EXHIBIT 99(3)(iv)
LIFE INSURANCE BROKER-DEALER AGREEMENT
LIFE INSURANCE BROKER-DEALER AGREEMENT made as of __________, 199_ between AETNA
LIFE INSURANCE AND ANNUITY COMPANY, an insurance company organized and existing
under the laws of the state of Connecticut, with offices at 000 Xxxxxxxxxx
Xxxxxx, Xxxxxxxx, Xxxxxxxxxxx 00000 (referred to in this Agreement as the
"Company") and ____________________, a ______________________ corporation with
offices at ____________________________________________ (referred to in this
Agreement as "Broker-Dealer").
1. APPOINTMENT AND AUTHORIZATION
(a) The Company wishes to appoint Broker-Dealer as Broker-Dealer of the
Company, and Broker-Dealer agrees to accept this appointment, subject
to the terms and conditions of this Agreement.
(b) The Broker-Dealer is authorized to solicit and submit to the Company
applications for all of the Company's life insurance products
(referred to in this Agreement as "Policies"), including but not
limited to, the Company's variable life insurance products, to deliver
the Policies, to collect first premiums, and to service the business.
(c) The Company and the Broker-Dealer represent that each is registered
with the Securities and Exchange Commission as a Broker-Dealer under
the Securities Exchange Act of 1934, as amended, and that each is a
member in good standing of the National Association of Securities
Dealers, Inc. (referred to in this Agreement as "NASD").
(d) The Company represents that its variable life insurance products are
registered, as necessary, under the Securities Act of 1933, and that
it is qualified to transact the business of insurance in all states
and the District of Columbia, and has received all the necessary state
approvals to sell its Policies.
2. DUTIES OF THE BROKER-DEALER
(a) The Broker-Dealer will comply with all requirements of the Company
governing the submission of applications and shall make available to
the Company all information, whether favorable or unfavorable, which
comes into the Broker-Dealer's possession concerning the underwriting
of any risk.
(b) The Broker-Dealer will obligate the Company only to the extent
authorized (1) by this Agreement, and amendments to this Agreement as
may be made by the Company from time to time; (2) by the rules,
procedures and regulations set forth by the Company; and (3) as may be
authorized in writing by an authorized officer of the Company.
(c) The Broker-Dealer will promptly return to the Company all Policies not
delivered within the prescribed time period.
(d) The Broker-Dealer will notify the Company in writing of a change in
the chief executive officer, if a corporation; a general partner if a
partnership; or the majority ownership of the agency.
3. LIMITATIONS OF BROKER-DEALER'S AUTHORITY
(a) The Broker-Dealer is not authorized and is expressly forbidden on
behalf of the Company to make, alter, modify, waive or change any of
the terms, rates, or conditions of any of the Company's forms,
Policies, contracts, or advertising materials. The Broker-Dealer
shall not discharge contracts or waive forfeitures, quote extra rates,
extend the time of payment of any premium, extend credit, or guarantee
dividends.
(b) The Broker-Dealer is not authorized and is expressly forbidden on
behalf of the Company to estimate future dividends or policy
performance except through the use of authorized projections or
illustrations of the Company.
(c) Any money or property due or to become due the Company from customers
as premiums or otherwise are funds of the Company ("Company Funds").
The Broker-Dealer is not authorized to receive Company Funds except
the initial premiums, and is not authorized to deduct commissions,
service fees, or allowances from any Company Funds it collects. All
Company Funds collected by the Broker-Dealer for the Company must be
immediately delivered to the Company and shall not be commingled with
the Broker-Dealer's personal funds. If any Company Funds are not
remitted to the Company in accordance with this Section, the Company
shall have a first lien on all compensation due or which may become
due the Broker-Dealer to the extent of such funds.
(d) The Broker-Dealer has no exclusive territory, and has no exclusive
rights in any term conversions, policy increases or purchase options,
or any salary budget, group, pension or other multiple-life case.
(e) The Broker-Dealer shall not hold itself out as an employee, partner,
joint venturer, officer, or associate of the Company; nor as an agent
of the Company in any other manner, or for any other purpose, than as
specifically provided in this Agreement.
(f) The Company reserves the right to approve the form of any agreement
between the Broker-Dealer and its employees, agents, and registered
representatives with regard to services provided or compensation paid
in accordance to this Agreement, but such agreement and approval shall
not create any liability on the Company's part whatsoever.
