Exhibit 99.27(3)(b)
BROKER-DEALER SELLING AGREEMENT
AGREEMENT by and among the BROKER-DEALER ("Broker-Dealer"), a registered
Broker-Dealer with the Securities and Exchange Commission ("SEC") under the
Securities Exchange Act of 1934 and a member of the National Association of
Securities Dealers ("NASD") and INSURANCE AGENCY ("Agency"); and each additional
insurance agency signatory hereto (each of which shall also be referred to
herein as "Agency"), and the Undersigned Company or Companies. The term
"Company" used in the Agreement refers to the respective undersigned life
insurance company whose products are being solicited and sold. Unless otherwise
stated in this Agreement, any rights, obligations and liabilities of the
Undersigned Companies are separate and distinct. Each Undersigned Company is
only responsible under the terms of this Agreement, for those activities
involving the solicitation and sales of the respective Company's products.
WITNESSETH:
WHEREAS, the Company proposes to have Broker-Dealer's registered
representatives ("Representatives") who are also licensed to sell insurance in
appropriate jurisdictions solicit and sell certain variable life insurance and
annuity contracts ("Policies") more particularly described in this Agreement and
which are deemed to be securities under the Securities Act of 1933;
WHEREAS, the principal distributor of the Policies is provided in Company
Schedule A-1 and shall be responsible for the training and supervision of
persons involved with the solicitation and offer or sale of any of the Policies,
and proposes to delegate, to the extent legally permitted, said training and
supervisory duties to Broker-Dealer; and
WHEREAS, as full compensation, the Company will pay to Broker-Dealer, or,
if required by state law, to Agency, the compensation provided for in Company
Schedule A-1 on premiums paid to the Company on Policies sold by Broker-Dealer
after this Agreement becomes effective;
NOW THEREFORE, in consideration of the premises and the mutual covenants
hereinafter contained, the parties hereto agree as follows:
1. APPOINTMENT OF BROKER-DEALER. The Company and Principal Distributor
hereby appoint Broker-Dealer to sell the Policies through its Representatives
and to provide certain administrative services to facilitate solicitations for
and sales of the Policies.
Broker-Dealer agrees that its authority is limited to the solicitation and
marketing of the Policies in accordance with this Agreement and Broker-Dealer
agrees that it will not make, alter, modify or discharge any contract or extend
any provision thereof, or extend the time for payment of premiums or waive any
forfeiture or guarantee dividends or estimate future interest, mortality or
expense factors except through the use of authorized illustrations and
projections approved by the Company, or deliver any contract unless the
applicant is at the time of delivery in good health and insurable condition, or
incur any debts or liability against the Company or Principal Distributor.
Nothing in this Agreement shall create or be construed to create an exclusive
authority to represent the Company, or Principal Distributor or to effect sales
of Policies, either with respect to a specific geographic territory, or
otherwise.
Multi-Company - Variable
6/17/02
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2. THE POLICIES. The Policies issued by the Company to which this
Agreement applies are listed in Company Schedule B-1. Company Schedule B-1 may
be amended at any time by the Company. The Company in its sole discretion and
without notice to Broker-Dealer, may suspend sales of any Policies or may amend
any policies or contracts evidencing such Policies if, in the Company's opinion,
such suspension or amendment is: (1) necessary for compliance with federal,
state, or local laws, regulations, or administrative order(s); or, (2) necessary
to prevent administrative or financial hardship to the Company. In all other
situations, the Company shall provide 30 days notice to Broker-Dealer prior to
suspending sales of any Policies or amending any policies or contracts
evidencing such Policies.
3. SECURITIES LICENSING. Broker-Dealer shall, at all times when
performing its functions under this agreement, be registered as a securities
broker with the SEC and be a member of the NASD and licensed or registered as a
securities broker-dealer in the states and other local jurisdictions that
require such licensing or registration in connection with variable life
insurance and annuity contract sales activities or the supervision of
Representatives who perform such activities in the respective location.
