EXHIBIT 99-b.8.33
FORM OF PARTICIPATION AGREEMENT
AMONG
ING LIFE INSURANCE AND ANNUITY COMPANY,
PIMCO VARIABLE INSURANCE TRUST,
AND
PIMCO ADVISORS DISTRIBUTORS LLC
EXHIBIT 99-B.8.33
FORM OF PARTICIPATION AGREEMENT
AMONG
ING LIFE INSURANCE AND ANNUITY COMPANY,
PIMCO VARIABLE INSURANCE TRUST,
AND
PIMCO ADVISORS DISTRIBUTORS LLC
ING Life Insurance and Annuity Company ("ING"), PIMCO Variable Insurance
Trust (the "Fund") and PIMCO Advisors Distributors LLC (the "Underwriter")
hereby agree to an arrangement (the "Agreement") whereby the Fund shall be made
available to serve as underlying investment media for Variable Annuity or
Variable Life Contracts ("Contracts") to be issued by ING.
1. Establishment of Accounts; Availability of Fund; Diversification and
Qualification.
(a) ING represents that it has established Variable Annuity Accounts B,
C, D and F and Variable Life Accounts B and C and may establish such other
accounts as may be set forth in Schedule A attached hereto and as may be amended
from time to time with the mutual consent of the parties hereto (the
"Accounts"), each of which is a separate account under Connecticut Insurance
law, and has registered or will register each of the Accounts (except for such
Accounts for which no such registration is required) as a unit investment trust
under the Investment Company Act of 1940 (the "1940 Act"), to serve as an
investment vehicle for the Contracts. Each Contract provides for the allocation
of net amounts received by ING to an Account for investment in the shares of one
of more specified open-end management investment companies available through
that Account as underlying investment media. Selection of a particular
investment management company and changes therein from time to time are made by
the participant or Contract owner, as applicable under a particular Contract.
(b) The Fund and the Underwriter represent and warrant that the
investments of the series of the Fund (each designated a "Portfolio") specified
in Schedule B attached hereto (as may be amended from time to time with the
mutual consent of the parties hereto) will at all times be adequately
diversified within the meaning of Section 817(h) of the Internal Revenue Service
Code of 1986, as amended (the "Code"), and Treasury Regulation Section 1.817-5
and any Treasury interpretations thereof, and that at all times while this
agreement is in effect, all beneficial interests will be owned by one or more
insurance companies or by any other party permitted under Section 1.817-5(f)(3)
of the Regulations promulgated under the Code or by the successor thereto, or by
any other party permitted under a Revenue Ruling or private letter ruling
granted by the Internal Revenue Service.
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(c) ING represents that the Contract are currently, and at the time of
issuance shall be treated as life insurance or annuity insurance contracts,
under applicable provisions of the Code, and that it will make every effort to
maintain such treatment, and this it will notify the Fund and the Underwriter
immediately upon having a reasonable basis for believing the Contract have
ceased to be so treated or that they might not be so treated in the future. ING
agrees that any prospectus offering a contract that is a "modified endowment
contract" as that term is defined in Section 7702A of the Code (or any successor
or similar provision), shall identify such contract as a modified endowment
contract.
2. Sale of Fund Shares; Pricing Information; Orders; Settlement.
(a) The Fund has granted the Underwriter exclusive authority to
distribute the Fund's shares, and has agreed to instruct, and has so instructed,
the Underwriter to make available to ING for purchase on behalf of the Accounts,
shares the Portfolios listed in Schedule B to this Agreement. Such Portfolios
shall be made available to ING in accordance with the terms and provisions of
this Agreement until this Agreement is terminated pursuant to Section 5 or the
Underwriter suspends or terminations the offering of Shares of the Portfolios
thereof, if such action is required by law or by regulatory authorities having
jurisdiction or if, in the sole discretion of the Board acting in good faith and
in light of its fiduciary duties under federal and any applicable state laws,
suspension or termination is necessary in the best interests of the shareholders
of the Portfolios.
(b) The Fund will make Fund shares available to be purchased by ING, and
will accept redemption orders from ING, on behalf of each Account at the net
asset value applicable to each order on those days on which the New York Stock
Exchange is open for trading and on which the Fund calculates its net asset
value pursuant to the rules of the SEC (a "Business Day"). Fund shares shall be
purchased and redeemed in such quantity and at such time determined by ING to be
necessary to meet the requirements of those Contracts for which the Fund serve
as underlying investment media, provided, however, that the Board of Trustees of
the Fund (hereinafter the "Trustees") may upon reasonable notice to ING, refuse
to sell shares of any Portfolio to any person, or suspend or terminate the
offering of shares of any Portfolio if such action is required by law or by
regulatory authorities having jurisdiction or is, in the sole discretion of the
Trustees, acting in good faith and in the best interests of the shareholders of
any Portfolio and is acting in compliance with their fiduciary obligations under
federal and/or any applicable state laws.