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4. LICENSES
Where consistent with state law, the Broker-Dealer will be responsible for
not only securing and keeping in effect for itself and its employees,
agents, and registered representatives any licenses required to represent
the Company, but also for not allowing any of its employees, agents, or
registered representatives to sell any Company Policy if subject to either
an NASD or state bar or suspension order. The Broker-Dealer agrees to
offer, solicit or service the Company's Policies only through persons who
are properly licensed and appointed by the Company and, as necessary,
registered with the NASD to do so. No person, whether licensed or
unlicensed, may solicit any Company Policy on behalf of the Broker-Dealer
unless approval in writing has been granted by an authorized officer of the
Company.
5. ADMINISTRATIVE PROCEDURES
(a) The Broker-Dealer is not authorized to offer or solicit a Company
Policy for sale until notified by the Company that the Policy has been
approved by the appropriate state and federal authorities, as
required.
(b) The Company controls the sale of all its Policies, and reserves the
unconditional right to refuse to accept or approve any applications or
enrollments obtained by the Broker-Dealer. Assuming Company
acceptance of the application submitted by the Broker-Dealer, each
Policy sold through the Broker-Dealer will be mailed directly from the
Company to the Broker-Dealer's office for personal delivery to the
appropriate person.
(c) Applications, enrollment forms, other Company forms and payments
received by Broker-Dealer's employees, agents, or registered
representatives will promptly be forwarded to the Broker-Dealer, which
will conduct a review to determine the suitability of the proposed
sale. After the Broker-Dealer has conducted its suitability review,
and assuming good order, it will forward all relevant documents,
including any required completed forms and related payments, to the
Company's designated office within two (2) business days, whereupon
the Company will begin its underwriting process.
(d) Broker-Dealer personnel will follow established Company administrative
procedures, unless otherwise provided in this Agreement, with regard
to the processing of applications, prospectus receipts, and related
documents. The Company will, as appropriate, advise the Broker-Dealer
of these procedures.
(e) The Broker-Dealer will be credited with all Policies issued by the
Company upon application bearing its name as Broker-Dealer.
(f) Commission statements and checks related to business generated by the
Broker-Dealer will be mailed directly by the Company to its designated
office for distribution to the Broker-Dealer as directed.
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6. COMPENSATION
(a) The Company will pay the Broker-Dealer in full compensation for all
services rendered by the Broker-Dealer under this Agreement, the
applicable commissions, fees and allowances specified in the Company's
Individual Life Insurance Schedule of Agents Commissions ("Commissions
Schedule") in force on the date of issue of the Policy, on premiums
paid for each Policy credited to the Broker-Dealer under this
Agreement.
(b) The Company reserves the right to revise the Commissions Schedule, but
any revision of Commissions Schedule shall apply only to Policies
thereafter issued. The publication of revisions to the Commissions
Schedule shall constitute notification to the Broker-Dealer, and any
revised Commissions Schedule shall become a part of this Agreement on
the effective date of the revisions.
(c) Commissions based on premiums applicable to the Company's variable
life insurance products will only be paid to or through the Broker-
Dealer if it is properly registered with the NASD.
7. COMMISSIONS ON SPECIAL CASES
Commissions payable on the following cases, irrespective of any other
provision of this Agreement, will be at the rates allowed under the
Company's rules and practices at the time the premium is due:
(a) Premiums on backdated conversions of Term Life Insurance Policies;
(b) Premiums on reinstatement of lapsed policies; and
(c) Premiums on special plans not shown in the Company's rate books, or on
cases carrying special rate quotations.
8. GROUP CONVERSIONS AND WAIVED PREMIUMS
Commissions will not be payable on premiums on conversions of Group and
Employee Insurance, or premiums waived on account of disability.
9. REFUND OF COMMISSIONS
Should the Company for any reason refund or credit to the customer any
premium, the Broker-Dealer will promptly, on demand, refund to the Company
all commissions and other compensation received on such premium.
Commission adjustments will be made on decreases in premium on which first
year commissions have previously been paid.
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10. ADVANCES AND INDEBTEDNESS
(a) The Company is authorized, at any time either before or after the
termination of this Agreement, to deduct from any compensation due
from the Company to the Broker-Dealer the entire amount of any funds,
including, but not limited to, advances or debts, owed by the Broker-
Dealer to the Company or its affiliates, associates, parents or
subsidiaries, but only to the extent of the actual amount owed by the
Broker-Dealer as determined by the Company.
(b) Any compensation paid to the Broker-Dealer for premiums or
considerations later returned or credited to the customer, or any
overpayment of compensation shall be a debt due to the Company from
the Broker-Dealer and payable in accordance with Section 10(a) above.
(c) In addition to all other rights available to the Company as a
creditor, the Company shall have a first lien on all compensation
payable under this Agreement for any of the funds, advances or debts
described in this Section.
