Exhibit 10.8
SELLING AGREEMENT
Agreement, made this 2nd day of August, 1999, by and between Lincoln Benefit
Life Company ("LBL"), a Nebraska Corporation; Allstate Life Financial Services,
Inc. ("ALFS"), a Delaware Corporation, and LSA Securities, Inc. ("BD"), an
Oregon Corporation. This Agreement will be construed in accordance with the laws
of the State of Nebraska.
LINCOLN BENEFIT LIFE COMANY: ALLSTATE LIFE FINANCIAL SERVICE, INC.
By: /s/ Xxxxxx X. Xxxxxx By: /s/ Xxxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxx
BROKER/DEALER ASSOCIATED INSURANCE AGENCY (If BD is
utilizing such agency pursuant to
Section 12)
LSA Securities, Inc.
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(Name) (Name)
000 Xxxxx 00xx Xxxxxx
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(Street Address) (Street Address)
Xxxxxxx, XX 00000
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(City, State, Zip) (City, State, Zip)
By: /s/ Xxxxx X. Xxxxxx By:
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Xxxxx X. Xxxxxx
Title: President Title:
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For States:
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Whereas, LBL issues certain variable insurance contracts/policies ("Contracts")
described in this Agreement, which are deemed securities under the Securities
Act of 1933 ("1933 Act"); and
Whereas, ALFS is duly licensed as a Broker/Dealer with the National Association
of Securities Dealers, Inc. ("NASD") and the Securities and Exchange Commission
("SEC"); and
Whereas, BD is duly licensed as a Broker/Dealer with the NASD and the SEC, and
Whereas, each Associated Insurance Agency is an insurance agent in the states
noted above; and
Whereas, LBL has appointed ALFS as the Underwriter of the Contracts, and
Whereas, LBL and ALFS propose to have Associated Insurance Agency and BD's
representatives ("Representatives") who are also duly licensed insurance agents
solicit sales of the Contracts, and
Whereas, ALFS delegates to BD, to the extent legally permitted, training and
certain administrative responsibilities and duties in connection with sales of
the Contracts.
NOW THEREFORE, in consideration of the premises and mutual promises contained
herein the parties hereto agree as follows:
1. APPOINTMENT
ALFS hereby authorized BD to supervise solicitations of the Contracts, and to
facilitate solicitations of sales of the Contracts which are described in the
Schedule(s) of Commissions attached hereto. LBL hereby appoints Associated
Insurance Agency to solicit sales of the contracts.
2. REPRESENTATIONS
a. LBL, ALFS, BD and Associated Insurance Agency each represents to the other
that it and the above signed officers have full power and authority to
enter into this Agreement.
x. XXXX represents to BD shall it is registered as a Broker/Dealer under the
Securities Exchange Act of 1934 ("1934 Act") and under the Blue Sky Laws of
each jurisdiction in which such registration is required for the sale of
the Contracts and that ALFS is a member of the NASD.
c. BD represents to ALFS that it is registered as a Broker/Dealer under the
1934 Act and under the Blue Sky Laws of each jurisdiction in which such
registration is required for the sale of the Contracts, and that BD is a
member of the NASD.
d. LBL represents to BD and Associated Insurance Agency that the Contracts,
including related separate accounts, shall comply with the registration and
all other applicable requirements of the 1933 Act and the Investment
Company Act of 1940, and the rules and regulations thereunder, including
the letters of any order of the SEC with respect thereto.
e. LBL represents to BD and Associated Insurance Agency that the Contracts it
issues have been duly filed and approved by the state insurance departments
in such jurisdictions where it is authorized to contract business.
f. LBL represents to BD that the Contract prospectuses included in LBL's
Registration Statement and in post-effective amendments therein, and any
supplements thereto, as filed or to be filed with the SEC, as of their
respective effective dates, contain or will contain. All statement and
information which are required to be stated therein by the 1933 Act and in
all respects conform or will conform, to the requirements thereof.
g. If BD utilizes an Associated Insurance Agency, BD represence that the
Associated Insurance Agency in licensed in all states in which it conducts
business. BD and the Associated Insurance Agency represent that they are in
compliance with the terms and conditions of no-action letters issued by the
staff of the SEC with respect to non-registration as a broker/dealer of an
insurance agency associated with a registered broker/dealer. BD and
Associated Insurance Agency shall notify ALFS immediately in writing if BD
and/or such agency fall to comply with any such terms and conditions and
shall take such measures as may be necessary to comply with any such terms
and conditions. If Associated Insurance Agency is the same person as BD,
this Paragraph g does not apply, and BD shall undertake all the duties,
responsibilities and privileges under this Agreement.
h. BD represents to ALFS that it has adopted supervisory procedures and
maintains a compliance manual that addresses:
(1) Maintenance of appropriate net capital,
(2) suitability review procedures for the production of variable products,
(3) proper selling methods to avoid misrepresentations,
(4) rules regarding the replacement/churning of variable products.
