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B/D Name
11/12/01
BROKER-DEALER
MARKETING AND SERVICING AGREEMENT
FOR
VARIABLE LIFE CONTRACTS
This Broker-Dealer Marketing and Servicing Agreement for Variable Life Contracts
(the "Agreement") is dated this ______ day of ________________, 2002, by and
between Princor Financial Services Corporation ("Princor"), and Principal Life
Insurance Company (the "Insurer"), respectively the distributor and issuer for
and of the Policies hereinafter described, and ABC Company ( "Broker-Dealer")
(individually, a "Party" and collectively, the "Parties") The Parties enter into
this Agreement for the purpose of appointing the Broker-Dealer to perform the
services hereunder described, subject to the following provisions:
1. Except as otherwise provided below, Princor hereby appoints the
Broker-Dealer to provide sales assistance with respect to, and to cause
applications to be solicited for the purchase of variable life policies
issued by the Insurer (the "Policies" or "Policy"). Broker-Dealer accepts
such appointment and agrees to use its best efforts to provide sales
assistance to registered representatives of the Broker-Dealer and to cause
applications for the purchase of Policies to be solicited by such
registered representatives. Broker-Dealer agrees to pay a commission to
such registered representatives. Commissions will be paid to the registered
representative's broker-dealer of record.
Insurer represents that the Policies, including any related separate
accounts, shall comply with the registration and other applicable
requirements of the Securities Act of 1933 (the "1933 Act") and the
Investment Company Act of 1940 (the "40 Act") and the rules and regulations
thereunder, including the terms of any order of the Securities and Exchange
Commission (the "SEC") with respect thereto. Insurer further represents
that the Policy prospectuses included in the Insurer's registration
statement, post-effective amendments, and any supplements thereto, as filed
or to be filed with the SEC, as of their respective effective dates,
contain or will contain all statements and information required to be
stated therein by the 1933 Act and in all respects conform or will conform
to the requirements thereof, and no prospectus, nor any supplement thereof,
includes or will include any untrue statement of a material fact, or omits
or will omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, provided, however,
that the foregoing representations shall not apply to information contained
in or omitted from any prospectus or supplement in reliance upon and in
conformity with written information furnished to the Insurer by the
Broker-Dealer specifically for use in preparation thereof. The foregoing
representations also shall not apply to information contained in or omitted
from any prospectus or supplement of any underlying mutual fund.
2. The Broker-Dealer will promptly forward to the appropriate office of
Princor, or its authorized designee, all Policy applications along with
other documents, if any, and any payments received with such applications
and will have no rights of set off for any reason. Any Policy application
which is rejected, together with any payment made and other documents
submitted, shall be returned to the Broker-Dealer.
3. Insurer, on behalf of Princor, shall pay compensation to Broker-Dealer as
set out in the Exhibits attached to this Agreement; provided, however, that
Princor and Insurer reserve the right to revise the payments for services
described in the Exhibits to this Agreement at any time upon the mailing of
written notice to Broker-Dealer. Broker-Dealer agrees to return promptly to
Insurer all compensation received for any Policy returned within the "free
look" period as specified in the Policy.
4. In those states where Broker-Dealer cannot obtain an insurance license,
Broker-Dealer represents and warrants that: it will effect the sale of the
Policy through a validly licensed insurance representative ("Compensation
Representative") who has entered into an agreement with Broker-Dealer for
this purpose; it authorizes Insurer to pay any compensation owed to
Broker-Dealer from sales of a Policy to such Compensation Representative;
it remains fully responsible for recordkeeping and supervision of the
solicitation and/or sale of the Policy; all compensation received by
Compensation Representative in accordance with this section will be
distributed by Compensation Representative only to duly licensed and
registered representatives who have been appointed by the Insurer to
solicit for applications for the Policies.
