PRINCIPAL UNDERWRITER’S AGREEMENT
PRINCIPAL
UNDERWRITER’S AGREEMENT
JV
ANNUITY PRODUCTS (All-Star)
Effective:
April 1, 2002
THIS
PRINCIPAL UNDERWRITER’S AGREEMENT is entered into by and among Sun Life
Assurance Company of Canada (U.S.) (Sun Life (U.S.)), a Delaware corporation,
and Clarendon Insurance Agency Inc. (Clarendon), a Massachusetts
corporation.
WITNESSETH
WHEREAS, Sun
Life (U.S.) proposes to issue and offer for sale certain insurance and annuity
contracts as designated by Sun Life (U.S.) 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
|
|
A.
|
Type of
plans
|
The Plans
issued by Sun Life (U.S.) to which this Agreement applies as of the Effective
Date are the All-Star variable annuity product. From time to time,
Sun Life (U.S.) may change, add, or delete the Plans to which this Agreement
applies.
|
|
B.
|
Suspension/Restriction
|
Sun Life
(U.S.) 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 Sun Life (U.S.)’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 Sun Life (U.S.) 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 (collectively referred to
as Distribution Agreements). All Distribution Agreements shall be
subject to approval by Sun Life (U.S.). Sun Life (U.S.), 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.
|
|
B.
Appointment and
Termination of
Representatives
|
(1) The
Distribution Agreements shall provide for the appointment, as insurance agent,
by Sun Life (U.S.) of the financial intermediaries and their individual
representatives. Sun Life (U.S.) reserves the right to terminate any
and all such appointments.
(2) All
appointments and dismissals of individuals as representatives of Sun Life (U.S.)
shall be subject to all applicable laws, rules and regulations and to such
written instructions and rules as Sun Life (U.S.) 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 Sun Life (U.S.), 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 all sales and advertising material for the Plans
with the NASD, when applicable.
(2) Sun Life (U.S.)’s
Responsibilities
Sun Life
(U.S.) shall make available to Clarendon, as necessary, Plan prospectuses,
applications and sales and advertising material.
Sun Life
(U.S.) shall be responsible for the approval of sales and advertising material
if required by state and other local insurance regulatory
authorities.
(3) Sun Life ( U.S.)’s Right to
Approve
Sun Life
(U.S.) shall have the right to review and approve or disapprove all sales and
advertising material to be used for the Plans.
III. Supervision
of Sun Life (U.S.) Associated Persons
Clarendon
has and assumes full responsibility (including training, supervision and
control) for the securities activities of all persons associated with Sun Life
(U.S.) in connection with the distribution, offer and sale of the Plans, as
contemplated by the 1934 Act.
IV. Administration
of the Plans
In its
capacity as principal underwriter, Clarendon shall be responsible for the timely
and proper performance of such administrative functions as may be delegated to
it from time to time by Sun Life (U.S.). Clarendon shall perform all
such functions in accordance with such administrative standards, practices and
procedures as may be established from time to time by Sun Life
(U.S.).
V. Expense
Reimbursement
Sun Life
(U.S.) shall reimburse Clarendon for expenses incurred by Clarendon as the
principal underwriter of the Plans, including: (a) all necessary examination and
registration fees and other expenses of any type incurred by Clarendon with
respect to the registration with the NASD of individuals employed by or
otherwise associated with Sun Life (U.S.); (b) all necessary training and
continuing education expenses incurred by Clarendon with respect to
NASD-registered individuals who are employed by or otherwise associated with Sun
Life (U.S.); and (c) all filing fees incurred by Clarendon with respect to the
filing with the NASD of sales and advertising material for the Plans. Within
thirty (30) days after the end of each quarter, Clarendon will submit to Sun
Life (U.S.) a detailed written statement of the reimbursements due from Sun Life
(U.S.) to Clarendon in the preceding quarter, including reimbursements not
included in any previous statements, and any balance payable as shown in such
statement shall be paid within thirty (30) days following receipt of such
written statement by Sun Life (U.S.).
VI. Books and
Records
A.