3. COMPLIANCE WITH NASD RULES OF FAIR PRACTICE AND FEDERAL AND STATE
SECURITIES AND STATE INSURANCE LAWS
BD agrees to abide by all rules and regulations of the NASD, including its
Conduct and Membership and Registration Rules, and BD and Associated Insurance
Agency agree to comply with all applicable state and federal laws and the rules
and regulations of authorized regulatory agencies affecting the sale of the
Contracts.
4. LICENSING AND/OR APPOINTMENT OF REPRESENTATIVES
a. BD and Associated Insurance Agency are hereby specifically authorized to
designate those registered representatives of BD, or individuals associated
with the Associated Insurance Agency ("Agents"), proposed to be engaged in
solicitation of sales of the Contracts for appointment by LBL as individual
insurance agents. BD and Associated Insurance Agency shall not propose
registered representative, or Agent, for appointment unless such
representative, or Agent, is duly licensed as an insurance agent in the
state(s) in which it is proposed that such representative, or Agent, engage
in solicitations of sales of the Contracts. BD and Associated Insurance
Agency together shall be responsible for registered representatives', and
Agents', compliance with applicable state insurance agent licensing laws.
b. BD and Associated Insurance Agency shall assist LBL and ALFS in the
appointment of BD's registered representatives; and Agents, under
applicable insurance laws, to sell the Contracts. BD and Associated
Insurance Agency shall comply with LBL requirements for, including the
General Letter of Recommendation (attached as Exhibit A), in submitting
licensing or appointment documentation for proposed registered
representatives and Agents. BD and Insurance Agency agree to provide LBL
and ALFS with a re-certification of those provisions set forth in the
General Letter of Recommendation as may be requested from Section 2 above
and time to time. All such documentation shall be submitted by BD or
Associated Insurance Agency to LBL or its designated agent licensing
administrator.
c. LBL reserves the right to refuse to appoint any such designated individual
or, once appointed, to terminate or refuse to renew the appointment of any
such designated individual. Only those registered representatives who are
duly licensed as insurance agents and appointed by LBL (herein,
"Representatives") shall have authority to solicit sales of the Contracts.
Only those Agents who are registered representatives of BD shall have
authority to solicit sales of the Contracts. Agents who are not registered
representatives of BD are not authorized to sell Contracts. BD and
Associated Insurance Agency shall notify ALFS immediately in writing if any
Representative appointed by LBL ceases to be a registered representative of
BD or if any Representative or Agent ceases to be properly licensed in any
state.
5. SUPERVISION OF REPRESENTATIVES
a. BD shall have full responsibility for training and supervision of all
Representatives associated with BD who are engaged directly or indirectly
in the offer or sale of the Contracts and all such persons shall be subject
to the control of BD with respect to such persons' activities in connection
with the sale of the Contracts. BD shall comply with the administrative
procedures of LBL and ALFS involving federal securities law and state
insurance law. There should be a comparable Representative for the
Associated Insurance Agency.
b. Before Representatives and Associated Insurance Agency engage in the
solicitation of applications for the Contracts, BD and Associated Insurance
Agency will cause (1) the Representatives to be registered representatives
of BD; (2) the Representatives to qualify under applicable federal and
state laws to engage in the sale of the Contracts; (3) the Representatives
to be trained in the sale of the Contracts; and (4) such Representatives to
limit solicitation of applications for the Contracts to jurisdictions where
LBL has authorized such solicitation.
c. BD is specifically charged with the responsibility of supervising and
reviewing its Representatives use of sale literature and advertising and
all other communications with the public in connection with the Contracts.
No sales solicitation, including the delivery of supplemental sales
literature or other such materials, shall occur, be delivered to, or used
with a prospective purchaser unless accompanied or preceded by the
appropriate then current prospectus(es).
d. In the event a Representative or Agent falls to meet the BD's or Associated
Insurance Agency's rules and standards, BD or Associated Insurance. Agency
shall notify LBL and shall act to terminate the sales activities of such
Representative or Agent relating to the Contracts.
e. Upon request by LBL, BD and Associated Insurance Agency shall furnish
appropriate records or other documentation to evidence BD's and Associated
Insurance Agency's diligent supervision.
