Exhibit 3(b)
Prudential Annuities Life Prudential Annuities Distributors,
Assurance Corporation Incorporated
One Corporate Drive One Corporate Drive
Shelton, CT 06484-0883 Xxxxxxx, XX 00000-0000
Telephone (000) 000-0000 Telephone (000) 000-0000
Fax (000) 000-0000 Fax (000) 000-0000
INSURANCE PRODUCTS SALES AGREEMENT
THIS AGREEMENT is made this __ day of ______________, ____, by and among
Prudential Annuities Life Assurance Corporation ("PALAC"), a Connecticut
insurance company; Prudential Annuities Distributors, Incorporated ("PAD"), a
Delaware corporation (PALAC and PAD referred to collectively as "Prudential
Annuities"); ____________________________________ ("Broker-Dealer"), a
______________________________ corporation; and any and all undersigned
insurance agency affiliates of Broker-Dealer ("Associated Insurance Agencies").
WHEREAS, PALAC offers certain variable annuity contracts, modified
guaranteed annuity contracts and variable life insurance policies which are
deemed to be securities under the Securities Act of 1933 (the "1933 Act")
(collectively the "Registered Contracts"), as well as certain fixed and
variable annuity contracts and life insurance contracts that are exempt from
registration under the 1933 Act ("Non-Registered Contracts") (Registered
Contracts and Non-Registered Contracts referred to collectively, as
"Contracts"); and
WHEREAS, PALAC has appointed PAD, a broker-dealer, as the Distributor of the
Registered Contracts; and
WHEREAS, Broker-Dealer is a broker-dealer engaged in the sale of securities
and other investment products, including variable insurance products, and is
licensed in certain states as an insurance agent or agency; and
WHEREAS, in those states where Broker-Dealer cannot obtain the necessary
licenses as an insurance agent or agency, Broker-Dealer has entered into an
agreement with Associated Insurance Agency to act on its behalf in the capacity
of insurance agent; and
WHEREAS, in the event that Broker-Dealer and Associated Insurance Agency are
the same party, the duties, responsibilities and privileges of Associated
Insurance Agency under this Agreement shall be undertaken by Broker-Dealer; and
WHEREAS, PALAC and PAD, in their individual capacities, proposes to
authorize Broker-Dealer and any undersigned Associated Insurance Agency to
solicit sales of the Contracts and ongoing premium and purchase payments to the
Contracts;
NOW THEREFORE, in consideration of the premises and mutual promises contained
herein including the Schedule(s), as amended from time to time, the parties
hereto agree as follows:
1. APPOINTMENT AND AUTHORIZATION
(a) PALAC and PAD hereby authorize Broker-Dealer to solicit sales of
Contracts identified in the attached Schedule(s). PALAC hereby appoints
Broker-Dealer, and any Associated Insurance Agency, in their capacity as
licensed insurance agency, to solicit sales of the Contracts and ongoing
premium and purchase payments in all states where PALAC is authorized to do
business and where Broker-Dealer and/or Associated Insurance Agency is properly
licensed and appointed on a non-exclusive basis. Broker-Dealer and Associated
Insurance Agency accept such appointment and authorization, and each agrees to:
(i) use its best efforts to find purchasers of
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the Contracts that satisfy PALAC's issue requirements; (ii) provide ongoing
service to such purchasers, including information consulting services, as
described below; and (iii) where appropriate, to make appropriate efforts to
conserve and retain Contracts that are with PALAC.
(b) Broker-Dealer and Associated Insurance Agency are authorized to
represent PALAC and PAD only to the extent expressly granted in this Agreement.
No further authority is granted or implied. Except for this Agreement, no other
legal relationship is intended or exists between Prudential Annuities and
Broker-Dealer or Prudential Annuities and Associated Insurance Agency.