Broker-Dealer represents that it is a registered broker-dealer under the
Securities Exchange Act of 1934, a member in good standing of the National
Association of Securities Dealers, Inc. ("NASD"), and is registered as a
broker-dealer under state law to the extent required in order to provide
the services described in this Agreement. Broker-Dealer agrees to abide by
all rules and regulations of the NASD Regulation, Inc. ("NASDR"), including
its Conduct Rules, and to comply with all applicable state and federal laws
and the rules and regulations of authorized regulatory agencies affecting
the sale of the Policies, including the prospectus delivery requirements
under the 1933 Act for the Policies and any underlying mutual fund. The
Broker-Dealer is responsible for prospectus delivery requirements only on
initial sale. The Insurer and underwriter will be responsible for
prospectus delivery annually after the original sale.
Broker-Dealer agrees to notify Princor promptly of any change, termination,
or suspension of its status as a broker-dealer or NASD member.
Broker-Dealer shall immediately notify Princor with respect to i) the
initiation and disposition of any form of disciplinary action by the NASDR
or any other agency or instrumentality having jurisdiction with respect to
the subject matter hereof against Broker-Dealer or any of its
representatives, employees or agents; ii) the issuance of any form of
deficiency notice made part of the public record by the NASDR or any such
agency regarding Broker-Dealer's training, supervision or sales practices;
and/or iii) the effectuation of any consensual order with respect thereto.
6. In connection with the solicitation of applications for the purchase of
Policies, Broker-Dealer agrees to indemnify and hold harmless Princor and
the Insurer from any damage or expense as a result of (a) the negligence,
misconduct or wrongful act of Broker-Dealer or any employee, representative
or agent of the Broker-Dealer and/or (b) any actual or alleged violation of
any securities or insurance laws, regulations or orders and/or (c) any
actual or alleged obligation of the Compensation Representative under terms
of the agreement between the Broker-Dealer and the Compensation
Representative, including claims by one or more of the Broker-Dealer's
representatives for compensation due or to become due on account of such
representatives' sales of the Policy and any claims or controversy between
Broker-Dealer and Compensation Representative as to rights to compensation.
Any indebtedness or obligation of the Broker-Dealer to Princor or the
Insurer, whether arising hereunder or otherwise, and any liabilities
incurred or moneys paid by Princor or the Insurer to any person as a result
of any misrepresentation, wrongful or unauthorized act or omission,
negligence of or failure of Broker-Dealer or its employees, producers, and
registered representatives to comply with this Agreement, shall be set off
against any compensation payable under this Agreement. Notwithstanding the
foregoing, Broker-Dealer shall not indemnify and hold harmless Princor and
the Insurer from any damage or expense on account of the negligence,
misconduct or wrongful act of Broker-Dealer or any employee, representative
or producer of Broker-Dealer if such negligence, misconduct or wrongful act
arises out of or is based upon any untrue statement or alleged untrue
statement of material fact, or the omission or alleged omission of a
material fact in: (i) any registration statement, including any prospectus
or any post-effective amendment thereto; or (ii) any material prepared
and/or supplied by Princor or the Insurer for use in conjunction with the
offer or sale of Policies, or (iii) any state registration or other
document filed in any state or jurisdiction in order to qualify any
Policies under the securities laws of such state or jurisdiction. The terms
of this provision shall not be impaired by termination of this Agreement.
7. In connection with the solicitation of applications for the purchase of
Policies, Princor and the Insurer agree to indemnify and hold harmless
Broker-Dealer from any damage or expense on account of the negligence,
misconduct or wrongful act of Princor or the Insurer or any employee,
representative or producer of Princor or the Insurer, including but not
limited to, any damage or expense which arises out of or is based upon any
untrue statement or alleged untrue statement of material fact, or the
omission or alleged omission of a material fact in: (i) any registration
statement, including any prospectus or any post-effective amendment
thereto; or (ii) any material prepared and/or supplied by Princor or the
Insurer for use in conjunction with the offer or sale of the Policies; or
(iii) any state registration or other document filed in any state or other
jurisdiction in order to qualify any Policy under the securities laws of
such state or jurisdiction and/or any actual or alleged violation of any
securities or insurance laws, regulations or orders. The terms of this
provision shall not be impaired by termination of this Agreement.
