MARKETING ORGANIZATION AGREEMENT
(THIRD PARTY)
PRODUCT AUTHORIZATION
FSBL Variable Products |_|
Effective Date:
1. This Agreement is made among Security Distributors, Inc. ("SDI"),
_____________ ("Marketing Organization"), and each of the agencies listed
on Exhibit "A," attached hereto (collectively referred to herein as
"General Agent"). SDI hereby authorizes Marketing Organization and those
persons associated with General Agent who are registered representatives of
Marketing Organization and licensed agents of First Security Benefit Life
Insurance and Annuity Company of New York to solicit and service variable
annuity contracts and variable life insurance policies issued under First
Security Benefit Life Insurance and Annuity Company of New York's ("FSBL")
several Variable Annuity Accounts, which have been registered as securities
under the Securities Act of 1933 with Security Distributors, Inc. (a member
of the National Association of Securities Dealers, Inc.) having been
designated Principal Underwriter thereof. Said variable annuity contracts
and variable life insurance policies are referred to herein as "variable
products."
2. General Agent is hereby authorized to solicit, and to recommend for
appointment subagents (referred to herein as "Agents") to solicit sales of
FSBL variable products, to deliver the contracts, and to service the
business. General Agent may organize, train, and maintain an agency force;
however, FSBL may at its option, refuse to contract with any proposed Agent
and may at any time terminate any Agreement with any Agent.
General Agent agrees to abide by the terms and conditions of this Agreement
and any sales manuals and/or rules and practices of FSBL and SDI and agrees
that its Agents will not (i) solicit or submit applications, (ii) receive
any compensation based on transactions in securities or the provision of
securities advice, or (iii) engage in any other securities activities,
unless such Agents are properly licensed under applicable insurance laws
and are "associated persons" of the Marketing Organization within the
meaning of "associated person of a broker or dealer," as that term is used
in Section 3(a)(18) of the Securities Exchange Act of 1934. Marketing
Organization agrees to be responsible for the training, supervision and
control of Agents as required under the 1934 Act and other applicable law.
General Agent agrees to abide by all applicable local, state and federal
laws and regulations in conducting business under this Agreement. General
Agent and Marketing Organization undertake and agree to hold FSBL and SDI
harmless against any loss of whatever kind or nature arising out of any
claim made by any of said Agents for compensation.
General Agent shall endeavor to promote FSBL's and SDI's interests and
those mutual interests of General Agent and FSBL and SDI as contemplated by
this Agreement and shall at all times conduct itself, and see that those
Agents assigned to or appointed by General Agent or its employees conduct
themselves, so as not to adversely affect the business reputation or good
standing of either General Agent, FSBL or SDI. The primary General Agent
agrees to provide the affiliated General Agents listed on Exhibit "A"
attached hereto (if any), with a copy of this agreement and insure
compliance with its terms by each General Agent.
General Agent shall be responsible to FSBL and SDI for the acts of the
Agents assigned to or appointed by General Agent or its employees and shall
indemnify and hold harmless from any and all expenses, costs, causes of
action, and/or damages resulting from or growing out of any unauthorized
act by General Agent or any of its Agents or employees. In addition, the
primary General Agent shall be responsible to FSBL and SDI for the acts of
each of the affiliated General Agents (if any) listed on Exhibit "A,"
attached hereto, and shall indemnify and hold harmless from any and all
expenses, costs, causes of action, and/or damages resulting from or growing
out of any unauthorized act by General Agent or any of its Agents or
employees.
3. Marketing Organization hereby accepts authorization to solicit and service
FSBL variable products and confirms that Marketing Organization is properly
licensed to solicit and service such variable products for FSBL and is a
member in good standing of the National Association of Securities Dealers,
Inc., hereinafter called "NASD," and further agrees to notify SDI if it
ceases to be a member of NASD.
4. Marketing Organization shall have the authority to recruit, train and
supervise registered representatives for the sale of variable products of
FSBL. Such training and supervision shall be conducted by the Marketing
Organization in accordance with the Securities Exchange Act of 1934, the
NASD's Conduct Rules and other applicable law. SDI reserves the right to
require termination of any registered representative's right to sell FSBL
variable products. Marketing Organization shall be responsible for any
registered representative appointed hereunder complying with the terms,
conditions and limitations as set forth in this Agreement.