4. INSURANCE LICENSING. Broker-Dealer shall, at all times when performing
its functions under this agreement, be validly licensed as an insurance agency
in the states and other local jurisdictions that require such licensing or
registration in connection with Broker-Dealer's variable life insurance and
annuity contract sales activities; or, in those states in which Broker-Dealer
cannot or does not obtain a corporate agent's license, shall maintain a
contractual relationship with an agency, which shall be validly licensed as an
insurance agency in such jurisdiction or jurisdictions. Such contractual
relationship shall be set forth in an agreement substantially equivalent to that
set forth as Exhibit A. Broker-Dealer represents that it is in full compliance
with all applicable federal and state statutes, laws, regulations and SEC
No-Action letters (specifically the requirements of First of America Brokerage
Services, Inc.) and any rules and regulations of the NASD, pertaining to the
appropriate relationship between a Broker-Dealer and an insurance agency which
are separate and distinct entities, not able to sell variable life insurance and
annuity products without entering into a contractual relationship as described
herein. Broker-Dealer shall provide the Company with a list of all licensed
insurance agencies relied upon by Broker-Dealer to comply with this paragraph
and covenants to maintain the completeness and accuracy of such list, and to
cause each such agency to become a signatory hereto (each of which shall
thereupon also be an "Agency" hereunder).
5. APPOINTMENTS. Broker-Dealer shall assist the Company in the
appointment of Representatives under the applicable insurance laws to sell the
Policies. Broker-Dealer shall fulfill all requirements set forth in the General
Letter of Recommendation, attached as Schedule C-1 with respect to the Company,
in conjunction with the submission of licensing/appointment papers for all
applicants as insurance agents of the Company. All such licensing/appointment
papers should be submitted by Broker-Dealer to the Company or its duly appointed
agent. Notwithstanding such submission, the Company shall have sole discretion
to appoint, refuse to appoint, discontinue, or terminate the appointment of any
Representative as an insurance agent of the Company.
6. SECURING APPLICATIONS.
(a) All applications for the Company Policies shall be made on
application forms supplied by the Company and all payments collected by
Broker-Dealer or any Representative of Broker-Dealer shall be remitted promptly
in full, together with such application forms and any other required
documentation, directly to the Company at the address indicated on such
application or to such other address as the Company may, from time-to-time,
designate in writing. Broker-Dealer shall review all such applications for
completeness and suitability, consistent with Company policies and procedures.
Checks
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in payment on any such Policy shall be drawn to the order of the Company name as
reflected in Company Schedule A-1. All applications are subject to acceptance or
rejection by the Company at its sole discretion.
(b) All records or information obtained hereunder by Broker-Dealer
shall not be disclosed or used except as expressly authorized herein, and
Broker-Dealer will keep such records and information confidential pursuant to
Section 26 of this Agreement.
7. MONEY RECEIVED BY BROKER-DEALER. All money payable in connection with
any of the Policies, whether as premium or otherwise, and whether paid by or on
behalf of any policyholder, contract owner or anyone else having an interest in
the Policies, is the property of the Company and shall be transmitted
immediately in accordance with the administrative procedures of the Company
without any deduction or offset for any reason, including, by way of example but
not limitation, any deduction or offset for compensation claimed by
Broker-Dealer.
8. SUPERVISION OF REPRESENTATIVES.
(a) To the extent the Principal Distributor and its representatives
assist Broker-Dealer and its representatives in the sale of the Policies, the
Principal Distributor shall have full responsibility for the training and
supervision of its representatives, and such representatives will be qualified
under applicable federal and state law.
(b) Broker-Dealer shall have full responsibility for the training and
supervision of all Representatives associated with Broker-Dealer who are engaged
directly or indirectly in the offer or sale of the Policies, and all such
persons shall be subject to the control of and supervision of Broker-Dealer with
respect to such persons' activities in connection with the solicitation and sale
of and other communication with respect to the Policies. Broker-Dealer, prior to
allowing its Representatives to solicit for sales or sell the Policies, shall
require such Representatives to be validly insurance licensed, registered and
appointed by the Company as variable contract agents in accordance with the
jurisdictional requirements of the place where the solicitations and sales take
place as well as the solicited person's or entity's place of residence; will
cause such Representatives to qualify under applicable federal and state laws to
engage in the sale of the Policies; will cause such Representatives to be
registered representatives of Broker-Dealer before such Representatives engage
in the solicitation of applications for the Policies; and will cause such
Representatives to limit solicitation of applications for the Policies to
jurisdictions where the Company has authorized such solicitation. Broker-Dealer
shall cause such Representatives' qualifications to be certified to the
satisfaction of the Principal Distributor and shall notify the Principal
Distributor if any Representative ceases to be a registered representative of
Broker-Dealer or ceases to maintain the proper licensing required for the sale
of any of the Policies.
