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EXHIBIT 3(b)
FORM OF SELLING AGREEMENT
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CANADA LIFE INSURANCE COMPANY OF AMERICA
A wholly-owned subsidiary of
The Canada Life Assurance Company
Annuity Service Xxxxxx
0000 Xxxxxx Xxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
(000)000-0000
SELLING AGREEMENT
AGREEMENT by and between Canada Life Insurance Company of America
(CLICA), a Michigan Corporation, a wholly-owned subsidiary of The Canada
Assurance Company of Canada; Canada Life of America Financial Services, Inc.
(CLAFS), a registered broker-dealer with the Securities and Exchange Commission
under the Securities Act of 0000 (xxx 0000 Xxx), and a member of the National
Association of Securities Dealers, Inc. (NASD);
________________________________________________________________________________
________________________________________________________________________________
(Selling Broker-Dealer), also a registered broker-dealer and member of the NASD;
and
________________________________________________________________________________
________________________________________________________________________________
(General Agent).
I. INTRODUCTION
WHEREAS, CLICA has issued certain annuity contracts, and these Contracts
are registered under the Securities Act of 1933 (the 1933 Act)(Contracts or
Contracts collectively); and
WHEREAS, Selling Broker-Dealer and General Agent wish to participate in
the distribution of the Contracts;
NOW THEREFORE, in consideration of the premises and the mutual covenants
hereinafter contained, the parties hereto agree as follows:
II. APPOINTMENT
Subject to the terms and conditions of this Agreement, CLICA and CLAFS
hereby appoint ________________ as Selling Broker-Dealer and __________________
as General Agent for the solicitation of applications for the purchase of the
Contracts, and Selling Broker-Dealer and General Agent accept such appointment.
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III. AUTHORITY AND DUTIES OF GENERAL AGENT
A. LICENSING AND APPOINTMENT OF PRODUCERS
General Agent is authorized to appoint Producers to solicit sales of the
Contracts. General Agent warrants that ail Producers appointed by General Agent
pursuant to this Agreement shall not solicit nor aid, directly or indirectly, in
the solicitation of any application for any Contract until that Producer is
fully licensed under the applicable insurance laws and, in connection with
securities regulated Contracts, is a fully registered representative of Selling
Broker-Dealer. General Agent shall prepare and transmit the appropriate
licensing and appointment forms to CLICA. General Agent shall pay all fees to
state insurance regulatory authorities in connection with obtaining necessary
licenses and appointments for Producers. All fees payable to regulatory
authorities in connection with the initial CLICA appointment of Producers who
already possess necessary insurance licenses shall be paid by CLICA. Any renewal
license fees due after the initial appointment shall be paid by General Agent.
General Agent shall periodically provide CLICA with a list of all Producers
appointed by General Agent and the jurisdictions where such Producers are
licensed to solicit sales of the contracts. CLICA shall periodically provide
General Agent with a list which shows: 1) the jurisdictions where CLICA is
authorized to do business; and 2) any limitations on the availability of the
Contracts in any of such jurisdictions. General Agent agrees to fulfill all
requirements set forth in the General Letter of Recommendation attached as
Exhibit A in conjunction with the submission of licensing and appointment papers
for all applicants as Producers submitted by General Agent.
B. REJECTION OF PRODUCER
CLAFS, or CLICA may, by written notice to General Agent, refuse to permit
any Producer the right to solicit applications for the sale of any of the
Contracts, require General Agent to cause any Producer to cease such
solicitations or sales and cancel the appointment of any Producer.
C. SUPERVISION OF PRODUCERS
General Agent shall supervise any Producers appointed pursuant to this
Agreement to solicit sales of the Contracts and bear responsibility for all acts
and omissions of each Producer. General Agent shall comply with and exercise all
responsibilities required by applicable federal and state law and regulations.