(d) To the extent that compensation due to the Broker-Dealer from the
Company is insufficient to cover advances, the difference shall become
a debt due to the Company. Interest at the rate of 6% per annum shall
be charged from the date any indebtedness becomes due and payable to
the Company.
11. GENERAL CONDUCT, REBATES, REPLACEMENTS
(a) The Company will conduct training programs for the appropriate
employees, agents, and registered representatives of the Broker-Dealer
at times and places mutually agreed upon to describe the Company's
Policies and related sales as well as administrative processes. The
Broker-Dealer agrees that it will use its best efforts to participate
in conducting these programs and that the appropriate employees,
agents, and registered representatives will attend these programs
before they will be permitted to sell any Company Policy in accordance
with this Agreement. Moreover, the Broker-Dealer agrees that it will
pay all expenses that its employees, agents, and registered
representatives incur in connection with these programs, as well as,
the cost of any meeting room required in connection with the programs.
(b) The Company and Broker-Dealer agree to cooperate fully in any
investigation or proceeding with respect to any employee, agent, or
registered representative of the Broker-Dealer or the Broker-Dealer
itself to the extent that this investigation or proceeding has been
undertaken in connection with the Company Policies and related
services marketed under this Agreement. Without limiting the
foregoing:
(i) The Company will promptly notify the Broker-Dealer of any
customer complaint or notice of any investigation or
proceeding received by it with respect to the Broker-Dealer
or any employee, agent, or registered representative of the
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Broker-Dealer or the Company that may affect the issuance of
the Policies or services marketed under this Agreement.
(ii) The Broker-Dealer will promptly notify the Company of any
customer complaint or notice of any investigation or
proceeding received by the Broker-Dealer with respect to it
or any employee, agent, or registered representative of the
Broker-Dealer in connection with the Policies or services
marketed under this Agreement or any related activity.
(c) The Broker-Dealer will comply with all rules of the Company and with
applicable federal, state or other laws and regulations governing the
sale of the Company's Policies.
(d) The Broker-Dealer shall not rebate, or allow to be rebated, or offer,
or allow to be offered, all or any part of a commission or premium on
a Policy issued, or to be issued by the Company, or withhold any money
due to, or property of, the Company.
(e) The Broker-Dealer shall not either before or after the termination of
this Agreement induce or endeavor to induce any customers of the
Company to discontinue the payment of premiums or to relinquish a
policy, contract or certificate or induce any other broker-dealer,
agent or general agent of the Company to leave its service.
(f) The Broker-Dealer shall comply with the replacement rules and
regulations of the Company and the state in which the Broker-Dealer is
licensed and shall not directly or indirectly engage in selling
practices involving "twisting" or "switching" of contracts of the
Company or of other companies offering mutual funds, securities, other
investment products, insurance or annuity contracts.
12. ADVERTISING
(a) The Broker-Dealer agrees that it will not, directly or indirectly, use
or disseminate advertising matter, prospectuses, circulars, letters,
booklets, schedules, stationery, broadcasting, or sales material of
any kind concerning the Company or its Policies until approved by an
officer of the Company in writing.
(b) The Company will supply the Broker-Dealer with reasonable quantities
of current prospectuses as filed with the Securities and Exchange
Commission and appropriate sales material. In offering Company
variable Policies, the Broker-Dealer shall use only sales or
promotional material that has been approved by the Company and filed
with the NASD. All Broker-Dealer plans and methods for marketing
Company Policies will be subject to review by the Company on a
periodic basis, but not less frequently than annually.
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13. OWNERSHIP OF RECORDS
(a) All records, customer files and related paperwork, literature,
authorization cards, sales aids, sales and rate manuals, computer
software, supplies and equipment of every kind and nature furnished to
the Broker-Dealer by the Company or obtained by the Broker-Dealer and
relating to the solicitation, service or sale of Policies subject to
this Agreement shall be the exclusive property of the Company and
shall be returned to the Company free from any claims or asserted
retention rights of the Broker-Dealer upon termination of this
Agreement.
(b) The Broker-Dealer shall safely keep and preserve Company property and
shall replace at the Broker-Dealer's expense any item which may be
lost, destroyed or defaced while in the Broker-Dealer's possession or
control. On termination of this Agreement, the Broker-Dealer shall
deliver to the Company, or any person as it may designate, all Company
property in the Broker-Dealer's possession or control. Pending return
of these items, the Company may withhold any and all compensation
which may be due to the Broker-Dealer.
(c) The Broker-Dealer agrees to keep confidential any and all information
obtained pursuant to this Agreement, and shall disclose this
information only if either authorized by the Company or expressly
required by applicable statute, regulation, or other regulatory rule.
14. TERMINATION AND THE RIGHT TO COMPENSATION THEREAFTER
(a) This Agreement may be terminated without cause by either party upon at
least thirty days written notice specifying the termination date.
(b) This Agreement will automatically terminate:
(i) upon the death or total and permanent physical or mental
disability of the Broker-Dealer, if an individual;
(ii) upon the dissolution of the corporation, if the Broker-
Dealer is a corporation;
(iii) upon the dissolution of the partnership, if the Broker-
Dealer is a partnership;
(iv) upon the expiration or lapse of the Broker-Dealer's license
and appointment to represent the Company; or
(v) upon at the end of any calendar year during which the
Broker-Dealer has not maintained the agreed upon thirteen
month life premium persistency, and has not been credited
with the minimum amount of first year commission on life
insurance sold under this Agreement established by the
Company at the date of this Agreement and set forth by the
Company at the beginning of each calendar year thereafter.
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If this Agreement is terminated as provided in Section 18(a) or (b), the
Broker-Dealer shall be entitled to commissions as set forth in the
Commissions Schedule.
(c) The Company may terminate this Agreement for cause at any time,
without prior notice, if:
(i) the Broker-Dealer shall fail to conform to the rules and
regulations of the Company;
(ii) the Broker-Dealer shall have his license to transact
business as contemplated by this Agreement revoked,
suspended, or refused by a state licensing authority;
(iii) the Broker-Dealer shall fail to comply with the laws,
Insurance Department regulations, or other administrative
regulations, governing the insurance business of the state
in which the Broker-Dealer is licensed or of any other state
in which the Company is authorized to do business;
(iv) the Broker-Dealer shall induce, or attempt to induce, any
registered representative, general agent, or any producer
contracted with a general agent, or any other agent or
employee of the Company to leave its service, or to cease
soliciting or writing business for the Company, or to
decrease the volume of business so written, or if the
Broker-Dealer shall improperly induce, or attempt to induce,
any policyholder of the Company to discontinue premium
payments on his policy;
(v) the Broker-Dealer shall make false or misleading statements
about the Company; or
(vi) the Broker-Dealer shall commit any fraud in connection with
the solicitation, sale, or service of any Company Policy.
If the Company terminates this Agreement for cause, no further commission,
service fees, or expense reimbursement allowance shall be payable to the
Broker-Dealer after the termination, except commissions, service fees, or
expense reimbursement allowance which were payable prior to the
termination, less any outstanding indebtedness to the Company.
(d) For purposes of determining whether this Agreement has been breached,
if the Broker-Dealer is a partnership or a corporation, then the acts
of all general partners of the partnership, or of all officers,
directors and voting shareholders of the corporation, as the case may
be, shall be deemed acts of the Broker-Dealer.
(e) In the event that the Broker-Dealer, or any partner of the Broker-
Dealer, or any shareholder of the Broker-Dealer, at any time after the
termination of this Agreement shall improperly induce, or attempt to
induce, any policyholder of the Company to cancel or fail to renew any
insurance with the Company, or shall induce or attempt to induce,
within two years after the termination of this Agreement, any
registered representative, general agent, or any other agent or
employee of the Company to leave its service, or to cease soliciting
or writing business for the Company, or to reduce the volume of
business written, then the Company shall have the right to terminate
all future payments of any sort. This provision shall survive the
termination of the other items and provisions of this Agreement.
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(f) Payments becoming due after termination also shall be subject to the
provisions of Section 10.
(g) Notwithstanding the termination of the Agreement, the Company and
Broker-Dealer acknowledge that each of them shall be individually and
respectively liable, responsible and accountable for any and all
actions undertaken prior to the effective date of the Agreement's
termination.
15. ASSIGNMENT
(a) An assignment of commissions shall not be binding upon the Company
until a copy of the assignment has been received at the Company's Home
Office and approved in writing by an officer of the Company. The
Company does not assume any responsibility for the validity,
sufficiency or tax consequences of any assignment.
(b) This Agreement may not be assigned unless an authorized officer of the
nonassigning party agrees in writing to the proposed assignment.
16. LIABILITIES OF BROKER-DEALER
(a) The Broker-Dealer assumes full responsibility for the supervision of
its employees, agents, and registered representatives in all their
activities relating to the Company under this Agreement.
(b) The Broker-Dealer will indemnify and hold the Company harmless for all
expenses, loss or damage suffered by the Company because of a
violation of, or refusal or failure to comply with the terms of this
Agreement or with any federal or state laws, rules or regulations, by
the Broker-Dealer, the Broker-Dealer's employees, registered
representatives, assigns, and any other persons engaged by or acting
on the Broker-Dealer's behalf. The rights and remedies reserved by
the Company in this Agreement are in addition to and not exclusive of
any other right or remedy available to the Company.
(c) The Company, in its sole discretion and business judgment, may make a
financial settlement with respect to a particular customer's policy or
account in response to this customer's allegation of an error,
omission, or wrongdoing by the Broker-Dealer, its employees, agents,
or registered representatives. If a settlement is made, the Company
will recover the amount of that settlement under Section 10, "Advances
and Indebtedness," as if the settlement is a debt owed by the Broker-
Dealer to the Company.
(d) The Broker-Dealer will reimburse the Company for any and all expenses
incurred by the Company to enforce any of the provisions of this
Agreement.
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17. REVOCATION OF PRIOR AGREEMENTS
The execution of this Agreement by the Company and Broker-Dealer terminates
and supersedes all previous contracts or agreements made between said
parties except as to renewal commissions, first year commissions and the
service fees provided for in those contracts, if any, that may now be due
or shall become due the Broker-Dealer on business written prior to the
effective date of this Agreement. But nothing in this Section shall be
construed to effect or waive any claim of any kind, whether for money or
otherwise, of the Company against the Broker-Dealer or any obligations or
vested right under any prior contract or agreement.
This Agreement shall be effective to cover all applications taken by the
Broker-Dealer on or after the date of this Agreement. Notwithstanding
prior or subsequent oral agreements to the contrary, this Agreement and the
appropriate Commissions Schedule shall constitute the entire agreement
between the parties.
18. STATUS OF BROKER-DEALER
The relationship of the Broker-Dealer and its employees, agents, and
registered representatives to the Company shall be that of an independent
contractor, and nothing contained in the Agreement shall be construed to
create an employer-employee relationship, partnership, or joint venture
between the Company and Broker-Dealer.
19. GOVERNING LAW
This contract shall be governed by the laws of the State of Connecticut.
20. SEVERABILITY
In the event one or more, but not all of the provisions of this Agreement
are declared unlawful or unenforceable by a court of competent
jurisdiction, such determination shall not affect the legality or
enforceability of the remainder of the terms of this Agreement.
21. MODIFICATIONS OF THIS AGREEMENT
Neither this Agreement nor any of its provisions shall be modified or
amended unless in writing and signed by the Company and Broker-Dealer.
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22. NOTICE
(a) All notices and demands made under this Agreement shall be valid only
if in writing and hand-delivered or properly sent by (i) United States
certified or registered mail, postage prepaid, return receipt
requested; or (ii) overnight delivery service such as Xxxxx or Federal
Express with provisions for a receipt and delivery charge prepaid,
addressed as follows or to any other address a party may designate by
giving notice to the other party.
(b) Any notice sent to the Company should be sent to Vice President,
Individual Life Sales, Aetna Life Insurance and Annuity Company, 000
Xxxxxxxxxx Xxxxxx, Xxxxxxxx, XX 00000 and a copy sent to the Company's
Life Sales Manager. Any notice sent to the Broker-Dealer should be
sent to the address indicated on page 1.
23. BENEFIT
This Agreement shall be binding upon, and inure to the benefit of the
parties to this Agreement, their legal representatives, successors, and
assigns (to the extent limited by this Agreement).
24. MISCELLANEOUS
(a) The Company reserves the right to:
(i) modify the amount or plan of any Policy or its premium
rates;
(ii) modify any issue or underwriting rules;
(iii) cancel or rescind any existing Policy;
(iv) withdraw any Policy from any state at any time or introduce
new Policies.
(b) The failure of the Company to enforce the performance of any of the
terms of this Agreement will not constitute a waiver unless agreed to
in writing by the Company and the Broker-Dealer.
(c) The captions and headings of the sections of this Agreement are for
convenience only and are not to be used to interpret, modify, define
or limit the provisions of this Agreement.
The Company and Broker-Dealer, by their duly authorized officers, have caused
this Agreement to be executed.
Signed at ________________________ on _______________________________
Effective: ______________________________
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AETNA LIFE INSURANCE AND ANNUITY CO.
__________________________________ ___________________________________
By:_______________________________ By: _______________________________
(Print Name and Title) (Print Name and Title)
--------------------------------------------------------------------------------
Life Code No. ____________________ Social Security (or EIN) No. ______
Aetna Life Insurance and Annuity Code No. _________________________________
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