6. SALES PROMOTION MATERIAL AND ADVERTISING
a. BD, Associated Insurance Agency, Agents and Representatives, in connection
with the offer or sale of the Contracts or Solicitation or a payment or
other transaction under a Contract, shall not give any information or make
any representations or statements, written or oral concerning the Contracts
inconsistent with information or representations contained in the
prospectus, statement of additional information and registration statement
for the Contracts or in reports or proxy statements thereof, or in
promotional, sales or advertising material or other information supplied
and approved in writing by ALFS for such use, in the contracts or materials
furnished by LBL BD, Associated Insurance Agency, Agents and
Representatives may not modify or represent that they may modify any such
prospectus, statement of additional information, registration statement
promotional sales or advertising materials.
b. No item of sales promotion materials or advertising relating to the
Contracts, including any illustrations or software programs therefor, shall
be used by BD, Associated Insurance Agency, Agents or Representatives
unless the specific item has been provided by LBL and ALFS or has first
been approved in writing by LBL and ALFS for use. LBL and ALFS reserve the
right to recall any material provided by them at any time for any reason,
and BD and Associated Insurance Agency shall promptly comply with any such
request for the return of material and shall not use such material
thereafter.
7. ETHICAL MARKET CONDUCT COMPLIANCE
In addition to the requirement that you comply with the rules and regulations
pertaining to supervision, underwriting practices, acceptance of risks, delivery
of policies and all other areas of LBL's business, the BD and BD's
representatives are required to:
a. Comply with LBL's and ALFS's policies and procedures concerning the
replacement of life insurance policies and security policies. A replacement
occurs whenever an existing life insurance policy or annuity is terminated,
converted, or otherwise changed in value. For any transaction involving a
replacement, LPL and ALFS required you to:
(1) recommend the replacement of an existing policy only when replacement
in the best interest of the customer.
(2) fully disclose all relevant information to the customer, which
information includes: 1) comparison of old and new Premiums, expenses
and surrender charges, cash values, and death benefits; 2) any loss of
cash value or policy value by surrendering the existing policy; 3) all
guaranteed and maximum values of both policies 4) the fact that a new
contestability and suicide period starts under the new policy;
and 5) the requirement that the customer must be re-underwritten for
the new policy;
(3) provide state required replacement notices to customers on the same
day the application is taken and indicate on the application that the
transaction in values the full or partial replacement of an existing
policy;
(4) never ??? that a customer cancel an existing policy until a new policy
is in force and the customer has determined that the new policy is
acceptable.
b. Adhere to LBL's rules and regulations concerning ethical market conduct,
which require that you:
(1) carefully evaluate the insurance needs and financial objectives of
your clients, and use ??? tools (e.g. policy illustrations and sales
brochures) to determine that the insurance or annuity you are
proposing meets there needs:
(2) maintain a current license and valid appointment in all states in
which you promote the sale of LBL, products to customers and keep
current of changes in insurance laws and regulations by reviewing the
bullettin and newsletters that LBL publishes;
(3) comply with LBL policies concurring replacements and refrain from
providing false or misleading information about a competitor or
competing product or otherwise making disparaging remarks about a
competition
(4) submit all advertising materials intended to promote the sale of an
LBL product to the home office for approval prior to use.
(5) immediately report to LBL any customer complaints, whether written or
oral, and assist LBL in resolving the complaint to the satisfaction of
all parties;
(6) communicate these standards to any Producers or office personnel that
you directly supervise and request their agreement to be bound by
these conditions as well.
8. SECURING APPLICATIONS
All applications for Contracts shall be made on application forms supplied by
LBL. BD will review all sales for suitability and all applications for
completeness and correctness as to form. BD will promptly, but in no case later
than the end of the next business day following receipt by BD or a
Representative forward to LBL all complete and correct applications for suitable
transactions, together with any payments received with the applications, without
deduction for compensation, LBL reserves the right to reject any Contract
application and return any payment made in connection with an application which
is rejected, Contracts issued on accepted applications will be forwarded to BD
or its Representative? for delivery to the Contract Owner.
9. PAYMENTS RECEIVED BY BD
All premium payments (hereinafter collectively referred to as "Payments") are
the property of LBL and shall be transmitted to LBL by BD immediately upon
receipt by BD or Associated Insurance Agency or any Agent or Representative in
accordance with the administrative procedures of LBL without any deduction or
offset for any reason. Including by example but not limitation, any deduction or
offset for compensation claimed by BD. CUSTOMER CHECKS SHALL BE MADE PAYABLE TO
THE ORDER OF "LINCOLN BENEFIT LIFE COMPANY"
10. COMMISSIONS PAYABLE
Commissions payable in connection with the contracts shall be paid to BD or
Associated insurance Agency according to the Commission Schedule(s) relating to
this Agreement as they may be amended from time to time and in effect at the
time the Contract Payments are received by LBL LBL, reserves the right to revise
the Commission Schedules at any time upon at least thirty (30) days prior
written notice to BD. Compensation to the BD's Representatives for Contracts
solicited by the Representatives and issued by LBL will be governed by agreement
between BD and its Representatives and its payment will be the BD's
responsibility
BD's right to any commissions, or any other thing of value shall case if BD or
its representatives violate laws and regulations, including but not limited to,
unfair trade practices, life insurance and annuity advertising, replacement of
lif insurance and annuities, sales illustrations and agent licensing.