(c) The Fund will provide to ING closing net asset value, dividend and
capital gain information at the close of trading each day that the New York
Stock Exchange (the "Exchange" is open (each such day a "Business Day"), and
shall use best efforts to make it available no later than 7:00 p.m. East Coast
time on such Business Day. ING will send via facsimile or electronic
transmission to the Fund or its specified agent orders to purchase and/or redeem
Fund shares by 9:00 a.m. East Coast Time the following business day. Payment for
net purchases will be wired by ING to an account designated by the Fund to
coincide with the order for shares of the Fund.
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(d) The Fund hereby appoints ING as its agent for the limited purpose of
accepting purchase and redemption orders for Fund shares relating to the
Contracts from Contract owners or participants. Orders from Contract owners or
participants received from any distributor of the Contracts (including
affiliates of ING) by ING, acting as agent for the Fund, prior to the close of
the Exchange and prior to the time that the Fund ordinarily calculates its net
asset value as described from time to time in the Fund Prospectus (which as of
the date of execution of this Agreement is 4:00 p.m. Eastern Time) on any given
business day will be executed by the Fund at the net asset value determined as
of the close of the Exchange on such Business Day, provided that the Fund
receives written (or facsimile) notice of such order by 9 a.m. East Coast Time
on the next following Business Day.
(e) Payments for net redemptions of shares of the Fund will be wired by
the Fund to an account designated by ING, and payments for net purchases of the
Fund will be wired by ING to an account designated by the Fund. Payments for net
redemptions and net purchases will be made on the same Business Day as the order
to purchase or redeem Fund shares. Payments shall be in federal funds
transmitted by wire.
(f) In lieu of applicable provisions set forth in paragraphs 2(b) through
2(e) above, 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 Exhibit I to this Agreement.
(g) Each party has the right to rely on information or confirmations
provided by the other party (or by any affiliate of the other party), and shall
not be liable in the event that an error is a result of any misinformation
supplied by the other party.
(h) ING agrees to purchase and redeem the shares of the Portfolios named
in Schedule B offered by the then current prospectus and statement of additional
information of the Fund in accordance with the provisions of such prospectus and
statement of additional information. ING shall not permit any person other than
a Contract owner or Participant to give instructions to ING which would require
ING to redeem or exchange shares of the Fund. This provision shall not be
construed to prohibit ING from substituting shares of another fund, as permitted
by law.
(i) Issuance and transfer of Fund shares shall be by book entry only.
Stock certificates will not be issued to ING or to an Account. Purchase and
redemption orders for Fund shares shall be recorded in an appropriate ledger for
the Account or the appropriate subaccount of the Account.
(j) The parties hereto acknowledge that the arrangement contemplated by
this Agreement is not exclusive; the Fund's shares by sold to other insurance
companies (subject to Section 2(n) hereof) and the cash value of the Contracts
may be invested in other investment companies.
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(k) ING shall not, without prior notice to the Underwriter (unless
otherwise required by applicable law), take any action to operate an Account as
a management investment company under the 1940 Act.
(l) ING shall not, without prior notice to the Underwriter (unless
otherwise required by applicable law), induce Contract Owners to change or
modify the Fund or change the Fund's distributor or investment adviser.
3. Expenses.
(a) Except as otherwise provided in this Agreement, all expenses incident
to the performance by the Fund under this Agreement shall be paid by the Fund,
including the cost of registration of Fund shares with the Securities and
Exchange Commission (the "SEC") and in states where required. The Fund and
Underwriter shall pay no fee or other compensation to ING under this Agreement,
and ING shall pay no fee or other compensation to the Fund or Underwriter,
except as provided herein and in Schedule C attached hereto and made a part of
this Agreement as may be amended from time to time with the mutual consent of
the parties hereto. All expenses incident to performance by each party of its
respective duties under this Agreement shall be paid by that party, unless
otherwise specified in this Agreement.
(b) The Fund or the Underwriter shall provide to ING Post Script files of
periodic fund reports to shareholders and other materials that are required by
law to be sent to Contract owners. In addition, the Fund or the Underwriter
shall provide ING with a sufficient quantity of its prospectuses, statements of
additional information and any supplements to any of these materials, to be used
in connection with the offerings and transactions contemplated by this
Agreement. In addition, the Fund shall provide ING with a sufficient quantity of
its proxy material that is required to be sent to Contract owners. The Fund
shall be permitted to review and approve the typeset form of such material prior
to such printing provided such material has been provided by the Fund to ING
within a reasonable period of time prior to typesetting.
(c) In lieu of the Fund's or Underwriter's providing printed copies of
prospectuses, statements of additional information and any supplements to any of
these materials, and periodic fund reports to shareholders, ING shall have the
right to request that the Fund transmit a copy of such materials in an
electronic format (Post Script files), which ING may use to have such materials
printed together with similar materials of other Account funding media that ING
or any distributor will distribute to existing or prospective Contract owners or
participants, such printing to be at ING's expense.
