Exhibit 27(c)ii
SELECTED BROKER AGREEMENT
This Agreement, dated__________________________,20____, is made by and between
AFSG Securities Corporation ("Distributor"), a Pennsylvania corporation,
Transamerica Life Insurance Company ("Company"), an Iowa corporation,
and__________________________________________________("Broker"), a
____________corporation. This Agreement supersedes and replaces any prior
Selected Broker Agreement among the parties hereto.
WITNESSETH:
In consideration of the mutual promises contained herein, the parties hereto
agree as follows:
A. Definitions
(1) 1933 Act -- The Securities Act of 1933, as amended, and regulations
issued pursuant thereto.
(2) 1934 Act -- The Securities Exchange Act of 1934, as amended, and
regulations issued pursuant thereto.
(3) 1940 Act -- The Investment Company Act of 1940, as amended, and
regulations issued pursuant thereto.
(4) Accounts -- Separate accounts established and maintained by Company
pursuant to the laws of Iowa, as applicable.
(5) Contracts -- Private Contracts and/or Public Contracts, as the case may
be.
(6) Funds -- open-end management investment companies registered under the
1940 Act, shares of which are sold to Accounts in connection with the
sale of Contracts, as described in the appropriate Prospectus or
Private Placement Memorandum.
(7) NASD -- The National Association of Securities Dealers, Inc.
(8) Private Contracts -- Variable life insurance contracts and/or variable
annuity contracts not subject to, or exempt from registration under,
the 1933 Act and described in Schedule A attached hereto, issued by
Company and for which Distributor has been appointed the principal
underwriter pursuant to distribution agreements, copies of which have
been furnished to Broker.
(9) Private Placement Memorandum -- Offering memoranda, including
amendments or supplements thereto, that describe Private Contracts.
(10) Prospectus -- Prospectuses, including amendments or supplements
thereto, contained in a Registration Statement.
(11) Public Contracts -- Variable life insurance contracts and/or variable
annuity contracts required to be registered under the 1933 Act and
described in Schedule B attached hereto, issued by Company and for
which Distributor has been appointed the principal underwriter pursuant
to distribution agreements, copies of which have been furnished to
Broker.
(12) Registration Statement -- Registration statements, including amendments
thereto, relating to Contracts, Accounts and Funds, including financial
statements and all exhibits.
(13) SEC -- The Securities and Exchange Commission.
B. Agreements of Distributor
(1) Pursuant to the authority delegated to it by Company, Distributor
hereby authorizes Broker to solicit applications for Contracts from
eligible persons during the term of this Agreement, provided that:
(a) Broker has been notified by Distributor that Contracts are
qualified for sale, or exempt from such qualification, under all
applicable securities and insurance laws of the states or
jurisdictions in which applications will be solicited, and
(b) there is an effective Registration Statement relating to those
Contracts that are Public Contracts. In connection with the
solicitation of applications for Contracts, Broker is hereby
authorized to offer riders that are available with Contracts in
accordance with instructions furnished by Distributor or Company.
(2) During the term of this Agreement, Distributor shall notify Broker of
any action or circumstance that may prevent the lawful sale of
Contracts in any state or jurisdiction, including the issuance by the
SEC of any stop order with respect to a Registration Statement or the
initiation of any proceedings for that purpose or for any other purpose
relating to the registration and/or offering of Public Contracts.
(3) During the term of this Agreement, Distributor shall advise Broker of
any amendment to a Registration Statement or any amendment or
supplement to any Prospectus or Private Placement Memorandum.
C. Agreements of Broker
(1) It is understood and agreed that Broker is a registered broker/dealer
under the 1934 Act and a member of the NASD and that the agents or
representatives of Broker who may solicit applications for Contracts
shall be duly registered representatives of Broker. If an agent or
representative ceases to be a registered representative of Broker, is
disqualified from continued NASD registration, has his or her
registration suspended by the NASD or otherwise fails to comply with
the rules or meet the standards imposed by this Agreement or by Broker,
Broker shall immediately notify such agent or representative and
Distributor that such agent or representative is no longer authorized
to solicit applications for Contracts.