(c) Each party shall be liable for its own negligence and misconduct
hereunder.
9. COMPLIANCE WITH NASD RULES AND FEDERAL AND STATE SECURITIES LAWS.
Broker-Dealer and the Principal Distributor each shall fully comply with the
requirements of the NASD and of the Securities Exchange Act of 1934 and all
other applicable federal or state laws and will establish such rules and
procedures as may be necessary to cause diligent supervision of the securities
activities of the Broker-Dealer's Representatives and the Principal
Distributor's representatives, respectively.
10. REPRESENTATIVE'S NONCOMPLIANCE. In the event a Representative fails or
refuses to submit to supervision of Broker-Dealer, Broker-Dealer fails to meet
the rules and standards imposed by Broker-
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Dealer on it's Representatives, Broker-Dealer shall advise Principal Distributor
of this fact and shall immediately notify such Representative that he or she is
no longer authorized to sell any of the Policies and Broker-Dealer shall take
whatever action may be necessary to terminate the sales activities of such
Representative relating to the Policies.
11. PROSPECTUSES, SALES PROMOTION MATERIAL AND ADVERTISING.
(a) Broker-Dealer shall be provided with prospectuses relating to the
Policies and such other material as the Principal Distributor determines to be
necessary or desirable for use in connection with sales of such Policies. No
sales promotion materials or any advertising relating to the Policies shall be
used by Broker-Dealer unless the specific item has been approved in writing by
the Principal Distributor, which consent shall not be unreasonably withheld or
delayed.
(b) In addition, neither Broker-Dealer nor Agency shall print,
publish or distribute any advertisement, circular or any document relating to
the Company unless such advertisement, circular or document shall have been
approved in writing by the Company; provided, however, that nothing herein shall
prohibit Broker-Dealer from advertising variable insurance in general or on a
generic basis.
(c) Broker-Dealer and Agency agree that all computer software
containing the rates and values of products issued by the Company whether or not
distributed through the Principal Distributor, all rate books, computer
printouts, client files, policies, brochures, prospectuses, sales promotion
materials, whether in hard copy or computer format, containing the name/logo of
the Company, Principal Distributor or any affiliated company, are furnished to
Broker-Dealer and Agency in confidence, and Broker-Dealer and Agency agree to
refrain from reproducing, publishing, or disclosing such material other than in
the ordinary course of business. Broker-Dealer and Agency further agrees that
all such property shall be returned to the Company upon demand or upon
termination of this Agreement if so required by the Company.
12. RIGHT OF REJECTION. The Company or Principal Distributor, in its sole
discretion, may reject any applications or payments remitted by Representatives
through Broker-Dealer and may refund an applicant's payments to the applicant.
In the event such refunds are made and if Broker-Dealer or Agency have received
compensation based on an applicant's payment that is refunded, Broker-Dealer
shall promptly repay such compensation to the Company. If repayment is not
promptly made, the Company may at its sole option deduct any amounts due it from
Broker-Dealer or Agency from future commissions otherwise payable to
Broker-Dealer or Agency pursuant to this agreement. This provision shall survive
termination of this Agreement.
13. COMPENSATION.
(a) COMMISSIONS, FEES AND ALLOWANCES. Sales compensation payable to
Broker-Dealer in connection with the Policies shall be paid by the Company to
the Agency, (or, only if Broker-Dealer is also a corporate insurance agency
permitted to receive such compensation, to Broker-Dealer in its capacity as an
Agency) and Broker-Dealer hereby appoints Agency to receive on its behalf any
and all compensation that may be due and payable to Broker-Dealer in accordance
with the provisions set forth in Company Schedule A-1. The Company will provide
Broker-Dealer or Agency with a copy of its current Schedule of Sales
Compensation for the Policies. These fees and commissions will be paid based on
premiums received and accepted by the Company for applications obtained by the
various Representatives of Broker-Dealer. Compensation upon termination of this
Agreement shall be subject to
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the terms of Section 25. Broker-Dealer and/or Agency shall be liable for any
chargebacks or for any other amounts advanced by or otherwise due to the Company
hereunder.
