PRINCIPAL UNDERWRITER’S AGREEMENT
PRINCIPAL
UNDERWRITER’S AGREEMENT
VARIABLE
INSURANCE PRODUCTS SUN LIFE (N.Y.)
Effective:
February 1, 2003
THIS
PRINCIPAL UNDERWRITER’S AGREEMENT is entered into by and among Sun Life
Insurance and Annuity Company of New York (the “Insurance Company”), a New York
corporation, and Clarendon Insurance Agency Inc. (“Clarendon”), a Massachusetts
corporation.
WITNESSETH
WHEREAS, Insurance
Company proposes to issue and offer for sale certain insurance and annuity
contracts as designated by Insurance Company from time to time (the Plans),
which are deemed to be securities under the Securities Act of 1933, as amended;
and
WHEREAS,
Clarendon is registered as a broker-dealer with the Securities and Exchange
Commission (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, Clarendon
agrees to serve as the principal underwriter/general distributor with respect to
the Plans for securities law purposes in accordance with the terms and
conditions of this Agreement.
NOW
THEREFORE, in consideration of the premises and the mutual covenants hereinafter
contained, and other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged by all parties, the parties hereto agree as
follows:
I. The
Plans
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A.
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Type of
plans
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The Plans
to which this Agreement applies are the variable insurance products issued by
Insurance Company from time to time.
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B.
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Suspension/Restriction
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Insurance
Company may, at its sole discretion, suspend or restrict in any manner the sale
or method of distribution of all or any of the Plans, including sales by all or
any individuals licensed to sell Insurance Company’s products. If any
suspension or restriction is required by any regulatory authority having
appropriate jurisdiction, written notice shall be given to Clarendon immediately
upon receipt by Insurance Company of notice of such required suspension or
restriction.
II. Distribution of the
Plans
A. Distribution
Agreements
As the
principal underwriter, Clarendon will distribute the Plans pursuant to
distribution agreements with financial intermediaries. All
distribution agreements shall be subject to approval by Insurance
Company. Insurance Company, on behalf of Clarendon as the principal
underwriter, shall retain copies of all executed distribution agreements and all
correspondence, memoranda and other documents relating to the distribution
agreements.
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B.
Appointment and
Termination of
Representatives
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(1) The
distribution agreements shall provide for the appointment, as insurance agent,
by Insurance Company of the financial intermediaries and their individual
representatives. Insurance Company reserves the right to terminate
any and all such appointments.
(2) All
appointments and dismissals of individuals as representatives of Insurance
Company shall be subject to all applicable laws, rules and regulations and to
such written instructions and rules as Insurance Company may establish from time
to time.
C. Payment of Commissions to
Representatives
Unless
otherwise agreed, all commission payments required to be made pursuant to the
distribution agreements shall be made by Insurance Company, on behalf of
Clarendon as principal underwriter, directly to the parties entitled
thereto.
D. Sales Material and Other
Documents
(1) Clarendon’s
Responsibilities
Clarendon
shall be responsible for filing or causing to be filed all sales and advertising
material for the Plans with the NASD, when applicable.
(2) Insurance Company’s
Responsibilities
Insurance
Company shall make available to Clarendon, as necessary, Plan prospectuses,
applications and sales and advertising material.
Insurance
Company shall be responsible for the approval of sales and advertising material
if required by state and other local insurance regulatory
authorities. Insurance Company shall comply with New York Insurance
Laws and Regulations applicable to such sales and advertising
material.
(3) Insurance Company’s Right to
Approve
Insurance
Company shall have the right to review and approve or disapprove all sales and
advertising material to be used for the Plans.
III. Supervision
of Insurance Company Associated Persons
Clarendon
has and assumes full responsibility (including training, supervision and
control) for the securities activities of all persons associated with Insurance
Company in connection with the distribution, offer and sale of the Plans, as
contemplated by the 1934 Act.
IV. Expense
Reimbursement
Insurance
Company agrees to reimburse Clarendon for the cost of the services provided by
Clarendon to Insurance Company pursuant to this Agreement. The charge
to Insurance Company for such services shall include all direct and directly
allocable expenses, reasonably and equitably determined to be attributable to
Insurance Company by Clarendon, plus a reasonable charge for direct overhead,
the amount of such charge for overhead to be agreed upon by the parties from
time to time.
Subject
to New York Insurance Department Regulation 33, the bases for determining such
charges to Insurance Company shall be those used by Clarendon for internal cost
distribution including, where appropriate, unit costs or time records prepared
at least annually for this purpose. Such bases shall be modified and
adjusted by mutual agreement where necessary or appropriate to reflect fairly
and equitably the actual incidence of costs incurred by Clarendon on behalf of
Insurance Company.
Cost
analyses will be made at least annually by Clarendon to determine, as closely as
possible, the actual cost of services rendered to Insurance Company
hereunder. Clarendon shall forward to Insurance Company the
information developed by these analyses, and such information shall be used to
develop bases for the distribution of expenses which more currently reflect the
actual incidence of costs incurred by Clarendon on behalf of Insurance
Company.
Clarendon's
determination of charges hereunder shall be in accordance with New York
Insurance Department Regulation 33 to the extent applicable and shall be
presented to Insurance Company, and if Insurance Company objects to any such
determination, it shall so advise Clarendon within thirty (30) days of receipt
of notice of said determination. Unless the parties can reconcile any
such objection, they shall agree to the selection of a firm of independent
certified public accountants which shall determine the charges properly
allocable to Insurance Company and shall, within a reasonable time, submit such
determination, together with the basis therefor, in writing to Clarendon and
Insurance Company, whereupon such determination shall be binding. The
expenses of such a determination by a firm of independent certified public
accountants shall be borne equally by Clarendon and Insurance
Company.
Within
thirty (30) days after the end of each calendar quarter, Clarendon will submit
to Insurance Company a detailed written statement of the charges due from
Insurance Company to Clarendon in the preceding calendar quarter, including
charges not included in any previous statements, and any balance payable or to
be refunded as shown in such statement shall be paid or refunded within thirty
(30) days following receipt of such written statement by Insurance
Company.
V. Books and
Records
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A.
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Accounting Records and
Documents; Audit Rights
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Clarendon
shall be responsible for maintaining full and accurate accounts and records of
all services it renders under this Agreement in accordance with applicable laws
and regulations, including, but not limited to, New York Insurance Department
Regulation 152, and such additional information as Insurance Company may
reasonably request for purposes of its internal bookkeeping and accounting
operations. Clarendon shall keep copies of such accounts and records
insofar as they pertain to the services performed hereunder and the computation
of any charges hereunder available at its principal offices for audit,
inspection and copying by Insurance Company and persons authorized by it or any
governmental agency having jurisdiction over Insurance Company during all
reasonable business hours.
In
addition to the foregoing, Insurance Company may audit Clarendon, at Insurance
Company’s sole expense and upon reasonable notice, to ensure that security
controls and operational management procedures are in place as required by this
Agreement. Clarendon will also make available to Insurance Company,
upon written notice, copies of any external audit reports produced for Clarendon
with respect to the services provided under this Agreement. Clarendon
acknowledges that the Superintendent of Financial Institutions of Canada (the
"Canadian Superintendent") may find it necessary to have Insurance Company’s
material outsourcing arrangements reviewed, examined or caused to be
examined. Accordingly, Clarendon undertakes and agrees as
follows:
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(i)
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The
Canadian Superintendent may exercise the right of Insurance Company
relating to audit and inspection rights and monitoring procedures;
and
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(ii)
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The
Canadian Superintendent may have access to and make copies of any internal
audit reports and associated working papers and recommendations prepared
for or by Clarendon in respect of services being performed for Insurance
Company, subject to the Canadian Superintendent agreeing to sign
appropriate confidentiality documentation in form and content satisfactory
to Clarendon.
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Clarendon
will use commercially reasonable best efforts to seek the consent of its
external auditor for the release to the Canadian Superintendent of any findings
in the external audit of Clarendon (and associated working papers and
recommendations) that addresses the services being performed for Insurance
Company, subject to the Canadian Superintendent agreeing to sign appropriate
confidentiality documentation in form and content satisfactory to
Clarendon.
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B.
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Ownership of Business
Records
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All
books, records, and files established and maintained by Clarendon by reason of
its performance under this Agreement which, absent this Agreement, would have
been held by Insurance Company, shall: (i) be deemed the property of Insurance
Company; (ii) be maintained in accordance with applicable law and regulation,
including, but not limited to, Regulation 152; and (iii) be subject to
examination at all times by Insurance Company and persons authorized by it or
any governmental agency having jurisdiction over Insurance Company.
Notwithstanding
the foregoing, Insurance Company, as agent for Clarendon, shall confirm to each
applicant for, and purchaser of, an SEC-registered Plan, in accordance with Rule
10b-10 under the 1934 Act acceptance of premiums and such other transactions as
are required by Rule 10b-10 or administrative interpretations
thereunder. Insurance Company shall maintain and preserve books and
records with respect to such confirmations in conformity with the requirements
of Rules 17a-3 and 17a-4 under the 1934 Act to the extent such requirements
apply. The books, accounts and records of Insurance Company,
Clarendon, the SEC-registered Plans and as to all transactions hereunder shall
be maintained so as to disclose clearly and accurately the nature and details of
the transactions. Insurance Company shall maintain, as agent for
Clarendon, such books and records of Clarendon pertaining to the distribution
and servicing of the Plans as required by the 1934 Act as may be mutually agreed
upon by them, including but not limited to maintaining a record of selling firms
and of the payment of commissions and other payments or service fees to selling
firms. In addition, Insurance Company, as agent for Clarendon, shall
maintain and preserve such additional accounts, books and other records as are
required of Clarendon by the 1934 Act. Insurance Company shall
maintain all such books and records and hold such books and records on behalf of
and as agent for Clarendon whose property they are and shall remain, and
acknowledges that such books and records are at all times subject to inspection
by the SEC in accordance with Section 17(a) of the 1934 Act, NASD, and all other
regulatory bodies having jurisdiction.
VI. Other
Provisions
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A.
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Approval
of Practices and Procedures
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Insurance
Company shall have the right to review and suggest revisions to the standards,
practices and procedures utilized by Clarendon in fulfilling its obligations
under this Agreement. Insurance Company reserves the right, from time
to time, to prescribe reasonable rules and regulations respecting the conduct of
the business covered hereby, as relates to the Plans.
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B.
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Policyholder
Communications
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In
providing services under this Agreement, Clarendon agrees that any and all
personal contact or communication, both oral and written, with Insurance
Company’s policyholders, insureds, beneficiaries and applicants will be done in
the name of and on behalf of Insurance Company. Clarendon agrees to
use Insurance Company’s letterhead for all such written
communications. Clarendon further agrees that if any of its employees
who have direct contact with Insurance Company’s policyholders, insureds,
beneficiaries or applicants perform such services from a location outside the
State of New York, Clarendon will establish and maintain a toll-free telephone
number for use by Insurance Company’s policyholders, insureds, beneficiaries and
applicants.
C. Limitations and
Authority
Clarendon
shall have authority only as expressly granted in this Agreement. No
party to this Agreement shall enter into any proceeding in a court of law or
before a regulatory agency in the name of any other party, without the express
written consent of that party. If any legal or administrative
proceedings are commenced against any party arising out of the obligations,
duties or services performed under this Agreement by any third party or any
federal, state or other governmental or regulatory authority, that party, as the
case may be, shall immediately notify the other parties of this
fact.
D. Waiver
Failure
of any party to insist upon strict compliance with any of the conditions or
provisions of this Agreement shall not be construed as a waiver of any of such
conditions or provision; and this Agreement shall remain in full force and
effect. No waiver of any of the provisions of this Agreement shall be
deemed, or shall constitute, a waiver of any other provisions, whether or not
similar, nor shall any waiver constitute a continuing waiver.
E.
Fidelity
Bond
Clarendon
will maintain whatever fidelity bond as may be required by Insurance Company,
and such bond shall be of a type and amount and issued by a reputable company,
satisfactory to Insurance Company.
F. Binding Effect; Entire
Agreement
This
Agreement shall be binding on and shall inure to the benefit of the parties to
it and their respective successors and assigns. This Agreement
constitutes the sole and entire understanding of the parties with respect to the
services to be provided with respect to the Plans and supersedes all prior oral
or written agreements between or among the parties with respect to the services
contemplated by this Agreement.
G. Notices
All
notices, requests, demands and other communication under this Agreement shall be
in writing, and shall be deemed to have been given on the date of service if
served personally on the party to whom notice is to be given, or as
of the date of mailing, if sent by First Class Mail, Registered or
Certified, postage prepaid and promptly addressed as follows:
TO
INSURANCE COMPANY:
Sun Life
Insurance and Annuity Company of New York
000 Xxxx
00xx
Xxxxxx, Xxxxx 0000
Xxx Xxxx,
XX 00000
Attention:
Secretary
with a
copy to:
Sun Life
Assurance Company of Canada (U.S.)
One Sun
Life Executive Park
Xxxxxxxxx
Xxxxx, XX 00000
Attention:
Legal Department
TO
CLARENDON:
Clarendon
Insurance Agency Inc.
One Sun Life Executive
Park
Xxxxxxxxx
Xxxxx, XX 00000
Attention: Secretary
H.
Governing
Law
This
Agreement shall be governed by a construed in accordance with the laws of the
State of New York.
I.
Compliance
All
parties agree to observe and comply with all applicable federal, state and local
laws, rules and regulations in the performance of this Agreement.
J.
Termination
This
Agreement may be terminated by either party upon thirty (30) days prior written
notice to the other party, or upon immediate written notice to the other party
in the event of a breach of any provision of this Agreement.
[signature page
follows]
IN
WITNESS WHEREOF, each of the undersigned parties has executed this Agreement, by
its duly authorized officers, to be effective this 1st day of February,
2003.
SUN LIFE
INSURANCE AND ANNUITY COMPANY OF NEW YORK
________________________________
Xxxxxx X.
Xxxxxxxxxxx, For the President
________________________________
Xxxx X.
Xxxxxx, For the Secretary
CLARENDON
INSURANCE AGENCY, INC.
By: ________________________________
Name: Xxxxxxx
X. Xxxxx
Title: Assistant
Secretary
By: _______________________________
Name: Xxxxxx
X. Xxxxx
Title: Secretary
gc:\xxxxx
02\Intercompany Agts\Principal Underwriter Agt New
York.doc
