Exhibit 1.A.(3)(b)
CONSECO VARIABLE INSURANCE COMPANY
CONSECO EQUITY SALES, INC.
SELLING AGREEMENT
This Agreement is made between Conseco Variable Insurance Company ("Company"),
Conseco Equity Sales, Inc. ("Underwriter"), (collectively, "Conseco"), with
Administrative Offices in Carmel, Indiana, and
_________________________________, the Broker-Dealer named herein registered as
a Broker-Dealer ("Broker") and as a member of the National Association of
Securities Dealers, Inc. (the "NASD") and the Securities and Exchange Commission
(SEC). The parties do hereby agree as follows:
1. Authorization
Broker, either as an individual, partnership, or corporation, is hereby
authorized by Company and Underwriter to solicit applications for variable life
insurance policies ("Policies"). The Compensation Schedule is made a part of the
Selling Agreement, and Broker agrees to collect and remit initial required
premiums to Company, and deliver policies issued by Company:
a. only in jurisdictions where Broker is duly licensed and appointed
by the appropriate regulatory agencies, and;
b. only in states and territories in which Company is admitted to do
business and only for those Policies offered by Company that have
been approved by the appropriate regulatory agencies.
Licensing of agents shall be in compliance with the statutory and regulatory
requirements of the Departments of Insurance or other regulatory agencies and in
accordance with the standards and procedures establish by Conseco.
Broker shall supply Company with copies of all certificates of qualification or
licenses required of Broker under this Agreement.
1.1 Limitation of Authority
Broker has no authority during the time this Agreement is in effect, or after
termination, to:
a. make or modify Policies on behalf of Company or waive any of
Company's rights or requirements;
b. collect or receive premiums or renewals other than the initial
premium;
c. endorse, cash or deposit any checks or drafts payable to the
Company;
d. open any bank account or trust account on behalf of, for the
benefit of, or containing the name of, Company;
e. advertise or publish any matter or thing, including use of the
names or logos of Company or those of its subsidiaries or
affiliates, concerning Company or its Policies without prior
written permission of Company;
f. directly or indirectly cause or endeavor to cause any Broker of
Company and Underwriter or Registered Representatives of
Underwriter to terminate or alter its/his/her contract with
Company, or induce or attempt to induce any policyholder of
Company to relinquish, surrender, replace, or lapse a Policy; or
g. do or perform any acts or things other than expressly authorized
herein.
This agreement shall not create an employer-employee relationship. The
relationship of Broker to Company shall be that of independent contractor.
Broker agrees to furnish and maintain a satisfactory bond of indemnity as
required under the rules of the NASD, a copy of such bond to be submitted to
Company within 30 days of request.
Broker shall indemnify and hold harmless Company, Underwriter, and their
affiliated officers, directors, employees and agents from any and all claims,
demands, penalties, suits, or actions, and from any and all losses, costs, and
reasonable expenses in connection therewith, including attorney's fees and
expenses arising out of or resulting from the sales of the Policies by or
through the Broker, or from the default in the performance of, or in the
negligent performance of, by Broker or Broker's partners, directors, officers,
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employees or agents, the obligations of Broker under this Agreement. The
provisions of this and the preceding paragraph shall survive the termination of
this Agreement.
Conseco shall indemnify and hold harmless Broker and its affiliated officers,
directors, employees and agents from any and all claims, demands, penalties,
suits, or actions, and from any and all losses, costs, and reasonable expenses
in connection therewith, including attorney's fees and expenses arising out of
or resulting from the default in the performance of, or the negligent
performance of the obligations of Conseco under this Agreement.
