Security Distributors, Inc.
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A Member of The Security One Security Benefit Place
Benefit Group of Companies Xxxxxx, Xxxxxx 00000-0000
000-000-0000
MARKETING ORGANIZATION AGREEMENT
COMMISSION SCHEDULE
AdvanceDesignsSM Variable Annuity (the "Contract")
Issued by First Security Benefit Life Insurance
and Annuity Company of New York (the "Company")
Marketing Organization:
(Broker/Dealer)
EFFECTIVE DATE OF COMMISSION SCHEDULE:
COMMISSIONS - This Commission Schedule is hereby made a part of and amends your
Marketing Organization Agreement (hereinafter called the "Agreement"), with
Security Distributors, Inc. (hereinafter called "SDI"), and commissions payable
hereunder are subject to the provisions contained in the Agreement and this
Commission Schedule. Minimum Purchase Payments are as set out in the applicable
prospectus and Contract. Commissions to a Marketing Organization are equal to a
percentage of each Purchase Payment written by Marketing Organization, as
follows:
1. UP FRONT COMMISSIONS: The rate of commissions paid on Purchase Payments
made with respect to each particular Contract is based on the issue age of
the Owner (or of the Annuitant if the Contract is owned by a non-natural
person) as set forth in the tables below. You may select one of Commission
Options A through D as shown in the table below at the time of application
for each Contract. IF NO SELECTION IS MADE ON THE APPLICATION, SDI WILL PAY
YOU PURSUANT TO OPTION B. You may select a different option for each
Contract but may not change the Option in effect after the Contract is
issued. No commission will be paid on Purchase Payments made that are less
than the minimum specified in the applicable prospectus and Contract.
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Commission Option OPTION A* OPTION B OPTION C OPTION D
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Owner Issue Age 0 - 80 81 - 85 0 - 80 81 - 85 0 - 80 81 - 85 0 - 80 81 - 85
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6.50% 0.00% 5.00% 2.50% 2.50% 0.00% 0.00% 0.00%
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*Commission Option A is not available in connection with a Contract qualified
under Section 401, 403 or 457 of the Internal Revenue Code. Option A is
available, however, in connection with a Contract issued as an individual
retirement annuity under Section 408 or 408A of the Code.
2. ASSET-BASED COMMISSIONS: Under Commission Options B, C and D, SDI will pay
an asset-based commission as of the end of each calendar month. The amount
of the asset-based commission under each Option is equal to 1/12 of the
applicable percentage set forth in the table below times the aggregate
Contract Value of those Contracts sold under the applicable Commission
Option for which Marketing Organization is the broker of record and, with
respect to Options B and C only, the initial Purchase Payment is more than
12 months old. For Option D only, the asset-based commission will be paid
as of the end of the first calendar month of the Contract Date. On an
annual basis, the asset-based commission is equal to the amount set forth
in the Table below. No asset-based commission will be paid on Contracts
that have annuitized under a life contingent annuity option. An
Annuitization Fee may be available as discussed in paragraph 6.
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Commission Option OPTION A* OPTION B OPTION C OPTION D
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Owner Issue Age 0 - 80 81 - 85 0 - 80 81 - 85 0 - 80 81 - 85 0 - 80 81 - 85
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0 bps 0 bps 25 bps 25 bps 45 bps 0 bps 65 bps 60 bps
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* Commission Option A is not available in connection with a Contract qualified
under Section 401, 403 or 457 of the Internal Revenue Code. Option A is
available, however, in connection with a Contract issued as an individual
retirement annuity under Section 408 or 408A of the Code.
3. ALTERNATE WITHDRAWAL CHARGE RIDER: For a Contract sold with a CDSC Rider
(also referred to as an "Alternate Withdrawal Charge Rider"), the
commission and asset-based commission schedules set forth above do not
apply. The following commission schedules will apply in lieu of those set
forth above if a CDSC Rider is in effect. The following commission rates
are
applicable based upon the CDSC Rider selected and the issue age of the
Owner (or of the Annuitant if the Contract is owned by a non-natural
person). You may select one of Commission Options A or B as shown in the
table below at the time of application for each Contract. IF NO SELECTION
IS MADE ON THE APPLICATION, SBL WILL PAY YOU PURSUANT TO OPTION B. You may
select only Option A or Option B for each Contract issued with a CDSC Rider
but may not change the Option in effect after the Contract is issued. THE
COMMISSION SCHEDULES FOR THE 0 YEAR AND 4 YEAR CDSC RIDERS AS SET FORTH
BELOW APPLY ONLY TO CONTRACTS ISSUED WITH A 0 YEAR OR 4 YEAR CDSC RIDER ON
OR AFTER SEPTEMBER 1, 2005. FOR CONTRACTS ISSUED WITH A 0 YEAR OR 4 YEAR
CDSC RIDER PRIOR TO SEPTEMBER 1, 2005, THE COMMISSION SCHEDULE IN EFFECT ON
THE CONTRACT'S DATE OF ISSUE WILL APPLY IN LIEU OF THE SCHEDULES SET FORTH
BELOW.