8. The Broker-Dealer will itself be, or will select persons associated with it
who are trained and qualified to solicit applications for purchase of
Policies in conformance with applicable state and federal laws. Any such
persons shall be registered representatives of the Broker-Dealer in
accordance with the rules of the NASDR, be licensed to offer the Policies
in accordance with the insurance laws of any jurisdiction in which such
person solicits applications and be licensed with and appointed by the
Insurer to solicit applications for the Policies. Broker-Dealer will
supervise its representatives to insure that purchase of a Policy is not
recommended to an applicant in the absence of reasonable grounds to believe
that the purchase of a Policy is suitable for that applicant. Broker-Dealer
shall pay the fees to regulatory authorities in connection with obtaining
necessary securities licenses and authorizations for registered
representatives to solicit applications for the purchase of Policies.
Insurer is responsible for fees in connection with the appointment of
registered representatives as producers of the Insurer.
9. The activities of all registered representatives, employees and agents
(the"producers") will be under the direct supervision and control of the
Broker-Dealer. The right of producers to solicit applications for the
purchase of Policies is subject to their continued compliance with the
rules and procedures which may be established by the Broker-Dealer, or the
Insurer, including, but not limited to, those set forth in this Agreement.
10. The Broker-Dealer shall ensure that applications for the purchase of
Policies are solicited only in the states where the Policies are qualified
for sale, and only in accordance with the terms and conditions of the then
current prospectus applicable to the Policies and will make no
representations not included in the prospectus, Statement of Additional
Information, or in any authorized supplemental material supplied by
Princor. With regard to the Policies, the Broker-Dealer shall not use or
permit its producers to use any sales promotion materials or any form of
advertising other than that supplied or approved by Princor. The Insurer
and Princor shall provide only approved supplemental material, advertising
and sales materials, including illustrations, for Broker-Dealer use.
11. Broker-Dealer shall ensure that the prospectus delivery requirements under
the 1933 Act and all other applicable securities and insurance laws, rules
and regulations are met and that delivery of any prospectus for the
Policies will be accompanied by delivery of the prospectus for the
underlying mutual funds, and, where required by state law, the Statement of
Additional Information for the underlying mutual funds. The Insurer or
Princor shall inform the Broker-Dealer of those states which require
delivery of a Statement of Additional Information with the prospectus on
initial sale.
Broker-Dealer understands and agrees that in performing the services
covered by this Agreement, it is acting in the capacity of an independent
contractor and not as an agent or employee of Princor or the Insurer and
that it is not authorized to act for, or make any representation on behalf
of, Princor or the Insurer except as specified herein. Broker-Dealer
understands and agrees that the Insurer shall execute telephone
transactions only in accordance with the terms and conditions of the then
current prospectus applicable to the Policies and agrees that in
consideration for the Broker-Dealer's right to exercise the telephone
transaction services neither Princor nor the Insurer will be liable for any
loss, injury or damage incurred as a result of acting upon, nor will they
be held responsible for the authenticity of any telephone instructions
containing unauthorized, incorrect or incomplete information. Broker-Dealer
agrees to indemnify and hold harmless Princor and the Insurer against any
loss, injury or damage resulting from any telephone transactions
instruction containing unauthorized, incorrect or incomplete information
received from Broker-Dealer or any of its registered representatives.
(Telephone instructions are recorded on tape.)
13. This Agreement may not be assigned by the Broker-Dealer without the prior
written consent of Princor.