2. REPRESENTATIONS AND WARRANTIES
(a) PALAC, PAD, Broker-Dealer and Associated Insurance Agency each represent
and warrant to one another that they and the officers signing below have full
power and authority to enter into this Agreement, and that this Agreement has
been duly and validly executed by them and constitutes a legal, valid and
binding agreement.
(b) PAD represents and warrants to Broker-Dealer that PAD is registered as a
broker-dealer with the Securities and Exchange Commission (the "SEC") under the
Securities Exchange Act of 1934 ("1934 Act") and under the state securities
laws of each jurisdiction in which such registration is required to distribute
the Registered Contracts, and that it is a member in good standing of the
Financial Industry Regulatory Authority ("FINRA").
(c) Broker-Dealer represents and warrants to PAD that Broker-Dealer is, and
at all times when performing its functions and fulfilling it obligations under
this Agreement, will be, registered with the SEC as a broker-dealer under the
1934 Act and under the state securities laws of each jurisdiction in which such
registration is required for the sale of the Contracts, and is a member in good
standing of FINRA. Broker-Dealer will notify PAD immediately, in writing, if
such registration is terminated or suspended, and shall take all reasonable
actions to reinstate such registration. Broker-Dealer further represents and
warrants to PALAC that Broker-Dealer is a properly licensed insurance agency in
each jurisdiction in which such licensing is required for purposes of receiving
compensation in connection with the Contracts, except in those states where
Broker-Dealer has an Associated Insurance Agency that acts in the capacity of
licensed insurance agency for purposes of receiving compensation.
(d) Associated Insurance Agency represents and warrants to PALAC that
Associated Insurance Agency is, and at all times when performing its functions
and fulfilling its obligations under this Agreement, will be, a properly
licensed insurance agency in each jurisdiction in which such licensing is
required for purposes of soliciting sales of the Contracts and receiving
compensation in connection with the Contracts and for ongoing premiums or
purchase payments thereon.
3. COMPLIANCE WITH REGULATORY REQUIREMENTS
Broker-Dealer shall comply with all rules and regulations of the SEC and
FINRA governing the sale of the Registered Contracts and all applicable state
insurance laws, rules and regulations. Broker-Dealer and Associated Insurance
Agency shall comply with all applicable state and federal laws and the rules
and regulations of governmental or regulatory agencies affecting or governing
the sale of the Contracts including, but not limited to, those of the
Department of Labor, in connection with the sale of Contracts deemed subject to
the Employee Retirement Income Security Act. Broker-Dealer and Associated
Insurance Agency shall also comply with all applicable rules and administrative
procedures of Prudential Annuities.
4. LICENSING AND/OR APPOINTMENT OF REGISTERED REPRESENTATIVES
(a) PALAC hereby authorizes Broker-Dealer to designate registered
representatives who are associated persons of Broker-Dealer for appointment by
PALAC as individual insurance agents, for the purpose of soliciting sales of
the Registered Contracts ("Registered Representatives"). Broker-Dealer and
Associated Insurance
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Agency (where required) are hereby authorized to designate individual insurance
agents affiliated with Broker-Dealer or Associated Insurance Agency, for the
purpose of soliciting sales of the Non-Registered Contracts ("Agents").
Broker-Dealer and Associated Insurance Agency shall not recommend a Registered
Representative or Agent for appointment by PALAC unless such Registered
Representative or Agent is duly licensed as an insurance agent in the state(s)
in which it is proposed that such Registered Representative or Agent will
solicit sales of the Contracts. Registered Representatives and Agents must
specify with each Contract application, the Broker-Dealer and/or Associated
Insurance Agency on whose behalf the application has been solicited. If a
Registered Representative of Broker-Dealer or Agent of Associated Insurance
Agency is no longer to be treated as the agent of record on a Contract,
Broker-Dealer or Associated Insurance Agency must immediately notify PALAC in
writing and, within thirty (30) business days of such notice, identify a
Registered Representative of Broker-Dealer or Agent of Associated Insurance
Agency who will act as the substitute agent of record.