General Agent shall not be responsible for those supervisory responsibilities
belonging to Selling Broker-Dealer under applicable securities laws which
include, but are not limited to, supervising and training Producers in their
capacity as registered representatives. Nothing contained in this Agreement or
otherwise shall be deemed to make any Producer appointed by General Agent an
employee or agent of CLICA or CLAFS. If the act or omission of a Producer or any
other employee of General Agent is the proximate cause of any claim, damage or
liability (including reasonable attorneys' fees) to CLICA or CLAFS, General
Agent shall be responsible and liable therefor.
Before a Producer is permitted to sell the Contracts, General Agent,
Selling Broker-Dealer and Producer shall have entered into a written agreement
pursuant to which: 1) Producer is appointed a Producer of General Agent and a
registered representative of Selling Broker-Dealer, 2) Producer agrees that his
or her selling activities relating to securities regulated contracts shall be
under the supervision and control of Selling Broker-Dealer and his or her
selling activities relating to insurance regulated Contracts shall be under the
supervision and control of General Agent; and 3) that Produce's right to
continue to sell such Contracts is subject to his or her continued compliance
with such agreement and any procedures, rules or regulations implemented by
Selling Broker-Dealer or General Agent.
IV. AUTHORITY AND DUTIES OF SELLING BROKER-DEALER
A. SUPERVISION OF REGISTERED REPRESENTATIVES
Selling Broker-Dealer agrees that it has full responsibility for the
training and supervision of all persons, including Producers of General Agent,
associated with Selling Broker-Dealer who are engaged directly or indirectly in
the offer or
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sale of securities regulated Contracts. All such persons shall be subject to the
control of Selling Broker-Dealer with respect to their securities regulated
activities. Broker-Dealer shall: 1) train and supervise Producers, in their
capacity as registered representatives, in the sale of securities regulated
Contracts; 2) use its best efforts to cause such Producers to qualify under
applicable federal and state laws to engage in the sale of securities regulated
Contracts when required; 3) provide CLICA and CLAFS, to their satisfaction, with
evidence of Producers' qualifications to sell securities regulated Contracts;
and 4) notify CLICA if any of such Producers ceases to be a registered
representative of Selling Broker-Dealer. Selling Broker-Dealer agrees that a
Producer must be a registered representative of Selling Broker-Dealer before
engaging in the solicitation of any securities regulated Contracts and have
entered into the written agreement more fully described in Section III,
Paragraph C. CLICA and CLAFS shall not have any responsibility for the
supervision of any registered representative or any other employee or affiliate
of Selling Broker-Dealer. If the act or omission of a registered representative
or any other employee or affiliate of Selling Broker-Dealer is the proximate
cause of any claim, damage or liability (including reasonable attorneys' fees)
to CLICA or CLAFS, Selling Broker-Dealer shall be responsible and liable
therefore.
Selling Broker-Dealer shall fully comply with the requirements of the
National Association of Securities Dealers, Inc. and of the Securities Exchange
Act of 1934 and all other applicable federal or state laws. Selling
Broker-Dealer shall establish such rules and procedures as may be necessary to
cause diligent supervision of the securities activities of the Producers. Upon
request by CLICA or CLAFS, Broker-Dealer shall furnish such records as may be
necessary to establish diligent supervision.
V. AUTHORITY AND DUTIES OF GENERAL AGENT
AND SELLING BROKER-DEALER
A. CONTRACTS
The securities and insurance regulated Contracts issued by CLICA to which this
Agreement applies are listed in Schedule I which may be amended from time to
time by CLICA. CLICA, in its sole discretion, with prior or concurrent written
notice to Selling Broker-Dealer and General Agent, may suspend distribution on
any Contracts. CLICA also has the right to amend any Contracts at any time.