4. Representations and Warranties
(a) ING represents and warrants (i) that the Contracts are registered
under the 1933 Act (unless exempt therefrom) or will be so registered before the
issuance thereof, (ii) that the Contracts will be issued in compliance in all
material respects with all applicable federal and
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state laws and (iii) that ING will require of every person distributing the
Contracts that the Contract be offered and sold in compliance in all material
respects with all applicable federal and state laws. ING further represents and
warrants that it is an insurance company duly organized and validly existing
under applicable law and that it has legally and validly authorized each Account
as a separate account under Connecticut Insurance Law, and has registered or,
prior to the issuance of any Contracts, will register each Account (unless
exempt therefrom) as a unit investment trust in accordance with the provisions
of the 1940 Act to serve as a separate account for its Contracts, and that it
will maintain such registrations for so long as any Contracts issued under them
are outstanding. ING also represents and warrants that it and each Account are
Qualified Persons.
(b) The Fund represents and warrants that shares of any Portfolio sold
pursuant to this Agreement shall be registered under the 1933 Act and duly
authorized for issuance in accordance with applicable law and that the Fund is
and shall remain registered under the 1940 Act for so long as the shares are
sold.
(c) The Fund represents and warrants that each Portfolio invested in by
an Account is currently qualified as a "regulated investment company" under
Subchapter M of the Code, that it will maintain such qualification under
Subchapter M (or any successor or similar provisions) and will notify ING
immediately upon having a reasonable basis for believing any Portfolio has
ceased to so qualify or might not so qualify in the future.
(d) The Fund makes no representations as to whether any aspect of its
operations, including, but not limited to, investment policies, fees and
expenses, complies with the insurance and other applicable laws of the various
states.
(e) The Fund represents that to the extent that it decides to finance
distribution expenses pursuant to Rule 12b-1 under the 1940 Act, it will have a
board of trustees, a majority of whom are not interested persons of the Fund, to
formulate and approve any plan under Rule 12b-1 to finance distribution.
(f) The Underwriter represents and warrants that it is duly registered as
a broker-dealer under the 1934 Act, a member in good standing of the NASD, and
duly registered as a broker-dealer under applicable state securities laws. The
Underwriter further represents that its operations are in compliance with
applicable law, and it will distribute the Fund's shares in accordance with
applicable state and federal securities laws.
(g) The Fund and the Underwriter represent and warrant that all of their
trustees/directors, officers, employees, investment advisers, and other
individuals or entities dealing with money and/or securities of the Fund are and
shall continue to be at all times covered by a blanket fidelity bond or similar
coverage for the benefit of the Fund in an amount not less than the minimum
coverage as required currently by Rule 17g-1 under the 1940 Act or related
provisions as may be promulgated from time to time. The aforesaid bond shall
include coverage for larceny and embezzlement and shall be issued by a reputable
bonding company.
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(h) ING represents and warrants that all of its directors, officers,
employees, and other individuals/entities employed or controlled by ING dealing
with money and/or securities of the Account are covered by a blanket fidelity
bond or similar coverage for the benefit of the Account, in an amount not less
than $5 million. The aforesaid bond includes coverage for larceny and
embezzlement and is issued by a reputable bonding company. ING agrees to hold
for the benefit of the Fund and to pay to the Fund any amounts lost from
larceny, embezzlement or other events covered by the aforesaid bond to the
extent such amounts properly belong to the Fund pursuant to the terms of this
Agreement. ING agrees to make all reasonable efforts to see that this bond or
another bond containing these provisions is always in effect, and agrees to
notify the Fund and the Underwriter in the event that such coverage no longer
applies.
(i) Each party represents and warrants that it shall comply with any
applicable privacy and notice provisions of 15 U.S.C. [SECTIONS] 6801-6827 and
any applicable regulations promulgated thereunder (including but not limited to
17 C.F.R. Part 248) as they may be amended.
(j) Each party undertakes and agrees to comply, and to take full
responsibility in complying with any and all laws, regulations, protocols and
other requirements relating to money laundering both United States and foreign,
including, without limitation, the International Money Laundering Abatement and
Anti-Terrorist Financing Act of 2001 (Title III of the USA Patriot Act),
hereinafter, collectively the rules, regulations and orders promulgated
thereunder, the "Act," and any requirements and/or requests in connection
therewith, made by regulatory authorities, the other party or their duly
appointed agents, either generally or in respect of a specific transaction,
and/or in the context of a "primary money laundering concern" as defined in the
Act.
Each party agrees as a condition precedent to any transaction
taking or continuing to be in effect, to comply with any and all anti-money
laundering laws, regulations, orders or requirements, and without prejudice to
the generality of the above, to provide regulatory authorities, the other party
or their duly appointed agents, with all necessary reports and information for
them to fulfill their obligations, if any, under the Act for the purposes of
each party, or other third parties complying with any and all anti-money
laundering requirements, including, without limitation, the enhanced due
diligence obligations imposed by the Act, the filing of Currency Transaction
Reports and/or of Suspicious Activity Reports obligations required by the Act,
and/or the sharing of information requirements imposed by the Act.
In the event satisfactory reports and information are not received
within a reasonable time period from the date of the request, each party
reserves the right to reject any transaction and/or cease to deal with the other
party.
Each party represents that it has not received notice of, and to
its knowledge, there is no basis for, any claim, action, suit, investigation or
proceeding that might result in a finding that it is not or has not been in
compliance with the Act, and the rules and regulations promulgated thereunder.
