EXHIBIT 1.A3(a)
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DISTRIBUTION AGREEMENT
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AGREEMENT made this _______ day of __________________, by and between
Lutheran Brotherhood, a fraternal benefit society organized under the laws
of the state of Minnesota ("LB"), on its own behalf and on behalf of the LB
Variable Insurance Account I (the "Variable Account"), and Lutheran
Brotherhood Securities Corp., a Pennsylvania corporation ("LBSC").
WITNESSETH:
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WHEREAS, LB has established and maintains the Variable Account, a
separate investment account, pursuant to the laws of Minnesota for the
purpose of selling flexible premium variable life insurance contracts
("Contracts"), to commence after the effectiveness of the Registration
Statement relating thereto filed with the Securities and Exchange Commission
on Form S-6 pursuant to the Securities Act of 1933, as amended (the "1933
Act"); and
WHEREAS, the Variable Account will be registered as a unit investment
trust under the Investment Company Act of 1940 (the "1940 Act"); and
WHEREAS, LBSC is registered as a broker-dealer under the Securities
Exchange Act of 1934 (the "Securities Exchange Act") and is a member of the
National Association of Securities Dealers, Inc. ("NASD"); and
WHEREAS, LB and LBSC wish to enter into an agreement to have LBSC act
as the Company's principal underwriter for the sale of the Contracts through
the Variable Account;
NOW, THEREFORE, the parties agree as follows:
1. APPOINTMENT OF THE DISTRIBUTOR
LB agrees that during the term of this Agreement it will take
all action which is required to cause the Contracts to comply
as an insurance product and a registered security with all
applicable federal and state laws and regulations. LB appoints
LBSC and LBSC agrees to act as the principal underwriter for
the sale of Contracts to the public, during the term of this
Agreement, in each state and other jurisdiction in which such
Contracts may lawfully be sold. LBSC shall offer the Contracts
for sale and distribution at premium rates set by LB.
Applications for the Contracts shall be solicited only by
representatives duly and appropriately licensed or otherwise
qualified for the sale of such Contracts in each state or other
jurisdiction. LB shall undertake to appoint LBSC's qualified
registered representatives as life insurance or annuity agents
of LB. Completed applications for Contracts shall be
transmitted directly to LB for acceptance or rejection in
accordance with underwriting rules established by LB. Initial
premium payments under the Contracts shall be made by check
payable to LB and shall be held at all times by LBSC or its
registered representatives in a fiduciary capacity and remitted
promptly to LB. Anything in this Agreement to the contrary
notwithstanding, LB retains the ultimate right to control the
sale of the Contracts and to appoint and discharge life
insurance agents of LB. LBSC shall be held to the exercise of
reasonable care in carrying out the provisions of this
Agreement.
2. SALES AGREEMENTS
LBSC is hereby authorized to enter into separate written
agreements, on such terms and conditions as LBSC may determine
not inconsistent with this Agreement, with one or more
registered representatives who agree to participate in the
distribution of Contracts. Such registered representatives
shall be registered as securities agents with the NASD. LBSC
and its registered representatives soliciting applications for
Contracts shall also be duly and appropriately licensed,
registered or otherwise qualified for the sale of such
Contracts (and the riders and other policies offered in
connection therewith) under the insurance laws and any
applicable blue sky laws of each state or other jurisdiction in
which LB is authorized to offer the Contracts. LBSC shall have
the responsibility for ensuring that its registered
representatives are properly supervised. LBSC shall assume any
legal responsibilities of LB for the acts, commissions or
defalcations of such registered representatives insofar as they
relate to the sale of the Contracts. Applications for
Contracts solicited by LBSC through its registered
representatives shall be transmitted directly to LB. All
premium payments under the Contracts shall be made by check to
LB and, if received by LBSC, shall be held at all times in a
fiduciary capacity and remitted promptly to LB.
3. LIFE INSURANCE OR ANNUITY LICENSING
LB shall be responsible for ensuring that the registered
representatives are duly qualified under the insurance laws of
the applicable jurisdictions to sell the Contracts.
