MARKETING COORDINATION AND ADMINISTRATIVE
SERVICE AGREEMENT
THIS AGREEMENT entered into by and between Sun Life Assurance Company of
Canada (U.S.) ("Sun Life (U.S.)"), a Delaware corporation and Clarendon
Insurance Agency, Inc., a Massachusetts corporation ("Clarendon").
WITNESSETH
WHEREAS Sun Life (U.S.) proposes to issue and offer for sale certain life
insurance products (the "Plans") which are deemed to be securities under the
Securities Act of 1933 ("33 Act"); and
WHEREAS Clarendon is registered as a broker-dealer with the Securities and
Exchange Commission ("SEC") under the Securities Exchange Act of 1934 ("34 Act")
and is a member of the National Association of Securities Dealers, Inc.
("NASD"); and
WHEREAS Clarendon proposes to coordinate the marketing of the Plans and to
perform certain administrative services in conjunction with the Plans.
NOW THEREFORE, in consideration of the premises and the mutual covenants
hereinafter contained, the parties hereto agree as follows:
I
THE PLANS
A. TYPE OF PLANS
The Plans issued by Sun Life (U.S.) to which this Agreement applies are
listed in Exhibit A. Exhibit A may be amended from time to time as
agreed upon by Sun Life (U.S.) and Clarendon.
B. SUSPENSION/RESTRICTION
Sun Life (U.S.) may, at its option and at its sole discretion, suspend
or restrict in any manner the sale or method of distribution of all or
any of the Plans, including sales by all or any individuals licensed to
sell Sun Life (U.S.)'s products. If any suspension or restriction is
required by any regulatory authority having jurisdiction, written notice
shall be given to Clarendon immediately upon receipt by Sun Life (U.S.)
of notice of such required suspension or restriction. In all other
cases, Sun Life (U.S.) will provide thirty (30) days' prior written
notice to Clarendon of any such suspension or restriction.
C. PLAN CHANGES
Sun Life (U.S.) may, at its option and at its sole discretion, amend, add
or delete features
2
of all or any of the Plans. In the event of any such amendment, addition
or deletion, Sun Life (U.S.) will provide written notice of such change to
Clarendon. If the change is required by any regulatory authority having
jurisdiction, written notice shall be given to Clarendon immediately upon
receipt by Sun Life (U.S.) of notice of such required change. In all other
cases, Sun Life (U.S.) will provide written notice at least thirty (30)
days' prior to the effective date of such change.
II
MARKETING COORDINATION AND SALES ADMINISTRATION
A. GENERAL DISTRIBUTOR
Clarendon is hereby appointed by Sun Life (U.S.) as the General Distributor
of the Plans. Clarendon shall, at all times, when performing its functions
under this Agreement, be registered as a securities broker-dealer with the
SEC and the NASD.
B. DISTRIBUTION AGREEMENTS
Clarendon will distribute the plans pursuant to a Corporate Markets
Variable Life Insurance Sales Agreement (the "Distribution Agreement"),
substantially in the form attached as Exhibit B. No Commission Schedule
attached to any Distribution Agreement may provide for commission payments
in excess of specified maximums established by Sun Life (U.S.) from time to
time. Sun Life (U.S.), on behalf of Clarendon, shall retain copies of all
executed Distribution Agreements and all correspondence, memoranda and
other documents relating to the Distribution Agreements.
C. SALES REPRESENTATIVES/REGISTERED REPRESENTATIVES
1. APPOINTMENT AND TERMINATION
(a) Sun Life (U.S.) hereby designates Clarendon as its agent to
appoint and dismiss individuals as sales representatives of Sun
Life (U.S.) in those jurisdictions in which Sun Life (U.S.)
transacts an insurance business. Sun Life (U.S.) reserves the
right to terminate any and all such designations and will provide
written notice of any such termination to Clarendon concurrently
with notice to the particular regulatory authority.