Each party agrees to notify the other party immediately if the representation in
the previous sentence is no longer true or if it has reasonable basis for
believing that such representation may no longer be true.
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Further, ING represents and warrants that it has in place an
anti-money laundering program consistent with the requirements of the Act.
(k) ING represents and warrants that (i) all transactions submitted with
respect to a Business Day in accordance with Section 2 will be received in good
order by ING prior to calculation of the NAV on that Business Day and will be
proceed by ING in compliance with Rule 22c-1 under the 1940 Act; and (ii) ING
will provide the Fund or its agent with assurances regarding the compliance of
its order handling with the requirements of Rule 22c-1 upon reasonable request.
(l) The parties acknowledge that market timing, short-term trading or
excessive trading (hereinafter "market timing") may be harmful to the
Portfolios. Each party represents and warrants that it has implemented policies
and procedures reasonably designed to guard against market timing of the shares
of the Portfolios. Each party further represents and warrants that it will
follow any procedures set forth in the Agreement and its own internal policies
and procedures regarding anti-market timing policies.
(m) ING acknowledges that, pursuant to Form 24F-2, the Fund is not
required to pay fees to the SEC for registration of its shares under the 1933
Act with respect to its shares issued to an Account that is a UIT that offers
interests that are registered under the 1933 Act and on which a registration fee
has been or will be paid to the SEC (a "Registered Account"). ING agrees to
provide the Fund each year within 60 days of the end of the Fund's fiscal year,
or when reasonably requested by the Fund, information as to the number of shares
purchased by a Registered Account and any other Account the interests of which
are not registered under the 1933 Act. ING acknowledges that the Fund intends to
rely on the information so provided and represents and warrants that such
information shall be accurate.
5. Termination.
This agreement shall terminate as to the sale and issuance of new
Contracts:
(a) at the option of either ING, the Underwriter or the Fund, upon sixty
days advance written notice to the other parties;
(b) at the option of ING, upon one week advance written notice to the
Underwriter and the Fund, if Fund shares are not available for any reason to
meet the requirement of Contracts as determined by ING. Reasonable advance
notice of election to terminate shall be furnished by Company;
(c) at the option of either ING, the Underwriter or the Fund, immediately
upon institution of formal proceedings against the broker-dealer or
broker-dealers marketing the Contracts, the Account, ING, the Fund or the
Underwriter by the National Association of Securities Dealers, Inc. (the
"NASD"), the SEC or any other regulatory body;
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(d) upon the determination of the Accounts to substitute for the Fund's
shares the shares of another investment company in accordance with the terms of
the applicable Contracts. ING will give 60 days written notice to the Fund and
the Underwriter of any decision to replace the Fund's' shares;
(e) upon assignment of this Agreement, unless made with the written
consent of all other parties hereto;
(f) if Fund shares are not registered, issued or sold in conformance with
Federal law or such law precludes the use of Fund shares as an underlying
investment medium for Contracts issued or to be issued by ING. Prompt notice
shall be given by the appropriate party should such situation occur.
6. Continuation of Agreement.
(a) Termination as the result of any cause listed in Section 5 shall not
affect the Fund's obligation to furnish its shares to Contracts then in force
for which its shares serve or may serve as the underlying medium ("Existing
Contracts"), unless the Underwriter requests that ING seek an order pursuant to
Section 26(b) of the 1940 Act to permit the substitution of other securities for
the shares of the Portfolios or such further sale of Fund shares is prohibited
by law or the SEC or other regulatory body, or is determined by the Fund's Board
to be necessary to remedy or eliminate an irreconcilable conflict pursuant to
Section 10 hereof.
(b) ING shall not redeem Fund shares attributable to the Contracts (as
opposed to Fund shares attributable to ING's assets held in an Account) except:
(i) as necessary to implement Contract Owner initiated or approved transactions,
(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"), (iii) upon 30 days prior written notice to the
Fund and Underwriter, as permitted by an order of the SEC pursuant to Section
26(b) of the 1940 Act, but only if a substitution of other securities for the
shares of the Portfolios is consistent with the terms of the Contracts, or (iv)
as permitted under the terms of the Contract. Upon request, ING will promptly
furnish to the Fund and the Underwriter reasonable assurance that any redemption
pursuant to clause (ii) above is a Legally Required Redemption. Notwithstanding
any termination of this Agreement, each party's obligation under Section 9 to
indemnify the other parties shall survive.
7. Prospectuses and Proxy Statements; Filed Documents; Proxy Voting
(a) At ING's request, the Fund will provide to ING additional copies of
its financials as soon as they are reasonably available and at least one
complete copy of all registration statements, prospectuses, statements of
additional information, annual and semi-annual reports, proxy statements and all
amendments or supplements to any of the above that relate to the Fund as soon as
reasonably practicable after the filing of such document with the SEC or other
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regulatory authorities. At the Fund's request, ING will provide to the Fund at
least one complete copy of all registration statements, prospectuses, statements
of additional information, annual and semi-annual reports, proxy statements, and
all amendments or supplements to any of the above that relate to the Account
promptly after the filing of such document with the SEC or other regulatory
authority.