(b) Broker-Dealer and Associated Insurance Agency are solely responsible for
the conduct of Registered Representatives and/or Agents associated with such
Broker-Dealer and/or Associated Insurance Agency, as well as for monitoring
ongoing compliance with applicable federal and state laws, rules and
regulations and applicable NASD Rules. Prudential Annuities is not liable and
undertakes no obligations under any agreement between Broker-Dealer and
Registered Representative or Associated Insurance Agency and its Agents unless
Prudential Annuities has specifically agreed to do so in writing.
(c) PALAC, at its sole discretion, reserves the right to refuse to appoint
any Registered Representative or Agent or, once appointed, to terminate or
refuse to renew any Registered Representative's or Agent's appointment with
PALAC. By written notice to Broker-Dealer or Associated Insurance Agency, PALAC
may require Broker-Dealer or Associated Insurance Agency to cause Registered
Representatives or Agents to cease soliciting Contracts and additional premiums
or purchase payments thereon on behalf of PALAC or require Broker-Dealer or
Associated Insurance Agency to cancel the appointment by PALAC of any of their
Registered Representatives or Agents. Broker-Dealer and Associated Insurance
Agency shall notify PAD immediately in writing if any Registered Representative
appointed by PALAC ceases to be a Registered Representative of Broker-Dealer,
is disciplined or suspended by FINRA or by Broker-Dealer, or if any Registered
Representative or Agent ceases to be properly licensed or is the subject of a
disciplinary proceeding in any state. Further, Broker-Dealer has, follows and
enforces policies and procedures obligating its Registered Representatives to
update their FINRA U-4. Broker-Dealer shall promptly notify Prudential
Annuities if it becomes aware that any Registered Representative who is
appointed by Prudential Annuities has updated their FINRA Form U4 to disclose a
conviction that would disqualify them from engaging in the business of
insurance under 18 USCS Sec. 1033 (Federal Crime Xxxx) and has not otherwise
received the consent and/or waiver of an authorized insurance regulator to
engage in the business of insurance. .
(d) Broker-Dealer and Associated Insurance Agency represent, warrant and
certify that, on their own behalf, and as agent on behalf of PALAC, each:
(i) has performed due diligence in compliance with state law and has duly
investigated and performed a thorough background check into the character and
fitness of any Registered Representatives or Agent; (ii) is not aware of any
felony or misdemeanor convictions in the last 10 years arising out of conduct
involving embezzlement, fraudulent conversion or misappropriation of funds or
securities, or involving violations of (S)(S)1341, 1342, or 1343 of Title 18 of
the United States Code or any subsequent amendments thereto; and (iii) is
satisfied that each such Registered Representative and/or Agent that
Broker-Dealer and/or Associated Insurance Agency has designated is trustworthy,
financially responsible, in good business standing and competent for
appointment to act as an individual insurance agent of PALAC. Further,
Broker-Dealer agrees to use reasonable efforts to not knowingly recommend
anyone for appointment to conduct insurance business who is disqualified from
engaging in the business of insurance under 18 USCS (S)1033 (Federal Crime
Xxxx), or who has not otherwise received consent and/or waiver of an authorized
insurance regulator to engage in the business of insurance. Broker-Dealer and
Associated Insurance Agency agree, to the extent permitted by law, to provide
PALAC with copies of any and all background check reports and any additional
documentation in connection with the investigation into the background of the
designated Registered Representative or Agent.
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(e) Registered Representatives who are duly licensed as insurance agents and
appointed by PALAC shall have authority to solicit sales of the Registered
Contracts and Non-Registered Contracts and additional premiums and purchase
payments thereon. In addition, certain group variable annuity contracts that
are sold as funding vehicles for qualified plans and that are exempt from
registration under the 1933 Act ("Qualified Contracts") may only be solicited
by Registered Representatives of Broker-Dealer. Agents who are not registered
representatives of Broker-Dealer but who are properly insurance licensed and
associated with Broker-Dealer and/or Associated Insurance Agency in the
applicable jurisdiction may only solicit Non-Registered Contracts.