5. Commissions on purchase payments or premiums accepted by FSBL or SDI on
behalf of an annuitant, participant, or policyholder of a variable product
covered by this Agreement will be in accordance with the Schedule of
Commissions made part of this Agreement, and are in full consideration of
all services rendered and expenses incurred hereunder by the General Agent
and Marketing Organization or their representatives. SDI will pay General
Agent commissions as described in the attached Commission Schedule(s) for
policies sold by Agents assigned to Marketing Organization. Neither General
Agent nor Marketing Organization is authorized to deduct commissions prior
to forwarding any remittance received to FSBL. All checks or drafts
received by the General Agent or Marketing Organization in regards to any
variable product shall be made payable to FSBL. All compensation payable
hereunder shall be subject to a first lien and may be reduced or set off as
to any indebtedness owed by the General Agent or Marketing Organization to
FSBL or SDI. Any commissions paid to a third party at the request of the
General Agent or Marketing Organization shall be deducted from the
commissions payable hereunder. In the event this agreement is executed by
one or more affiliated insurance agencies listed on Exhibit "A", it is
understood and agreed that the primary agency will collect and disburse
said commissions to the soliciting General Agency.
6. General Agent and Marketing Organization agree to be bound by the terms,
conditions and limitations set forth in this Agreement and the rules and
practices of SDI and FSBL that are now and hereafter in force. Marketing
Organization agrees not to solicit or submit applications for variable
products to FSBL unless they and their registered representatives are
properly licensed, and further agrees that it will conform to all
applicable state, federal and local laws and regulations in conducting
business under this Agreement. Both SDI and Marketing Organization hereby
agree to abide by the applicable NASD Conduct Rules, which Rules are
incorporated herein as if set forth in full. The signing of this Agreement
and the purchase of variable products pursuant thereto is a representation
to SDI and FSBL that Marketing Organization is a properly registered
Marketing Organization under the Securities Exchange Act of 1934.
7. Neither the General Agent, Marketing Organization nor their representatives
are authorized to make any representations concerning the variable
products, their sponsor (FSBL), the principal underwriter (SDI) or the
underlying mutual funds except those contained in the applicable current
prospectuses and in the printed information furnished by FSBL. General
Agent and Marketing Organization agree not to use any other advertising or
sales material relating to the variable products unless specifically
approved in writing by FSBL and SDI.
8. General Agent and Marketing Organization are not authorized and have no
authority (a) to make, alter or discharge any contract for or on behalf of
FSBL, (b) endorse any check or draft payable to FSBL, (c) to accept any
variable product consideration after the initial remittance, (d) to waive
or modify any prospectus, contract, policy or application provision,
condition or obligation, (e) to extend the time for payment of any variable
product consideration or accept payment of any past due variable product
consideration.
9. This Agreement shall not create or be construed as creating an
Employer-Employee or Master-Servant relationship between General Agent and
FSBL and SDI or Marketing Organization and FSBL and SDI.
10. General Agent agrees to keep accurate records on all business written and
moneys received under this Agreement. Such records may be examined by FSBL,
SDI or their representatives at any reasonable time.
11. General Agent and Marketing Organization agree to be responsible for any
county or municipal occupational or privilege fee, tax or license which may
be required of General Agent, Marketing Organization or its representatives
as a result of business submitted under this Agreement.
12. Marketing Organization will maintain books and records relating to the sale
of the variable products and the receipt and disbursement of insurance
commissions and fees thereon. Such books and records will be maintained and
preserved in conformity with the requirements of Section 17(a) of the
Securities Exchange Act of 1934 and the rules thereunder, to the extent
applicable, and will at all times be compiled and maintained in a manner
that permits inspection by the supervisory personnel of Marketing
Organization, the Securities and Exchange Commission, the NASD, and other
appropriate regulatory authorities.
13. The receipt of commissions and fees relating to the variable products by
General Agent will be reflected in the quarterly FOCUS reports filed by the
Marketing Organization and in its fee assessment reports filed with the
NASD.