(b) CHANGES TO COMPENSATION SCHEDULE. The Company may, upon at least
( ) days prior written notice, change its Schedule of Sales Compensation. Any
such change shall apply to compensation due on applications received by the
Company after the effective date of such notice.
(c) RESTRICTIONS.
(i) If Broker-Dealer, Agency or any Representative shall
rebate or offer to rebate all or any part of a premium on a policy issued by the
Company in violation of applicable state insurance laws or regulations, or if
Broker-Dealer, Agency or any Representative shall withhold any premium on any
Policy issued by the Company, or if Broker-Dealer, Agency or any Representative
rebates or offers to rebate all or any part of a commission paid or payable upon
the sale of a Policy in violation of applicable state insurance laws or
regulations, the Company may, at its option, terminate this Agreement.
(ii) If Broker-Dealer, Agency or any Representative shall at
any time induce or endeavor to induce any owner of a Policy to relinquish the
Policy except under circumstances where there is reasonable grounds for
believing the Policy or interest therein is not suitable for such person, any
and all compensation due hereunder shall cease and terminate except for that
already earned.
(iii) Broker-Dealer, Agency or any Representative shall not
broker business through this Agreement, and shall be subject to immediate
termination if business is shared with any person not licensed and contracted
with Company or if the Broker-Dealer, Agency or Producer shares compensation
with any person in excess of the amounts determined payable to that person by
Company.
(iv) [Description of rules for split cases.]
(v) Nothing in this Agreement shall be construed as giving
Broker-Dealer or Agency the right to incur any indebtedness on behalf of the
Company. Broker-Dealer and Agency each hereby authorizes the Company to set off
their respective liabilities to the Company against any and all amounts
otherwise payable to them by the Company.
(d) INDEBTEDNESS.
(i) The Company is authorized, at any time either before or
after the termination of the Agreement, to deduct compensation due from Company
to Broker-Dealer or Agency the entire amount of any funds, including, but not
limited to, advances or debts, owed by Broker-Dealer to Company or its
affiliates, associates, parents or subsidiaries, but only to the extent of the
actual amount owed by Broker-Dealer or Agency as determined by Company.
(ii) Any compensation, regardless of how characterized, paid
to Broker-Dealer or Agency for premiums or considerations, including rollover
amounts, later returned or credited to the customer, or any overpayment of such
compensation shall be a debt due to Company from Broker-Dealer or Agency and
payable in accordance with (a) above.
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(iii) In addition to all other rights available to Company as
a creditor, Company shall have a first lien on all compensation payable under
the Agreement for any of the funds, advances or debts described herein.
(iiii) To the extent that any compensation due Broker-Dealer
or Agency from Company is insufficient to cover advances, the difference shall
become a debt due and payable immediately to Company unless other arrangements
have been made with Company. At the sole discretion of Company, interest, at a
lawful rate to be determined by Company, shall thereupon begin to accrue.
14. POLICY DELIVERY. The Company may, upon written request of
Broker-Dealer, transmit Policies to Broker-Dealer or Agency for delivery to
Policyowners. Broker-Dealer hereby agrees to deliver all such Policies to
policyowners promptly upon its receipt thereof from the Company. Broker-Dealer
and Agency agree that the indemnification provisions of this Agreement include
any and all costs, expenses, loss, damages and attorneys' fees resulting from
Broker-Dealer's or Agency's failure to perform or inability to prove performance
of the undertakings described in this paragraph, and authorizes the Company to
set off any amount it owes the Company under this paragraph against any and all
amounts otherwise payable to or on behalf of Broker-Dealer or Agency by the
Company pursuant to this agreement. The Company reserves the right to revoke or
withdraw this privilege, in whole or in part, at any time, and without prior
notice.
15. INDEMNIFICATION.
(a) The Company and Principal Distributor shall indemnify and hold
Broker-Dealer and Agency harmless from any and all cost, expense, loss or
damages, including reasonable attorneys' fees, resulting from any negligent,
fraudulent or unauthorized acts or omissions by the Company, Principal
Distributor, their employees and authorized agents.
(b) Broker-Dealer and Agency shall indemnify and hold the Company and
Principal Distributor harmless from any and all costs, expenses, loss or
damages, including reasonable attorneys' fees, resulting from any negligent,
fraudulent or unauthorized acts or omissions of Broker-Dealer or its
Representatives.