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(2) Commencing at such time as Distributor and Broker shall agree upon,
Broker agrees to make commercially reasonable efforts to find
purchasers for Contracts acceptable to Company, provided that Broker:
(a) shall only offer a Private Contract to a person who (i) meets the
definition of accredited investor under the 1933 Act, and (ii)
meets the definition of qualified purchaser under the 1940 Act,
if Accounts are not subject to registration under the 1940 Act
pursuant to Section 3(c)(7) thereof; and
(b) shall not solicit applications for Private Contracts in any manner
that constitutes a public offering or involves any form of
general solicitation or general advertising.
(3) In making commercially reasonable efforts to solicit applications for
Contracts, Broker shall engage in the following activities during the
term of this Agreement:
(a) Regularly utilize only training, sales and promotional materials
relating to Contracts which have been approved by Company.
(b) Establish and implement reasonable procedures for periodic
inspection and supervision of sales practices of its agents or
representatives and submit periodic reports to Distributor as may
be requested on the results of such inspections and the
compliance with such procedures.
(c) Take reasonable steps to ensure that the various representatives
appointed by it shall not make recommendations to an applicant to
purchase a Contract in the absence of reasonable grounds to
believe that the purchase of the Contract is suitable for such
applicant. While not limited to the following, a determination of
suitability shall be based on information furnished to a
representative after reasonable inquiry of such applicant
concerning the applicant's insurance and investment objectives,
financial situation and needs, and, if applicable, the likelihood
that the applicant will make the premium payments contemplated by
the Contract.
(d) Adopt, abide by, and enforce the principles set forth in the
Principles and Code of Ethical Market Conduct of the Insurance
Marketplace Standards Association as adopted by Company and
provided to Broker with this Agreement.
(4) All payments for Contracts collected by agents or representatives of
Broker shall be held at all times in a fiduciary capacity and shall be
remitted promptly in full together with such applications, forms and
other required documentation to an office of Company designated by
Distributor. Checks or money orders in payment of initial premiums
shall be drawn to the order of "Transamerica Life Insurance Company."
Broker acknowledges that Company retains the ultimate right to control
the sale of Contracts and that Distributor or Company shall have the
unconditional right to reject, in whole or part, any application for a
Contract. In the event Company or Distributor rejects an application,
Company shall immediately return all payments directly to the purchaser
and Broker shall be notified of such action. In the event that any
purchaser of a Contract elects to return such Contract pursuant to the
free look right, the purchaser shall receive a refund of either premium
payments or the value of the invested portion of such premiums as set
forth in the Contract and according to applicable state law. Broker
shall be notified of any such action.
(5) Broker shall act as an independent contractor, and nothing herein
contained shall constitute Broker, its agents or representatives, or
any employees thereof as employees of Company or Distributor in
connection with solicitation of applications for Contracts. Broker, its
agents or representatives, and its employees shall not hold themselves
out to be employees of Company or Distributor in this connection or in
any dealings with the public.
(6) Broker agrees that any material, including material it develops,
approves or uses for sales, training, explanatory or other purposes in
connection with the solicitation of applications for Contracts
hereunder (other than generic advertising materials which do not make
specific reference to Company or Contracts) shall only be used after
receiving the written consent of Distributor to such material and,
where appropriate, the endorsement of Company to be obtained by
Distributor.