11. CANCELLATION OF POLICY
If LBL is required to refund premiums or return contract values and waive
surrender charges on any Contract for any reason, then no commission will be
payable with respect to said premiums and any commission previously paid for
said premiums must be refunded to ALFS. ALFS agrees to notify BD within thirty
(30) days after it receives notice from LBL of any premium refund or a
commission chargeback.
12. ADDITIONAL PARTY TO THIS AGREEMENT
In the event that BD is not licensed as an insurance agency in any state where
it wishes to solicit contracts, but utilizes an Associated Insurance Agency to
satisfy state insurance laws, such Associated Insurance Agency shall sign this
Agreement and BD shall countersign this Agreement, and BD and its Associated
Insurance Agency shall be duly bound thereby.
13. HOLD HARMLESS AND INDEMNIFICATION PROVISIONS
No party to this Agreement will be liable for any obligation, act or omission of
the other. Each party to this Agreement will hold harmless and Indemnity LBL,
ALFS, and BD, as appropriate, for any laws or expenses suffered as a result of
the violation or non compliance by that party or the Associated Persons of that
party by any applicable law or regulation. The term "Associated Person" as used
herein shall be defined consistently with the definition of such term as
contained in Article I of the NASD By-Laws.
Without limiting the above paragraph, in situations when "as of pricing is
necessary in connection with the Contracts (and a loss in incurred to compensate
the Contract owner for reduced Contract values) the party whose actions resulted
in the ??? will bear the ??? according to pricing procedures established by LBL.
14. NON-ASSICNABILITY PROVISION
This Agreement may not be assigned by any party except by mutual consent.
15. NON-WAIVER PROVISION
Failure of any party to terminate the Agreement for any of the causes set forth
in this Agreement will not constitute waiver of the right to terminate this
Agreement at a later time for any of these causes.
16. AMENDMENTS
Except as stated in Paragraph 10, no amendment to this Agreement will be
effective unless it is in writing and signed by all the parties hereto.
17. INDEPENDENT CONTRACTORS
BD and its Representatives are independent contractors with respect to LBL and
ALFS.
18. NOTIFICATION OF DISCIPLINARY PROCEEDINGS
a. BD and Associated Insurance Agency agree to notify ALFS in a timely fashion
of any disciplinary proceedings against any of BD's Representatives
soliciting sales of the Contracts or any thereowned or filed arbitration
action or civil litigation listing out of BD's solicitation of the
Contracts.
b. BD and Associated Insurance Agency shall cooperate with LBL in
investigating and responding to any customer complaint, attorney demand, or
inquiry received from state insurance departments or other regulatory
agencies or legislative bodies, and in any settlement or trail of any
actions arising out of the conduct of business under this Agreement.
c. Any response by BD or Associated Insurance Agency to an individual customer
complaint will be sent to LBL and ALFS for approval not less than five (5)
business days prior to it being sent to the customer, except that if a more
prompt response is required, the proposed response may be communicated by
telephone, facsimile or in person.
19. BOOKS AND RECORDS
a. LBL, ALFS, BD and Associated Insurance Agency agree to maintain the books,
accounts and records so as to clearly and accurately disclose the nature
and details of transactions and to assist each other in the timely
preparation of records. ALFS and BD shall each submit such records to the
regulatory and administrative bodies which have jurisdiction over LBL or
the underlying mutual fund shares.
b. Each party to this Agreement shall promptly furnish to the other party any
reports and information which the other party may request for the purpose
of meeting its reporting and record keeping requirements under the
insurance laws of any state, and under the federal and state securities
laws or the rules of the NASD.