(f) Broker-Dealer and Associated Insurance Agency agree to assist PALAC in
appointing insurance licensed Registered Representatives and Agents, under
applicable state insurance laws. Broker-Dealer and Associated Insurance Agency
also agree to comply with PALAC's requirements regarding the submission of
licensing or appointment documentation for proposed Registered Representatives
and Agents.
5. SUPERVISORY RESPONSIBILITIES
(a) Broker-Dealer shall have full responsibility for training and
supervision of all Registered Representatives and all other persons associated
with Broker-Dealer who are involved directly or indirectly in the offer or sale
of the Registered Contracts, and to the extent required by SEC and/or FINRA,
certain Non-Registered Contracts that are Qualified Contracts. All such persons
shall be subject to the supervision and control of Broker-Dealer with respect
to such persons' activities in connection with the sale of Registered Contracts
and Qualified Contracts. Associated Insurance Agency shall have full
responsibility for training and supervision of all Agents who are involved
directly or indirectly in the offer or sale of the Contracts and for Agent's
compliance with applicable state insurance laws. Broker-Dealer and Associated
Insurance Agency shall be responsible for all acts and omissions of each
Registered Representative or Agent, as applicable. PALAC and PAD shall not
incur liability or have any responsibility for the supervision of Registered
Representatives or Agents.
(b) Before Registered Representatives begin soliciting sales of the
Registered Contracts or Qualified Contracts, Broker-Dealer and Associated
Insurance Agency must insure that the Registered Representatives are: (i) an
associated person of Broker-Dealer; (ii) licensed, registered or otherwise
qualified under applicable federal and state laws to engage in such activities
and any applicable FINRA registration; (iii) trained in the sale of the such
Contracts; and (iv) only soliciting sale of such Contracts in jurisdictions
where PALAC has authorized such solicitations.
(c) Before Registered Representatives or Agents engage in the sale of the
Non-Registered Contracts, Broker-Dealer and Associated Insurance Agency must
insure that such individuals are: (i) licensed or otherwise qualified under
applicable state laws to engage in such activities; (ii) trained in the sale of
such Contracts; and (iii) only soliciting sales of such Contracts in
jurisdictions where PALAC has authorized such solicitations.
(d) Broker-Dealer and Associated Insurance Agency are responsible for
supervising and reviewing its Registered Representatives' use of sales
literature and advertising and all other communications with the public related
to the Contracts. With regard to Registered Contracts, no sales solicitation,
including the delivery of supplemental sales literature or other materials,
shall occur, be delivered to, or used with a prospective purchaser unless
accompanied or preceded by the appropriate then current product prospectus,
unless such material is not required to be so presented.
(e) Broker-Dealer and Associated Insurance Agency shall establish rules and
procedures as may be necessary to cause diligent supervision of the securities
activities of Registered Representatives, employees and/or affiliated persons
or organizations. Upon request by PALAC or PAD, Broker-Dealer and Associated
Insurance Agency shall furnish in a timely fashion any records or other
documentation evidencing such diligent supervision.
(f) When properly authorized by a Contract owner, Broker-Dealer and
Associated Insurance Agency shall execute any electronic or telephone
transactions in accordance with the current procedures communicated by PALAC
and as may be described in the prospectus(es) applicable to the Contracts.
Broker-Dealer agrees that, in consideration for the electronic and telephone
transaction privileges available under the Contracts, PALAC will not be liable
for any loss incurred as a result of acting upon electronic or telephone
instructions containing unauthorized, incorrect or incomplete information
received from Broker-Dealer, Associated Insurance Agency, Registered
Representatives or Agents.
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(g) In the event a Registered Representative or Agent performs any
unauthorized, incorrect or incomplete transaction(s) with respect to a
Contract(s), Broker-Dealer and/or Associated Insurance Agency shall bear sole
responsibility for any and all financial liability resulting from such conduct,
shall immediately notify PALAC in writing, and, in the case of unauthorized
transactions, shall act to terminate the sales activities of such Registered
Representative or Agent relating to the Contract(s).