(7) Solicitation and other activities by Broker shall be undertaken only in
accordance with applicable Company procedures and ethical principles
and applicable laws and regulations. No agent or representative of
Broker shall solicit applications for Contracts until duly licensed and
appointed by Company (such appointment not to be unreasonably withheld
by Company) as a life insurance and variable contract broker or agent
of Company in the appropriate states or other jurisdictions. Broker
shall ensure that such agents or representatives fulfill any training
requirements necessary to be licensed and that such agents or
representatives are properly supervised and controlled pursuant to the
rules and regulations of the SEC and the NASD. Broker shall certify
agents' and representatives' qualifications to the satisfaction of
Distributor. Broker will provide Distributor with a General
Recommendation of Agents substantially in the form attached hereto as
Exhibit "A" which will apply to all agents or subagents proposed to be
licensed and/or appointed by the Company. Any documentation regarding
the background investigation of agents conducted by Broker prior to
appointment shall be made available as required upon valid request by
any regulatory authority during the period the agent is appointed with
the Company. Broker shall provide, from time to time as requested by
Distributor, copies of insurance licenses for all states in which
Broker holds the licenses and/or insurance licenses for any states in
which Broker's affiliated insurance agency holds the licenses. Broker
understands and acknowledges that neither it nor its agents or
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representatives is authorized by Distributor or Company to give any
information or make any representation in connection with this
Agreement or the offering of Contracts other than those contained in
the Prospectus or Private Placement Memorandum, as the case may be, or
other solicitation material authorized in writing by Distributor or
Company.
(8) Broker shall not have authority on behalf of Distributor or Company to:
make, alter or discharge any Contract or other form; waive any
forfeiture, extend the time of paying any premium; receive any monies
or premiums due, or to become due, to Company, except as set forth in
Section C(4) of this Agreement. Broker shall not expend, nor contract
for the expenditure of the funds of Distributor, nor shall Broker
possess or exercise any authority on behalf of Distributor by this
Agreement.
(9) Broker shall have the responsibility for maintaining the records of its
representatives who are licensed, registered and otherwise qualified to
sell Contracts. Broker shall maintain such other records as are
required of it by applicable laws and regulations. The books, accounts
and records of Company, Accounts, Distributor and Broker relating to
the sale of Contracts shall be maintained so as to clearly and
accurately disclose the nature and details of the transactions. All
records maintained by Broker in connection with this Agreement shall be
the property of Company and shall be returned to Company upon
termination of this Agreement, free from any claims or retention of
rights by Broker. Nothing in this Section C(9) shall be interpreted to
prevent Broker from retaining copies of any such records relating to
contract owner transactions which Broker is required to maintain in
order to comply with applicable federal, NASD, and state regulation.
Broker shall keep confidential any information obtained pursuant to
this Agreement and shall disclose such information only if Company has
authorized such disclosure or if such disclosure is expressly required
by any regulatory authority or court of competent jurisdiction. Broker
acknowledges that information regarding Contracts is proprietary
information and that in connection with the offer and sale of
Contracts, Broker may be required to execute confidentiality agreements
with third parties. Broker acknowledges and agrees that monetary
damages would not be a sufficient or adequate remedy for breach of the
confidentiality provisions of this Section C(9) and that Company or
Distributor shall be entitled to specific performance or injunctive
relief, in addition to any other legal or equitable remedy which may be
available. The confidentiality provisions of this Section C(9) shall
survive the termination of this Agreement.
D. Compensation
(1) Pursuant to the appropriate distribution agreement between Distributor
and Company, Distributor shall cause Company to arrange for the payment
of compensation for the sale of each Contract sold by an agent or
representative of Broker in accordance with Company's agreement with
the agent or representative, as the case may be, and the commission
schedule attached thereto. Such amounts shall be paid to Broker, or if
state insurance law requires, to an affiliated insurance agency,
provided, that with respect to payments to an affiliated insurance
agency, Broker:
(a) has obtained a letter from the SEC staff to the effect that the
staff will not recommend enforcement action if the affiliated
insurance agency is not registered as a broker-dealer with the SEC;
or
(b) has obtained from counsel an opinion, which shall be provided to
Distributor, that (i) Broker is entitled to rely on a no-action
letter issued by the SEC staff, a copy of which shall be provided
to Distributor, which granted no action relief to a broker-dealer
with respect to the distribution activities of the broker-dealer's
affiliated insurance agency when the insurance agency was not
registered as a broker-dealer with the SEC, and (ii) such no-action
letter has not been rescinded or modified.