1.2 Representation and Service
Broker agrees:
a. that the Broker will take full responsibility for training an
supervision of all Representatives associated with Broker 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
Broker with respect to such persons' activities in connection with
the sale of Policies. Broker agrees to establish such rules and
procedures as are necessary to insure compliance with applicable
federal and state securities laws and to accept such supervision;
b. to observe the rules, procedures and other directives established,
and given by Underwriter relating to the sale of the Policies by
Broker. However, provisions of the Underwriter's Manual pertaining
to underwriting practices, acceptance of risks, delivery of
Policies, and all other areas of conduct of Conseco's business
shall not be deemed to imply a duty of supervision by Company or
Underwriter over Broker, or to relieve Broker of its duty to
supervise its personnel. Broker will also comply with the rules
and regulations of the Securities and Exchange Commission and the
NASD, (including its Rules of Fair Practice), relating to the sale
and distribution of the Policies and will observe all applicable
federal and state laws relating to the Policies, and the
regulations of authorized regulatory agencies affecting the sale
of insurance;
c. that all solicitations for Policies are accompanied by the
appropriate current prospectuses for the Policies conforming to
the requirements of the Securities Act of 1933;
d. that no representations concerning the Policies will be made
except those contained in the appropriate current prospectuses and
in information supplemental to the prospectuses, which may be
supplied by Underwriter and designated for use with the public. In
this regard, Broker further agrees not to use advertising or sales
literature concerning the Policies unless and until it has been
approved by Underwriter;
e. to become fully informed as to the provisions and benefits of each
Policy offered by Company for which Broker solicits applications;
f. to represent such Policies adequately and fairly to prospects;
g. to provide all usual and customary service to policyholders and
work to maintain in force any business placed with Company; and
h. to hold all premiums received with any applications for Policies
solicited for Company and to promptly forward such premiums and
applications to the Company using a reasonable standard of care.
All such funds shall be segregated by Broker and held in trust,
and shall not be used by Broker for any purpose.
1.3 Broker's Agents
Broker will recruit, train and supervise Registered Representatives
("Representatives") to sell the Policies. Appointment of each Representative
shall be subject to Company's prior approval. Company may terminate any
Representative without Broker's prior approval. Company may require termination
of any Representative's authority to sell the Policies. Broker is responsible
for the Representatives' compliance with the terms and conditions of this
Agreement and for the Representative being duly licensed pursuant to applicable
state and federal laws.
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1.4 Delivery of Policy
Broker shall promptly deliver all issued Policies in accordance with Company
rules.
1.5 Administrative Guidelines and Compliance
Company's administrative guidelines, including bulletins, product and procedure
updates, the revisions, additions and amendments thereto, from the time made by
Company, shall be complied with by Broker provided, however, that this shall not
be deemed to imply a duty of supervision by Company or Underwriter over Broker,
or to relieve Broker of its duty to supervise its personnel. Broker agrees to
comply fully with all applicable regulations, bulletins, rulings, circular
letters, proclamations and statutes, now or hereafter in force, and to promptly
notify Company in writing of all contacts and/or correspondence received from
insurance regulatory, or other governmental authorities with regard to Policies
sold under this agreements, and to cooperate fully with Company in making
responses to those authorities.
1.6 Licensing and/ or Appointment of Representative
Broker shall assist Conseco in the licensing and/or appointment of
Representatives under applicable insurance laws to sell Policies.
2. Compensation
All compensation payable for sales of the Policies shall be paid by Company to
Broker through Underwriter and nothing contained herein shall create any right,
title or interest in Underwriter to such compensation nor any responsibility on
the part of Underwriter for payment of such compensation. Company agrees to pay
compensation in the form of commissions and other payments as provided in the
Compensation Schedule(s) delivered to Broker by Company and incorporated herein
by reference, upon any cash premiums received by Company for Policies issued on
applications submitted by Broker. Such compensation shall be payment in full for
all services performed and all expenses incurred by Broker. Company reserves the
right to accrue compensation under this Agreement until a minimum of $25.00 has
become due. If this agreement is terminated for any reason, regardless of what
the Compensation Schedule(s) might provide, no compensation of any kind shall
thereafter be payable.