(h) In the event a Registered Representative, Agent or an other persons
associated with Broker-Dealer who is involved in the sale or servicing of the
Contracts fails to meet the Broker-Dealer's or Associated Insurance Agency's
rules and standards, Broker-Dealer or Associated Insurance Agency, as the case
may be, shall immediately notify PALAC in writing and shall terminate the sales
or servicing activities of such person related to the Contracts.
6. MISREPRESENTATION
Broker-Dealer, Associated Insurance Agency, Registered Representatives, and
Agents, in connection with soliciting sales of the Contracts or soliciting
additional premiums, purchase payments, or other transactions under a Contract,
shall not give any information or make any representations or statements
concerning the Contracts which are materially misleading or omit to state
material facts necessary in order to make the statements made not misleading,
or which are not contained in or otherwise consistent with information or
representations contained, (i) in the case of a Registered Contract, in the
prospectus, statement of additional information and registration statement for
the Contracts, or in reports or proxy statements thereof, or in promotional,
sales or advertising material or other information supplied and approved in
writing by PALAC or PAD for such use, (ii) in the case of Qualified Contracts,
in any disclosure statement distributed by PALAC, or (iii) in the case of
Non-Registered Contracts, in the contracts or materials furnished by PALAC.
Broker-Dealer, Associated Insurance Agency, Registered Representatives, and
Agents may not modify or represent that they may modify any such prospectus,
statement of additional information, registration statement, disclosure
statement, contract, promotional, sales or advertising materials.
7. USE OF ADVERTISING AND PROMOTIONAL MATERIAL
Broker-Dealer, Associated Insurance Agency, Registered Representatives, and
Agents shall not use or distribute, in writing or electronically, any
advertisement or sales literature, as defined in Section 2210 of the rules of
the National Association of Securities Dealers, Inc. adopted by FINRA ("NASD
Rules") or applicable state insurance law, relating to the Contracts, unless
the specific item has been provided by Prudential Annuities or has first been
approved for use in writing by Prudential Annuities. Prudential Annuities
reserves the right to recall any material provided by them at any time for any
reason, and Broker-Dealer and Associated Insurance Agency shall promptly comply
with any such request for the return of material and shall not use any such
material thereafter. Additionally, Broker-Dealer or Associated Insurance Agency
must return or destroy all manuals, forms, supplies, and any other properties
furnished by Prudential Annuities immediately upon termination of this
Agreement. Broker-Dealer, Associated Insurance Agency, Registered
Representatives, and Agents shall comply with IM-2210-2 of the NASD Rules
regarding Communications with the Public about Variable Life Insurance and
Variable Annuities.
8. SOLICITING APPLICATIONS AND PAYMENTS
(a) Broker-Dealer and Associated Insurance Agency shall review all
applications, enrollment forms or other forms seeking Contracts, additional
coverage or reinstatement of coverage under a Contract for completeness and
accuracy, as well as compliance with applicable suitability standards. Upon
request, Broker-Dealer and Associated Insurance Agency shall provide PALAC
and/or PAD with satisfactory proof of approval by a principal of Broker-Dealer
or Associated Insurance Agency indicating that the application has been
reviewed for suitability. Broker-Dealer will promptly, but in no case later
than the end of the next business day following receipt by Broker-Dealer or a
Registered Representative, forward all complete and correct applications, forms
and/or other required
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documentation, together with any payments received with the such forms, without
deduction for compensation unless there has been a written agreement for
netting of sales or service compensation payable by Prudential Annuities to
Broker-Dealer and/or Associated Insurance Agency, as applicable.
(b) Prudential Annuities may authorize Broker-Dealer and Associated
Insurance Agency to transmit applications, forms and/or other required
documentation to Prudential Annuities via electronic transmission, subject to
all applicable administrative procedures and rules of Prudential Annuities.