All terms and conditions of Company's agreement with the agent or
representative, as the case may be, shall be incorporated by reference
herein to the extent such terms and conditions do not conflict with
this Agreement. Company shall identify to Broker with each such payment
the name of the agent or representative of Broker who solicited each
Contract covered by the payment.
(2) Neither Broker nor any of its agents or representatives shall have any
right to withhold or deduct any part of any premium it may receive for
purposes of payment of commission or otherwise. Neither Broker nor any
of its agents or representatives shall have an interest in any
compensation paid by Company to Distributor, now or hereafter, in
connection with the sale of Contracts hereunder.
E. Complaints and Investigations
(1) Broker and Distributor jointly agree to cooperate fully in any
insurance or securities regulatory investigation or proceeding or
judicial proceeding arising in connection with Contracts marketed under
this Agreement. Broker, upon receipt, shall notify Distributor of any
customer complaint or notice of any regulatory investigation or
proceeding or judicial proceeding in connection with Contracts. Broker
and Distributor further agree to cooperate fully in any securities
regulatory investigation or proceeding or judicial proceeding with
respect to Broker, Distributor, and their respective affiliates, agents
or representatives to the extent that such investigation or proceeding
is in connection with Contracts marketed under this Agreement. Broker
shall furnish applicable federal and state regulatory authorities with
any information or reports in connection with its services under this
Agreement which such authorities may request in order to ascertain
whether Company's operations are being conducted in a manner consistent
with any applicable law or regulation. Each party shall bear its own
costs and
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expenses of complying with any regulatory requests, subject to any
right of indemnification that may be available pursuant to Section G of
this Agreement.
(2) Broker shall report promptly in writing to Distributor all customer
complaints relating to offers and sales of Contracts or made by or on
behalf of owners of Contracts, whether written or oral, and shall
assist Distributor and Company in resolving those complaints to the
satisfaction of all parties.
F. Term of Agreement
(1) This Agreement shall continue in force for one year from its effective
date and thereafter shall automatically be renewed every year for a
further one year period; provided that any party may unilaterally
terminate this Agreement upon thirty (30) days' written notice to the
other parties of its intention to do so. This Agreement shall
automatically terminate without notice upon:
(a) the bankruptcy or dissolution of Broker;
(b) any fraud or gross negligence by Broker in the performance of any
duties imposed by this Agreement or if Broker wrongfully withholds
or misappropriates, for Broker's own use, funds of Company, its
policyholders or applicants;
(c) any material breaches by Broker of this Agreement;
(d) any material violation of any applicable state or federal law
and/or administrative regulation in a jurisdiction where Broker
transacts business; or
(e) any failure of Broker to maintain a necessary license in any
jurisdiction, but only as to that jurisdiction and only until
Broker reinstates its license in such jurisdiction.
(2) Upon termination of this Agreement, all authorizations, rights and
obligations shall cease except:
(a) the agreements contained in Sections C(9) and E hereof;
(b) the indemnity set forth in Section G hereof; and
(c) the obligations to settle accounts hereunder, including commission
payments on premiums subsequently received for Contracts in effect
at the time of termination or issued pursuant to applications
received by Broker prior to termination.
(3) Distributor and Company reserve the right, without notice to Broker, to
suspend, withdraw or modify the offering of Contracts or to change the
conditions of their offering.
G. Indemnity
(1) Broker shall be held to the exercise of reasonable care in carrying out
the provisions of this Agreement.
(2) Distributor agrees to indemnify and hold harmless Broker and each
officer or director of Broker against any losses, claims, damages or
liabilities, joint or several, to which Broker or such officer or
director may become subject under applicable law, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any allegedly untrue statement, or
alleged omission, of a material fact, when it would be necessary to
include a true statement of such fact in a Registration Statement, a
Prospectus or a Private Placement Memorandum, as the case may be, or in
any sales literature provided by Company or by Distributor in order to
make the statements contained therein not misleading.