(b) The Fund's prospectus shall state that the current Statement of
Additional Information ("SAI") for the Fund is available, and the Fund, at its
expense, shall provide a reasonable number of copies of such SAI free of charge
to ING for itself and for any owner of a Contract who requests such SAI.
(c) The Fund shall provide ING with information regarding the Fund's
expenses, which information may include a table of fees and related narrative
disclosure for use in any prospectus or other descriptive documents relating to
a Contract. ING shall provide prior written notice of any proposed modification
or such information, which notices will describe in detail the manner in which
ING proposes to modify the information, and agrees that it may not modify such
information in any way without the prior consent of the Fund.
(d) Upon request, the Fund will provide via Excel spreadsheet diskette
format or in electronic transmission to ING at least quarterly portfolio
information necessary to update Fund profiles with seven business days following
the end of each quarter.
(f) ING shall not give any information or make any representations or
statements on behalf of the Fund or concerning the Fund or the Underwriter in
connection with the sale of the Contracts other than the information or
representations contained in the registration statement or prospectus or SAI for
the Fund shares, such as registration statement and prospectus or SAI may be
amended or supplemented from time to time, or in reports or proxy statements for
the Fund, or in sales literature or other promotional material approved by the
Fund or its designee or by the Underwriter, except with the written consent of
the Fund or the Underwriter or the designee of either.
(g) ING shall:
(i) solicit voting instructions from Contract Owners
(ii) vote the Fund shares in accordance with instructions received
from Contract Owners; and
(iii) vote Fund shares for which no instructions have been received
in the same proportion as the Funds hares of such Portfolio for which
instructions have been received,
so long as and to the extent that the SEC continues to interpret the 1940 Act to
require pass-through voting privileges for Contract Owners and participants or
to the extent otherwise required by law. ING shall provide pass-through voting
privileges on Fund shares held by unregistered separate accounts to all Contract
Owners, to the extent permitted by law.
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(h) ING will distribute to Contract owners and participants, as
appropriate, all proxy material furnished by the Fund and will vote Fund shares
in accordance with instructions received from such Contract owners and
participants. If and to the extent required by law, ING, with respect to each
group Contract and in each Account, shall vote Fund shares for which no
instructions have been received in the same proportion as shares for which such
instructions have been received. ING and its agents shall not oppose or
interfere with the solicitation of proxies for Fund shares held for such
Contract owners and participants.
(i) Participating Companies (defined in Section 10) shall be responsible
for assuring that each of their separate accounts participating in a Portfolio
calculates voting privileges as required by the Mixed and Shared Exemptive Order
and consistent with any reasonable standards that the Fund may adopt and provide
in writing.
(j) The Fund will provide ING with as much notice as is reasonably
practicable of any proxy solicitation for any Portfolio, and of any material
change in the Fund's registration statement, particularly any change resulting
in a change to the registration statement or prospectus of any Account. The Fund
will work with ING so as to enable ING to solicit proxies from Contract Owners,
or to make changes in its prospectus or registration statement, in an orderly
manner. The Fund will make reasonable efforts to attempt to have changes
affecting Contract prospectuses become effective simultaneously with the annual
updates for such prospectuses.
8. Advertising Materials
(a) Advertising and sales literature with respect to the Fund prepared by
ING or its agents for use in marketing its Contracts will be submitted to the
Fund or its designee for review, and the Underwriter and its Designee for review
before such material is submitted to any regulatory body for review. The Fund or
its designee, and the Underwriter and its designee, shall advise the submitting
part in writing within five (5) Business Days of its approval or disapproval of
such materials.
(b) Advertising and sales literature with respect to ING prepared by the
Fund, the Underwriter or their agents for use in marketing the Fund will be
submitted to ING or its designee for review before such material is submitted to
any regulatory body for review. ING or its designee shall advise the submitting
part in writing within five (5) Business Days of its approval or disapproval of
such materials.
(c) For purposes of this Section, "advertising and sales literature"
includes, but is not limited to, any of the following that refer to the Fund or
any affiliate of the Fund: 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 generally available to customers or the public,
including brochures, circulars, reports, market
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letters, form letters, seminar texts, reprints or excepts 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 agents, employees, and registration statements, prospectuses, SAIs,
shareholder reports, proxy materials, and any other communications distributed
or made generally available with regard to the Fund.
9. Indemnification.
(a) ING agrees to indemnify and hold harmless the Fund and the
Underwriter, and its directors, officers, employees, agents and each person, if
any, who controls the Fund or its Underwriter within the meaning of Section 15
of the Securities Act of 1933 (the "1933 Act") against any losses, claims,
damages or liabilities to which the Fund or any such director, officer,
employee, agent, or controlling person may become subject, under the 1933 Act or
otherwise, insofar as such losses, claims, damages, or liabilities (or actions
in respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the Registration
Statement, prospectus or sales literature of ING 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, or arise out of or as a result of conduct, statements or
representations (other than statements or representations contained in the
prospectuses or sales literature of the Fund) of ING or its agents, with respect
to the sale and distribution of Contracts for which Fund shares are the
underlying investment. ING will reimburse any legal or other expenses reasonably
incurred by the Fund or any such director, officer, employee, agent, investment
adviser, or controlling person in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that ING will
not be liable in any such case to the extent that any such loss, claim, damage
or liability arises out of or is based upon (i) an untrue statement or omission
or alleged omission made in such Registration Statement or prospectus in
conformity with written materials furnished to ING by the Fund specifically for
use therein or (ii) the willful misfeasance, bad faith, or gross negligence by
the Fund or Underwriter in the performance of its duties or the Fund's or
Underwriter's reckless disregard of obligations or duties under this Agreement
or to ING, whichever is applicable. This indemnity agreement will be in addition
to any liability which ING may otherwise have.
(b) The Fund and the Underwriter agree to indemnify and hold harmless ING
and its directors, officers, employees, agents and each person, if any, who
controls ING within the meaning Section 15 of the 1933 Act against any losses,
claims, damages or liabilities to which ING or any such director, officer,
employee, agent or controlling person may become subject, under the 1933 Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the Registration Statement,
prospectuses or sales literature of the Fund 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 material fact required to be stated therein or
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necessary to make the statements therein not misleading. The Fund will reimburse
any legal or other expenses reasonably incurred by ING or any such director,
officer, employee, agent, or controlling person in connection with investigating
or defending any such loss, claim, damage, liability or action; provided,
however, that the Fund will not be liable in any such case to the extent that
any such loss, claim, damage or liability arises out of or is based upon an
untrue statement or omission or alleged omission made in such Registration
Statement or prospectuses which are in conformity with written materials
furnished to the Fund by ING specifically for use therein.
(c) Promptly after receipt by an indemnified party hereunder of notice of
the commencement of action, such indemnified party will, if a claim in respect
thereof is to be made against the indemnifying party hereunder, notify the
indemnifying party of the commencement thereof; but the omission so to notify
the indemnifying party will not relieve it from any liability which it may have
to any indemnified party otherwise than under this Section 9. In case any such
action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein and, to the extent that it may wish to, assume
the defense thereof, with counsel satisfactory to such indemnified party, and
after notice from the indemnifying party to such indemnified party of its
election to assume the defense thereof, the indemnifying party will not be
liable to such indemnified party under this Section 9 for any legal or other
expenses subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation.
10. Potential Conflicts.
(a) ING has received a copy of an application for exemptive relief, as
amended, filed by the Fund on and with the SEC and the order issued by the SEC
dated February 9, 1998 (File No. 812-10822) in response thereto (the "Mixed and
Shared Funding Exemptive Order"). ING has reviewed the conditions to the
requested relief set forth in such application for exemptive relief. As set
forth in such application, the Board of Directors of Fund (the "Board") will
monitor the Fund for the existence of any material irreconcilable conflict
between the interests of the contractholders of all separate accounts
("Participating Companies") investing in the Fund. An irreconcilable material
conflict may arise for a variety of reasons, including: (i) an action by any
state insurance regulatory authority; (ii) 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
actions by insurance, tax or securities regulatory authorities; (iii) an
administrative or judicial decision in any relevant proceeding; (iv) the manner
in which the investments of any portfolio are being managed; (v) a difference in
voting instructions given by variable annuity contractholders and variable life
insurance contractholders; or (vi) a decision by an insurer to disregard the
voting instructions of contractholders. The Board shall promptly inform ING if
it determines that an irreconcilable material conflict exists and the
implications thereof.
12
(b) ING will report any potential or existing conflicts of which it is
aware to the Board. ING will assist the Board in carrying out its
responsibilities under the Shared Funding Exemptive Order by providing the Board
with all information reasonably necessary for the Board to consider any issues
raised. This includes, but is not limited to, an obligation by ING to inform the
Board whenever contractholder voting instructions are disregarded.
(c) If a majority of the Board, or a majority of its disinterested Board
members, determines that a material irreconcilable conflict exists with regard
to contractholder investments in a Fund, the Board shall give prompt notice to
all Participating Companies. If the Board determines that ING is responsible for
causing or creating said conflict, ING shall at its sole cost and expense, and
to the extent reasonably practicable (as determined by a majority of the
disinterested Board members), take such action as is necessary to remedy or
eliminate the irreconcilable material conflict. Such necessary action may
include but shall not be limited to:
(i) withdrawing the assets allocable to the Account from the Fund
and reinvesting such assets in a different investment medium or submitting the
question of whether such segregation should be implemented to a vote of all
affected contractholders and as appropriate, segregating the assets of any
appropriate group (i.e., annuity contract owners, life insurance contract
owners, or variable contract owners of one or more Participating Companies) that
votes in favor of such segregation, or offering to the affected contractholders
the option of making such a change; and/or
(ii) establishing a new registered management investment company
or managed separate account.
(d) If a material irreconcilable conflict arises as a result of a
decision by ING to disregard its contractholder voting instructions and said
decision represents a minority position or would preclude a majority vote by all
of its contractholders having an interest in the Fund, ING at its sole cost, may
be required, at the Board's election, to withdraw an Account's investment in the
Fund and terminate this Agreement; 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 members
of the Board.