2.1 Compensation Schedule(s)
The Compensation Schedule(s) attached, or which may hereafter be added, is (are)
incorporated herein and made a part of this Agreement. Company reserves the
right to change such Compensation Schedule(s) at any time upon written notice to
Broker. However, no such changes shall be applicable to Policies for which
Company has accepted premiums prior to effective date of such change.
2.2 Accounting
Company will give to Broker a monthly statement of all compensation and advances
becoming due and payable to Broker since the date of the previous monthly
statement. This statement shall also include Broker's indebtedness to Company,
if any. Unless Company receives written objection to such monthly statement from
Broker, within 90 days after the date it is mailed to Broker's last known
address or delivered to Broker in person, the same shall be deemed final and
binding upon Broker.
2.3 Exchanges
If in the sole discretion of Company a new Policy is issued to replace a
terminated or in-force policy of Company or its affiliates or subsidiaries, the
new Policy shall be regarded as an exchanged Policy, and any compensation
payable shall be determined and adjusted by Company in accordance with Company's
then current exchange rules, independent of the Compensation Schedule(s).
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2.4 Return of Premium
If no Policy is issued on an application, the whole amount of all monies
collected by Broker will be immediately returned to the applicant. If Company
finds it necessary, for any reason, to cancel a Policy and refund premiums, any
compensation paid to Broker on the amount refunded shall be repaid to Company,
or may be deducted from any compensation payable to Broker under this Agreement.
2.5 Local Taxes
Broker is responsible for any county or municipal occupational or privilege fee,
tax or license which may be required of Broker or Representatives as a result of
business submitted hereunder.
2.6 Expenses
Broker shall pay all expenses of every nature incurred in connection with the
conduct of its business and Conseco shall not be liable in any way therefore.
3. Indebtedness
Company shall have first lien upon any amounts due under this Agreement, or to
become due from Broker's indebtedness to Company or its affiliates and
subsidiaries, whether due or contingent, of Broker or Broker's assigns under
this Agreement. Such indebtedness may be deducted by Company from such amounts
due or to become due.
4. Termination
Termination of this Agreement is effected as follows:
a. Cause. This Agreement may be terminated for cause by Company,
immediately upon written notice to Broker, if Broker or Broker's
partner, director, officer, employee or agent has, or is
reasonably believed to have:
(i) misappropriated funds from any policy owner or from
Company;
(ii) endeavored to induce Brokers of Company and Underwriter or
Registered Representatives of Underwriter to leave its
services or policy owners of Company to relinquish their
policies;
(iii) interfered with the collection of renewal premiums;
(iv) engaged in fraudulent acts or any other act violative of
federal or state law or other applicable rules or
regulations, including the Conduct Rules of the NASD;
(v) been adjudged a bankrupt or executed a general assignment
for benefit of creditors or committed an act of bankruptcy;
or
(vi) otherwise acted to prejudice materially the interest of
Company in breach of this Agreement.
If Company does not terminate this Agreement for any such cause, a
waiver shall not result and this Agreement may be terminated under
this subparagraph for any subsequent cause.
b. Death or Dissolution. If Broker is not a corporation or
partnership, this Agreement will terminate on the date of Broker's
death. If Broker is a corporation or partnership, this Agreement
will terminate on the date that the corporation or partnership is
dissolved or otherwise judged by appropriate regulatory agencies
no longer to be a legal entity.
c. License Suspension or Revocation. This Agreement will terminate
immediately in the event of any order of suspension, revocation or
termination of Broker's license by any regulatory authority.
d. Default. This Agreement will terminate immediately upon notice of
the event of:
1. default under this Agreement; or
2. Broker or Broker's associated person's failure to fully
comply with Company directives, rules, regulations or
manuals in a timely fashion.