Ownership of Business
Records
Sun Life
(U.S.) shall own all Plan records, tax records, payments records, Plan
descriptions, appointment records, representative’s lists and other similar Plan
records maintained by Clarendon, either on paper or in machine-readable form,
pertaining to the duties and responsibilities of Clarendon under or otherwise
created in connection with this Agreement. Such records shall be
delivered to Sun Life (U.S.) promptly after its reasonable request
therefor. Clarendon will maintain all records and accounts in
accordance with Sun Life (U.S.)’s standards or requirements, as communicated
from time to time by Sun Life (U.S.), or otherwise in accordance with generally
accepted industry procedures. At Sun Life (U.S.)’s reasonable
request, Clarendon will make any such records available to Sun Life
(U.S.)’s auditors or to any governmental authority having
jurisdiction over Sun Life (U.S.); but all such records shall, otherwise, be the
sole and exclusive property of Sun Life (U.S.) and shall constitute proprietary
and confidential matter, whether or not identified as such.
Notwithstanding
the foregoing, Sun Life (U.S.), 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. Sun Life (U.S.) 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 Sun Life (U.S.), 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. Sun Life (U.S.) shall maintain, as agent for
Clarendon, such books and records of Clarendon pertaining to the distribution
and servicing of the Plans and 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, Sun Life (U.S.), as agent for
Clarendon, shall maintain and preserve such additional accounts, books and other
record as are required of Clarendon by the 1934 Act. Sun Life (U.S.)
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.
B. Audit
Rights
|
(a)
|
Clarendon
shall furnish the domestic insurance regulator of Sun Life (U.S.) with any
information or reports in connection with any of the services provided
hereunder which the applicable regulator may require of Sun Life
(U.S.).
|
|
(b)
|
Sun
Life (U.S.) shall have access to the books and records of Clarendon during
regular business hours and shall have the right to examine and audit the
books and records pertaining to the business operations serviced under
this Agreement.
|
In
addition to the foregoing, Sun Life (U.S.) may audit Clarendon, at Sun Life
(U.S.)’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 Sun Life (U.S.),
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 Sun Life (U.S.)’s
material outsourcing arrangements reviewed, examined or caused to be
examined. Accordingly, Clarendon undertakes and agrees as
follows:
|
|
(i)
|
The
Canadian Superintendent may exercise the right of Sun Life (U.S.) relating
to audit and inspection rights and monitoring procedures;
and
|
|
|
(ii)
|
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 Sun Life
(U.S.), subject to the Canadian Superintendent agreeing to sign
appropriate confidentiality documentation in form and content satisfactory
to Clarendon.
|
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 Sun Life
(U.S.), subject to the Canadian Superintendent agreeing to sign appropriate
confidentiality documentation in form and content satisfactory to
Clarendon.
VII. Other
Provisions
A. Approval
of Practices and Procedures
Sun Life
(U.S.) 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. Sun Life (U.S.) 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.
B.
Complaints
1. After
recording a customer complaint received by Clarendon in the appropriate customer
complaint file, Clarendon shall immediately forward to Sun Life (U.S.) any
complaints received relating to the Plans, including any notice or complaint
which alleges activity or omission by a representative, broker-dealer, or other
person appointed on behalf of Sun Life (U.S.) under this
Agreement. All such complaints shall be reflected as appropriate in
records and reports filed with the NASD by Clarendon.
2. In
the case of complaints or inquiries relating to the Plans distributed pursuant
to the Distribution Agreements, Sun Life (U.S.) may consult with Clarendon, as
applicable, before responding and thereafter may respond directly or request
Clarendon to investigate and/or respond to such complaints or
inquiries. In such instances, Clarendon, as appropriate, shall
promptly forward to Sun Life (U.S.) copies of all documents and other material
relating to such investigations and/or responses. Whichever party to
this Agreement responds, it is expressly acknowledged and agreed that the
complaint resolution process shall confirm to the “fair dealing” standards
established by the NASD.
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 Sun Life (U.S.), and
such bond shall be of a type and amount and issued by a reputable company,
satisfactory to Sun Life (U.S.).
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 SUN
LIFE (U.S.):
Sun Life
Assurance Company of Canada (U.S.)
One Sun
Life Executive Park
Xxxxxxxxx
Xxxxx, XX 00000
Attention:
Secretary
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
Commonwealth of Massachusetts.
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.
IN
WITNESS WHEREOF, each of the undersigned parties has executed this Agreement, by
its duly authorized officers, to be effective this 1st day of April,
2002.
SUN LIFE
ASSURANCE COMPANY OF CANADA (U.S.)
________________________________
For the
President
________________________________
For the
Secretary
CLARENDON
INSURANCE AGENCY, INC.
By: ________________________________
Name: ________________________________
Title: ________________________________
By: _______________________________
Name: _______________________________
Title: _______________________________
gc:\evers2002\Principal
Underwriter Agt AllStar.doc
--
