PARTICIPATION AGREEMENT Among ING FUNDS TRUST and ING LIFE INSURANCE AND ANNUITY COMPANY and DISTRIBUTOR
EXHIBIT 99-B.8.44
FORM OF
Among
ING FUNDS TRUST
and
ING LIFE INSURANCE AND ANNUITY COMPANY
and
DISTRIBUTOR
THIS AGREEMENT, made and entered into as of this ____ day of _____________,
200__, among ING Life Insurance and Annuity Company (the "Company"), a life insurance
company organized under the laws of Connecticut, on its own behalf and on behalf of each
separate account of the Company as set forth on Schedule A hereto, as such Schedule may be
amended from time to time (each such account hereinafter referred to as the "Account"), ING
FUNDS TRUST (the "Trust"), an open-ended management investment company and business
trust organized under the laws of Massachusetts, and ______________________(the
"Distributor"), a corporation organized under the laws of the State of _____________.
WHEREAS, the Trust is an open-end diversified management investment company and
is available to act as the investment vehicle for separate accounts established for variable life
insurance policies and variable annuity contracts (collectively, the “Contracts”) to be offered by
insurance companies which have entered into Participation Agreements with the Trust and the
Distributor (the "Participating Insurance Companies"); and
WHEREAS, the beneficial interest in the Trust is divided into several series of shares,
each designated a "Fund" and representing the interest in a particular managed portfolio of
securities and other assets; and
WHEREAS, the Trust may rely on an order ("ING Variable Insurance Trust, et al.,
Investment Company Act Rel. No. 24439 (May 3, 2000)) from the Securities and Exchange
Commission ("SEC"), granting the variable annuity and variable life insurance separate accounts
participating in the Trust exemptions from the provisions of Sections 9(a), 13(a), 15(a) and 15(b)
of the Investment Company Act of 1940, as amended (the "1940 Act"), and Rules 6e-2(b)(15)
and 6e-3(T)(b)(15) thereunder, to the extent necessary to permit shares of the Trust to be sold to
and held by variable annuity and variable life insurance separate accounts of the Participating
Insurance Companies (the "Mixed and Shared Funding Exemptive Order"); and
WHEREAS, the Trust is registered as an open-end management investment company
under the 1940 Act and its shares are registered under the Securities Act of 1933, as amended
(the "1933 Act"); and
WHEREAS, the Company has registered or will register certain of the Contracts under
the 1933 Act, the 1940 Act and applicable state securities and insurance law; and
WHEREAS, the Company represents herein that each Account is a duly organized,
validly existing separate account, which was established by resolution of the Board of Directors
of the Company, on the dates shown for such Accounts on Schedule A hereto, to set aside and
invest assets attributable to one or more of the Contracts; and
WHEREAS, the Company has registered or will register the Accounts (except those
Accounts for which no such registration is required) as unit investment trusts under the 1940
Act; and
WHEREAS, the Distributor is registered as a broker-dealer with the SEC under the
Securities Exchange Act of 1934, as amended (the "1934 Act"), and is a member in good
standing of the National Association of Securities Dealers, Inc. (the "NASD"); and
WHEREAS, to the extent permitted by applicable insurance laws and regulations, the
Company intends to purchase shares in certain Funds ("Authorized Funds") on behalf of each
Account to fund certain of the Contracts and the Distributor is authorized to sell such shares to
unit investment trusts such as each Account at net asset value;
NOW, THEREFORE, in consideration of the promises herein, the Company, the Trust
and the Distributor agree as follows:
ARTICLE I
Sale of Trust Shares
1.1 The Distributor agrees, subject to the Trust's rights under Section 1.2 and
otherwise under this Agreement, to sell to the Company those Trust shares representing interests
in Authorized Funds which each Account orders, executing such orders on a daily basis at the net
asset value next computed after receipt by the Trust or its designee of the order for the shares of
the Trust. For purposes of this Section 1.1, the Company shall be the designee of the Trust for
receipt of such orders from each Account and receipt by such designee shall constitute receipt by
the Trust; provided that the Trust receives notice of such order by 10:00 a.m., Eastern Time, on
the next following Business Day. "Business Day" shall mean any day on which the New York
Stock Exchange ("NYSE") is open for trading and on which the Trust calculates its net asset
value pursuant to the rules of the SEC. The initial Authorized Funds are set forth in Schedule B,
as such schedule is amended from time to time.
1.2. The Trust agrees to make its shares available indefinitely for purchase at the
applicable net asset value per share by the Company and its Accounts on those days on which the
Trust calculates its net asset value pursuant to the rules of the SEC and the Trust shall use
reasonable efforts to calculate such net asset value on each day the NYSE is open for trading.
Notwithstanding the foregoing, the Trustees of the Trust (the "Trustees") may refuse to sell
shares of any Authorized Fund to the Company or any other person, or suspend or terminate the
offering of shares of any Authorized Fund if such action is required by law or by regulatory
authorities having jurisdiction over the Trust or if the Trustees determine, in the exercise of their
fiduciary responsibilities, that to do so would be in the best interests of shareholders.
1.3. The Trust and the Distributor agree that shares of the Trust will be sold only to
Participating Insurance Companies and their separate accounts and other persons who are
permissible investors consistent with the Accounts meeting the requirements of Treas. Reg.
1.817 -5.
1.4. The Trust shall redeem its shares in accordance with the terms of its then-current
prospectus. For purposes of this Section 1.4, the Company shall be the designee of the Trust for
receipt of requests for redemption from each Account and receipt by such designee shall
constitute receipt by the Trust; provided that the Trust receives notice of such request for
redemption by 10:00 a.m., Eastern time, on the next following Business Day.
1.5. The Company shall purchase and redeem the shares of Authorized Funds offered
by the then-current prospectus and statement of additional information (“SAI”) of the Trust in
accordance with the provisions of such prospectus and SAI.
1.6. The Company shall pay for Trust shares on the next Business Day after an order
to purchase Trust shares is made in accordance with the provisions of Article I hereof. Payment
shall be in federal funds transmitted by wire.
1.7. Issuance and transfer of the Trust's shares will be by book entry only. Share
certificates will not be issued to the Company or to any Account. Shares ordered from the Trust
will be recorded as instructed by the Company to the Distributor in an appropriate title for each
Account or the appropriate sub-account of each Account.
1.8. The Distributor shall furnish prompt notice (by wire or telephone, followed by
written confirmation) to the Company of the declaration of any income, dividends or capital gain
distributions payable on the Trust's shares. The Company hereby elects to receive all such
income dividends and capital gain distributions as are payable on the Authorized Fund shares in
additional shares of that Authorized Fund. The Company reserves the right to revoke this
election and to receive all such income dividends and capital gain distributions in cash. The
Distributor shall notify the Company of the number of shares so issued as payment of such
dividends and distributions.
1.9. The Distributor shall make the net asset value per share for each Authorized Fund
available to the Company on a daily basis as soon as reasonably practical after the Trust
calculates its net asset value per share, and each of the Trust and the Distributor shall use its
reasonable best efforts to make such net asset value per share available by 6:00 p.m., Eastern
time, but in no event later than 7:00 p.m., Eastern time, each Business Day.
1.10. Any error in the calculation of the net asset value, dividend and capital gain
information greater than or equal to $0.01 per share of the Trust's shares, shall be reported
immediately upon discovery to the Company. Any error of a lesser amount shall be corrected in
the next Business Day's net asset value per share for the Trust. Any such notice will state for
each day for which an error occurred the incorrect price, the correct price and, to the extent
communicated to the Trust's shareholders, the reason for the price change. The Company may
send this notice or a derivation thereof (so long as such derivation is approved in advance by the
Distributor) to contract owners or participants whose accounts are affected by the price change.
The parties will negotiate in good faith to develop a reasonable method for effecting such
adjustments. The Trust shall provide the Company, on behalf of the Account or the appropriate
subaccount of each Account, with a prompt adjustment to the number of shares purchased or
redeemed to reflect the correct share net asset value.
For purposes of this Section 1.10, the Trust or the Distributor shall be liable to the
Company for any amount the Company is required to pay to Contract owners or participants due
to (i) an incorrect calculation of a Fund’s daily net asset value, dividend rate, or capital gain
distribution rate, in accordance with the Trust’s procedures or (ii) incorrect or late reporting of
the daily net asset value or capital gain distribution rate of an Authorized Fund, in accordance
with the Trust’s procedures, upon written notification by the Company, with supporting data, to
the Trust, provided, however, that neither the Trust nor the Distributor shall be liable for any
information provided to the Company pursuant to this Agreement which information is based on
inaccurate information supplied by the Company to the Trust or any of its affiliates, or for any
incorrect or late reporting because of acts of God or systems or mechanical failures over which
the Trust, or the Distributor or the investment adviser to the Trust have no reasonable control;
and provided further that the Distributor and Officers of the Trust shall in good faith discuss with
the Company the bearing of any expenses described in (i) and (ii) above for which the Trust or
Distributor are not liable under this provision. In addition, the Trust or the Distributor shall be
liable to the Company for systems and out of pocket costs incurred by the Company in making a
Contract owner's or a participant's account whole, if such costs or expenses are a result of the
Trust’s failure to provide timely or correct net asset values, dividend and capital gains or
financial information, and if such information is not corrected by 4pm EST of the next business
day after releasing such incorrect information. If a mistake is caused in supplying such
information or confirmations, which results in a reconciliation with incorrect information, the
amount required to make a Contract owner's or a participant's account whole shall be borne by
the party providing the incorrect information, regardless of when the error is corrected.
1.11. The parties may agree to provide pricing information, execute orders and wire
payments for purchases and redemptions through National Securities Clearing Corporation’s
Fund/SERV system in which case such activities will be governed by the provisions set forth in
an Exhibit to this Agreement.
ARTICLE II
Representations and Warranties
« | The Company represents and warrants that |
(a) at all times during the term of this Agreement, the Contracts are or will be | |
registered (except those Contracts which are not registered because they are properly exempt
from registration under the 1933 Act or will be offered exclusively in transactions that are
properly exempt from registration under the 0000 Xxx) under the 1933 Act and the 1940 Act; the
Contracts will be issued and sold in compliance in all material respects with all applicable laws
and the sale of the Contracts shall comply in all material respects with state insurance suitability
requirements. The Company further represents and warrants that it is an insurance company
duly organized and in good standing under applicable law and that it has legally and validly
established each Account prior to any issuance or sale thereof as a separate account under
applicable law and has registered or, prior to any issuance or sale of the Contracts, will register
each Account (except those Accounts which have not been registered in proper reliance upon an
exclusion from registration under the 0000 Xxx) as a unit investment trust in accordance with the
provisions of the 1940 Act to serve as a segregated investment account for the Contracts;
(b) the Contracts are currently treated as endowment, annuity or life insurance
contracts, under applicable provisions of the Internal Revenue Code of 1986, as amended (the
"Code"), and that it will make every effort to maintain such treatment and that it will notify the
Trust and the Underwriter immediately upon having a reasonable basis for believing that the
Contracts have ceased to be so treated or that they might not be so treated in the future; and
(c) all notices to the Trust of the purchase and/or redemption of Trust shares
by each Account shall be accurate.
« | The Trust represents and warrants that |
(a) at all times during the term of this Agreement, Trust shares sold pursuant | |
to this Agreement shall be registered under the 1933 Act, duly authorized for issuance and sold
by the Trust to the Company in compliance with all applicable laws, subject to the terms of
Section 2.4 below, and the Trust is and shall remain registered under the 1940 Act. The Trust
shall amend the Registration Statement for its shares under the 1933 Act and the 1940 Act from
time to time as required in order to effect the continuous offering of its shares. The Trust shall
register and qualify the shares for sale in accordance with the laws of the various states only if
and to the extent deemed advisable by the Trust or the Distributor in connection with their sale
by the Trust to the Company and only as required by Section 2.4;
(b) each Authorized Fund is currently qualified as a Regulated Investment
Company under Subchapter M of the Code, and that the Trust will use its best efforts to maintain
such qualification (under Subchapter M or any successor provision) and that it will notify the
Company immediately upon having a reasonable basis for believing that an Authorized Fund has
ceased to so qualify or that it might not so qualify in the future; and
(c) the Trust is lawfully organized and validly existing under the laws of the
Commonwealth of Massachusetts and that it does and will comply in all material respects with
the 0000 Xxx.
2.3 The Distributor represents and warrants that it is a member in good standing of
the NASD and is registered as a broker-dealer with the SEC. The Distributor further represents
that it will sell and distribute the Trust shares in accordance with all applicable securities laws
applicable to it, including without limitation the 1933 Act, the 1934 Act, and the 0000 Xxx.
2.4. Notwithstanding any other provision of this Agreement, the Trust shall be
responsible for the registration and qualification of its shares and of the Trust itself under the
laws of any jurisdiction only in connection with the sale of shares directly to the Company
through the Distributor. The Trust shall not be responsible, and the Company shall take full
responsibility, for determining any jurisdiction in which any qualification or registration of Trust
shares or the Trust by the Trust may be required in connection with the sale of the Contracts or
the indirect interest of any Contract in any shares of the Trust and advising the Trust thereof at
such time and in such manner as is necessary to permit the Trust to comply.
2.5. The Trust makes no representation as to whether any aspect of its operations
(including, but not limited to, fees and expenses and investment policies) complies with the
insurance laws or regulations of the various states.
2.6 The Trust and the Distributor represent and warrant that all of their trustees,
officers, employees, investment advisers, and other individuals/entities having access to the
funds and/or securities of the Trust are and continue to be at all times covered by a blanket
fidelity bond or similar coverage for the benefit of the Trust in an amount not less than the
minimal coverage as required currently by Rule 17g-(1) of the 1940 Act or related provisions as
may be promulgated from time to time. The aforesaid bond includes coverage for larceny and
embezzlement and is issued by a reputable bonding company.
ARTICLE III
Prospectuses and Proxy Statements; Voting
3.1. The Trust shall provide the Company with a sufficient quantity of its prospectus,
SAI and any supplements to any of these materials once each year (or more frequently if these
materials are amended), to be used in connection with the offerings and transactions
contemplated by this Agreement. In addition, the Trust shall provide the Company with a
sufficient quantity of its proxy materials that are required to be sent to Contract owners or
participants. In lieu of the Trust providing the Company with printed copies of its prospectus,
SAI, supplements and proxy materials, the Company shall have the right to request that the Trust
transmit a copy of such materials in an electronic format (camera-ready copy), which the
Company may use to have such materials printed together with similar materials of other
Account funding media that the Company or any distributor will distribute to existing or
prospective Contract owners or participants.
3.2. The Trust's prospectus shall state that the SAI for the Trust is available from the
Trust, and the Trust shall provide the SAI free of charge to any owner of a Contract or to any
prospective Contract owner who requests the SAI. Distributor and Trust, as appropriate, agree to
provide to Company with as many copies of the SAI as reasonably requested by Company.
3.3. The Trust, at its expense, shall provide the Company with copies of its reports to
shareholders, proxy material and other communications to shareholders in such quantity as the
Company shall reasonably require for distribution to the Contract owners or participants. The
Company shall respond to requests for documents regarding the Trust in a manner that is
consistent with SEC rules, including, but not limited to, Item 1(b) of Form N-1A, which requires
requested documents to be sent within three (3) business days from the date of request.
3.4. The Company shall vote all Trust shares as required by law and the Mixed and
Shared Funding Exemptive Order. The Company reserves the right to vote Trust shares held in
any separate account in each Company's own right, to the extent permitted by law and the Mixed
and Shared Funding Exemptive Order. The Company shall be responsible for assuring that each
of its separate accounts participating in the Trust calculates voting privileges in a manner
consistent with all legal requirements and the Mixed and Shared Funding Exemptive Order.
3.5. The Trust will comply with all applicable provisions of the 1940 Act requiring
voting by shareholders.
ARTICLE IV
Sales Material and Information
4.1. Without limiting the scope or effect of Section 4.2 hereof, the Company shall
furnish, or shall cause to be furnished, to the Distributor each piece of sales literature or other
promotional material (as defined hereafter) in which the Trust, its investment adviser or the
Distributor is named at least 15 days prior to its use. No such material shall be used if the
Distributor objects to such use within five (5) Business Days after receipt of such material.
4.2. The Company shall not give any information or make any representations or
statements on behalf of the Trust or concerning the Trust in connection with the sale of the
Contracts other than the information or representations contained in the registration statement or
prospectus for the Trust shares, as such registration statement and prospectus may be amended or
supplemented from time to time, or in annual or semi-annual reports or proxy statements for the
Trust, or in sales literature or other promotional material approved by the Trust or its designee or
by the Distributor, except with the written permission of the Trust or the Distributor or the
designee of either or as is required by law.
4.3. The Distributor or its designee shall furnish, or shall cause to be furnished, to the
Company or its designee, each piece of sales literature or other promotional material prepared by
the Distributor in which the Company and/or the Company's Account is named at least 15 days
prior to its use. No such material shall be used if the Company or its designee object to such use
within five (5) Business Days after receipt of such material.
4.4. Neither the Trust nor the Distributor shall give any information or make any
representations on behalf of the Company or concerning the Company, each Account, or the
Contracts other than the information or representations contained in a registration statement or
prospectus for the Contracts, as such registration statement and prospectus may be amended or
supplemented from time to time, or in published reports for each Account which are in the public
domain or approved by the Company for distribution to Contract owners or participants, or in
sales literature or other promotional material approved by the Company or its designee, except
with the written permission of the Company or as is required by law.
4.5. For purposes of this Article IV, the phrase "sales literature or other promotional
material" includes, but is not limited to, advertisements (such as material published, or designed
for use in, a newspaper, magazine, or other periodical, radio, television, telephone or tape
recording, videotape display, signs or billboards, motion pictures, or other public media), sales
literature (i.e. any written communication distributed or made generally available to customers or
the public, including brochures, circulars, research reports, market letters, form letters, seminar
texts, reprints or excerpts of any other advertisement, sales literature, or published article),
educational or training materials or other communications distributed or made generally
available to some or all registered representatives.
4.6 The Trust will provide to the Company at least one complete copy of all
registration statements, prospectuses, statements of additional information, reports, proxy
statements, sales literature and other promotional materials, notices and exemptive orders related
to applications for exemptive relief from the requirements of the federal securities laws, and all
amendments to any of the above, that relate to the Trust or its shares, promptly after the filing of
such document with the SEC, the NASD or other regulatory authority.
4.7 The Company will provide to the Trust at least one complete copy of all
registration statements, prospectuses, statements of additional information, reports, proxy
statements, sales literature and other promotional materials, notices and exemptive orders related
to applications for exemptive relief from the requirements of the federal securities laws, and all
amendments to any of the above, that relate to the Trust or its shares, promptly after the filing of
such document with the SEC, the NASD, or other regulatory authority.
ARTICLE V
Fees and Expenses
5.1. If the Trust or any Authorized Fund adopts and implements a plan pursuant to
Rule 12b-1 under the 1940 Act to finance distribution expenses, subject to obtaining any
required exemptive orders or other regulatory approvals, the Trust or Distributor may make
payments to the Company or to the underwriter for the Account if and in such amounts agreed to
by the parties in writing.
5.2. All expenses incident to performance by the Trust under this Agreement shall be
paid by the Trust to the extent permitted by law. The Trust shall bear the expenses for the cost of
registration and qualification of the Trust's shares, preparation and filing of the Trust's prospectus
and registration statement, proxy materials and reports, setting the prospectus and shareholder
reports in type, setting in type and printing the proxy materials, and the preparation of all
statements and notices required by any federal or state law, in each case as may reasonably be
necessary for the performance by it of its obligations under this Agreement. All expenses
incident to the solicitation and tabulation of the Trust's proxy materials will be paid by the Trust,
including postage.
5.3. The Trust shall pay for the cost of typesetting and printing periodic fund reports to
shareholders, prospectuses, prospectus supplements, statements of additional information and
other materials that are required by law to be sent to Contract owners or participants, as well as
the cost of distributing such materials. The Company shall pay for the cost of printing the
Trust’s prospectuses and statements of additional information and for the distribution thereof for
prospective Contract owners or participants. Each party shall be provided with such supporting
data as may reasonably be requested for determining expenses under this Article V.
ARTICLE VI
Diversification
6.1 The Trust will invest its assets to cause each Authorized Fund to maintain a
diversified pool of investments that would, if such Fund were a segregated asset account, satisfy
the diversification requirements of Treasury Reg. section 1.817 -5(b)(1) or (2). In the event of a
breach of this Article VI by the Trust, it will take all reasonable steps: (a) to notify the Company
of such breach; and (b) to adequately diversify the Trust so as to achieve compliance within the
grace period afforded by Treasury Regulation 1.817 -5.
ARTICLE VII
Potential Conflicts
7.1. The Trustees will monitor the Trust for the existence of any material
irreconcilable conflict between the interests of the Contract owners or participants of all separate
accounts investing in the Trust. A material irreconcilable conflict may arise for a variety of
reasons, including: (a) an action by any state insurance regulatory authority; (b) a change in
applicable federal or state insurance, tax, or securities laws or regulations, or a public ruling,
private letter ruling, no-action or interpretative letter, or any similar action by insurance, tax, or
securities regulatory authorities; (c) an administrative or judicial decision in any relevant
proceeding; (d) the manner in which the investments of any Authorized Fund are being managed;
(e) a difference in voting instructions given by variable annuity contract and variable life
insurance contract owners or participants; or (f) a decision by an insurer to disregard the voting
instructions of Contract owners or participants. The Trust shall promptly inform the Company if
the Trustees determine that a material irreconcilable conflict exists and the implications thereof.
7.2. The Company will report any potential or existing conflicts of which it is aware to
the Trustees. The Company will assist the Trustees in carrying out their responsibilities under
the Mixed and Shared Funding Exemptive Order, by providing the Trustees with all information
reasonably necessary for the Trustees to consider any issues raised. This responsibility includes,
but is not limited to, an obligation by the Company to inform the Trustees whenever Contract
owner voting instructions are disregarded.
7.3. If it is determined by a majority of the Trustees, or a majority of the disinterested
Trustees, that a material irreconcilable conflict exists, the Company shall to the extent reasonably
practicable (as determined by a majority of the disinterested Trustees), take, at the Company's
expense (but only if the Trustees determine that the Company is responsible for causing or
creating said conflict, said conflict is caused by operation of law or said conflict is the result of
some other cause outside the control of the Trust or any of the Participating Insurance
Companies), whatever steps are necessary to remedy or eliminate the material irreconcilable
conflict, up to and including: (1) withdrawing the assets allocable to some or all of the separate
accounts from the Trust or any Authorized Fund thereof and reinvesting such assets in a different
investment medium, including (but not limited to) another series of the Trust, or submitting the
question whether such segregation should be implemented to a vote of all affected Contract
owners or participants and, as appropriate, segregating the assets of any appropriate group (i.e.,
annuity contract owners or participants, life insurance contract owners or participants, or variable
contract owners or participants of one or more Participating Insurance Companies) that votes in
favor of such segregation, or offering to the affected Contract owners or participants the option
of making such a change; and (2) establishing a new registered management investment
company or managed separate account.
7.4. If a material irreconcilable conflict arises because of a decision by the Company
to disregard Contract owner voting instructions and that decision represents a minority position
or would preclude a majority vote, the Company may be required, at the Trust's election, to
withdraw the affected Account's investment in one or more portfolios of the Trust and terminate
this Agreement with respect to such Account; provided, however, that such withdrawal and
termination shall be limited to the extent required by the foregoing material irreconcilable
conflict as determined by a majority of the disinterested Trustees. No charge or penalty shall be
imposed as a result of such withdrawal. Any such withdrawal and termination must take place
within six (6) months after the Trust gives written notice that this provision is being
implemented, and until the end of that six month period, the Distributor and Trust shall, to the
extent permitted by law and any exemptive relief previously granted to the Trust, continue to
accept and implement orders of the Company for the purchase (and redemption) of shares of the
Trust.
7.5. If a material irreconcilable conflict arises because of a particular state insurance
regulator's decision applicable to the Company to disregard Contract owner voting instructions
and that decision represents a minority position or would preclude a majority vote, then the
Company may be required, at the Trust's direction, to withdraw the affected Account's
investment in one or more Authorized Funds of the Trust; provided, however, that such
withdrawal and termination shall be limited to the extent required by the foregoing material
irreconcilable conflict as determined by a majority of the disinterested Trustees. Any such
withdrawal and termination must take place within six (6) months after the Trust gives written
notice that this provision is being implemented, unless a shorter period is required by law, and
until the end of the foregoing six month period (or such shorter period if required by law), the
Distributor and Trust shall, to the extent permitted by law and any exemptive relief previously
granted to the Trust, continue to accept and implement orders by that Company for the purchase
(and redemption) of shares of the Trust. No charge or penalty will be imposed as a result of such
withdrawal.
7.6. For purposes of Sections 7.3 through 7.6 of this Agreement, a majority of the
disinterested Trustees shall determine whether any proposed action adequately remedies any
material irreconcilable conflict. Neither the Trust nor the Distributor shall be required to
establish a new funding medium for the Contracts, nor shall the Company be required to do so, if
an offer to do so has been declined by vote of a majority of Contract owners or participants
materially adversely affected by the material irreconcilable conflict. In the event that the
Trustees determine that any proposed action does not adequately remedy any material
irreconcilable conflict, then the Company will withdraw the Account's investment in one or more
Authorized Funds of the Trust and terminate this Agreement within six (6) months (or such
shorter period as may be required by law or any exemptive relief previously granted to the Trust)
after the Trustees inform the Company in writing of the foregoing determination; provided,
however, that such withdrawal and termination shall be limited to the extent required by any
such material irreconcilable conflict as determined by a majority of the disinterested Trustees.
No charge or penalty will be imposed as a result of such withdrawal.
7.7. The responsibility to take remedial action in the event of the Trustees'
determination of a material irreconcilable conflict and the obligation of the Company set forth in
this Article VII shall be carried out with a view only to the interests of Contract owners or
participants.
7.8. If and to the extent that Rule 6e-2 and Rule 6e-3(T) are amended, or Rule 6e-3 is
adopted, to provide exemptive relief from any provision of the 1940 Act or the rules promulgated
thereunder with respect to mixed or shared funding (as defined in the Mixed and Shared Funding
Exemptive Order) on terms and conditions materially different from those contained in the
Mixed and Shared Funding Exemptive Order, then (a) the Trust and/or the Participating
Insurance Companies, as appropriate, shall take such steps as may be necessary to comply with
Rules 6e-2 and 6e-3(T), as amended, and Rule 6e-3, as adopted, to the extent such rules are
applicable; and (b) Sections 3.4, 3.5, 7.1, 7.2, 7.3, 7.4 and 7.5 of this Agreement shall continue in
effect only to the extent that terms and conditions substantially identical to such Sections are
contained in such Rule(s) as so amended or adopted.
7.9. The Company has reviewed the Mixed and Shared Funding Exemption Order and
hereby assumes all obligations referred to therein which are required, including, without
limitation, the obligation to provide reports, material or data as the Trustees may request, as
conditions to such order, to be assumed or undertaken by the Company.
ARTICLE VIII
Indemnification
8.1. Indemnification by the Company
8.2. (a). The Company shall indemnify and hold harmless the Trust, the Distributor
and __________________________ (the “Adviser”), and each of the Trustees, directors of the
Distributor or the Adviser, officers, employees or agents of the Trust, the Distributor or the
Adviser, and each person, if any, who controls the Trust, Adviser or the Distributor within the
meaning of Section 15 of the 1933 Act (collectively, the "Indemnified Parties" for purposes of
this Section 8.1) against any and all losses, claims, damages, liabilities (including amounts paid
in settlement with the written consent of the Company which consent may not be unreasonably
withheld) or litigation expenses (including reasonable legal and other expenses), to which the
Indemnified Parties may become subject under any statute, regulation, at common law or
otherwise, insofar as such losses, claims, damages, liabilities or expenses (or actions in respect
thereof) or settlements are related to the sale or acquisition of the Trust's shares or the Contracts
or the performance by the parties of their obligations hereunder and:
(i) arise out of or are based upon any untrue statements or alleged untrue
statements of any material fact contained in a registration statement, prospectus or
SAI for the Contracts or contained in the Contracts or sales literature for the
Contracts (or any amendment or supplement to any of the foregoing), or arise out
of or are based upon the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, provided that this agreement to indemnify shall not apply
as to any Indemnified Party if such statement or omission or such alleged
statement or omission was made in reliance upon and in conformity with
information furnished to the Company by or on behalf of the Trust for use in the
registration statement, prospectus or SAI for the Contracts or in the Contracts or
sales literature (or any amendment or supplement) or otherwise for use in
connection with the sale of the Contracts or Trust shares; or
(ii) arise out of or as a result of written statements or representations (other
than statements or representations contained in the Trust's registration statement
or prospectus, or in sales literature for Trust shares not supplied by the Company,
or persons under its control) or wrongful conduct of the Company or its agents or
employees or persons under its control, with respect to the sale or distribution of
the Contracts or Trust shares; or
(iii) arise out of any untrue statement or alleged untrue statement of a material
fact contained in a registration statement, prospectus, or sales literature of the
Trust or any amendment thereof or supplement thereto or the omission or alleged
omission to state therein a material fact required to be stated therein or necessary
to make the statements therein not misleading if such a statement or omission was
made in reliance upon information furnished to the Trust or the Distributor by or
on behalf of the Company; or
(iv) arise out of or result from any breach of any material representation and/or
warranty made by the Company in this Agreement or arise out of or result from
any other material breach of this Agreement by the Company, as limited by and in
accordance with the provisions of Sections 8.1(b) and 8.1(c) hereof.
8.2. (b) The Company shall not be liable under this indemnification provision
with respect to any losses, claims, damages, liabilities or litigation incurred or assessed against
an Indemnified Party to the extent such may arise from such Indemnified Party's willful
misfeasance, bad faith, or gross negligence in the performance of such Indemnified Party's duties
or by reason of such Indemnified Party's reckless disregard of obligations or duties under this
Agreement or to the Trust, whichever is applicable.
8.2. (c) The Company shall not be liable under this indemnification provision with
respect to any claim made against an Indemnified Party unless such Indemnified Party shall have
notified the Company in writing within a reasonable time after the summons or other first legal
process giving information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of such service on
any designated agent), on the basis of which the Indemnified Party should reasonably know of
the availability of indemnity hereunder in respect of such claim but failure to notify the
Company of any such claim shall not relieve the Company from any liability which it may have
to the Indemnified Party against whom such action is brought otherwise than on account of this
indemnification provision. In case any such action is brought against the Indemnified Parties,
the Company shall be entitled to participate, at the Company's expense, in the defense of such
action. The Company also shall be entitled to assume the defense thereof, with counsel
satisfactory to the Indemnified Party named in the action. After notice from the Company to such
Indemnified Party of the Company's election to assume the defense thereof, the Indemnified
Party shall bear the fees and expenses of any additional counsel retained by it, and the Company
will not be liable to such Indemnified Party under this Agreement for any legal or other expenses
subsequently incurred by such Indemnified Party independently in connection with the defense
thereof other than reasonable costs of investigation.
8.2. (d) The Distributor shall promptly notify the Company of the commencement
of any litigation or proceedings against the Trust or the Distributor in connection with the
issuance or sale of the Trust Shares or the Contracts or the operation of the Trust.
8.2. (e) The provisions of this Section 8.1 shall survive any termination of this
Agreement.
« | Indemnification by the Distributor |
« | (a) The Distributor shall indemnify and hold harmless the Company and each |
person, if any, who controls the Company within the meaning of Section 15 of the 1933 Act and
any director, officer, employee or agent of the foregoing (collectively, the "Indemnified Parties"
for purposes of this Section 8.2) against any and all losses, claims, damages, liabilities (including
amounts paid in settlement with the written consent of the Distributor which consent may not be
unreasonably withheld) or litigation expenses (including reasonable legal and other expenses) to
which the Indemnified Parties may become subject under any statute, at common law or
otherwise, insofar as such losses, claims, damages, liabilities or expenses (or actions in respect
thereof) or settlements are related to the sale or acquisition of the Trust's shares or the Contracts
or the performance by the parties of their obligations hereunder and:
(i) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in a registration statement, prospectus,
or SAI for the Trust or the sales literature for the Trust prepared by the Trust or
Distributor (or any amendment or supplement to any of the foregoing), or arise
out of or are based upon the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, provided that this agreement to indemnify shall not
apply as to any Indemnified Party if such statement or omission or such alleged
statement or omission was made in reliance upon and in conformity with
information furnished to the Distributor or Trust by or on behalf of the
Company for use in sales literature (or any amendment or supplement) or
otherwise for use in connection with the sale of the Contracts or Trust shares; or
(ii) arise out of or as a result of written statements or representations (other
than statements or representations contained in the registration statement,
prospectus, SAI or sales literature for the Contracts not supplied by the
Distributor or persons under its control) of the Distributor or persons under its
control, with respect to the sale or distribution of the Contracts or Trust shares;
or
(iii) arise out of any untrue statement or alleged untrue statement of a material
fact contained in a registration statement, prospectus, SAI or sales literature
covering the Contracts, or any amendment thereof or supplement thereto, or the
omission or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statement or statements therein not misleading,
if such statement or omission was made in reliance upon information furnished
to the Company by or on behalf of the Distributor; or
(iv) arise out of or result from any breach of any material representation and/or
warranty made by the Distributor or the Trust in this Agreement or arise out of
or result from any other material breach of this Agreement by the Distributor or
the Trust; as limited by and in accordance with the provisions of Sections 8.2(b)
and 8.2(c) hereof.
8.3. (b) The Distributor shall not be liable under this indemnification provision
with respect to any losses, claims, damages, liabilities or litigation incurred or assessed against
an Indemnified Party as such may arise from such Indemnified Party's willful misfeasance, bad
faith, or gross negligence in the performance of such Indemnified Party's duties or by reason of
such Indemnified Party's reckless disregard of obligations and duties under this Agreement or to
the Company or the Account, whichever is applicable.
8.3. (c) The Distributor shall not be liable under this indemnification provision
with respect to any claim made against an Indemnified Party unless such Indemnified Party shall
have notified the Distributor in writing within a reasonable time after the summons or other first
legal process giving information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of such service on
any designated agent) on the basis of which the Indemnified Party should reasonably know of the
availability of indemnity hereunder in respect of such claim, but failure to notify the Distributor
of any such claim shall not relieve the Distributor from any liability which it may have to the
Indemnified Party against whom such action is brought otherwise than on account of this
indemnification provision. In case any such action is brought against the Indemnified Parties,
the Distributor will be entitled to participate, at its own expense, in the defense thereof. The
Distributor also shall be entitled to assume the defense thereof, with counsel satisfactory to the
Indemnified Party named in the action. After notice from the Distributor to such Indemnified
Party of the Distributor's election to assume the defense thereof, the Indemnified Party shall bear
the fees and expenses of any additional counsel retained by it, and the Distributor will not be
liable to such Indemnified Party under this Agreement for any legal or other expenses
subsequently incurred by such Indemnified Party independently in connection with the defense
thereof other than reasonable costs of investigation.
8.3. (d) The Company shall promptly notify the Distributor, the Adviser, and the
Trust of the commencement of any litigation or proceedings against it or any of its officers or
directors, in connection with the issuance or sale of the Contracts or the operation of each
Account.
8.3. (e) The provisions of this Section 8.2 shall survive any termination of this
Agreement.
ARTICLE IX
Applicable Law
9.1. This Agreement shall be construed and the provisions hereof interpreted under
and in accordance with the laws of the State of Delaware.
9.2. This Agreement shall be subject to the provisions of the 1933, 1934 and 1940
acts, and the rules and regulations and rulings thereunder, including such exemptions from those
statutes, rules and regulations as the SEC may grant (including, but not limited to, the Mixed and
Shared Funding Exemptive Order) and the terms hereof shall be interpreted and construed in
accordance therewith.
ARTICLE X
Termination
« | This Agreement shall terminate: |
(a) at the option of any party, with respect to some or all of the Authorized | |
Funds, upon sixty (60) days’ advance written notice to the other parties; or
(b) at the option of the Trust or the Distributor in the event that formal
administrative proceedings are instituted against the Company by the NASD, the SEC, any State
Insurance Commissioner or any other regulatory body regarding the Company's duties under this
Agreement or related to the sales of the Contracts, with respect to the operation of any Account,
or the purchase of the Trust shares, provided, however, that the Trust or the Distributor
determines in its sole judgment exercised in good faith, that any such administrative proceedings
will have a material adverse effect upon the ability of the Company to perform its obligations
under this Agreement; or
(c) at the option of the Company in the event that formal administrative
proceedings are instituted against the Trust or Distributor by the NASD, the SEC, or any state
securities or insurance department or any other regulatory body in respect of the sale of shares of
the Trust to the Company, provided, however, that the Company determines in its sole judgment
exercised in good faith, that any such administrative proceedings will have a material adverse
effect upon the ability of the Trust or Distributor to perform its obligations under this
Agreement; or
(d) with respect to any Account, upon requisite vote of the Contract owners or
participants having an interest in such Account (or any subaccount) to substitute the shares of
another investment company for the corresponding Authorized Fund shares of the Trust in
accordance with the terms of the Contracts for which those Authorized Fund shares had been
selected to serve as the underlying investment media. The Company will give 30 days' prior
written notice to the Trust of the date of any proposed vote to replace the Trust's shares;
(e) with respect to any Authorized Fund, upon 30 days’ advance written
notice from the Distributor to the Company, upon a decision by the Distributor to cease offering
shares of the Trust for sale; or
(f) at the option of any party to this Agreement, upon written notice to the
other parties, upon another party's material breach of any provision of this Agreement which
material breach is not cured within thirty (30) days of said notice.
10.2. It is understood and agreed that the right of any party hereto to terminate this
Agreement pursuant to Section 10.1 (a) may be exercised for any reason or for no reason.
10.3. No termination of this Agreement shall be effective unless and until the party
terminating this Agreement gives prior written notice to all other parties to this Agreement of its
intent to terminate, which notice shall set forth the basis for such termination. Such prior written
notice shall be given in advance of the effective date of termination as required by this Article X.
10.4 Notwithstanding any termination of this Agreement, subject to Sections 1.2 and
10.5 of this Agreement, the Trust and the Distributor shall, at the option of the Company,
continue to make available additional shares of the Trust pursuant to the terms and conditions of
this Agreement, for all Contracts in effect as of the effective date of termination of this
Agreement (hereinafter referred to as "Existing Contracts"). Specifically, subject to Sections 1.2
and 10.5 of this Agreement, the owners or participants of the Existing Contracts shall be
permitted to reallocate investments in the Trust, redeem investments in the Trust and/or invest in
the Trust upon the making of additional purchase payments under the Existing Contracts. The
parties agree that this Section 10.4 shall not apply to any termination under Article VII and the
effect of such Article VII termination shall be governed by Article VII of this Agreement.
10.5 If any party terminates this Agreement with respect to any Authorized Fund
pursuant to the provisions under Article X, the Agreement shall nevertheless continue in effect as
to any shares of the Trust that are outstanding as of the date of such termination (the "Initial
Termination Date"). This continuation shall extend to the earlier of (a) the date as of which an
Account no longer owns shares of the affected Authorized Fund or (b) the date (the "Final
Termination Date") as of 180 days following the Initial Termination Date, or, at the Distributor's
option, such later date as is necessary for the Company to obtain a substitution order from the
SEC, the application for which the Company will diligently pursue.
10.6 The Company shall not redeem Trust shares attributable to the Contracts (as
opposed to Trust shares attributable to the Company's assets held in either Account) except (i) as
necessary to implement Contract owner or participant initiated transactions, or (ii) as required by
state and/or federal laws or regulations or judicial or other legal precedent of general application
(hereinafter referred to as a "Legally Required Redemption"). Upon request, the Company will
promptly furnish to the Trust and the Distributor an opinion of counsel for the Company,
reasonably satisfactory to the Trust, to the effect that any redemption pursuant to clause (ii)
above is a Legally Required Redemption. Furthermore, except in cases where permitted under
the terms of the Contracts, subject to Sections 1.2 and 10.5 of this Agreement, the Company shall
not prevent Contract owners or participants from allocating payments to an Authorized Fund that
was otherwise available under the Contracts without first giving the Trust or the Distributor 90
days’ written notice of its intention to do so.
ARTICLE XI
Notices
Any notice shall be sufficiently given when sent by registered or certified mail to the other party
at the address of such party set forth below or at such other address as such party may from time
to time specify in writing to the other party.
If to the Trust:
____________________________
____________________________
____________________________
____________________________
If to the Distributor:
_______________________________
_______________________________
_______________________________
Attn:
__________________________
If to the Company:
ING Life Insurance and Annuity Company
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attn: Counsel
ARTICLE XII
Miscellaneous
12.1 A copy of the Agreement and Declaration of Trust is on file with the Secretary of
State of the State of Massachusetts, and notice is hereby given that this instrument is executed on
behalf of the Trustees of the Trust as Trustees and not individually and that the obligations of or
arising out of this instrument, including without limitation Article VI, are not binding upon any
of the Trustees or shareholders individually but binding only upon the assets and property of the
Trust.
12.2. The captions in this Agreement are included for convenience of reference only
and in no way define or delineate any of the provisions hereof or otherwise affect their
construction or effect.
12.3. This Agreement may be executed simultaneously in two or more counterparts,
each of which taken together shall constitute one and the same instrument.
12.4. If any provision of this Agreement shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of the Agreement shall not be affected thereby.