e. Ownership Change. This agreement will terminate, if Broker
is not a natural person, and in the event of a significant
change in Broker's ownership or management, or in the event
of the
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execution of an agreement of sale, transfer or merger of
Broker, without prior notice and consent of Company.
f. Notice. This Agreement may be terminated by either party
for any reason by giving the other party at least 30 days'
advance written notice delivered personally or mailed to
the last known address of the other party.
g. Indebtedness. Upon termination of this Agreement, any
indebtedness to Company becomes immediately due and
payable.
h. Records. All books, records, application forms and material
furnished by Conseco pertaining to the solicitation of
applications for insurance hereunder shall be the property
of Conseco and shall be returned upon termination of this
agreement.
5. Previous Agreement
By execution of this Agreement, any prior agreement(s) between the Company,
Underwriter and the Broker or between Company and the signing principal(s)
related specifically to the business transacted under this Agreement is
terminated as of the effective date of this Agreement; but while this Agreement
remains in force, any rights of Broker to receive compensation under the terms
and conditions of the prior agreement are continued hereunder, and such earned
compensation shall be payable at the rate, for the remainder of the period, and
on the basis applicable as if that agreement remained in force.
6. Entire Agreement
This Agreement, including supplements and the Compensation Schedule(s),
constitutes the entire Agreement between the parties for all dealings after its
effective date. This Agreement shall not be assigned without the prior written
consent of Company. No amendment of this Agreement shall be valid unless made in
writing by Company.
7. Waiver
No waiver by Company of rights arising from wrongdoing of failure by Broker
shall occur by Company's election not to enforce any provision of this
Agreement, nor reduce or affect Company's rights arising from subsequent
wrongdoing or failure by Broker. Broker releases Company from any liability for
providing Social Security numbers and tax data to authorized governmental
agencies.
8. Notice
Any written notice given under any provision of this Agreement shall be complete
upon deposit, postage paid, in the U.S. Mail addressed to Broker at Broker's
last known address according to Company's records or to Company or Underwriter
at its Administrative Offices.
9. Arbitration
Any dispute, claim or controversy arising out of or relating to this Agreement,
performance hereunder or the breach hereof, or otherwise arising between Broker
and Company or Underwriter, shall be subject to mandatory arbitration under the
auspices, rules and by-laws of the NASD, as may be amended from time to time,
and any arbitration award may be entered as a judgment in a court of competent
jurisdiction. Notwithstanding the foregoing arbitration requirement, at its
option, Company and/or Underwriter may seek injunctive relief either within the
arbitration process or from a court of competent jurisdiction. Venue for any
such injunctive action shall be in a court located in Noblesville, Xxxxxxxx
County, Indiana. Venue for arbitration hearing shall be in Xxxxxxxx County,
Indiana.
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10. Construction
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
INDIANA EXCLUSIVE OF CHOICE OF LAWS PROVISIONS. CONSECO AND BROKER EACH
REPRESENT TO THE OTHER THAT IT AND THE OFFICERS SIGNING BELOW HAVE FULL POWER
AND AUTHORITY TO ENTER INTO THIS AGREEMENT.
The effective date of this Selling Agreement with Conseco Variable Insurance
Company and Conseco Equity Sales, Inc., shall be:
------------------ -----, ---------- ----------------------------------------
(Month) (Day) (Year) Contract Number (Company Assigned)
Type of Legal Entity: ( ) Individual ( ) Partnership ( ) Corporation
-------------------------------------- ----------------------------------------
Type or Print Name of Broker-Dealer Taxpayer Identification Number of
Broker-Dealer
-------------------------------------- ----------------------------------------
Type or Print Name of Principal Signature of Principal
-------------------------------------- ----------------------------------------
Social Security Number of Principal Date
CONSECO VARIABLE INSURANCE COMPANY
-------------------------------------- ----------------------------------------
Type or Print Name and Title Signature of Principal and Date
CONSECO EQUITY SALES, INC.
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Type or Print Name and Title Signature of Principal and Date