B. SECURING APPLICATION
Each application for a Contract shall be made on an application form
provided by CLICA, and all payments collected by Selling Broker-Dealer, General
Agent or any registered representative and Producer shall be remitted promptly
in full, together with such application form and any other required
documentation, directly to CLICA at the address indicated on such application or
to such other address as may be designated. Selling Broker-Dealer and General
Agent shall review all such applications for completeness. Check or money order
in payment of such Contracts should be made payable to the order of "CANADA LIFE
INSURANCE COMPANY OF AMERICA". All applications are subject to acceptance or
rejection by CLICA in its sole discretion.
C. RECEIPT OF MONEY
All money payable in connection with any of the Contracts, whether as
premium, purchase payment or otherwise and whether paid by or on behalf of any
contract owner or anyone else having an interest in the Contracts, is the
property of CLICA and shall be transmitted immediately in accordance with the
administrative procedures of CLICA without any deduction or offset for any
reason including, but not limited to, any deduction or offset for compensation
claimed by Selling Broker-Dealer or General Agent, unless there has been a prior
arrangement for net wire transmissions between CLICA and Selling Broker-Dealer
or General Agent.
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D. NOTICE OF PRODUCER'S NONCOMPLIANCE
Selling Broker-Dealer shall notify CLAFS and General Agent in the event a
Producer fails or refuses to submit to the supervision of Selling Broker-dealer
or General Agent in accordance with this Agreement, the agreement between
Selling Broker-Dealer, General Agent and Producer referred to in Section III,
Paragraph C and Section IV, Paragraph A, or otherwise fails to meet the rules
and standards imposed by Selling Broker-Dealer or its registered representatives
or General Agent or its Producers. Selling Broker-Dealer or General Agent shall
also immediately notify such Producer that he or she is no longer authorized to
sell the Contracts, and both Selling Broker-Dealer and General Agent shall take
whatever additional action may be necessary to terminate the sales activities of
such Producer relating to the Contracts.
E. SALES PROMOTION, ADVERTISING AND PROSPECTUSES
No sales promotion materials, circulars, documents or any advertising
relating to any of the Contracts shall be used by Selling Broker-Dealer, General
Agent or any Producers unless the specific item has been approved in writing by
CLAFS and CLICA prior to use. Selling Broker-Dealer shall be provided, without
any expense to Selling Broker-Dealer, with prospectuses and other material
determined to be necessary for use relating to securities regulated Contracts.
Nothing in these provisions shall prohibit Selling Broker-Dealer or General
Agent from advertising life insurance and annuities on a generic basis.
VI. COMPENSATION
A. COMMISSIONS AND FEES
Commissions and fees payable to Selling Broker Dealer or General Agent in
connection with the securities regulated Contracts shall be paid on behalf of
CLAFS by CLICA to Selling Broker-Dealer or General Agent, or as otherwise
directed or required by law. Commissions and fees payable to Selling
Broker-Dealer, General Agent or Producer in connection with the insurance
regulated Contracts shall be paid by CLICA to Selling Broker-Dealer or General
Agent, or as otherwise directed or required by law. Selling Broker-Dealer or
General Agent, as applicable, shall pay Producer. CLAFS will provide Selling
Broker-Dealer and General Agent with a copy of CLICA's current Contracts,
Commissions and Fee Schedule. Unless otherwise provided in the Contracts,
Commissions and Fee Schedule, commissions will be paid as a percentage of
premiums or purchase payments (collectively, Payments) received in cash or other
legal tender and accepted by CLICA on applications obtained by the various
Producers appointed by General Agent hereunder. Upon termination of this
Agreement, all compensation to the Selling Broker-Dealer and General Agent
hereunder shall cease. However, Selling Broker-Dealer and General Agent shall be
entitled to receive compensation for all new and additional premium payments
which are in process at the time of termination, and shall continue to be liable
for any chargebacks pursuant to the provisions of said Contracts, Commissions
and Fee Schedule, or for any other amounts advanced by or otherwise due CLAFS or
CLICA hereunder.