16. 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.
17. INDEPENDENT CONTRACTORS.
(a) Broker-Dealer, its Representatives and Agency are independent
contractors with respect to the Company and Principal Distributor. Nothing
contained in this Agreement shall create, or shall be construed to create, the
relationship of employer and employee between the Company or Principal
Distributor and Broker-Dealer, its Representatives or Agency.
(b) Broker-Dealer shall, in its sole discretion, select the persons
from whom it will solicit applications for Policies, as well as the time, manner
and place of solicitation.
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18. LIMITATIONS. No party other than the Company shall have the authority
to make, alter, or discharge any policy, contract, or certificate issued by the
Company, to waive any forfeiture or to grant, permit, or extend the time for
making any payments, or to guarantee earnings or rates, or to alter the forms
which the Company may prescribe or substitute other forms in place of those
prescribed by the Company, or to enter into any proceeding in a court of law or
before a regulatory agency in the name of or on behalf of the Company.
19. FIDELITY BOND.
(a) Broker-Dealer represents that all of its directors, officers,
employees and Representatives who are appointed pursuant to this Agreement as
the Company agents for state insurance law purposes or who have access to funds
of the Company, including but not limited to funds submitted with applications
for the Policies or funds being returned to owners, shall at all times be
covered by a blanket fidelity bond, including coverage for larceny and
embezzlement, issued by a reputable bonding company. This bond shall be
maintained by Broker-Dealer at Broker-Dealer's expense. Such bond shall be, at
least, of the form, type and amount required under the NASD Conduct Rules.
Broker-Dealer and Agency shall maintain Errors and Omissions insurance coverage
in an amount and with a company satisfactory to the Company and Principal
Distributor. The Company may require evidence, satisfactory to it, that such
coverage is in force and Broker-Dealer and Agency shall give prompt written
notice to the Company of any notice of cancellation or change of coverage.
(b) Broker-Dealer shall assign any proceeds received from the
fidelity bonding company to the Company to the extent of any loss to the Company
due to activities covered by the bond for which the Company and/or Principal
Distributor are not responsible. If there is any deficiency amount, whether due
to a deductible or otherwise, Broker-Dealer shall promptly pay the Company such
amount on demand and Broker-Dealer hereby indemnifies and holds harmless the
Company from any such deficiency and from the costs of collection thereof
(including reasonable attorneys' fees).
(c) Broker-Dealer and Agency hereby represent and warrant that no
Broker-Dealer or Agency representative or employee assigned to provide services
or work hereunder have been convicted of any felony under any state or federal
law and Broker-Dealer and Agency agree to defend and indemnify Company with
respect to any action brought against Company to the extent that such action is
based upon a claim that the engagement by Company of such representative or
employee violated any state or federal proscription against such engagement,
including but not limited to The Violent Crime Control and Law Enforcement Act
of 1994.
20. 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;
provided however, that neither Broker-Dealer nor Agency may assign this
Agreement or any rights or obligations hereunder without the prior written
consent of the Company.
21. REGULATIONS. The parties agree to observe and comply with all
applicable local, state, and federal laws and rules or regulations, and to fully
co-operate with any regulatory authority having jurisdiction with respect
thereto.
22. NOTICES. All notices or communications shall be sent in writing and to
the addresses shown below or to such other address as the party may request by
giving written notice to the other
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parties. Notices shall be effective immediately upon date of postmark in the
mail, if received, or upon receipt if delivered by any other means, unless
otherwise specifically provided.
BROKER-DEALER
ADDRESS
ADDRESS
23. GOVERNING LAW. This Agreement shall be construed in accordance with
and governed by the laws of the State of Indiana.
24. AMENDMENT OF AGREEMENT. The Company and Principal Distributor reserve
the right to amend this Agreement at any time, and the submission of an
application to purchase a policy by Broker-Dealer after notice of any such
amendment shall constitute agreement to any such amendment.
25. TERMINATION.
(a) This Agreement may be terminated by any party, with or without
cause, upon ( ) months written notice to the other parties.
(b) This Agreement may be terminated immediately by any party if the
Company, Principal Distributor or Broker-Dealer shall cease to be a registered
Broker-Dealer under the Securities Exchange Act of 1934 or a member of the NASD
or for cause.