4. SUITABILITY
LB wishes to ensure that Contracts sold by LBSC will be issued
to purchasers for whom the Contract will be suitable. LBSC
shall take reasonable steps to ensure that the various
registered 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 registered
representative after reasonable inquiry of such applicant
concerning the applicant's insurance and investment objectives,
financial situation and needs, and the likelihood that the
applicant will continue to make the premium payments
contemplated by the Contracts.
5. PROMOTION MATERIALS
LB shall have the responsibility for furnishing to LBSC and its
registered representatives sales promotion materials and
individual sales proposals related to the sale of the
Contracts. LBSC shall not use any such materials that have not
been approved by LB.
6. COMPENSATION
LB shall arrange for the payment of commissions directly to
those registered representatives of LBSC who are entitled
thereto in connection with the sale of the Contracts on behalf
of LBSC, in the amounts and on such terms and conditions as LB
and LBSC have determined, provided, however, that such terms,
conditions and commissions as are set forth in or as are not
inconsistent with the Prospectus included as part of the
Registration Statement for the Contracts and effective under
the 1933 Act. LB may, at its option, adjust the commissions
paid for contracts and riders hereafter sold, by giving written
notice to LBSC thirty days in advance of such change.
LB shall reimburse LBSC for the costs and expenses incurred by
LBSC in furnishing or obtaining the services, materials and
supplies required by the terms of this Agreement, in the
initial sales efforts and the continuing obligations hereunder.
7. RECORDS
LBSC shall have the responsibility for maintaining the records
of representatives licensed, registered and otherwise qualified
to sell the Contracts. LBSC shall maintain such other records
as are required of it by applicable laws and regulations. The
books, accounts and records of LB, the Variable Account and
LBSC shall be maintained so as to clearly and accurately
disclose the nature and details of the transactions. All
records maintained by LBSC or in connection with this Agreement
shall be the property of LB and shall be returned to LB upon
termination of this Agreement, free from any claims or
retention of rights by LBSC. LBSC shall keep confidential any
information obtained pursuant to this Agreement and shall
disclose such information, only if LB has authorized such
disclosure, or if such disclosure is expressly required by
applicable federal or state regulatory authorities.
8. INVESTIGATIONS AND PROCEEDINGS
(a) LBSC and LB agree to cooperate fully in any insurance
regulatory investigation, proceeding or judicial
proceeding arising in connection with the Contracts
distributed under this Agreement. LBSC and LB further
agree to cooperate fully in any securities regulatory
investigation, proceeding or judicial proceeding with
respect to LB, LBSC, their affiliates and their agents or
representatives to the extent that such investigation or
proceeding is in connection with Contracts distributed
under this Agreement. LBSC 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 the LB's operations are
being conducted in a manner consistent with any
applicable law or regulation.
(b) In the case of a written customer complaint, LBSC and LB
will cooperate in investigating such complaint and any
response to such complaint will be sent to the other
party to this Agreement for approval not less than five
business days prior to its being sent to the customer or
regulatory authority, except that if a more prompt
response is required, the proposed response shall be
communicated by telephone or telegraph.
9. TERMINATION
This Agreement shall terminate automatically upon its
assignment by either party without the prior written consent of
both parties. This Agreement may be terminated at any time by
either party on 60 days' written notice to the other party,
without the payment of any penalty. Upon termination of this
Agreement all authorizations, rights and obligations shall
cease except the obligation to settle accounts hereunder,
including commissions on premiums subsequently received for
Contracts in effect at time of termination, and the agreements
contained in paragraph 8 hereof.
10. REGULATION
This Agreement shall be subject to the provisions of the
1933 Act, the 1940 Act and the Securities Exchange Act and the
rules, regulations and rulings promulgated thereunder and of
the applicable rules and regulations of the NASD, from time to
time in effect, and the terms hereof shall be interpreted and
construed in accordance therewith.
11. SEVERABILITY
If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the
remainder of this Agreement shall not be affected thereby.
12. APPLICABLE LAW
This Agreement shall be construed and enforced in accordance
with and governed by the laws of the State of Minnesota.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.
LUTHERAN BROTHERHOOD
By
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LUTHERAN BROTHERHOOD
SECURITIES CORP.
By
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