14. Any Party hereto may cancel this Agreement at any time upon written notice.
This Agreement shall automatically terminate if Broker-Dealer voluntarily
or involuntarily ceases to be or is suspended from being, a member in good
standing of the NASD. In addition, Princor and Insurer reserve the right to
terminate this Agreement in the event that any registered representative,
employee or agent of Broker-Dealer is suspended, disciplined or found to be
in violation of governing insurance or securities laws, rules or
regulations. Failure of any party to terminate this Agreement for any of
the causes set forth in this Agreement shall not constitute a waiver of the
right to terminate this Agreement at a later time for any such causes.
15. Confidentiality. Each Party acknowledges that, in the course of performing
its duties under this Agreement or otherwise, it may receive or learn
information about individuals who have applied for or purchased financial
products or financial services from the other Party, including, but not
limited to, personal, financial and/or health information ("Confidential
Information"). Each Party agrees that it will not use or disclose to any
affiliate or third party, either orally or in writing, any Confidential
Information of the other Party for any purpose other than the purpose for
which the Confidential Information was provided to that Party. Without
limiting any of the foregoing, each Party agrees to take all precautions
that are reasonably necessary to protect the security of the other Party's
Confidential Information. Each Party agrees to restrict access to the other
Party's Confidential Information to those employees who need to know that
information to perform their duties under this Agreement. Each Party
further agrees that, upon request of the other Party, it will return to the
Party making such request all tangible items containing any Confidential
Information of the other Party, including all copies, abstractions and
compilations thereof, without retaining any copies of the items required to
be returned. The obligations of this paragraph extend to the employees,
agents, affiliates and contractors of each Party, and each Party shall
inform such persons of their obligations hereunder.
Notification obligation. Each Party shall, upon learning of any
unauthorized disclosure or use of any of the other Party's Confidential
Information, notify the other Party promptly and cooperate fully with such
Party to protect such Confidential Information.
Disclosure required by law. If Broker-Dealer believes it is required by law
or by a subpoena or court order to disclose any Confidential Information,
Broker-Dealer, prior to any disclosure, shall promptly notify Insurer in
writing attaching a copy of the subpoena, court order or other demand and
shall make all reasonable efforts to allow Insurer an opportunity to seek a
protective order or other judicial relief.
Non-restricted information. Except as stated in the final sentence of this
paragraph, nothing in this Agreement shall be construed to restrict
disclosure or use of information that: (a) was in the possession of or
rightfully known by the recipient, without an obligation to maintain its
confidentiality, prior to receipt from the other Party; (b) is or becomes
generally known to the public without violation of this Agreement; (c) is
obtained by the recipient in good faith from a third party having the right
to disclose it without an obligation of confidentiality; (d) is
independently developed by the receiving party without the participation of
individuals who have had access to the other Party's confidential or
proprietary information. The Parties acknowledge that certain laws
governing Confidential Information about individuals are more restrictive
than the foregoing statements and they agree to comply in all respects with
such laws.
Compliance with law. Each Party agrees, In connection with its performance
under this Agreement, to comply with all applicable laws, including but not
limited to laws protecting the privacy of non-public personal information
about individuals.
Survival. The provisions of this Agreement relating to confidentiality
shall survive termination or expiration of this Agreement.
16. This Agreement on the part of the Broker-Dealer runs to Princor and the
Insurer and is for the benefit of and enforceable by each.
17. This Agreement shall be governed by and construed in accordance with the
laws of the State of Iowa.
18. Anti-Money Laundering and Know Your Customer Compliance: Broker-Dealer
represents, covenants and agrees that Broker-Dealer is, and at all times
during the term of this Agreement shall be, in compliance with NASD Rule
3011 and the anti-money laundering and know-your-customer requirements
thereof.
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This Broker-Dealer Marketing and Servicing Agreement for Variable Life Contracts
is agreed to as of the date shown on the first page of the Agreement by
Broker Dealer Name
By:
Title:
Date:___________________________
Princor Financial Services Corporation
By:
Title:
Date: __________________________
Principal Life Insurance Company
By:
Xxxxx X. Xxxxxxxx
Title: SMB Distribution Support Officer
Date:
