UNDERWRITING AGREEMENT
UNDERWRITING AGREEMENT made this 13th day of December 1993, by and between
Farm Bureau Life Insurance Company ("Farm Bureau"), an Iowa corporation, on its
own behalf and on behalf of Farm Bureau Life Annuity Account ("Annuity Account")
and FBL Marketing Services, Inc. ("FBL Marketing"), a Delaware corporation.
WITNESSETH:
WHEREAS, Farm Bureau has established and maintains the Annuity Account, a
segregated investment account, pursuant to the laws of the State of Iowa for the
purpose of selling flexible premium deferred variable annuity contracts (the
"Contracts"), to commence after the effectiveness of the registration statement
for the Contracts as filed with Securities and Exchange Commission (the "SEC")
on Form N-4 pursuant to the Securities Act of 1933, as amended (the "1933 Act");
and
WHEREAS, the Annuity Account is registeed as a unit investment trust under
the Investment Company Act of 1940, as amended (the "1940 Act:"); and
WHEREAS, the FBL Marketing is registered as a broker-dealer with the SEC
under the Securities Exchange Act of 1934, as amended (the "1934 Act"), and is a
member of the National Association of Securities Dealers, Inc. (the "NASD"); and
WHEREAS, the parties desire to have FBL Marketing act as principal
underwriter for the Account and assume such supervisory responsibility as is
required by federal and state securities law and applicable requirements of the
NASD for the securities activities of any "person associated" (as that term is
defined in Section 3(a)(18) of the 0000 Xxx) with FBL Marketing, including Farm
Bureau personnel, and engaged directly or indirectly in Farm Bureau's variable
annuity operations (the "associated persons"); and
WHEREAS, Farm Bureau and the Annuity Account desire to have the Contracts
sold and distributed through FBL Marketing, and FBL Marketing is willing to sell
and distribute such Contracts, under the terms stated herein.
NOW THEREFORE, the parties hereto agree as follows:
1. DISTRIBUTOR AND PRINCIPAL UNDERWRITER
Farm Bureau grants to FBL Marketing the right to be, and FBL Marketing
agrees to serve as, distributor and principal underwriter of the Contracts
during the term of this Agreement. FBL Marketing agrees to use its best efforts
to solicit applications for the Contracts, and to undertake to provide sales
services relative to the Contracts and otherwise to perform all duties and
functions which are necessary and proper for the distribution of the Contracts.
2. PREMIUM PAYMENTS
All premium payments or other monies payable for the Contracts shall be
paid or remitted in full by or on behalf of contractowners directly to Farm
Bureau or its designated servicing agent together with such applications, forms
and other documentation as may be required by Farm Bureau. Checks or money
orders in payment of premiums or other monies payable shall be drawn to the
order of "Farm Bureau Life Insurance Company." Farm Bureau will retain all such
payments except to the extent such payments are allocated to the Annuity
Account.
3. SALES IN ACCORDANCE WITH CURRENT PROSPECTUS
FBL Marketing agrees to offer the Contracts for sale in accordance with the
current prospectus therefor. FBL Marketing is not authorized to give any
information or to make any representations concerning the Contracts other than
those contained in the current prospectus therefor filed with the SEC or in
such sales literature as may be developed and authorized by Farm Bureau.
4. PROSPECTUSES AND PROMOTIONAL MATERIALS
On behalf of the Annuity Account, Farm Bureau shall furnish FBL Marketing
with copies of all prospectuses, financial statements, and other documents which
FBL Marketing reasonably requests for use in connection with the distribution
of the Contracts. Farm Bureau shall have responsibility for preparing, filing
and printing all required prospectuses and/ or registration statements in
connection with the Contracts and the payment of all related expenses. FBL
Marketing and Farm Bureau shall cooperate fully in the design, draft, and review
of sales promotion materials and the preparation of individual sales proposals
related to the sale of the Contracts. FBL Marketing shall not use any such
materials not provided or approved by Farm Bureau.
5. COMPLIANCE WITH APPLICABLE LAWS
FBL Marketing represents that it is duly registered as a broker-dealer
under the 1934 Act and is a member in good standing of the NASD and, to the
extent necessary to offer the Contracts, shall be duly registered or otherwise
qualified under the securities laws of any state or other jurisdiction. FBL
Marketing shall be responsible for carrying out its sales and underwriting
obligation hereunder in continued compliance with the NASD Rules of Fair
Practice and federal and state securities laws and regulations. Without
limiting the generality of the foregoing, FBL Marketing agrees that it shall be
fully responsible for:
(a) ensuring that no person shall offer or sell the Contracts on its behalf
until such person is duly registered as a representative of FBL Marketing,
duly licensed and appointed by Farm Bureau under applicable state insurance
law, and appropriately licensed, registered or otherwise qualified to offer
and sell such Contracts under the federal securities laws and any applicable
securities laws of each state or other jurisdiction in which such Contracts
may be
lawfully sold, in which Farm Bureau is licensed to sell the Contracts and
in which such persons shall offer or sell the Contracts; and
(b) training, supervision, and control of all such persons for purposes of
complying on a continuous basis with the NASD Rules of Fair Practice and
with federal and state securities laws requirements applicable in connection
with the offering and sale of the Contracts. In this connection FBL
Marketing shall:
(i) conduct such training (including the preparation and utilization of
training materials) as in the opinion of FBL Marketing is necessary to
accomplish the purposes of this Agreement;
(ii) establish and implement reasonable written procedures for supervision
of sales practices of associated persons or brokers selling the
Contracts;
(iii) establish branch offices and offices of supervisory jurisdiction, as
necessary or appropriate; and
(iv) take reasonable steps to ensure that the various sales representatives
associated with it shall not make recommendations to an applicant to
purchase a Contract in the absence of reasonable grounds to believe
that the purchase of the Contract is suitable for such applicant.
While not limited to the following, a determination of suitability
shall be based on information furnished to a sales representative
after reasonable inquiry of such applicant concerning the applicant's
insurance and investment objectives, financial situation and needs,
and the likelihood of whether the applicant will persist with the
Contract for such a period of time that Farm Bureau's acquisition
costs are amortized over a reasonable period of time.
6. SALES AGREEMENTS
FBL Marketing is hereby authorized to enter into separate written
agreements, on such terms and conditions as FBL Marketing may determine not
inconsistent with this Agreement, with broker-dealers which agree to participate
in the distribution of the Contracts and to use their best efforts to solicit
applications for the Contracts. All such sales agreements shall provide that
each independent broker-dealer will assume full responsibility for continued
compliance by itself and its representatives with applicable federal and state
securities laws. Such broker-dealers and their agents or representatives
soliciting applications for the Contracts shall be duly and appropriately
licensed, registered or otherwise qualified for the sale of such Contracts under
the federal securities laws, the state insurance laws and any applicable state
securities laws of each state or other jurisdiction in which such Contracts may
be lawfully sold and in which Farm Bureau is licensed to sell the Contracts.
Each such organization shall be both registered as a broker-dealer under the
1934 Act and a member of the NASD.
Applications for the Contracts solicited by such organizations through
their representatives shall be forwarded to Farm Bureau. All payments for the
Contracts shall be made by check payable to "Farm Bureau Life Insurance Company"
and remitted promptly by such organizations to Farm Bureau as agent for FBL
Marketing. All broker-dealers who agree to participate in the distribution of
the Contracts shall act as independent contractors and nothing
herein contained shall constitute such broker-dealers or their agents or
employees as employees of Farm Bureau in connection with the sale of the
Contracts.
7. INSURANCE LICENSES
Farm Bureau shall apply for the proper insurance licenses in the
appropriate states or jurisdictions for the designated persons associated with
FBL Marketing or with other independent broker-dealers which have entered into
agreements with FBL Marketing for the sale of the Contracts, provided that Farm
Bureau reserves the right to refuse to appoint any proposed registered
representatives as an agent or broker, and to terminate an agent or broker once
appointed.
8. MAINTENANCE OF BOOKS, RECORDS AND ACCOUNTS
Farm Bureau and FBL Marketing shall cause to be maintained and preserved,
for the periods prescribed, such accounts, books and other documents as are
required of them by the 1940 Act, the 1934 Act and any other applicable laws and
regulations. The books, accounts and records of Farm Bureau, the Annuity
Account, and FBL Marketing as to all transactions hereunder shall be maintained
so as to disclose clearly and accurately the nature and details of the
transactions.
As agent for and on behalf of FBL Marketing, Farm Bureau shall maintain
such books and records of FBL Marketing pertaining to the sale of the Contracts
and required by the 1934 Act as may be mutually agreed upon from time to time by
Farm Bureau and FBL Marketing; provided that such books and records shall be the
property of FBL Marketing and shall at all times be subject to such reasonable
periodic, special or other examination by the SEC and all other regulatory
bodies having jurisdiction. In addition, Farm Bureau will maintain records of
all sales commissions paid to associated persons of FBL Marketing in connection
with the sale of the Contract. Farm Bureau, as agent for FBL Marketing, shall
be responsible for sending all required confirmations on customer transactions
in compliance with applicable regulations, as modified by an exemption or other
relief obtained by Farm Bureau and FBL Marketing.
FBL Marketing shall have the responsibility for maintaining the records of
associated persons of FBL Marketing who are licensed, registered, and otherwise
qualified to sell the Contracts, and for furnishing periodic reports thereto to
Farm Bureau. FBL Marketing shall cause Farm Bureau to be furnished with such
other reports as Farm Bureau may reasonable request for the purpose of meeting
its reporting and recordkeeping requirements under the insurance laws of the
State of Iowa and any other applicable states or jurisdictions.
9. COSTS AND EXPENSES BORNE BY FBL MARKETING
FBL Marketing shall bear the costs and expenses of: (a) services,
materials, and supplies required to be supplied by FBL Marketing pursuant to the
terms of this Agreement; (b) registration, licensing or other qualification of
associated persons of FBL Marketing under federal and state securities laws and
with the NASD; and (c) training and supervision of associated persons.
10. COMPENSATION
As compensation for FBL Marketing's assumption of the costs and expenses
set forth in Section 9 hereof, the sales services rendered by FBL Marketing and
the associated persons of FBL Marketing, and the continuing obligations spelled
out herein, Farm Bureau shall pay FBL Marketing an annual fee, payable monthly,
at a rate equal to $100 multiplied by the number of associated persons of FBL
Marketing, and shall, on behalf of and as agent for FBL Marketing, pay
associated persons of FBL Marketing all commissions or other fees which are due
for the sale of the Contracts. No associated person shall have an interest in
any fees payable to FBL Marketing pursuant to this Agreement.
For Contracts sold under dealer sales agreements that FBL Marketing enters
into with other broker-dealers pursuant to Section 6 hereof, Farm Bureau shall
pay to the parties specified in any such agreements such compensation as is due
under the terms of such sales agreements.
11. INDEMNIFICATION
Farm Bureau agrees to indemnify FBL Marketing for any losses incurred as a
result of any action taken or omitted by FBL Marketing or any of its officers,
agents, or employees in performing their responsibilities under this Agreement
in good faith and without willful misfeasance, gross negligence, or reckless
disregard of such obligations.
12. INVESTIGATIONS AND PROCEEDINGS
FBL Marketing and Farm Bureau agree to cooperate fully in any insurance
regulatory investigation or proceeding or judicial proceeding arising in
connection with the Contracts distributed under this Agreement. FBL Marketing
and Farm Bureau further agree to cooperate fully in any securities regulatory
inspection, inquiry, investigation or proceeding or any judicial proceeding with
respect to Farm Bureau, FBL Marketing, their affiliates, or the associated
persons to the extent that such inspection, inquiry, investigation or proceeding
is in connection with the Contracts distributed under this Agreement. Without
limiting the foregoing:
(a) FBL Marketing will be notified promptly of any customer complaint or
notice of any regulatory inspection, inquiry, investigation or
proceeding or judicial proceeding received by Farm Bureau with respect
to FBL Marketing or any associated person or which may affect Farm
Bureau's issuance of any Contract marketed under this Agreement; and
(b) FBL Marketing will promptly notify Farm Bureau of any customer
complaint or notice of any regulatory inspection, inquiry,
investigation or proceeding received by FBL Marketing or its
affiliates with respect to FBL Marketing or any associated person in
connection with any Contract distributed under this Agreement or any
activity in connection with any such Contract
In the case of a customer complaint, FBL Marketing and Farm Bureau will
cooperate in investigating such complaint and arrive at a mutually satisfactory
response.
13. TERMINATION
This Agreement may be terminated by either party hereto upon 60 days'
written notice to the other party without the payment of any penalty. This
Agreement may be terminated upon written notice of one party to the other party
hereto in the event of bankruptcy or insolvency of such party to which notice is
given. This Agreement may be terminated at any time upon the mutual written
consent of the parties hereto. This Agreement shall terminate automatically if
it shall be assigned.
Upon termination of this Agreement, all authorizations, rights and
obligations hereunder shall cease except (a) the obligation to settle accounts
hereunder, including commissions on premiums subsequently received for Contracts
in effect at the time of termination or issued pursuant to applications received
by Farm Bureau prior to termination, and (b) the agreements contained in 12
hereof.
1. EXCLUSIVITY
The services of FBL Marketing hereunder are not to be deemed exclusive and
FBL Marketing shall be free to render similar services to others so long as its
services hereunder are not impaired or interfered with hereby.
15. REGULATION
This Agreement shall be subject to the provisions of the 1940 Act and the
1934 Act and the rules, regulations, and rulings thereunder and of the NASD,
from time to time in effect, including such exemptions from the 1940 Act as the
SEC may grant and the terms hereof shall be interpreted and construed in
accordance therewith.
FBL Marketing shall submit to all regulatory and administrative bodies
having jurisdiction over the operations of Farm Bureau or the Annuity Account,
present or future, and will provide any information, reports or other material
which any such body by reason of this Agreement may request or require pursuant
to applicable laws or regulations. Without limiting the generality of the
foregoing, FBL Marketing shall furnish the Iowa Department of Insurance with any
information or reports which the Department may request in order to ascertain
whether the variable Annuity operations of Farm Bureau are being conducted in a
manner consistent with the Department's variable annuity insurance regulations
and any other applicable law or regulations.
16. SEVERABILITY
If any provision of this Agreement shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of the Agreement shall not
be affected thereby.
17. APPLICABLE LAW
This Agreement shall be construed and enforced in accordance with and
governed by the laws of the State of Iowa.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by their respective officers thereunto duly authorized as of the day and
year first above written.
Attest:
FARM BUREAU LIFE INSURANCE COMPANY
[signature]
Xxxxxx X. Xxxxxx,
President
Attest:
FBL MARKETING SERVICES, INC.
[signature]
Xxxxxxx X. Xxxxxxx,
President
