August 27, 2008
EXHIBIT 8.19(b)
August 27, 2008
Xxxxxx Investors Life Insurance Company
00000 XX 00xx Xxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Ladies and Gentlemen:
This letter sets forth the agreement (“Agreement”) between Xxxxxx Investors Life Insurance Company (“you” or the “Company”) and the undersigned (“we”, “us” or “Price Associates”) concerning certain administration services to be provided by you, with respect to the X. Xxxx Price Equity Series, Inc. (the “Fund”).
1. The Fund. The Fund is a Maryland Corporation registered with the Securities and Exchange Commission (the “SEC”) under the Investment Company Act of 1940 (the “Act”) as an open-end diversified management investment company. The Fund serves as a funding vehicle for variable annuity contracts and variable life insurance contracts and, as such, sells its shares to insurance companies and their separate accounts. With respect to various provisions of the Act, the SEC requires that owners of variable annuity contracts and variable life insurance contracts be provided with materials and rights afforded to shareholders of a publicly-available SEC-registered mutual fund.
2. The Company. The Company is an Illinois insurance company. The Company issues variable annuity and/or variable life insurance contracts (the “Contracts”) supported by the KILICO Variable Annuity Separate Account - 3 (the “Separate Account”) which is registered with the SEC as a unit investment trust. The Company has entered into a participation agreement (the “Participation Agreement”) with the Fund pursuant to which the Company purchases shares of the Fund for the Separate Account supporting the Company’s Contracts.
3. Price Associates. Price Associates serves as the Fund’s investment adviser. Price Associates supervises and assists in the overall management of the Fund’s affairs under an Investment Management Agreement with the Fund, subject to the overall authority of the Fund’s Board of Directors in accordance with Maryland law. Under the Investment Management Agreement, Price Associates is compensated by the Fund for providing investment advisory and certain administrative services (either directly or through its affiliates).
Xxxxxx Investors Life Insurance Company
August 27, 2008
Page 2
4. Administrative Services. You have agreed to assist us and/or our affiliates, as we may request from time to time, with the provision of administrative services to the Fund, as they may relate to the investment in the Fund by the Separate Account. It is anticipated that such services may include (but shall not be limited to): the mailing of Fund reports, notices, proxies and proxy statements and other informational materials to holders of the Contracts supported by the Separate Account; the transmission of purchase and redemption requests to the Fund’s transfer agent; the maintenance of separate records for each holder of the Contracts reflecting shares purchased and redeemed and share balances; the preparation of various reports for submission to the Fund Directors; the provision of advice and recommendations concerning the operation of the series of the Fund as funding vehicles for the Contracts; the provision of shareholder support services with respect to the Portfolios serving as funding vehicles for the Company’s Contracts; telephonic support for holders of Contracts with respect to inquiries about the Fund; and the provision of other administrative services as shall be mutually agreed upon from time to time. The Company agrees to monitor its contractholders’ accounts for excessive trading or market timing activity (as defined in the Fund’s prospectus) and agrees to work with the Price Associates to deter or block any future such activity.
5. Payment for Administrative Services. In consideration of the services to be provided by you, we shall pay you on a monthly basis (“Payments”), from our assets, including our bona fide profits as investment adviser to the Fund, an amount equal to:
(a) 15 basis points (0.15%) per annum of the average aggregate net asset value of shares of the Fund held by the Separate Account under the Participation Agreement, provided, however, that such payments shall only be payable for each calendar month during which the total dollar value of shares of the Fund purchased pursuant to the Participation Agreement exceeds $25,000,000, but is less than $250,000,000;
(b) 25 basis points (0.25%) per annum of the average aggregate net asset value of shares of the Fund held by the Separate Account under the Participation Agreement, provided, however, that such payments shall only be payable for each calendar month during which the total dollar value of shares of the Fund purchased pursuant to the Participation Agreement equals or exceeds $250,000,000.
For purposes of computing the payment to the Company contemplated under this Paragraph 5, the average aggregate net asset value of shares of the Fund held by the Separate Account over a monthly period shall be computed by totaling the Separate Account’s aggregate investment (share net asset value multiplied by total number of shares held by the Separate Account) on each business
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Xxxxxx Investors Life Insurance Company
August 27, 2008
Page 3
day during the calendar month, and dividing by the total number of business days during such month. The payment contemplated by this Paragraph 5 shall be calculated by Price Associates at the end of each calendar month and will be paid to the Company within 30 calendar days thereafter.
6. Nature of Payments. The parties to this Agreement recognize and agree that Price Associates’ Payments to the Company under this Agreement represent compensation for administrative services only and do not constitute payment in any manner for investment advisory services or for costs of distribution of the Contracts or of Fund shares; and further, that these payments are not otherwise related to investment advisory or distribution services or expenses, or administrative services which Price Associates is required to provide to owners of the Contracts pursuant to the terms thereof. You represent that you may legally receive the payments contemplated by this Agreement.
7. Term. This Agreement shall remain in full force and effect for an initial term of one year, and shall automatically renew for successive one-year periods unless either party notifies the other upon 60-days written notice of its intent not to continue this agreement. This Agreement and all obligations hereunder shall terminate automatically upon the redemption of the Company’s and the Separate Account’s investment in the Fund, or upon termination of the Participation Agreement.
8. Amendment. This Agreement may be amended only upon mutual agreement of the parties hereto in writing.
9. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which shall together constitute one and the same instrument.
If this Agreement is consistent with your understanding of the matters we discussed concerning your administration services, kindly sign below and return a signed copy to us.
| Very truly yours, | ||
| X. XXXX PRICE ASSOCIATES, INC. | ||
| By: | /s/ Xxxxxxx X. Xxxxxx | |
| Name: | Xxxxxxx X. Xxxxxx | |
| Title: | V.P. | |
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Xxxxxx Investors Life Insurance Company
August 27, 2008
Page 4
| Acknowledged and Agreed to: | ||
| XXXXXX INVESTORS LIFE INSURANCE COMPANY | ||
| By: | /s/ Xxxxx X. Xxxxx | |
| Name: | Xxxxx X. Xxxxx | |
| Title: | President & COO | |
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PAYMENT INSTRUCTIONS
Please provide the following information (complete both sections below relating to Payment by Wire and Payment by Check):
Check to indicate your preference for type of payment: By Wire X By Check
| Payment by Wire: | Bank Name: | Xxxxx Fargo | ||||
| Bank Address: |
|
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| Bank ABA#: | ||||||
| Account#: | ||||||
| Account Name: | Xxxxxx Investors Life Insurance Company | |||||
| Please Note: Payments less than $25 will be issued by check. | ||||||
| Payment by Check: | Xxxxxx Investors Life Insurance Company | |||||
| 0000 00xx Xxx. XX | ||||||
| Xxxxxx Xxxxxx, XX 00000 | ||||||
| Attn: Dimitrina H Besheva | ||||||
Please provide the name, phone number and e-mail address of a person we may contact relating to such Payments:
| Name: | Dimitrina H Besheva | |
| Phone #: | (000) 000-0000 | |
| E-mail: | xxxxxxxxx.xxxxxxx@xxxxxxxxxxxxxxxx.xxx |
[Complete the W-9 Form Attached]
The Tax ID Number provided will be used by X. Xxxx Price for reporting payments
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