Broker-Dealer and Associated Insurance Agency shall provide such information in
a form and manner that is mutually agreeable to Prudential Annuities and
Broker-Dealer and Associated Insurance Agency. Any agreement between the
parties hereto relating to electronic transmission of applications, forms and
other required documentation ("Electronic Transmission Agreement") is
incorporated into this Agreement by reference and will provide standards as to
timeliness and accuracy of electronic transmissions as well as establish rules
as to liability for any losses due to delays or transmission errors. Any
Electronic Transmission Agreement will only modify this Agreement to the extent
indicated.
(c) All requests for Contracts, additional coverage, or reinstatement of
coverage are subject to PALAC's acceptance. PALAC reserves the right, in its
sole discretion, to reject any such request and refund or return any payment
made thereon. PALAC also reserves the right to prescribe conditions, rules, and
regulations for the offer and acceptance of its Contracts, including additional
coverage thereon or reinstatement of coverage, which may be changed from time
to time. PALAC will forward changes to such conditions, rules, and regulations
to Broker-Dealer or Associated Insurance Agency at their last known mailing
address.
(d) PALAC will forward Contracts once issued to Broker-Dealer or Associated
Insurance Agency for delivery to the Contract owner according to procedures
established by PALAC, unless PALAC has provided otherwise. Broker-Dealer and
Associated Insurance Agency shall deliver each such Contract to the respective
Contract owner. With respect to Registered Contracts, Broker-Dealer must
deliver the Contract within the five (5) business days after receipt by
Broker-Dealer or Associated Insurance Agency. Broker-Dealer shall be liable to
PALAC for any loss incurred by PALAC (including consequential damages and
regulatory penalties) due to any delay by Broker-Dealer, Associated Insurance
Agency, Registered Representative or Agent in delivering such Contract.
Notwithstanding the above obligation, PALAC reserves the right to transmit
documentation directly to the Contract owner.
(e) Notwithstanding Paragraph 8(d), Broker-Dealer, Associated Insurance
Agency, Registered Representative or Agent shall not deliver a life insurance
contract to a Contract owner if the Registered Representative or Agent or any
employees or affiliated persons of Broker-Dealer or Associated Insurance Agency
have knowledge that the Contract owner's health has changed since the
application was taken or unless a premium payment previously has been made and
accepted by PALAC on such Contract. Any such Contract must be returned to PALAC
at its Home Office.
9. PREMIUM PAYMENTS
All premium or purchase payments (hereinafter collectively referred to as
"Payments") are the property of PALAC and shall be transmitted to PALAC by
Broker-Dealer or Associated Insurance Agency immediately upon receipt by
Broker-Dealer or Associated Insurance Agency or any Agent or Registered
Representative in accordance with PALAC's administrative procedures.
Broker-Dealer or Associated Insurance Agency may not deduct or offset any
compensation claimed by Broker-Dealer or Associated Insurance Agency, unless
there has been a written agreement for netting of sales or service compensation
payable by Prudential Annuities to Broker-Dealer and/or Associated Insurance
Agency, as applicable. CUSTOMER CHECKS SHALL BE MADE PAYABLE TO THE ORDER OF
"PRUDENTIAL ANNUITIES LIFE ASSURANCE CORPORATION." PALAC reserves the right to
reject and return any Payment for any reason.
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10. COMPENSATION
(a) PALAC will pay sales and/or service compensation to Broker-Dealer (or,
if required by law, to Associated Insurance Agency) in connection with the
Contracts according to the terms of the applicable Schedule(s) in effect as of
the date sales and/or service compensation is payable under the Contract.
Schedules effective on or after the issue date of a Contract will govern all
subsequent sales and/or service compensation payable for such Contract on or
after the Schedule effective date. The amount of compensation payable under any
Schedule(s), the continued availability of any compensation option(s) and other
conditions relating to payment of such compensation are subject to change upon
written notice to Broker-Dealer and Associated Insurance Agency, as applicable.