(b) Appointments and/or dismissals of individuals as sales
representatives of Sun Life (U.S.) shall be made on forms
supplied by regulatory authorities having jurisdiction or by Sun
Life (U.S.), as the case may be. All such appointments and
dismissals shall be subject to all applicable laws, rules and
regulations and to such written instructions and rules as Sun
Life (U.S.) may establish from time to time. Sun Life (U.S.), on
behalf of Clarendon, shall retain copies of all completed forms
appointing and/or dismissing agents and all related
correspondence, memoranda and other documents.
3
(c) Sun Life (U.S.), on behalf of Clarendon, shall maintain current
lists of sales representatives of Sun Life (U.S.) which it has
appointed.
(d) Sun Life (U.S.) shall pay all necessary appointment fees (initial
and renewal) and other expenses of any type incurred by Clarendon
with respect to licensing and appointment of individuals as sales
representatives of Sun Life (U.S.).
(e) Sun Life (U.S.) shall be responsible for determining that any
individual soliciting applications for Plans is: (i) properly
licensed with state insurance regulatory authorities; (ii)
appointed as a sales representative of Sun Life (U.S.); (iii)
properly licensed under all applicable securities laws; (iv)
associated as a registered representative with a broker/dealer
registered under the 34 Act and a NASD member and which has
executed a Distribution Agreement; and (v) covered by a fidelity
bond which provides for claim payments to be made to Sun Life
(U.S.) and Clarendon, as their interests may appear.
2. TRAINING OF SALES REPRESENTATIVES/REGISTERED REPRESENTATIVES
If requested by Sun Life (U.S.), Clarendon shall train sales
representatives of Sun Life (U.S.) which it has appointed to properly
solicit applications for the Plans.
3. SUPERVISION OF SALES REPRESENTATIVES/REGISTERED REPRESENTATIVES
Clarendon shall coordinate the supervision of the sales
representatives of Sun Life (U.S.) associated with other
broker-dealers in connection with the offering and sale of the Plans.
All rules and procedures as may be necessary to insure proper
supervision of the sales representatives/registered representatives
shall be subject to approval by Sun Life (U.S.).
4. SALES ASSISTANCE TO SALES REPRESENTATIVES/REGISTERED REPRESENTATIVES
If requested by Sun Life (U.S.), Clarendon shall provide sales
assistance to sales representatives of Sun Life (U.S.) which it has
appointed. This sales assistance shall include, but not be limited
to, assistance from home office personnel through its
telecommunications systems. In addition, Clarendon shall provide
broker/dealers and sales representatives with sufficient quantities
of sales promotional materials, prospectuses, sample Plans,
applications and any necessary service forms.
5. PAYMENT OF COMMISSIONS
All commission payments required to be made pursuant to the
Distribution Agreements shall be made by or through Clarendon as agent
for Sun Life (U.S.) or by Sun Life (U.S.) directly. Sun Life (U.S.)
will fund a commission account to make these payments. Sun Life
(U.S.) acknowledges that this function may be delegated by Clarendon,
subject to the prior approval of Sun Life (U.S.).
4
D. SALES MATERIAL AND OTHER DOCUMENTS
1. CLARENDON RESPONSIBILITIES
Clarendon shall be responsible for:
(a) the approval of promotional material prepared by Sun Life (U.S.)
or Clarendon by the Securities and Exchange Commission and the
National Association of Securities Dealers, Inc., where required.
2. SUN LIFE (U.S.)'S RESPONSIBILITIES
Sun Life (U.S.) shall be responsible for:
(a) providing Clarendon with sufficient quantities of prospectuses
regarding Plans and separate accounts, Plans (including
endorsements), applications and sample Plans for sales training
purposes.
(b) the design and printing of all promotional material for the
Plans.
(c) the approval of promotional material by state and other insurance
regulatory authorities.
E. ADVERTISING
Clarendon shall not print, publish or distribute any advertisement,
circular or any document relating to the Plans or relating to Sun Life
(U.S.) unless such advertisement, circular or document shall have been
approved in writing by Sun Life (U.S.). Neither Sun Life (U.S.) nor any of
its agents or affiliates shall print, publish or distribute any
advertisement, circular or any document relating to the Plans or relating
to Clarendon unless such advertisement, circular or document shall have
been approved in writing by Clarendon. However, nothing herein shall
prohibit any person from advertising annuities in general or on a generic
basis.