i. 0 YEAR CDSC RIDER UP FRONT COMMISSION: The amount of up front commission
for a Contract with a 0 Year CDSC Rider varies based upon the Duration set
forth below, which is measured from the Contract Date.
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OPTION A -Up Front Commission* OPTION B - Up Front Commission*
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Owner Issue Age Owner Issue Age
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CDSC Rider Duration 0-80 81-90 0-80 81-90
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0 year 0 - 6 months 0.00% 0.00% 2.00% 0.00%
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7 - 12 months 0.00% 0.00% 0.50% 0.00%
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13 months and thereafter 0.00% 0.00% 0.00% 0.00%
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*The up front commission is equal to the applicable percentage of each Purchase
Payment written by Marketing Organization based upon the applicable CDSC Rider
in effect, the Commission Option, the issue age of the Owner, and the Duration
of the Contract as of the date the Purchase Payment is received the Company. No
commission will be paid on Purchase Payments made that are less than the minimum
specified in the applicable prospectus and Contract.
ii. 0 YEAR CDSC RIDER ASSET-BASED COMMISSIONS: Under Commission Options A and
B, SBL will pay an asset-based commission as of the end of each calendar
month. The amount of the asset-based commission under each Option for a
Contract with a 0 Year CDSC Rider is equal to 1/12 of the applicable
percentage set forth in the table below times the aggregate Contract Value
of those Contracts sold under the applicable Commission Option for which
Marketing Organization is the broker of record and, with respect to Option
B (for issue ages 0-80), the initial Purchase Payment is more than 12
months old. For Option A and Option B (for issue ages 81-90 only), the
asset-based commission will be paid as of the end of the first calendar
month of the Contract Date. On an annual basis, the asset-based commission
is equal to the amount set forth in the Table below. No asset-based
commission will be paid on Contracts that have annuitized under a life
contingent annuity option. An Annuitization Fee may be available as
discussed in paragraph 6.
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OPTION A OPTION B
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Owner Issue Age Owner Issue Age
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CDSC Rider Duration 0-80 81-90 0-80 81-90
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0 year 0 - 12 months 1.00% 1.00% 0.00% 1.00%
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13 months and thereafter 1.25% 1.00% 1.00% 1.00%
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iii. 4 YEAR CDSC RIDER UP FRONT COMMISSION: The amount of up front commission
for a Contract with a 4 Year CDSC Rider varies based upon the Duration set
forth below, which is measured from the Contract Date.
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OPTION A -Up Front Commission* OPTION B - Up Front Commission*
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Owner Issue Age Owner Issue Age
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CDSC Rider Duration 0-80 81-90 0-80 81-90
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4 year 0 - 6 months 3.50% 0.00% 5.50% 0.00%
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7 month and thereafter 2.00% 0.00% 4.00% 0.00%
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*The up front commission is equal to the applicable percentage of each Purchase
Payment written by Marketing Organization based upon the applicable CDSC Rider
in effect, the Commission Option, the issue age of the Owner, and the Duration
of the Contract as of the date the Purchase Payment is received the Company. No
commission will be paid on Purchase Payments made that are less than the minimum
specified in the applicable prospectus and Contract.
iv. 4 YEAR CDSC RIDER ASSET-BASED COMMISSIONS: Under Commission Options A and
B, SBL will pay an asset-based commission as of the end of each calendar
month. The amount of the asset-based commission under each Option for a
Contract with a 4 Year CDSC Rider is equal to 1/12 of the applicable
percentage set forth in the table below times the aggregate Contract Value
of those Contracts sold under the applicable Commission Option for which
Marketing Organization is the broker of record and, with respect to Option
A (for issue ages 0-80 only), the initial Purchase Payment is more than 12
months old and Option B (for issue ages 0-80 only), the initial Purchase
Payment is more than 48 months old. For Option A (for issue ages 81-90
only) and Option B (for issue ages 81 - 90 only), the asset-based
commission will be paid as of the end of the first calendar month of the
Contract Date. On an annual basis, the asset-based commission is equal to
the amount set forth in the Table below. No asset-based commission will be
paid on Contracts that have annuitized under a life contingent annuity
option. An Annuitization Fee may be available as discussed in paragraph 6.