(b) PALAC provides compensation for sale of the Contracts, as commissions
and/or asset-based compensation. PALAC may also provide compensation in
relation to providing information consulting services to Registered Contract
owners on behalf of PALAC. Information consulting services consist of
communicating, and where necessary, explaining to Registered Contract owners,
certain types of statistical information regarding the investment options
available under the Registered Contracts. Information consulting fees are
payable for providing such services to Registered Contract owners and not for
the sale of such Contracts. Information consulting fees may not be payable on
all Registered Contracts.
(c) Compensation to the Registered Representatives or Agents by
Broker-Dealer or the Associated Insurance Agency on Contracts solicited by the
Registered Representatives or Agents and issued by PALAC will be governed by
agreements between Broker-Dealer or the Associated Insurance Agency and their
respective Registered Representatives or Agents. Any payment thereof will be
the Broker-Dealer's or Associated Insurance Agency's sole responsibility.
(d) If there is a change in the agent of record after the issue date of a
Contract, any subsequent compensation payable in connection with such Contract
will be governed by the compensation option elected by the agent of record at
the time the Contract was issued.
(e) Broker-Dealer and Associated Insurance Agency expressly authorize PALAC
to charge against all compensation due or to become due to Broker-Dealer or
Associated Insurance Agency under this Agreement any amount paid or liabilities
incurred by PALAC under this Agreement that are determined to be due to the
conduct of Broker-Dealer, Associated Insurance Agency, Registered
Representatives or Agents. Additionally, PALAC may deduct at any time any
indebtedness or obligation Broker-Dealer or Associated Insurance Agency owes
PALAC from any monies due under this Agreement that are determined to be due to
the conduct of Broker-Dealer, Associated Insurance Agency, Registered
Representatives or Agents
(f) Prudential Annuities shall not be obligated to pay any compensation
related to Registered Contracts if Broker-Dealer is disqualified from continued
registration with FINRA. In such event, Prudential Annuities will hold any such
compensation from the date of such disqualification, provided Broker-Dealer
(i) commences an appeal to FINRA within 180 days following the disqualification
notice; (ii) actively pursues such appeal; and (iii) notifies Prudential
Annuities of an appeal as well as the outcome of such appeal. Prudential
Annuities may, at its sole discretion, require documentation regarding the
outcome of said appeal. Should Broker-Dealer's FINRA registration be
reinstated, all compensation due or becoming due during the period of
disqualification shall be immediately paid, without interest, provided such
payment does not violate any NASD Rules or regulations in effect at the time of
such payment.
(g) Any outstanding indebtedness Broker-Dealer or Associated Insurance
Agency owes PALAC or PAD shall become immediately due and payable upon
termination of this Agreement.
(h) Broker-Dealer and/or Associated Insurance Agency may request that
Prudential Annuities make payment of compensation to an account established by
and/or in the name of Broker-Dealer and/or Associated Insurance Agency at the
National Securities Clearing Corporation ("NSCC") or other similar or successor
entity. If Prudential Annuities agrees to make payment of compensation to such
account, Prudential Annuities shall only be responsible for following the
procedures for payment established by the terms of Prudential Annuities'
agreement(s) with the NSCC. In consideration of Prudential Annuities' agreement
to make payment to Broker-Dealer and/or Associated Insurance Agency through its
NSCC account, Broker-Dealer and/or Associated Insurance Agency agree to only
seek recovery, for amounts due under the Agreement and for which Prudential
Annuities has made payment in accordance with NSCC rules, from NSCC. Prudential
Annuities shall bear no financial responsibility for any amounts properly paid
to NSCC on behalf of Broker-Dealer and/or Associated Insurance Agency.