F. SALES RECORDS - PRODUCTION REPORTS
Clarendon shall provide Sun Life (U.S.) with such reports and materials
relative to the marketing and distribution of Plans as may reasonably be
required by Sun Life (U.S.), in the furtherance of its insurance business.
G. BOOKS, RECORDS AND SUPERVISION
1. BOOKS AND RECORDS
Clarendon may request that all or some of the books and records
required to be maintained by it as a registered broker/dealer in
connection with the offer and sale of the Plans be prepared and
maintained by Sun Life (U.S.). Sun Life (U.S.) agrees to prepare and
maintain such books and records at its cost upon request, and agrees
that such books and records are the property of Clarendon, that they
will be made and preserved in accordance with Rules 17a-3 and 17a-4
under the 34 Act and that they will be subject to examination by the
SEC in accordance with Section 17(a) of the 34 Act.
5
2. SUPERVISION
Clarendon has and assumes full responsibility for the securities activities
of all persons associated with Sun Life (U.S.) who maintain books and
records on its behalf. Sun Life (U.S.) acknowledges that Clarendon has
full responsibility for all such persons in connection with their training,
supervision and control as contemplated by the 34 Act.
H. ASSIGNMENT OF DUTIES
Sun Life (U.S.) acknowledges that Clarendon may assign all or any part of
its duties under this Agreement subject to the prior consent of Sun Life
(U.S.). No other assignment of Clarendon's duties under this Agreement is
permitted.
III
COMPENSATION
A. GENERAL
For performing administrative and marketing coordination services under
this Agreement, Clarendon will be compensated by Sun Life (U.S.), as may be
agreed from time to time, and at a minimum, Clarendon shall be compensated
on a cost reimbursement basis for performing its services hereunder.
B. CHANGES IN COMPENSATION
Compensation payable under this Agreement may be increased to reflect any
change in administrative or marketing coordination responsibilities.
C. INDEBTEDNESS
Nothing in this Agreement shall be construed as giving Clarendon the right
to incur any indebtedness on behalf of Sun Life (U.S.). However, Sun Life
(U.S.) may offset amounts owed it under this Agreement against amounts
payable under this Agreement for any reason; and Clarendon may offset
amounts owed by Sun Life (U.S.) under this Agreement against any amounts
payable to Sun Life (U.S.) under this Agreement for any reason, provided
that no such offset is permitted in connection with Plan premiums or
purchase payments and Plan payments.
IV
OTHER PROVISIONS
A. PRODUCT DEVELOPMENT
Clarendon shall assist Sun Life (U.S.) in the design and development of
life insurance and annuity products for distribution pursuant to the
Distribution Agreements. This assistance
6
may include conducting market research studies as reasonably requested by
Sun Life (U.S.), providing consulting services with respect to product
design, and assisting in the development of sales training, sales
promotional and advertising material relating to new insurance and annuity
products. All such studies and materials are the property of Sun Life
(U.S.).
B. OWNERSHIP OF BUSINESS RECORDS
Sun Life (U.S.) shall own all business records, including but not limited
to Plan records, tax records, payment records, plan descriptions,
appointment records, agents lists, files, memoranda and other records
maintained by Clarendon either on paper or in machine-readable form
pertaining to the duties and responsibilities under this Agreement. Such
records shall be delivered to Sun Life (U.S.) promptly upon reasonable
request. Clarendon will maintain all records and accounts maintained by it
in accordance with Sun Life (U.S.)'s standards or requirements, or
otherwise, with generally accepted procedures as they apply to the
accounting and insurance industry. At Sun Life (U.S.)'s request Clarendon
will make any such records available to Sun Life (U.S.)'s auditors or to
any governmental authority having jurisdiction over Sun Life (U.S.).
C. APPROVAL OF PRACTICES AND PROCEDURES
Sun Life (U.S.) shall have the right to review and approve the standards,
practices and procedures utilized by Clarendon in fulfilling its
obligations under the Agreement. Sun Life (U.S.) reserves the rights, from
time to time, to prescribe rules and regulations respecting the conduct of
the business covered hereby.
D. COMPLAINTS
1. Clarendon shall immediately forward to Sun Life (U.S.) any information
received by Clarendon relating to any complaint relating to Sun Life
(U.S.) or the Plans.
2. In the case of complaints or inquiries relating to the Plans
distributed pursuant to the Distribution Agreements, Sun Life (U.S.)
may, at its option, request Clarendon to investigate and/or respond to
such complaints or inquiries. In such instances, Clarendon shall
promptly forward to Sun Life (U.S.) copies of all documents relating
to such investigations and/or responses.
E. LIMITATIONS ON AUTHORITY
Clarendon shall have authority only as expressly granted in this Agreement.
No party to this Agreement shall enter into any proceeding in a court of
law or before a regulatory agency in the name of any other party, without
the express written consent of that party. Further, if any legal or
administrative proceedings are commenced against any party arising out of
the obligations, duties or services performed under this Agreement by any
third party or any federal, state or other governmental or regulatory
authority, that party, as the case may be, shall immediately notify the
other parties of this fact.
7
V
GENERAL PROVISIONS
A. WAIVER
Failure of any party to insist upon strict compliance with any of the
conditions of this Agreement shall not be construed as a waiver of any of
the conditions, but the same shall remain in full force and effect. No
waiver of any of the provisions of this Agreement shall be deemed, or shall
constitute a waiver of any other provisions, whether or not similar, nor
shall any waiver constitute a continuing waiver.
X. XXXX
Clarendon will maintain whatever fidelity bond may be required by Sun Life
(U.S.), and such bond shall be of a type and amount and issued by a
reputable company, all as approved by Sun Life (U.S.).
C. BINDING EFFECT
This Agreement shall be binding on and shall inure to the benefit of the
parties to it and their respective successors and assigns.
D. INDEMNIFICATION
Each party hereby agrees to release, indemnify and hold harmless the other
party, its officers, directors, employees, agents, servants, predecessors
or successors from any claims or liability to third parties arising out of
the breach of this Agreement or arising out of the acts or omissions of a
party to this Agreement not authorized by this Agreement.
E. NOTICES
All notices, requests, demands and other communication under this Agreement
shall be in writing, and shall be deemed to have been given on the date of
service if served personally on the party to whom notice is to be given, or
on the date of mailing, if sent by First Class Mail, Registered or
Certified, postage prepaid and properly addressed as follows:
TO SUN LIFE (U.S.)
Sun Life Assurance Company of Canada (U.S.)
One Sun Life Executive Park
Xxxxxxxxx Xxxxx, Xxxxxxxxxxxxx 00000
Attention: Secretary SC 1335
TO Clarendon
Clarendon Insurance Agency, Inc.
One Sun Life Executive Park
Xxxxxxxxx Xxxxx, Xxxxxxxxxxxxx 00000
Attention: Secretary SC 1335
8
F. GOVERNING LAW
This Agreement shall be construed in accordance with and governed by the
laws of the Commonwealth of Massachusetts.
G. COMPLIANCE
All parties agree to observe and comply with the existing laws and rules or
regulations of applicable local, state or federal regulatory authorities,
and with those which may be enacted or adopted during the term of this
Agreement regulating the business contemplated hereby in any jurisdiction
in which business described herein is to be transacted.
H. TERMINATION
This Agreement may be terminated by any of the parties upon two (2) months'
prior written notice to the other party.
Executed to be effective this day of January, 1998.
SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
By /s/ Xxxxxxxx Xxxxx Xxxx
----------------------------------------------
Xxxxxxxx Xxxxx Xxxx, Secretary
By /s/ Xxxxxx X. Xxxxxx
----------------------------------------------
Xxxxxx X. Xxxxxx, Vice President
CLARENDON INSURANCE AGENCY, INC.
By /s/ Xxx X. Xxxxxxx
----------------------------------------------
Xxx X. Xxxxxxx, Secretary
By /s/ Xxxxxx Xxxxxxx
----------------------------------------------
Xxxxxx Xxxxxxx, Vice President