(c) This Agreement will automatically terminate:
(i) Upon the death or total and permanent physical or
mental disability of Broker-Dealer, if an individual.
(ii) Upon dissolution of Broker-Dealer, if a corporation or
a partnership, including LLC and LLP.
(d) Termination of this Agreement will result in the termination of all
agreements with Representatives of Broker-Dealer.
(e) In the event of such termination, commissions, fees and allowances for
the first contract year and for renewal years, with respect to in force policies
and applications submitted by Broker-Dealer and its Representatives prior to the
date of termination, shall be payable, based upon the compensation schedule set
forth in Company Schedule A-1 in effect at the time of issuance for in force
policies and time of termination for applications. Provided, however, if such
termination is due to a misappropriation of funds, fraud or for any reason based
on action prohibited by the criminal laws of the jurisdiction in which the act
is committed, no further compensation shall be paid.
26. CONFIDENTIAL INFORMATION AND PROTECTION OF NON-PUBLIC PERSONAL
INFORMATION. Each party agrees to maintain the other party's Confidential
Information (defined below) in strict confidence and in a manner to safeguard
against unauthorized access, disclosure, use, destruction, loss or alteration in
accordance with the Xxxxx-Xxxxx-Xxxxxx Act, the relevant state and federal
regulations pursuant thereto and state privacy laws (all the foregoing referred
to as "Privacy Law.")
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(a) "Confidential Information" shall mean (1) any data or information
that is proprietary to disclosing party and not generally known to the public,
whether in tangible or intangible form, including, but not limited to, the
following information relating to a party's marketing strategies, business
systems, databases, and (2) any customer or consumer specific data deemed to be
"nonpublic personal information" under the Privacy Law.
(b) Specifically, with regard to nonpublic personal information, the
parties agree that they are prohibited from using consumer or customer
non-public personal information other than (1) to execute the terms and
conditions of this Agreement as permitted by Privacy Law or (2) as required by
state or federal law, regulation or rule. The parties agree not to disclose
consumer or customer non-public personal information to any third parties
without prior written permission of the disclosing party. Each party shall
promptly report to the other party any unauthorized disclosure or use of any
Confidential Information of which it becomes aware.
(c) Upon request, each party shall return to the other party or
destroy (and provide an appropriate written destruction certificate) all
Confidential Information in its possession or control. No disclosure by a party
hereto of Confidential Information of such party to the other party shall
constitute a grant to the other of any interest or right whatsoever in such
Confidential Information, which shall remain the sole property of the disclosing
party.
(d) Both parties have the right to make reasonable requests to
inspect, during normal business hours, the other party's facilities, data and
records, associated audit reports, summaries of test results or equivalent
measures taken by a party to ensure compliance with the Privacy Law for the
purposes of verifying that the confidentiality provisions of this Agreement are
being complied
27. EFFECTIVE. This Agreement shall be effective on _________________ and
only upon inclusion of all Company schedules and the signature of all parties to
this Agreement.
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THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
By:
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Title:
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LINCOLN LIFE AND ANNUITY COMPANY OF NEW YORK
By:
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LINCOLN FINANCIAL ADVISORS CORP.
By:
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Title:
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BROKER-DEALER
By:
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Title:
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INSURANCE AGENCY
By:
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Title:
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Date:
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ADDITIONAL INSURANCE AGENCIES
NAME:
Business Address:
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Signature:
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Name:
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Tax ID #:
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NAME:
Business Address:
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Signature:
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Name:
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Tax ID #:
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NAME:
Business Address:
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Signature:
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Name:
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Tax ID #:
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EXHIBIT A
"SAMPLE" SECURITIES SUPERVISION AGREEMENT
This AGREEMENT is effective _______________, 200__ by and between
__________________ ("Broker-Dealer"), and _________________ (Agency) is made in
consideration of the mutual benefit to be derived.
RECITALS
Broker-Dealer is a broker and dealer in securities which is licensed and
qualified to transact business pursuant to rules and regulations promulgated by
the Securities and Exchange Commission ("SEC"), the National Association of
Securities Dealers, Inc. ("NASD"), and other governmental agencies.
Agency is licensed pursuant to state insurance law as an insurance agency
with authority to sell certain variable contracts which are also subject to
regulation by the SEC and/or NASD.