12.5. Each party hereto shall cooperate with each other party and all appropriate
governmental authorities (including without limitation the Securities and Exchange Commission,
the NASD and state insurance regulators) and shall permit such authorities reasonable access to
its books and records in connection with any investigation or inquiry relating to this Agreement
or the transactions contemplated hereby.
12.6. The rights, remedies and obligations contained in this Agreement are cumulative
and are in addition to any and all rights, remedies and obligations, at law or in equity, which the
parties hereto are entitled to under state and federal laws.
12.7. Notwithstanding any other provision of this Agreement, the obligations of the
Trust and the Distributor are several and, without limiting in any way the generality of the
foregoing, neither such party shall have any liability for any action or failure to act by the other
party, or any person acting on such other party's behalf.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed in its name and on its behalf by its duly authorized representative and its seal to be
hereunder affixed hereto as of the date specified below.
ING LIFE INSURANCE AND ANNUITY COMPANY
By its authorized officer,
Name:
Title:
ING FUNDS TRUST
By its authorized officer,
Name:
Title:
DISTRIBUTOR
By its authorized officer,
Name:
Title:
Schedule A
Contracts and Separate Accounts
Accounts:
Variable Annuity Account B of ING Life Insurance and Annuity Company
Variable Annuity Account C of ING Life Insurance and Annuity Company
Variable Annuity Account D of ING Life Insurance and Annuity Company
Variable Life Account B of ING Life Insurance and Annuity Company
Variable Life Account C of ING Life Insurance and Annuity Company
Contracts:
ING Variable Annuity Contracts
A-1
Schedule B
ING FUNDS TRUST
Authorized Funds
B-1
NSCC EXHIBIT
Procedures for Pricing and Order/Settlement Through National Securities Clearing
Corporation’s Mutual Fund Profile System and Mutual Fund Settlement, Entry and
Registration Verification System
1. As provided in Section 1.11 of the Participation Agreement, the parties hereby agree to
provide pricing information, execute orders and wire payments for purchases and redemptions of
Fund shares through National Securities Clearing Corporation (“NSCC”) and its subsidiary
systems as follows:
« | Distributor or the Funds will furnish to the Company or its affiliate through NSCC’s Mutual Fund Profile System (“MFPS”) (1) the most current net asset value information for each Fund, (2) a schedule of anticipated dividend and distribution payment dates for each Fund, which is subject to change without prior notice, ordinary income and capital gain dividend rates on the Fund’s ex-date, and (4) in the case of fixed income funds that declare daily dividends, the daily accrual or the interest rate factor. All such information shall be furnished to the Company or its affiliate by 6:30 p.m. Eastern Time on each business day that the Fund is open for business (each a "Business Day") or at such other time as that information becomes available. Changes in pricing information will be communicated to both NSCC and the Company or its affiliate. |
« | Upon receipt of Fund purchase, exchange and redemption instructions for acceptance as of the time at which a Fund's net asset value is calculated as specified in such Fund's prospectus ("Close of Trading") on each Business Day ("Instructions"), and upon its determination that there are good funds with respect to Instructions involving the purchase of Shares, the Company or its affiliate will calculate the net purchase or redemption order for each Fund. Orders for net purchases or net redemptions derived from Instructions received by the Company or its affiliate prior to the Close of Trading on any given Business Day will be sent to the Defined Contribution Interface of NSCC’s Mutual Fund Settlement, Entry and Registration Verification System (“Fund/SERV”) by 5:00 a.m. Eastern Time on the next Business Day. Subject to the Company’s or its affiliate’s compliance with the foregoing, the Company or its affiliate will be considered the agent of the Distributor and the Funds, and the Business Day on which Instructions are received by the Company or its affiliate in proper form prior to the Close of Trading will be the date as of which shares of the Funds are deemed purchased, exchanged or redeemed pursuant to such Instructions. Instructions received in proper form by the Company or its affiliate after the Close of Trading on any given Business Day will be treated as if received on the next following Business Day. Dividends and capital gains distributions will be automatically reinvested at net asset value in accordance with the Fund's then current prospectuses. |
« | The Company or its affiliate will wire payment for net purchase orders by the Fund’s NSCC |
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Firm Number, in immediately available funds, to an NSCC settling bank account designated by the Company or its affiliate no later than 5:00 p.m. Eastern time on the same Business Day such purchase orders are communicated to NSCC. For purchases of shares of daily dividend accrual funds, those shares will not begin to accrue dividends until the day the payment for those shares is received. | |
« | NSCC will wire payment for net redemption orders by Fund, in immediately available funds, to an NSCC settling bank account designated by the Company or its affiliate, by 5:00 p.m. |
Eastern Time on the Business Day such redemption orders are communicated to NSCC, except as provided in a Fund's prospectus and statement of additional information. | |
« | With respect to (c) or (d) above, if Distributor does not send a confirmation of the Company’s or its affiliate’s purchase or redemption order to NSCC by the applicable deadline to be included in that Business Day’s payment cycle, payment for such purchases or redemptions will be made the following Business Day. |
« | If on any day the Company or its affiliate or Distributor is unable to meet the NSCC deadline for the transmission of purchase or redemption orders, it may at its option transmit such orders and make such payments for purchases and redemptions directly to Distributor or to the Company or its affiliate, as applicable, as is otherwise provided in the Agreement. |
« | These procedures are subject to any additional terms in each Fund's prospectus and the requirements of applicable law. The Funds reserve the right, at their discretion and without notice, to suspend the sale of shares or withdraw the sale of shares of any Fund. |
2. The Company or its affiliate, Distributor and clearing agents (if applicable) are each
required to have entered into membership agreements with NSCC and met all requirements to
participate in the MFPS and Fund/SERV systems before these procedures may be utilized. Each
party will be bound by the terms of their membership agreement with NSCC and will perform
any and all duties, functions, procedures and responsibilities assigned to it and as otherwise
established by NSCC applicable to the MFPS and Fund/SERV system and the Networking
Matrix Level utilized.
3. Except as modified hereby, all other terms and conditions of the Agreement shall remain
in full force and effect. Unless otherwise indicated herein, the terms defined in the Agreement
shall have the same meaning as in this Exhibit.
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