B. TIME OF PAYMENT
CLICA will pay any commissions due General Agent hereunder no later than
within fifteen (15) days after the end of the calendar month in which Payments
upon which such commission is based are accepted by CLICA. Any commission
payable by CLICA based upon Fund Value (defined as The sum of the Variable
Account Value and the Fixed Account Value) will be paid on or about the date of
the policy anniversary.
C. AMENDMENT OF SCHEDULES
CLAFS and CLICA may, upon at least ten (10 ) days' prior written notice
to Selling Broker-Dealer and General Agent, change the Contracts, Commissions
and Fee Schedule by written amendment of such Schedule. Any such change shall
apply to compensation due on applications received by CLICA after the effective
date of such notice.
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D. PROHIBITION AGAINST REBATES
CLAFS or CLICA may terminate this Agreement if Selling Broker-Dealer,
General Agent or any Producer of General Agent rebates, offers to rebate or
withholds any part of any Payments on the Contracts. If Selling Broker-Dealer,
General Agent or any Producer of General Agent shall at any time induce or
endeavor to induce any owner of any Contract issued hereunder to discontinue
payments or to relinquish any such Contract, except under circumstances where
there is reasonable grounds for believing the Contract is not suitable for such
person, any and all compensation due Selling Broker-Dealer or General Agent
hereunder shall cease and terminate.
E. INDEBTEDNESS AND RIGHT OF SET OFF
Nothing contained in this Agreement shall be construed as giving Selling
Broker-Dealer or General Agent the right to issue any indebtedness on behalf of
CLICA or CLAFS. Selling Broker Dealer and General Agent hereby authorize CLICA
as agent of CLAFS to set off liabilities of Selling Broker-Dealer and General
Agent to CLICA or CLAFS against any and all amounts otherwise payable to Selling
Broker-Dealer as General Agent.
VII. 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 to be, or shall constitute,
a waiver of any other provisions, whether or not similar, nor shall any waiver
constitute a continuing waiver.
B. LIMITATIONS
No party other that CLICA shall have the authority to: 1) make, alter, or
discharge any Contract issued by CLICA; 2) waive any forfeiture or extend the
time of making any Payments; or 3) enter into any proceeding in a court of law
or before a regulatory agency in the name of or on behalf of CLICA. No party
other than CLAFS, shall have the authority to: 1) alter the forms or substitute
other forms in place of those prescribed by CLAFS; or 2) enter into any
proceeding in a court of law or before a regulatory agency in the name of or on
behalf of CLAFS.
C. FIDELITY BOND AND OTHER LIABILITY COVERAGE
Selling Broker-Dealer and General Agent hereby assign any proceeds
received from a fidelity bonding company, error and omissions or other liability
coverage to CLICA or CLAFS as their interest may appear, to the extent of their
loss due to activities covered by the bond, policy or other liability coverage.
If there is any deficiency amount, whether due to a deductible or otherwise,
Selling Broker-Dealer or General Agent shall promptly pay such amount on demand.
Selling Broker-Dealer and General Agent hereby indemnify and hold harmless CLICA
and CLAFS from any such deficiency and from the costs of collection thereof
(including reasonable attorneys' fees).
D. 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 that neither
Selling Broker-Dealer nor General Agent may assign this Agreement or any, rights
or obligations hereunder without the prior written consent of CLICA and CLAFS.
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E. REGULATIONS
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 the
business described herein is to be transacted.