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OPTION A OPTION B
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Owner Issue Age Owner Issue Age
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CDSC Rider Duration 0-80 81-90 0-80 81-90
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4 year 0 - 12 months 0.00% 1.00% 0.00% 1.00%
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13 - 48 months 1.00% 1.00% 0.00% 1.00%
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49 months and thereafter 1.00% 1.00% 1.00% 1.00%
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4. CONTRACT DATE: For the purpose of this Commission Schedule, the term
"Contract Date" shall be the date the first Purchase Payment is credited to
the Contract.
5. DEATH BENEFIT APPLIED TO ANNUITY OPTION: In the event that a beneficiary of
a Contract under this Commission Schedule applies the death benefit to one
of the annuity options under the Contract, no commission will be payable
upon such application. An Annuitization Fee may be available as discussed
in paragraph 6.
6. ANNUITIZATION: An Annuitization Fee will be paid to a Marketing
Organization who secures from the Contract Owner (or his or her
beneficiary) the proper forms and information to commence an immediate life
contingent annuity option under the Contract and significantly assists the
client and insurer in such settlement. The Annuitization Fee will be equal
to 4% of the amount applied to a fixed life contingent annuity option and
2% of the amount applied to a variable life contingent annuity option.
7. COMMISSION CHARGEBACK PROVISIONS: No commission chargebacks are applicable
to any partial withdrawals, full surrenders or death claims except in the
event of a free look surrender or for Contracts that have selected a 0-Year
Alternate Withdrawal Charge Rider. In the event of a full withdrawal during
the first 18 months of a Contract with a 0-Year Alternate Withdrawal Charge
Rider, SDI will charge back 100% of commissions paid in connection with the
Contract. In the event of a partial withdrawal that exceeds the Free
Withdrawal Amount as defined in the Contract during the first eighteen (18)
months of a Contract with a 0-Year Alternate Withdrawal Charge Rider, SDI
will charge back 100% of commissions paid in connection with that portion
of the withdrawal amount that exceeds the Free Withdrawal Amount. SDI also
will charge back 100% of commissions in the event of a free look surrender.
"Commissions" include up front and asset-based commissions.
8. CHANGE OF COMMISSION SCHEDULE: Notwithstanding any other provision of the
Agreement to the contrary, the following provisions shall apply. SDI
reserves the right at any time, with or without notice, to change, modify
or discontinue the commissions, asset-based commissions or any other
compensation payable under this Commission Schedule.
9. CHANGE OF DEALER: A Contract Owner shall have the right to designate a new
marketing organization, or terminate a marketing organization without
designating a replacement, by sending written notice of such designation or
termination to SDI. Upon written notice to SDI by the Owner of the
designation of a new marketing organization, all the commissions and
asset-based commissions shall be payable to the new marketing organization.
Upon written notice to SDI by the Contract Owner of termination of
Marketing Organization, without designating a new marketing organization,
SDI shall cease paying commissions and asset based commissions to Marketing
Organization.
10. TERMINATION OF THE AGREEMENT/VESTING: In the event of termination of the
Agreement for any reason, all rights to receive commissions, asset-based
commissions or other compensation under this Commission Schedule shall be
terminated, unless each of the following requirements is met: (i) the
Agreement has been in force for at least one year; (ii) Marketing
Organization is at the time such commissions are payable properly licensed
to receive such commissions; (iii) Marketing Organization is providing
service to the Contract Owner and performing its duties in a manner
satisfactory to SDI; (iv) commissions paid to Marketing Organization in the
previous calendar year amounted to at least $500; and (v) Marketing
Organization has not been terminated, nor a new marketing organization
designated, by the Contract Owner as set forth in paragraph 9 above.
THIS COMMISSION SCHEDULE replaces any previous Commission Schedule for the
Variable Annuity Contract listed above as of the Effective Date set forth above.
SECURITY DISTRIBUTORS, INC.
By: Xxxxxxx Xxxxxx
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Title: President
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