JEFFERSON PILOT VARIABLE CORPORATION
Xxx Xxxxxxx Xxxxx, XX Xxx 0000, Xxxxxxx, XX 00000-0000
(000)-000-0000
ENSEMBLE SL BROKER-DEALER SELLING AGREEMENT
This agreement is made by and between Jefferson Pilot Variable Corporation, a
corporation organized and existing under the laws of the state of North Carolina
with its principal place of business in Concord, New Hampshire (hereafter called
"JPVC") and ______________________________________________, a corporation
organized and existing under the laws of the State of
____________________________ (the State) with its principal place of business in
__________________________________ (hereinafter called "Broker").
In consideration of the premises and the mutual agreements herein made, it is
agreed as follows:
EFFECTIVE DATE
(TO BE COMPLETED BY JPVC)
This agreement shall be effective as of ___________________________, 19__.
BACKGROUND
JPVC pursuant to the provisions of a Distribution Agreement between JPVC and
Jefferson Pilot Financial Insurance Company ("JP Financial") , acts as a
distributor of certain flexible premium variable life insurance policies issued
by JP Financial and listed on the attached commission schedule. JPVC desires
that Broker distribute such policies in those states in which Broker, JPVC, JP
Financial and the policies are appropriately licensed or approved, and broker
desires to sell such policies, through its registered representatives
("representatives") in such states, on the terms and conditions set forth
hereinafter.
CONDITIONS
Broker represents, warrants and convenants that:
a) It is and will remain at all times during the term of this agreement a
member in good standing of the National Association of Securities Dealers,
Inc. ("NASD") and a broker-dealer duly registered with the Securities and
Exchange Commission ("SEC") and licensed as a broker-dealer under
applicable state securities laws;
b) It is a corporation organized and existing in good standing under the
laws of the State and the execution and performance of this agreement has
been duly authorized and will not violate any document or instrument to
which it is a party or by which it is bound;
c) It is, and during the term of this agreement will remain, in compliance
with the broker-dealer capital and/or net capital and financial reporting
requirements of the SEC, the NASD, and any applicable securities exchanges
of which it is a member, and of every state in which it is required to be
licensed as a broker-dealer, and shall immediately inform JPVC of any
noncompliance with such requirements and provide to JPVC, upon request,
such financial reports filed with any applicable regulatory agency
(including but not limited to the FOCUS reports filed with the SEC);
d) It will notify JPVC immediately in the event a determination is made to
cancel, terminate, or substantially modify its blanket bond insurance
coverage;
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e) It will keep confidential any confidential information it may acquire
as a result of this agreement regarding JPVC, its affiliates' and
subsidiaries' affairs, which requirement shall survive the termination of
this agreement;
f) Only representatives of Broker who are agents of JP Financial, and duly
registered as such with states having jurisdiction over such
representatives, may sell such policies;
g) Broker and/or its representatives selling Ensemble SL policies shall
maintain for the duration of the agreement an errors and omissions policy
that covers the activities and subject matter of this agreement and is
deemed satisfactory to JPVC;
h) Broker will select persons associated with it who are trained and
qualified to solicit applications for the purchase of Ensemble SL policies
in conformance with all applicable local, state, and federal laws. Any such
person shall be a representative of the Broker in accordance with the rules
of the NASD and be licensed to offer Ensemble SL policies in accordance
with the insurance laws of any jurisdiction in which such person solicits
applications. Broker will train and supervise its representatives to insure
that solicitation for sales of Ensemble SL are made in accordance with the
terms and conditions of the current prospectus for Ensemble SL. In addition
Broker will ensure that its representatives are soliciting applications
using only the current prospectus, Statement of Additional Information, and
authorized sales material supplied by JPVC.
2. JPVC represents, warrants, and covenants that:
a.) It is and will remain at all times during the term of this
agreement a member in good standing of the NASD and a broker-
dealer duly registered with the SEC;
b.) It is a corporation organized and existing in good standing under
the laws of North Carolina, and that the execution and
performance of this agreement has been duly authorized;
c.) It is, and during the term of this agreement will remain, in
compliance with the capital and financial reporting requirements
of the NASD; and
d.) It shall keep confidential any confidential information it may
require as a result of this agreement regarding Broker's business
and affairs, which requirement shall survive termination of this
agreement.
3. Subject to the terms and conditions contained herein, JPVC hereby
authorizes Broker as an independent contractor to make sales of such policies
for which JPVC acts as a distributor. Broker agrees to direct the sales
activities of its representatives and to enforce written supervisory procedures
to assure strict compliance with applicable rules and regulations of the NASD,
and any applicable state securities laws and regulations.
4. JPVC shall not have any responsibility for the supervision of any
representative or any other associated person or affiliate of Broker. Broker
agrees that it shall have sole responsibility for maintaining an organized
program of supervision and compliance, consistent with the rules and regulations
of the SEC, the NASD, any applicable national securities exchanges and any state
securities regulatory agency having jurisdiction, with respect to the sale of
such policies. Such program shall include, but not be limited to, the following
types of procedures:
(a) Review, verification and approval of all new accounts and
applications for the purpose of establishing the identity,
capacity to contract, reputability, financial condition,
creditworthiness, investment objectives and needs of each
customer (and if applicable, essential information concerning
such customer's agent); and obtaining and providing all documents
and agreements required in opening, operating and maintaining
such a policy,
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including, but not limited to, delivery of the current
prospectus;
(b) Review of all statements relating to each customer's policy;
(c) Investigation and analysis of all bona fide customer complaints
and regulatory or customer inquires relating to policies sold
through Broker, with prompt notification thereof to JPVC;
(d) Registration of the firm as a broker-dealer and of representative
in all states in which business is conducted and such
registration is required.
5. Broker agrees to use its best efforts on behalf of JPVC while performing the
functions set forth herein. Broker agrees to promptly report and remit to JPVC
all checks, drafts or funds of any kind received from clients and in the event
of failure to do so, all rights hereunder, including all accrued and accruing
commissions, shall immediately terminate.
6. Broker shall be free to exercise its own judgment as to whom to solicit and
the time, place, and manner of solicitation. Broker shall pay all expenses
incurred by it hereunder and shall comply with all federal and state laws,
ordinances and regulations relating thereto.
7. Broker hereby assigns to JPVC any and all commissions or other monies now or
hereafter owed to it, arising from the sale of such policies by its
representatives or from other business which Broker may do with JP Financial, or
any subsidiary or affiliate thereof, or their lawful successors, as security for
repayment for any advance or other extension of credit by JPVC to Broker.
Broker hereby authorizes JP Financial or any of its subsidiaries or
affiliates, upon receipt of written demand by JPVC, to pay such monies to JPVC
to the extent of JPVC's interest therein or, in the alternative, Broker hereby
grants to JPVC and its affiliates a right of offset against such commissions or
other monies due Broker, which right shall survive the termination of this
agreement.
8. Except as otherwise stated herein, Broker shall be entitled to commissions
with respect to all sales of such policies it shall make in accordance with the
Commission Schedule(s) attached hereto, which schedule(s) may be modified at any
time by JPVC. All commissions are payable only upon receipt of full payment of
premiums due on such policies and are not paid until such premiums are earned.
Payments, if any, made to Broker's account in excess of commissions earned by it
in accordance with said Commission Schedule, as amended or supplemented, shall
be deemed an advance against future commissions and the amount of any such
excess shall be refunded to JPVC in the event of termination of this agreement,
to the extent that such commissions have not been earned prior to such
termination.
If JP Financial is required to refund premiums on any policy sold under this
agreement for any reason, including, but not limited to, the exercise of any
"free look" right by a policyholder, then no commission will be payable to
Broker in connection with such policy and any commissions previously paid will
be refunded by Broker. Any such refund of commissions by Broker will be netted
against commissions next due the Broker, with Broker liable for any commission
refunded in excess of commissions payable to Broker.
In the event that it is determined by either party for any reason (other
than a termination of the agreement by JPVC for "cause") that Broker will no
longer sell new Ensemble SL Policies ("Determination Date"), the agreement will
remain in effect solely to allow Broker to receive commissions on premium
payments received in connection with Ensemble SL policies which were either in
effect or for which applications had been received prior to the Determination
Date. The Determination Date will be thirty days after the date of written
notification of the cessation of the sale of new policies. Broker shall maintain
all SEC, NASD, and all applicable state securities and insurance registrations
and licenses, to the extent required in order to continue to receive such
commissions, and both JPVC and Broker shall continue to comply with all
applicable terms and conditions of the agreement after the Determination Date.
If Broker
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does not maintain such required registrations and licenses, is dissolved or
liquidated, or does not comply with the applicable terms and conditions of the
agreement, the agreement will immediately terminate and no further commissions
will be due to Broker.
In the event that the Broker, or any partner or employee of the Broker, at
any time after the termination of this agreement shall improperly induce, or
attempt to induce any policyholder of JPVC to cancel or fail to renew any
Ensemble SL policy with JPVC, then JPVC shall have the right to terminate all
future payments of any sort hereunder. This provision shall survive the
termination of the other terms and provisions of the agreement.
9. JPVC will, each month, furnish to broker a statement of Broker's account
showing all earnings and payments made to its account allocated by
representative registered with Broker and the balance due from JPVC. Broker
agrees to notify JPVC, in writing, within 30 days, of any discrepancy or
disagreement with such statement in any respect, and in the absence of such
notice, such statement shall be conclusively presumed to be correct unless the
parties mutually agree to an adjustment in writing.
Notwithstanding anything to the contrary herein, JPVC shall have no
obligation hereunder to any registered representative of Broker.
10. Broker shall indemnify and hold harmless JPVC and its affiliates from any
losses, claims, damages or liabilities, including reasonable attorney's fees to
which JPVC and its affiliates may be subject arising out of or resulting from
unauthorized use of Ensemble SL sales materials and for negligent, improper,
fraudulent, unsuitable, or unauthorized acts or omissions by Broker, its
principals, employees or representatives relating to solicitation of
applications for Ensemble SL.
Notwithstanding the forgoing, JPVC will indemnify and hold harmless Broker
from any losses, claims, damages or liabilities, including reasonable attorney's
fees which result from any untrue statement of any material fact contained in
the prospectus of Ensemble SL or any JPVC prepared sales material or advertising
material or omission to state a material fact in the Ensemble SL Prospectus,
statement of additional information or supplements thereto.
If any action or proceeding shall be brought against JPVC or Broker relating
to a policy sold pursuant to this agreement, the party against whom such action
or proceeding is brought shall give prompt written notice to the other party to
this agreement if a claim is intended to be asserted against such other party
with respect to indemnity against any loss or expense and such other party shall
be entitled to participate in the defense thereof at its own expense.
In the event of any dispute with a policyholder, JPVC shall have the right
to take such action as JPVC may in its sole discretion deem necessary to
promptly effect mitigation of damages or limitation of losses without obtaining
the prior consent of Broker.
JPVC shall the right to settle with any policyholder engaged in a dispute
with JPVC or Broker without the prior consent of Broker and without waiving or
electing to relinquish any rights or remedies JPVC may have against Broker.
Additionally, without limiting the forgoing indemnities, JPVC and Broker
each agree to indemnify and hold harmless the other against any breach of
representation, warranty or covenant herein by the indemnifying party.
The indemnification provisions of this agreement shall remain operative and
in full force and effect, regardless of the termination of this agreement and
shall survive any such termination.