(e) If a material irreconcilable conflict arises because a particular
state insurance regulator's decision applicable to ING conflicts with the
majority of other state regulators, then ING will withdraw the affected
Account's investment in the Fund and terminate this Agreement with respect to
such Account after the Board informs ING in writing that it has determined that
such decisions has created an irreconcilable material conflict; 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 Board members. Until the date that the Agreement
is terminated, the Fund shall continue to accept and implement orders by ING for
the purchase (and redemption) of shares of the Fund.
13
(f) For the purpose of this Section 10, a majority of the disinterested
Board members shall determine whether or not any proposed action adequately
remedies any irreconcilable material conflict, but in no event will the Fund be
required to establish a new funding medium for any Contract. ING shall not be
required by this Section 10 to establish a new funding medium for any Contract
if an offer to do so has been declined by vote of a majority of the Contract
owners or participants materially adversely affected by the irreconcilable
material conflict.
(g) If and to the extent the Mixed and Shared Funding Exemptive Order or
any amendment thereto contains terms and conditions different from Sections
7(g), (h) and (i) and 10(a), (b), (c), (d) and (e) of this Agreement, then the
Fund and/or the Participating Companies, as appropriate, shall take such steps
as may be necessary to comply with the Mixed and Shared Funding Exemptive Order,
and Sections 7(g), (h) and (i) and 10(a), (b), (c), (d) and (e) of this
Agreement shall continue in effect only to the extent that terms and conditions
substantially identical to such Sections are contained in the Mixed and Shared
Funding Exemptive Order or any amendment thereto. 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 Fund
and/or the Participating 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 7(g), (h)
and (i) and 10(a), (b), (c), (d) and (e) 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.
11. Regulatory Responses
Each party shall promptly provide to all other parties copies of responses to
no-action requests, notices, orders and other rulings received by such party
with respect to any filings covered by Section 7 of this Agreement.
12. Complaints and Proceedings
(a) The Fund and/or the Underwriter shall immediately notify ING of: (i)
the issuance by any court or regulatory body of any stop order, cease and desist
order, or other similar order (but not including an order of a regulatory body
exempting or approving a proposed transaction or arrangement) with respect to
the Fund's registration statement or the prospectus of any Portfolio; (ii) any
request by the SEC for any amendment to the Fund's registration statement or the
prospectus of any Portfolio; (iii) the initiation of any proceedings for that
purpose or for any other purposes relating to the registration or offering of
the Fund's shares; or (iv) any other action or circumstances that may prevent
the lawful offer or sale of Fund shares in any state or
14
jurisdiction, including, without limitation, any circumstance in which (A) such
shares are not registered and, in all material respects, issued and sold in
accordance with applicable state and federal law or (B) such law precludes the
use of such shares as an underlying investment medium for the Contracts. The
Fund will make every reasonable effort to prevent the issuance of any such stop
order, cease and desist order or similar order and, if any such order is issued,
to obtain the lifting thereof at the earliest possible time.
(b) ING shall immediately notify the Fund and the Underwriter of: (i) the
issuance by any court or regulatory body of any stop order, cease and desist
order, or other similar order (but not including an order of a regulatory body
exempting or approving a proposed transaction or arrangement) with respect to
the Contracts' registration statement or the Contracts' prospectus; (ii) any
request by the SEC for any amendment to the Contracts' registration statement or
prospectus; (iii) the initiation of any proceedings for that purpose or for any
other purposes relating to the registration or offering of the Contracts; or
(iv) any other action or circumstances that may prevent the lawful offer or sale
of the Contracts or any class of Contracts in any state or jurisdiction,
including, without limitation, any circumstance in which such Contracts are not
registered, qualified and approved, and, in all material respects, issued and
sold in accordance with applicable state and federal laws. ING will make every
reasonable effort to prevent the issuance of any such stop order, cease and
desist order or similar order and, if any such order is issued, to obtain the
lifting thereof at the earliest possible time.
(c) Each party shall immediately notify the other parties when it
receives notice, or otherwise becomes aware of, the commencement of any
litigation or proceeding against such party or a person affiliated therewith in
connection with the issuance or sale of Fund shares or the Contracts.
(d) ING shall provide to the Fund and the Underwriter any complaints it
has received from Contract Owners pertaining to the Fund or a Portfolio, and the
Fund and Underwriter shall each provide to ING any complaints it has received
from Contract Owners relating to the Contracts.
13. Cooperation
Each party hereto shall cooperate with the other parties and all appropriate
government authorities (including without limitation the SEC, the NASD and state
securities and insurance regulators) and shall permit such authorities
reasonable access to its books and records in connection with any investigation
or inquiry by any such authority relating to this Agreement or the transactions
contemplated hereby. However, such access shall not extend to attorney-client
privileged information.
14. Customer Complaints
ING shall promptly address all customer complaints and resolve such complaints
consistent with high ethical standards and principles of ethical conduct.
15
15. Miscellaneous.
(a) Amendment and Waiver. Neither this Agreement, nor any provision
hereof, may be amended, waived, discharged or terminated orally, but only by an
instrument in writing signed by all parties hereto.