Agency has contracted and will contract with various individuals to sell
life insurance and annuity contracts. Those contracted individuals who are also
licensed by the NASD as registered representatives, have variable contract
authority under their insurance agent or broker license, and who wish to sell
variable insurance products through Agency, must also enter into a Sales
Representative Agreement with Broker-Dealer. (Such dually-licensed individuals
are hereinafter referred to as "registered agents.")
In order to avoid the necessity of duplicate licensing, the employment of
additional personnel, and providing related office facilities, Agency wishes to
engage Broker-Dealer to provide management and administrative services to Agency
for the operation of Agency with regard to all matters subject to regulation by
the SEC and/or NASD.
In order to meet its obligations under the Securities Exchange Act of 1934,
satisfy the requirements of its license with the NASD, and exercise its rights
and responsibilities under the Sales Representative Agreements, Broker-Dealer
wishes to undertake such services on behalf of the Agency.
AGREEMENT
1. TERM. This Agreement commences as of the effective date and shall continue
throughout the calendar 200_ and year to year thereafter, unless sooner
terminated. This Agreement may be terminated after December 31, 200_ by either
party upon at least ninety (90) days notice, or at any time by the consent of
both parties.
2. PERFORMANCE OF SERVICES BY BROKER-DEALER. During the term of this
Agreement, Broker-Dealer will furnish the following services (hereinafter
referred to as the "Services") to the Agency.
2.01 STANDARDS OF CONDUCT. Broker-Dealer will establish, maintain, and
enforce standards of conduct for registered agents of the Agency, which
standards shall meet or exceed the conduct requirements for registered
representatives set forth in the Conduct Rules promulgated by the NASD.
2.02. SUPERVISORY PROCEDURES. Broker-Dealer will establish and implement
supervisory procedures for the securities sales activity of the Agency which
meet or exceed the requirements set forth in the NASD Conduct Rules.
2.03 SUITABILITY. Broker-Dealer will establish standards and guidelines
for reasonably determining whether a variable contract is "suitable" for the
customer to whom it is recommended, based upon the facts, if any, disclosed by
such customer as to his/her other security holdings and as to his/her financial
situations and needs.
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2.04. ADVERTISING & SALES LITERATURE. Broker-Dealer will develop and
implement procedures for reviewing and approving all advertising and sales
promotional material relating to variable products developed and used by the
Agency or its registered agents.
2.05 RECORDKEEPING REQUIREMENTS. Broker-Dealer will be responsible for
recording all securities transactions of the Agency, and maintaining books and
records with respect to such transactions in such manner as will meet
requirements of '17(a) of the Securities Exchange Act of 1934 and the rules
promulgated thereunder.
2.06 AUDITS. Broker-Dealer will oversee all audits of the Agency's
securities transactions by the NASD or other securities regulatory authorities.
Broker-Dealer shall have full and complete access to all books and records of
the Agency for this purpose. Broker-Dealer will also conduct field audits of the
agents and associated persons as necessary or appropriate to assure ongoing
compliance with the requirements of the SEC and/or NASD.
2.07 TRAINING. Broker-Dealer will be responsible for training the
registered agents of the Agency in the uses and operation of variable contracts
and standards of conduct for securities salesperson. Broker-Dealer will
undertake this activity in such a manner as will assure a proper level of
competence among such agents.
2.08. MISCELLANEOUS. Broker-Dealer agrees to undertake all other actions
as are necessary and proper to assure that the Agency and its registered agents
are in compliance with all rules and regulations pertaining to the sale of
securities promulgated by the SEC, NASD, and state securities regulators.
3. REPRESENTATION BY BROKER-DEALER. Broker-Dealer represents to the Agency
that it and its personnel have substantial experience in the conduct of the type
of services required by this Agreement. Broker-Dealer agrees to cause its
personnel to use their best efforts in pursuit of the services.
4. PARTIES BOUND. This Agreement shall be binding upon and inure to the
benefit of each of the parties hereto and their respective successors and
assigns; provided, that no party may, without the prior written consent of the
other party hereto, assign or transfer any duties or obligations here under or
any interest herein.
5. GOVERNING LAW. This Agreement is being executed and delivered and is
intended to be performed in the State of __________ and else where, and the
substantive laws of such state and the applicable laws of the United States of
America shall govern the validity, construction, enforcement and interpretation
of this Agreement, unless otherwise specified herein.