(3) Broker agrees to indemnify and hold harmless Company and Distributor
and each of their current and former directors and officers and each
person, if any, who controls or has controlled Company or Distributor
within the meaning of the 1933 Act or the 1934 Act, against any losses,
claims, damages or liabilities, joint or several, to which Company or
Distributor or such director or officer or controlling person may
become subject under applicable law, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or
are based upon any:
(a) breach by Broker of any representation, warranty, covenant or
agreement contained in this Agreement;
(b) negligent act or omission or willful misconduct by Broker or any of
its agents, employees, representatives or affiliates with respect
to this Agreement;
(c) failure by Broker or any of its agents, employees, or affiliates to
comply with applicable law;
(d) unauthorized use of sales material or any verbal or written
misrepresentations or any unlawful sales practice concerning
Contracts by Broker, agents, employees, representatives or
affiliates; or
(e) claim by any agent, representative or employee of Broker for
commissions, service fees, development allowances or other
compensation or remuneration of any type;
(f) failure of Broker, its officers, employees, or agents to comply
with the provisions of this Agreement; and Broker shall reimburse
Company and Distributor and any director, officer or controlling
person of either for any legal or other expenses reasonably
incurred by Company, Distributor, or such director, officer or
controlling person in connection with investigating or defending
against any such losses, claims, damages or liabilities or actions.
This indemnity agreement shall be in addition to any liability
which Broker may otherwise have.
(4) Any request for indemnification against a party (the "Indemnitor")
arising out of a claim from a third party must be made in writing
within a reasonable time after notice of a claim or receipt of a claim
from a third party ("Claim") has been received by the party seeking
indemnification (the "Indemnitee"). At any time after such request,
Indemnitor may deliver to the Indemnitee its written acknowledgment
that Indemnitee is entitled to
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indemnification. The Indemnitor shall thereafter be entitled to assume
the defense of the Claim and shall bear all expenses associated
therewith, including without limitation, payment on a current basis of
all previous expenses incurred by the Indemnitee in relation to the
Claim from the date the Claim was brought. Until such time as
Indemnitee receives notice of an Indemnitor's election to assume the
defense of any Claim, Indemnitee may defend itself against the Claim
and may hire counsel and other experts of its choice and Indemnitor
shall be liable for payment of counsel and other expert fees on a
current basis as the same are billed. Indemnitor and Indemnitee shall
cooperate with one another in the defense of any such Claim and if
either party becomes aware of any significant developments, it shall
notify the other party as soon as practical.
(5) The provisions of this Section shall survive the termination of this
Agreement.
H. Assignability
This Agreement shall not be assigned by any party without the written
consent of the other parties.
I. Governing Law
This Agreement shall be governed by and construed in accordance with
the laws of the State of Iowa without regard to its law concerning
conflicts of law.
J. Notices
All communications under the Agreement shall be in writing and shall be
deemed delivered on the third business day after being mailed by
certified mail, postage prepaid. Alternatively, communications shall be
deemed delivered on the first business day after being transmitted
timely, delivery charges prepaid, to a third party company or
governmental entity providing delivery services in the ordinary course
of business, which guarantees delivery to the other party on the next
business day. Notices shall be sent to the following addresses unless
and until the addressee notifies the other party of a change in address
according to the terms of this Section:
If to Broker, to: if to Distributor or Company, to:
______________________________
Company Transamerica Life Insurance Company
0000 Xxxxxxxx Xxxx XX
______________________________ Xxxxx Xxxxxx, Xxxx 00000
Street address Attn: Counsel
Telephone: (000) 000-0000
______________________________ Telecopy: (000) 000-0000
City, State, Zip
______________________________
Attention
______________________________
Telephone
______________________________
Telecopy
K. Arbitration
Any disagreement, dispute, claim or controversy solely between Broker
and Distributor arising out of or relating to this Agreement shall be
subject to mandatory arbitration under the auspices, rules and bylaws
of the NASD, to the full extent applicable and as may be amended from
time to time.
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In Witness Whereof, the parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.