(b) Notices. All notices and other communications hereunder shall be
given or made in writing and shall be delivered personally, or sent by telex,
telecopier or registered or certified mail, postage prepaid, return receipt
requested, or recognized overnight courier service to the party or parties to
whom they are directed at the following addresses, or at such other addresses as
may be designated by notice from such party to all other parties.
To ING:
ING Life Insurance and Annuity Company
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxx, Counsel
To the Fund:
PIMCO Variable Insurance Trust
000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
Attn: Xxxx Xxxxxxx, Executive Vice President
To the Underwriter:
PIMCO Advisers Distributors LLC
0000 Xxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx, Xx., Managing Director
Any notice, demand or other communication given in a manner prescribed in
this subsection (b) shall be deemed to have been delivered on receipt.
(c) Successors and Assigns. This agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective permitted
successors and assigns.
(d) Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one agreement, and
any party hereto may execute this Agreement by signing any such counterpart.
16
(e) Severability. In case any one or more of the provisions contained in
this Agreement should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby.
(f) Entire Agreement. This Agreement constitutes the entire agreement and
understanding between the parties hereto and supersedes all prior agreement and
understandings relating to the subject matter hereof.
(g) Governing Law. This Agreement shall be governed and interpreted in
accordance with the laws of the State of Connecticut.
(h) It is understood by the parties that this Agreement is not an
exclusive arrangement in any respect.
(i) The terms of this Agreement and the Schedules thereto will be held
confidential by each party except to the extent that either party or its counsel
may deem it necessary to disclose such terms.
17. Limitation on Liability of Trustees, etc.
This agreement has been executed on behalf of the Fund by the undersigned
officer of the Fund in his or her capacity as an officer of the Fund. The
obligations of this agreement shall be binding upon the assets and property of
the Fund only and shall not be binding on any Trustee, officer or shareholder of
the Fund individually.
17
IN WITNESS WHEREOF, the undersigned have executed this Agreement by their
duly authorized officers effective as of the ____ day of _________, _____.
ING LIFE INSURANCE AND ANNUITY COMPANY
By:
__________________________________
Name:
__________________________________
Title:
__________________________________
PIMCO VARIABLE INSURANCE TRUST
By:
__________________________________
Name: Xxxx X. Xxxxxxx
__________________________________
Title: Executive Vice President
__________________________________
PIMCO ADVISORS DISTRIBUTORS LLC
By:
__________________________________
Name:
__________________________________
Title:
__________________________________
18
SCHEDULE A
(For any future separate accounts - See Section 1(a)
19
SCHEDULE B
PIMCO Variable Insurance Trust Administrative Class Portfolios
All Asset Portfolio
CommodityRealReturn Strategy Portfolio
Emerging Markets Bond Portfolio
Foreign Bond Portfolio (U.S. Dollar-Hedged)
Global Bond Portfolio (Unhedged)
High Yield Portfolio
Long-Term U.S. Government Portfolio
Low Duration Portfolio
Money Market Portfolio
Real Return Portfolio
Short-Term Portfolio
StocksPLUS Growth and Income Portfolio
StocksPLUS Total Return Portfolio
Total Return Portfolio
Total Return Portfolio II
20
SCHEDULE C
The following costs, expenses and reimbursements will be paid by the party
indicated:
1. For purposes of Sections 2 and 7, the Fund or the Underwriter shall be
liable to ING for any amount ING 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 or (ii) incorrect or
late reporting of the daily net asset value, capital gain distribution rate of a
Fund, upon written notification by ING, with supporting data, to the
Underwriter. In addition, the Fund or the Underwriter shall be liable to ING for
reasonable systems and out of pocket costs incurred by ING in making a Contract
owner's or a participant's account whole, if such costs or expenses are a result
of the Fund's failure to provide timely or correct net asset values, dividend
and capital gains or financial 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.
2. For purposes of Section 3, the Fund or the Underwriter 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. ING shall pay for the cost of prospectuses and statements of
additional information and 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 Section 3.
3. The Fund shall pay all expenses in connection with the provision to ING of
a sufficient quantity of its proxy material under Section 3. The cost
associated with proxy preparation, group authorization letters, programming for
tabulation and necessary materials (including postage) will be paid by the Fund.
21
EXHIBIT I
To
PARTICIPATION AGREEMENT
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 2(e) of the Fund 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:
(a) Distributor or the Funds will furnish to ING 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 (3) 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 ING 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 ING.
(b) 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,
ING 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 ING 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 ING's or its affiliate's compliance with the
foregoing, ING or its affiliate will be considered the agent of the
Distributor and the Funds, and the Business Day on which Instructions are
received by ING 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 ING 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.
22
(c) ING or its affiliate will wire payment for net purchase orders by the
Fund's NSCC Firm Number, in immediately available funds, to an NSCC
settling bank account designated by ING 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.
(d) NSCC will wire payment for net redemption orders by Fund, in immediately
available funds, to an NSCC settling bank account designated by ING 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.
(e) With respect to (c) or (d) above, if Distributor does not send a
confirmation of ING'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.
(f) If on any day ING 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 ING or its affiliate, as applicable,
as is otherwise provided in the Agreement.
(g) 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. ING 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.
23