This Agreement has been executed and is effective as of the date first
above written.
14
SCHEDULE C-1
General Letter of Recommendation
BROKER-DEALER hereby certifies to the Company that all the following
requirements will be fulfilled in conjunction with the submission of appointment
papers for all applicants as agents of the Company submitted by BROKER-DEALER.
BROKER-DEALER will, upon request, forward proof of compliance with same to the
Company in a timely manner.
1. We have made a thorough and diligent inquiry and investigation relative to
each applicant's identity, residence, business reputation, and experience
and declare that each applicant is personally known to us, has been
examined by us, is known to be of good moral character, has a good business
reputation, is reliable, is financially responsible and is worthy of
appointment as a variable life and/ or annuity agent of the Company. This
inquiry and background investigation has included a credit and criminal
check on each applicant. Based upon our investigation, we vouch for each
applicant and certify that each individual is trustworthy, competent and
qualified to act as an agent for the Company to hold himself out in good
faith to the general public.
2. We have on file a U-4 form which was completed by each applicant. We have
fulfilled all the necessary investigative requirements for the registration
of each applicant as a registered representative through our NASD member
firm, and each applicant is presently registered as an NASD registered
representative.
The above information in our files indicates no fact or condition which
would disqualify the applicant from receiving a license or appointment and
all the findings of all investigative information are favorable.
3. We certify that all educational requirements have been met for the specific
state each applicant is licensed in, and that, all such persons have
fulfilled the appropriate examination, education and training requirements.
4. We certify that each applicant will receive close and adequate supervision,
and that we will make inspection when needed of any or all risks written by
these applicants, to the end that the insurance interest of the public will
be properly protected.
5. We will not permit any applicant to transact insurance as an agent until
duly licensed and appointed by the Company. No applicants have been given a
contract or furnished supplies, nor have any applicants been permitted to
write, solicit business, or act as an agent in any capacity, and they will
not be so permitted until the certificate of authority applied for is
received.
15
SCHEDULE A-1
SAMPLE
LINCOLN LIFE & ANNUITY COMPANY OF NEW YORK
{NAME}
(Subject to Availability and State Variations Thereof)
VARIABLE LIFE PRODUCTS
Variable products are only available through a Broker-Dealer with an effective
selling agreement with the Company. Payments shown below are Gross Dealer
Concessions paid to a Broker-Dealer and are before Broker-Dealer charges.
TRAIL % OF ACCUMULATED
% OF PREMIUM FUND VALUE (c)
--------------------------------- --------------------------------
BAND x
ISSUE AGES AND BAND BAND 2 AND YEARS YEARS YEARS
PRODUCT PREMIUM TYPES 1 TO x(b) BEYOND 2 - 4 5 - 20 21 +
------- -------------- ---- ----- ------ ------
Lincoln Momentum VUL(ONE) (a),
(c) Option {*} All Ages
Target Premium {*} {*} {*} {*} {*} {*}
Collected Premium {*} {*} {*}
(a) Target premium will be used to create premium bands. Each band will have
its unique commission rate. Payment for each band will start in a
particular policy year and roll forward into later years through year 10.
(b) May be multiple columns when rates vary from band to band.
(c) Trail compensation rates are applied to the accumulated cash value LESS
outstanding loan balance on the policy.
* Rate will vary among Broker-Dealers and from contract to contract.
ADDITIONAL TERMS AND CONDITIONS LISTED ON PAGE 2 OF THIS SCHEDULE.
1
COMPENSATION NOTES:
- Charge backs shall include all relevant amounts paid.
- The Company reserves the right to establish check minimums and frequency of
payment.
- Flat extras on whole life products will have a *% commission rate.
- No compensation will be paid on any policies that have been placed on waiver
of premium, on internet or on policy loan payments.
- The Company will determine the amount of compensation to be paid, if any,
where policy changes, replacements or reinstatements are involved.
- VARIABLE PRODUCTS MAY BE SOLD ONLY IN CONJUNCTION WITH AN EFFECTIVE
BROKER-DEALER SELLING AGREEMENT.
CHARGE BACK POLICY
{Subject to negotiation}
* Rate will vary among Broker-Dealers and from contract to contract.
2
