer, or exchange) of every purchase, redemption,
| 1 | As defined in SEC Rule 22c-2(b), term “excepted fund” means any: (1) money market fund; (2) fund that issues securities that are listed on a national exchange; and (3) fund that affirmatively permits short-term trading of its securities, if its prospectus clearly and prominently discloses that the fund permits short-term trading of its securities and that such trading may result in additional costs for the fund. |
C-1
transfer, or exchange of Shares held through an account maintained by the Intermediary during the
period covered by the request. Unless otherwise specifically requested by the Fund, the
Intermediary shall only be required to provide information relating to Shareholder-Initiated
Transfer Purchases or Shareholder-Initiated Transfer Redemptions.
2. Period Covered by Request. Requests must set forth a specific period, which generally will not
exceed 90 days from the date of the request, for which transaction information is sought. BRIL
and/or the Fund may request transaction information older than 90 days from the date of the request
as they deem necessary to investigate compliance with policies (including, but not limited to,
polices of the Fund regarding market-timing and the frequent purchasing and redeeming or exchanges
of Fund shares or any other inappropriate trading activity) established or utilized by the Fund for
the purpose of eliminating or reducing any dilution of the value of the outstanding shares issued
by the Fund (the “Policies”). Requests for Shareholder information shall be made no more frequently
than quarterly except as the Fund, BRIL or their designee deems necessary to investigate compliance
with the Policies.
3. Form and Timing of Response. (a) Intermediary agrees to provide, promptly, but in any event not
later than five (5) business days after receipt of a request from the Fund, BRIL or their designee,
the requested information specified in Section 1. If requested by the Fund, BRIL or their designee,
Intermediary agrees to use best efforts to determine promptly, but in any event not later than five
(5) business days after receipt of a request, whether any specific person about whom it has
received the identification and transaction information specified in Section 1 is itself a
financial intermediary (as defined in Rule 22c-2) (“indirect intermediary”) and, upon further
request of the Fund, BRIL or their designee, promptly, but in any event not later than five (5)
business days after receipt of a request, either (i) provide (or arrange to have provided) the
information set forth in Section 1 for those Shareholders who hold an account with an indirect
intermediary or (ii) restrict or prohibit the indirect intermediary from purchasing, in nominee
name on behalf of other persons, securities issued by the Fund. Intermediary additionally agrees to
inform the Fund whether it plans to perform (i) or (ii).
(b) Responses required by this paragraph must be communicated in writing and in a format mutually
agreed upon by the Fund, BRIL or their designee and the Intermediary; and
(c) To the extent practicable, the format for any transaction information provided to the Fund,
BRIL or their designee should be consistent with the NSCC Standardized Data Reporting Format.
4. Limitations on Use of Information. BRIL and the Fund agree not to use the information received
pursuant to this Agreement for any purpose other than as necessary to comply with the provisions of
Rule 22c-2 or to fulfill other regulatory requests or legal requirements subject to the privacy
provisions of Title V of the Xxxxx-Xxxxx-Xxxxxx Act (Public Law 106-102) and comparable state laws.
5. Agreement to Restrict Trading. Intermediary agrees to execute written instructions from BRIL or
the Fund to restrict or prohibit further purchases or exchanges of Shares by a Shareholder that has
been identified by BRIL or the Fund, in their sole discretion, as having engaged in transactions of
Fund Shares (directly or indirectly through the Intermediary’s account) that violate the Policies.
Unless otherwise directed by the Fund, any such restrictions or prohibitions shall only apply to
Shareholder-Initiated Transfer Purchases or Shareholder- Initiated Transfer Redemptions that are
effected directly or indirectly through Intermediary. Instructions must be received by Intermediary
at the following address, or such other address that Intermediary may communicate to BRIL or the
Fund in writing from time to time, including, if applicable, an e-mail and/or facsimile telephone
number:
C-2
Mailing Address:
|
Email Address: | |||
Annuity Investors Life Insurance Company
|
xxxxxxxxxxx@xxxxx.xxx | |||
Attn: Xxxxx XxXxxxxxxx 525-13A |
||||
000 Xxxx Xxxxxx
|
Facsimile Telephone Number: | |||
Xxxxxxxxxx XX 00000
|
513.412.1470 | |||
| Attn: Xxxxx XxXxxxxxxx | ||||
6. Form of Instructions. Instructions to restrict or prohibit trading must include the TIN, ITIN,
or GII and the specific individual Contract owner number or participant account number associated
with the Shareholder, if known, and the specific restriction(s) to be executed, including how long
the restriction(s) is(are) to remain in place. If the TIN, ITIN, GII or the specific individual
Contract owner number or participant account number associated with the Shareholder is not known,
the instructions must include an equivalent identifying number of the Shareholder(s) or account(s)
or other agreed upon information to which the instruction relates.
7. Timing of Response. Intermediary agrees to execute instructions to restrict or prohibit trading
as soon as reasonably practicable, but not later than five (5) business days after receipt of the
instructions by the Intermediary.
8. Confirmation by Intermediary. Intermediary will provide written confirmation to BRIL and the
Fund that instructions to restrict or prohibit trading have been executed. Intermediary agrees to
provide confirmation as soon as reasonably practicable, but not later than ten (10) business days
after the instructions have been executed.
9. Construction of the Schedule; Fund Participation Agreement. This Schedule C supplements the Fund
Participation Agreement. To the extent the terms of this Schedule C conflict with the terms of the
Fund Participation Agreement, the terms of this Schedule C shall control.
C-3
Schedule D
Schedule D Expenses
| ITEM | FUNCTION | PARTY RESPONSIBLE FOR EXPENSE | ||
FUND PROSPECTUS |
||||
Update:
|
Typesetting | Fund | ||
New Sales:
|
Printing Distribution |
Company Company |
||
Existing Owners:
|
Printing Distribution |
Fund Fund |
||
STATEMENTS OF ADDITIONAL INFORMATION |
Same as Prospectus | |||
PROXY MATERIALS OF THE FUND
|
Typesetting Printing Distribution |
Fund Fund Fund |
||
ANNUAL REPORTS AND OTHER COMMUNICATIONS WITH SHAREHOLDERS OF THE FUND |
||||
All:
|
Typesetting | Fund | ||
Marketing:
|
Printing Distribution |
Company Company |
||
Existing Owners:
|
Printing Distribution |
Fund Fund |
||
OPERATIONS OF FUND
|
All operations and related expenses, including the cost of registration and qualification of the Fund’s shares, preparation and filing of Fund’s prospectus and registration statement, proxy materials and reports, the preparation of all statements and notices required by any federal or state law and all taxes on the issuance of the Fund’s shares, and all costs of management of the business affairs of the Fund. | Fund |
D-1