14. Marketing Organization is not authorized to accept any purchase payments
for SDI except initial purchase payments, unless SDI provides otherwise in
writing. All customer checks should be made payable directly to FSBL.
Receipts for purchase payments must be on the forms furnished by SDI for
that purpose. Marketing Organization shall immediately remit to FSBL's
Administrative Agent at the address set forth in the applicable prospectus
all money received or collected on FSBL's behalf, and such money shall be
considered as FSBL's funds held in trust by Marketing Organization. SDI
will not accept purchase payments in the form of checks drawn on Marketing
Organization or registered representative accounts. Marketing Organization
will not receive, accumulate or maintain custody of such customer funds.
15. Neither this Agreement nor the compensation payable hereunder shall be
assigned or pledged without the written consent of SDI. SDI reserves the
right to reject any assignment or pledge.
16. No consent or change in this Agreement shall be binding upon SDI unless in
writing and signed by the president, a vice president, secretary or an
assistant secretary of SDI. Any failure of SDI to insist upon strict
compliance with the provisions of this Agreement shall not constitute or be
construed as a waiver thereof.
17. FSBL shall have the right to decline or modify any application or to refund
any variable product consideration or any portion thereof, and General
Agent shall refund immediately upon request any commissions received in
connection therewith. All applications for variable products are subject to
acceptance by FSBL and become effective only upon confirmation by FSBL. SDI
will charge back 100% of commissions in the event of a free look surrender
of a variable product.
18. Variable products will be offered to the public at the price as outlined in
the applicable variable product's current prospectus. All cash surrenders
require the written request and consent of the contract or policyowner and
such surrenders will conform to the provisions set forth in the applicable
contract or policy.
19. FSBL has been and is designated Administrative Agent of Security
Distributors, Inc. to perform duties, including recordkeeping and payment
of commissions, necessary under this Agreement in connection with the
solicitation, sales and servicing of variable annuity contracts sold and
solicited hereunder.
20. SDI reserves the right to amend or terminate this agreement at any time. In
the event (i) Marketing Organization ceases to be a member in good standing
of the NASD; (ii) General Agent's license is revoked, terminated or not
renewed; or (iii) General Agent or Marketing Organization files or, has
filed on its behalf a petition for bankruptcy, this Agreement shall
terminate automatically without notice. After termination General Agent and
Marketing Organization upon request, shall without delay pay in full any
indebtedness owed to FSBL or SDI and return all FSBL property to its Home
Office. In the event General Agent or Marketing Organization are doing
business in such manner that servicing is impossible, SDI reserves the
right to reassign the business and service fees to another party. Should
General Agent or Marketing Organization fail to comply with any of the
terms of this Agreement, SDI reserves the right to terminate this Agreement
and terminate vesting as to all commissions payable hereunder.
21. General Agent and Marketing Organization agree to hold harmless and
indemnify SDI and FSBL against any and all claims, liabilities and expenses
which SDI and/or FSBL may incur from liabilities arising out of or based
upon any alleged or untrue statement other than statements contained in the
registration statement, prospectus or approved sales materials of any
contract.
22. If it should appear that any term of this contract is in conflict with any
applicable rule of law, statute, or regulation, then any such term shall be
deemed inoperative and null and void insofar as it may be in conflict
therewith and shall be deemed modified to conform to such rule of law,
statute, or regulation. The existence of any such apparent conflict shall
not invalidate the remaining provisions of this contract.
23. This agreement may be executed in one or more counterparts, together which
shall be deemed a complete original.
24. This Agreement is effective as of the Effective Date set forth above and
replaces any previous Agreement between the parties relating to variable
products of FSBL except as to any commissions payable thereunder.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the Effective Date set forth above.
SECURITY DISTRIBUTORS, INC. MARKETING ORGANIZATION:
By : By:
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Name: (Signature of Principal)
Title:
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(Name and Title of Principal)
PRIMARY GENERAL AGENT:
By:
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(Signature)
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(Name and Title)
EXHIBIT "A"
AFFLIATED GENERAL AGENTS
NAME TAX I.D. #