F. INDEMNIFICATION
1) CLAFS agrees to indemnify and hold harmless Selling Broker-Dealer and
General Agent, their officers, directors and employees, against any and all
losses, claims, damages or liabilities to which they may become subject under
the 1933 Act, the 1934 Act, or other federal or state statutory law or
regulations, at common law or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of a material fact or any
omission or alleged omission to state a material fact required to be stated or
necessary to make the statements made not misleading in the registration
statement for the Contracts or for the shares of Canada Life of America Series
Fund, Inc. (Fund) filed pursuant to the 1933 Act, or any prospectus included as
a part thereof, as from time to time amended and supplemented. CLAFS agrees to
indemnify and hold harmless Selling Broker-Dealer and General Agent, their
officers, directors and employees, against any and all losses, claims, damages
or liabilities to which they may become subject under the 1933 Act, the 1934
Act, or other federal or state statutory law or regulation, at common law or
otherwise, insofar as such losses, claims, damages or liabilities or actions in
respect thereof arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact or any omission or alleged omission to state
a material fact required to be stated or necessary to make the statements made
not misleading in any advertisement or sales literature approved in writing by
CLICA and CLAFS pursuant to Section V, Paragraph E, of this Agreement.
2) Selling Broker-Dealer and General Agent agree to indemnify and hold
harmless CLAFS, CLICA and any wholesaling organization, their officers,
directors, and employees, against any and all losses, claims, damages or
liabilities to which they may become subject under the 1933 Act, the 1934 Act or
other federal or state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon: a) any oral or written
misrepresentation by Selling Broker-Dealer or General Agent or their officers,
directors, employees or agents unless such misrepresentation is contained in the
registration statement for the Contracts or Fund Shares, any prospectus included
as a part thereof, as from time to time amended and supplemented, or any
advertisement or sales literature approved in writing by CLICA and CLAFS
pursuant to Section V, Paragraph E, of this Agreement, or b) the failure of
Selling Broker-Dealer or General Agent or their officers, directors, employees
or agents to comply with arty applicable provisions of this Agreement.
G. NOTICES
All notices or communications shall be sent to the address shown in this
Agreement or to such other address as the party may request, by giving written
notice to the other parties.
H. GOVERNING LAW
This Agreement shall be construed in accordance with and governed by the
laws of the State of Georgia.
I. AMENDMENT OF AGREEMENT
CLICA reserves the right to amend this Agreement in writing at any time.
The submission of an application for the Contracts by Selling Broker-Dealer or
General Agent five or more business days after notice of any such amendment has
been sent to the other parties shall constitute agreement to such amendment.
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J. GENERAL AGENT AS BROKER-DEALER
If Selling Broker-Dealer and General Agent are the same person or legal
entity, such person or legal entity shall have the rights and obligations
hereunder of both Selling Broker-Dealer and General Agent and this Agreement
shall be binding and enforceable by and against such person or legal entity in
both capacities.
K. COMPLAINTS AND INVESTIGATIONS
General Agent, Selling Broker-Dealer, CLICA and CLAFS agree to cooperate
fully in the event of any regulator investigation, inquiry or proceeding,
judicial proceeding or customer complaint involving the Contracts. In
furtherance the foregoing: 1) each party will notify all other parties of any
such investigation, inquiry, proceeding or complaint involving the Contracts or
affecting the ability of a party to perform pursuant to this Agreement within 10
days of obtaining knowledge of the same; and 2) in the case of a customer
complaint, the involved parties will consult with each other prior to sending
any written response with respect to such complaint.
L. TERMINATION
This Agreement may be terminated, without cause, by any party upon thirty
(30) days' prior written notice; and may be terminated, for cause, by any party
immediately; and shall be terminated if CLAFS or Selling Broker-Dealer shall
cease to be a registered broker-dealer under the Securities Exchange Act of 1934
and a member of the NASD.
M. ADDRESS FOR NOTICES
Address For Canada Life Insurance Company of America and
Canada Life of America Financial Services, Inc.
0000 Xxxxxx Xxxxx Xxxx, X.X., Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
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Address for Selling Broker-Dealer Address for General Agent
_________________________________ _________________________
_________________________________ _________________________
_________________________________ _________________________
This Agreement shall be effective upon execution by General Agent and
Selling Broker-Dealer, and delivery of the Agreement to CLICA or CLAFS.
Dated: __________________________________
Canada Life of America Financial Canada Life Insurance Company of
Services, Inc. America
By: /s/ Xxxxx X'Xxxxx III /s/ D. Xxxxx Xxxxx
----------------------------------- ------------------------------------
Xxxxx X'Xxxxx III D. Xxxxx Xxxxx
General Agent, Please Print
--------------------------------------
By: Name and Title
----------------------------------- ---------------------
Please Print Signature
Selling Broker-Dealer, Please Print
--------------------------------------
By: Name and Title
----------------------------------- ---------------------
Please Print Signature
Please complete the following.
1) CLICA is directed to mail issued policies to ________________ (select one
-POLICYOWNER, BROKER OR HOME OFFICE.) (Important Note: If not completed, CLICA
will automatically send issued policies to the Policyowner.)
2) We DO/DO NOT (select one) want to allow our broker the opportunity to
select commission options ON A CASE BY CASE BASIS. (Important Note: Please xxxx
all options, below, if you will allow this opportunity. If this question isn't
answered but all boxes below are checked, or if this question is answered in the
affirmative but all boxes below are not checked, CLICA will still allow the case
by case selection. If this question is not answered and only one option below is
selected, then CLICA will not allow the case by case selection.)
COMMISSION SCHEDULE SELECTION: Default to "A" if none selected. See
Schedule I for commission at issue ages 80-90 and additional premiums
after age 86.
______ Option A - 6.5% with no trails for issue ages 0-80
______ Option B - 5% up front with trails of .25% per year beginning in the 5th
quarter after receipt of premium
______ Option C - 1% up front with trails of 1% per year beginning in the 5th
quarter after receipt of premium
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EXHIBIT A
GENERAL LETTER OF RECOMMENDATION
General Agent hereby certifies to Canada Life Insurance Company of
America (CLICA) that all of the following requirements will be fulfilled in
conjunction with the submission of licensing/appointment papers for all
applicants as Producers submitted by General Agent. General Agent will, upon
request, forward proof of compliance with the same to CLICA in a timely manner.
1. We have made a thorough and diligent inquiry and investigation relative
to each applicant's identity, residence and business reputation 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 a
license. Each individual is trustworthy, competent and qualified to act
as an agent for CLICA to hold himself out in good faith to the general
public. We vouch for each applicant.
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 and all the
findings of all investigative information is favorable.
3. We certify that all educational requirements have been met for the
specific state in which each applicant is requesting a license, and that
all such persons have fulfilled the appropriate examination, education
and training requirements.
4. If the applicant is required to submit his or her picture and signature
in the state in which he or she is applying for a license, we certify
that those items forwarded to CLICA are those of the applicant.
5. We hereby warrant that the applicant is not applying for a license with
CLICA in order to place insurance chiefly and solely on his or life or
property, lives or property of his or her relatives, or property or
liability of his or her associates.
6. 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.
7. We will not permit any applicant to transact insurance as an agent until
duly licensed therefor. 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 or license applied for
is received.
8. We certify that General Agent, Selling Broker-Dealer and applicant shall
have entered into a written agreement pursuant to which a) applicant is
appointed a Producer of General Agent and a registered representative of
Selling Broker-Dealer; b) applicant agrees that his or her selling
activities relating to securities regulated contracts shall be under the
supervision and control of Selling Broker-Dealer and his or her selling
activities relating to insurance regulated Contracts shall be under the
supervision and control of General Agent; and c) that applicant's right
to continue to sell such Contracts is subject to his or her continued
compliance with such agreement and any procedures, rules or regulations
implemented by Selling Broker-Dealer or General Agent.
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SCHEDULE I
CANADA LIFE INSURANCE COMPANY OF AMERICA
AS OF FEBRUARY 1, 1997
Commissions will be paid to General Agent or to Broker/Dealer, as required by
law, in the percentages shown below.
OWNER'S ISSUE AGE 0-80 OWNER'S ISSUE AGE 81-85
OPTION A: 6.5% of premium OPTION A: 3.25% of premium
OPTION B: 5% of premium plus .25% OPTION B: 2.5% of premium plus .25%
annual trail based on account value. annual trail based on account value.
Such trail first payable and Such trail first payable and
calculated at the end of the fifth calculated at the end of the fifth
quarter of the associated premium. quarter of the associated premium.
OPTION C: 1% of premium plus 1%
annual trail based on account value.
Such trail first payable and
calculated at the end of the fifth
quarter of the associated premium.
OWNER'S ISSUE AGE 86-90 & ADDITIONAL PREMIUM ON ISSUED POLICIES, OWNER'S AGE
86-90:
At issue ages 86-90, only one commission option is available. Also regardless of
commission option under which a policy had been issued to an owner under age 86,
any additional premium after owner's attained age 86 will be paid at 1% plus
.50% trail to the broker/dealer.
ADDITIONAL PREMIUM AFTER OWNER'S ATTAINED AGE 90:
Similar to previous scenario, in that regardless of commission option under
which a policy had been issued, additional premium received after owner's
attained age 91 will be paid at .50% plus .25% trail to the broker/dealer.
SERVICE FEE AT ANNUITIZATION
(Assumes "internal" annuity rates are used. Service Fee is only paid on
annuitized proceeds that are past any applicable Surrender Charge period.)
I. 3% if payout = or > 10 years, or a life annuity, and the amount is $0 -
$1 million;
II. 1.25% on amounts over $1 million with same payout duration as I;
III. 2% if payout = or < 10 years and not a life annuity, and the amount is $0
- $1 million:
IV. 1.25% on amounts over $1 million with same payout duration as III.
CHARGEBACKS
(i) In the event a policy is returned to CLICA pursuant to a "Free Look"
provision, the full B/D Concession paid thereon or retained by Selling Firm
pursuant to net submission of premium or purchase payment shall be charged back
to the Selling Firm. (ii) Should any premium or purchase payment on any policy
issued by CLICA be refunded for any reason, Selling Firm shall repay or return
B/D Concession received by it with respect to such premium or purchase payment.
(iii) If a policy was not issued as a reset of failure of Selling Firm to submit
to CLICA an application sufficient to satisfy state insurance laws or CLICA's
eligibility requirements, then amounts paid to Selling Firm shall be returned or
repaid. (iv) If a policy was tendered to CLICA for redemption within 10 business
days of the date of activity, then amounts paid to Selling Firm shall be
returned or repaid. (v) For full or partial withdrawals from the policies, other
than those pursuant to Systematic and/or Free Withdrawals: 100% of all B/D
Concession paid to Selling Firm on amount(s) within 6 months of such amount(s)
being paid to CLICA and 50% of all B/D Concession paid to Selling Firm on
amount(s) withdrawn from 7-12 months of such amount(s) being paid to CLICA,
shall be returned or repaid. (vi) For Annuitizations occurring during the first
policy year, B/D Concessions will be charged back to the extent that they exceed
the amount of the Service Fees referenced above. OVER
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For any premium or purchase payment that has been in the Policy for more than 12
months, there shall be no chargeback on B/D Concession. To the extent permitted
by law, the amount so charged back may, at the option of CLICA, be set off
against B/D Concession Concession otherwise due Selling Firm. In Addition, such
other compensation will be payable as are from time to time agreed by the
parties to the foregoing Agreement and which is in accordance with applicable
law, and will be added to the schedule. The rates of concession specified above
and any rates of concession otherwise determined by the company will be subject
to change at any time by the Company but no charge will affect the rates of
concession in connection with any policy effected herein for which the initial
premium was due prior to the effective date of such change. Any such changes of
concession will be binding upon the General Agent and/or Broker/Dealer when the
Company sends notice thereof in writing to him/her and will take effect from the
date specified in such notice.
NOTE: If there is more than one owner of a policy the age of the oldest owner
determines the level of compensation.