11. Broker shall submit to JPVC, for written approval in advance of use, all
advertising, signs and sales promotion material involving the use of JPVC's name
and/or the sale of such policies.
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12. No relationship of principal and agent or partnership or joint venture
between the parties hereto is intended to be established and neither party shall
hold itself out as the agent, partner or joint venture of or with the other
party in any respect whatsoever. Except for this agreement, no other legal
relationship is intended between the parties.
13. This agreement may be terminated at any time by either party upon thirty
(30) days written notice to the other, and may be terminated immediately by JPVC
for cause. For purposes of this section 13, "cause" shall mean failure to
return money to clients where appropriate, failure to account for any money
received from or on behalf of JPVC, any fraud, misrepresentation or dishonesty
in any relationship with JPVC, its affiliates, or any past, present, or proposed
client, violation of any federal or state law or regulation, or violation of any
of the terms of this contract.
Notice of such termination shall be deemed to be given on the day mailed or
delivered by hand to an officer of either party. If mailed to JPVC, such notice
shall be address to the principal office of JPVC, currently Xxx Xxxxxxx Xxxxx,
Xxxxxxx, Xxx Xxxxxxxxx 00000, and if mailed to the Broker, shall be addressed to
the last known address as shown on the records of JPVC.
14. If any dispute, disagreement or controversy shall arise in connection with
any interpretation of this agreement, its performance or nonperformance, or the
figures and calculations used, the parties shall make every effort to meet and
settle their dispute(s) in good faith informally. If the parties to this
agreement cannot agree on a written settlement to the dispute within fourteen
(14) days after it arises, or within a longer period agreed upon by the parties,
then the matter in controversy shall be settled by arbitration, in accordance
with the rules of the Board of Arbitration of the National Association of
Securities Dealers, Inc. The determination of the arbitrator(s), or a majority
of them, shall be final and binding on all parties and judgment upon the award
rendered by the arbitrator(s) may be entered in any state or federal court
having jurisdiction.
15. Broker may not assign this agreement without prior written approval of
JPVC.
16. This agreement is exclusively for and shall inure to the benefit of the
parties hereto, their respective heirs, legal representatives, successors and
assigns and shall not be deemed to create any rights for the benefit of third
parties.
17. This agreement is made in the State of New Hampshire, and all questions
concerning its validity, construction or otherwise shall be determined under the
laws of New Hampshire.
IN WITNESS WHEREOF, the parties hereto have executed the agreement in duplicate.
JEFFERSON PILOT VARIABLE CORPORATION BROKER
_____________________________________ _________________________________
By___________________________________ By_______________________________
Print Name___________________________ Print Name_______________________
Title________________________________ Title____________________________
Date_________________________________ Date_____________________________
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COMMISSION SCHEDULE E
Non-Participating Flexible Premium Variable Life Insurance Policies Issued by
Jefferson Pilot Financial Insurance Company ("JP Financial").
This Supplemental Commission Schedule is part of the Broker/Dealer Agreement
entered into by the Broker/Dealer ("Broker") and Jefferson Pilot Variable
Corporation ("JPVC"). This Schedule supersedes all previous Commission
Schedules.
Gross commissions on policies issued on applications personally written by
Registered Representatives of Broker are payable to Broker on premiums received
and earned by JPVC as follows:
Schedule I Schedule II
First Year 65% First Year 65%
(up to Target Premium) (up to Target Premium)
First Year 4% First Year 3%
(in excess of Target) (in excess of Target)
Renewal Years 2 - 15 4% Renewal Years 2 -10 3%
Renewal Years 16 & Later 0% Renewal Years 11 & Later 0%
Asset Based Commission:
Percentage of Account Value
Years 1 -10 0%
Years 11 & Later 0.25%
The schedules of Target premium are published by JP Financial in the brochures
giving the Guideline Premium for Non-Participating Flexible Premium Variable
Life (Ensemble SL). Such schedules are subject to change upon 30 days notice by
JP Financial.
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