20. SUCESSOR ORGANIZATIONS
a. Upon written notice to ALFS, BD shall have the right to appoint a successor
BD in assume its duties, responsibilities and privileges under this
Agreement. ALFS reserves the right to reject the appointment of any
successor BD and shall provide written notice of such rejection to BD.
b. Upon written notice to LBL. Associated Insurance Agency shall have the
right to appoint a successor Associated Insurance Agency or additional
Associated Insurance Agencies to assume its duties, responsibilities and
privileges under this Agreement. LBL reserves the right to reject the
appointment of any successor Associated Insurance Agency or additional
Associated Insurance Agencies and shall provide written notice of such
rejection to Associated Insurance Agency
21. CONFIDENTIALITY
Each party to this Agreement shall maintain the confidentiality of any material
designated as proprietary by another party, and shall not use or disclose such
information without the prior written consent of the party designated such
material as proprietary.
22. LIMITATIONS
No party other than LBL shall have the authority on behalf of LBL to make,
alter, or discharge any Contract issued by LBL, to waive any forfeiture or to
grant, permit, or to extend the time of making any Payments, or to alter the
forms which LBL may prescribe or substitute other forms in place of prescribed
by LBL or to enter into any proceeding in a court of law or before a regulatory
agency in the name of or on behalf of LBL
23. TERMINATION
This Agreement may be terminated at the option of any party upon ten (10) days
written notice to the other parties, or at the option of any party hereto upon
the breach by any party of the covenants and terms of this Agreement
24. NOTICE
All notices to LBL and ALFS relating to this Agreement should be sent to Lincoln
Benefit Xxxx Xxxxxx, Xxxxxxx Xxxxxxxx 00000-0000. All notices to BD will be duly
given if mailed to the address shown above.
25. SEVERABILITY
Should any provision of this Agreement be held unenforceable, those provisions
not affected by the determination of unenforceability shall remain in full force
and effect.
26. JURISDICTION AND VENUE
The execution and performance of this Agreement involves transacting business in
the State of Nebraska by you with LBL. This agreement shall be governed by and
construed according to the laws of the State of Nebraska. All actions with
respect thereto shall be brought in a court of competent Jurisdiction in the
State of Nebraska.
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SCHEDULE OF COMMISSIONS
Subject to the terms and conditions of the Selling Agreement you shall be
compensated for AFA generated business according to the following schedule of
the policy forms shown. The payment of commissions is subject to the rules and
practices of Lincoln Benefit Life Company ("LBL or COMPANY"). By submission of
an application or the acceptance of commission, you agree to be bound by the
provisions of this schedule.
Plan Name Plan ? % Of Premium Trail Commissions
Investor's Select Variable Universal Life VUL-9390
Option A-First Year Target Premium 110 -
Renewal Premiums - Up to Target 4.00 -
Excess (All Years) - Issue Ages: 0-49 4.00 -
50-54 3.00 -
55-59 2.00 -
60-64 1.00 -
65+ 0 -
Consultant Variable Universal Life VUL-9800
Option A-First Year Target Premium 115 -
First Year Excess and Renewal Years 2-5 4.00 -
Trail Commission (Years 6+) .35
VARIABLE UNIVERSAL LIFE
(a) All premium paid into the policy during the first 12 months will be
credited to the first year target premium until the full first year target
premium has been paid. Any excess first year premium and all ??? premium
will be commissioned as showed in the table.
(b) If a term plan is exchanged for a variable universal life policy, full
first year commissions will be paid on the premium actually paid by the
policy owner. No commission will be payable on premiums which are paid by
applying a premium exchange allowance.
(c) No first year commission will be paid on any additional target premium
resulting from a temporary substandard extra premium.
(d) Renewal commissions will not be paid on premiums paid under a continuation
of premium rides.
(e) If the withdrawal charges are waived by the COMPANY when an existing policy
value is rolled over to a new policy, commissions on the new policy will be
reduced in accordance with the COMPANY'S published rules.
(f) The Primary Insured Term Rider ("Prime Term Rider") for Investor's Select
VUL and Consultant VUL do not increase target premium for these plans.
Premium paid in the first year reward the Prime Term Rider 'safety net'
will be commissioned at the excess/renewal rate.
(g) For Investor's Select VUL.
1. For issue ages 0-69, the target premium is equal to the 'safety net'
premium for the minimum guaranteed death benefit for issue ages 70+,
the target is frozen as the age 69 level.
2. An increase in face amount after issue will not result in an increase
in target premium for commission purposes.
(h) For Consultant VUL.
1. The target premium is equal to the 'safety net' premium for the
minimum guaranteed death benefit for issue ages 0-57 for male smokers
and unless smokers, and 0-67 for all other Underwriting classes. At
all other issue ages the target is less than the 'safety net' premium.
2. The mail commission will be paid quarterly at a rate of .0875% of the
net policy value for all Policies at less 78 months old.
3. An increase in face amount after issue will result in an increase in
target premium based on Insured's obtained age at time or increase.
Effective Date: 8/1/99
LSA-001 8/99
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