________________________________________
(Broker Name)
By:_____________________________________
Title:__________________________________
AFSG SECURITIES CORPORATION
(Distributor)
By:_____________________________________
Title:__________________________________
TRANSAMERICA LIFE INSURANCE COMPANY
(Company)
By:_____________________________________
Title:__________________________________
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EXHIBIT A
GENERAL LETTER OF RECOMMENDATION
Broker hereby certifies to the Distributor and Company that all the following
requirements will be fulfilled in conjunction with the submission of
licensing/appointment papers for all applicants as agents of the Company
submitted by Broker. Broker will, upon request, forward proof of compliance with
same to the Company in a timely manner.
1. We have made a reasonable investigation of each applicant's identity,
residence and business reputation and declare that each applicant is personally
known to us, and based on this review we believe each applicant has a good
business reputation and is worthy of a license.
2. We have on file a U-4 form which was completed (and has been amended,
as required) 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, including but not
limited to: (i) checking for and investigating criminal arrest and conviction
records available to Broker on the CRD system; and (ii) communicating with each
employer of the applicant for 3 years prior to the applicant's registration with
our firm. 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.
At the time of application, in those states required by the Company, we shall
provide the Company with a copy of the entire U-4 form, or designated pages,
thereof, completed by each applicant, including any amendments or updates
thereto, and we certify those items are true copies of the original.
3. We certify that all educational requirements have been met for the
specified state each applicant is requesting a license in, and that all such
persons have fulfilled the appropriate examination, education and training
requirements.
4. If the applicant is required to submit his picture, his signature, and
securities registration in the state in which he is applying for a license, we
certify that those items forwarded to the Company are those of the applicant and
the securities registration is a true copy of the original.
5. We hereby warrant that the applicant is not applying for a license with
the Company in order to place insurance chiefly and solely on his life or
property, or lives or property of his relatives, or property or liability of his
associates.
6. We will not permit any applicant to transact insurance in a state as an
agent until duly licensed and appointed therefor with the appropriate State
Insurance Department. 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.
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SCHEDULE A
PRIVATE CONTRACTS
This schedule shall be deemed an integral part of the above referenced Selected
Broker Agreement (the "Agreement") by and between AFSG SECURITIES CORPORATION
("Distributor"), TRANSAMERICA LIFE INSURANCE COMPANY ("Company") and
_______________________ ("Broker") and shall supersede and control any portions
of that Agreement which conflict with the provisions hereof. All other
provisions of the Agreement remain in full force and effect.
Transamerica Life Insurance Company and AFSG Securities Corporation authorize
_________________________ to offer and solicit for sale the following securities
product through persons who are registered with the NASD and in accordance with
the appropriate state insurance licensing requirements. Such persons, where
required, have authorized Broker to receive such commissions.
Name: Form Number:
[SAMPLE]
______________________________________
(Broker Name)
Date:_______________ By:___________________________________
Title:________________________________
TRANSAMERICA LIFE INSURANCE COMPANY
Date:_______________ By:___________________________________
Title:________________________________
AFSG SECURITIES CORPORATION
Date:_______________ By:___________________________________
Title:________________________________
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SCHEDULE B
PUBLIC CONTRACTS
This schedule shall be deemed an integral part of the above referenced Selected
Broker Agreement (the "Agreement") by and between AFSG SECURITIES CORPORATION
("Distributor"), TRANSAMERICA LIFE INSURANCE COMPANY ("Company") and
_______________________ ("Broker") and shall supersede and control any portions
of that Agreement which conflict with the provisions hereof. All other
provisions of the Agreement remain in full force and effect.
Transamerica Life Insurance Company and AFSG Securities Corporation authorize
_________________________ to offer and solicit for sale the following securities
product through persons who are registered with the NASD and in accordance with
the appropriate state insurance licensing requirements. Such persons, where
required, have authorized Broker to receive such commissions.
Name: Form Number:
[SAMPLE]
______________________________________
(Broker Name)
Date:_______________ By:___________________________________
Title:________________________________
TRANSAMERICA LIFE INSURANCE COMPANY
Date:_______________ By:___________________________________
Title:________________________________
AFSG SECURITIES CORPORATION
Date:_______________ By:___________________________________
Title:________________________________
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