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11. RETURN OF COMPENSATION
If PALAC is required to refund premiums or purchase payments, or return
account values on any Contract for any reason, then any compensation otherwise
payable will be adjusted as set forth in the Schedule(s). Any compensation
previously paid in connection with such Contract must be repaid to PALAC or PAD
within thirty (30) business days notice to Broker-Dealer or Associated
Insurance Agency of such a return of amounts in connection with such Contract.
Prudential Annuities shall have the right to offset any such returned
compensation against amounts otherwise payable by Prudential Annuities.
Prudential Annuities agrees to notify Broker-Dealer and Associated Insurance
Agency within thirty (30) days after any action that results in a charge back
of compensation.
12. PAYMENT TO ASSOCIATED INSURANCE AGENCY
(a) Broker-Dealer and Associated Insurance Agency represent and warrant that
they are in compliance with the terms and conditions of one or more no-action
letters issued by the SEC with respect to an insurance agency associated with a
registered broker-dealer not registering as a broker-dealer with the SEC. In
reliance on such representation, Prudential Annuities agrees to pay
compensation in connection with the Contracts, that would otherwise be payable
to Broker-Dealer, to the Associated Insurance Agency that is properly state
licensed. Broker-Dealer and Associated Insurance Agency represent and warrant
that any compensation payable by Prudential Annuities in connection with the
Contracts shall be distributed by Associated Insurance Agency only to duly
licensed and properly appointed Registered Representatives and Agents.
(b) Broker-Dealer and Associated Insurance Agency shall notify PAD
immediately in writing if Broker-Dealer and/or and Associated Insurance Agency
fail to comply with any such terms and conditions and shall take such measures
as may be necessary to comply with any such terms and conditions. If Associated
Insurance Agency is the same party as Broker-Dealer, this Paragraph 12 does not
apply, and Broker-Dealer shall undertake all the duties, responsibilities and
privileges under this Agreement.
13. HOLD HARMLESS AND INDEMNIFICATION PROVISIONS
(a) Broker-Dealer and Associated Insurance Agency shall indemnify and hold
Prudential Annuities harmless from any liability, loss or expense sustained as
a result of any acts or omissions, or the violation or noncompliance with any
applicable federal or state law or regulation or any provision of this
Agreement by Broker-Dealer, its Registered Representatives and associated
persons of Broker-Dealer, Associated Insurance Agency and its Agents and any
employees or affiliated persons, of any of the foregoing, including but not
limited to, any claim by one or more Agents or Registered Representatives for
amounts alleged to be payable pursuant to this Agreement for the sale of any
Contracts.
(b) Prudential Annuities shall indemnify and hold Broker-Dealer and
Associated Insurance Agency harmless from any liability, loss or expense
sustained as a result of any acts or omissions, or the violation or
noncompliance with any applicable federal or state law or regulation or any
provision of this Agreement by Prudential Annuities and any employees or
affiliated persons of Prudential Annuities.
(c) Indemnification of Broker-Dealer and Associated Insurance Agency by
Prudential Annuities is subject to the condition that Broker-Dealer and
Associated Insurance Agency promptly notify Prudential Annuities of any claim
or suit made against Broker-Dealer or Associated Insurance Agency and that
Broker-Dealer and Associated Insurance Agency allow Prudential Annuities to
make such investigation, settlement, or defense thereof as Prudential Annuities
deems prudent.
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14. NON-ASSIGNABILITY PROVISION
No assignment of this Agreement or any duty or compensation payable
hereunder shall be valid unless authorized by PALAC in writing. Every
assignment shall be subject to any indebtedness and obligation Broker-Dealer or
Associated Insurance Agency owes PALAC and any applicable state insurance laws
or regulations pertaining to such assignments.
15. NON-WAIVER PROVISION
(a) No waiver or modification of this Agreement will be effective unless it
is in writing and is signed by all parties hereto. Notwithstanding the above,
the parties agree that any Schedule(s) to this Agreement may be amended from
time to time, and that such revised Schedule(s) shall be automatically
effective upon receipt by Broker-Dealer and Associated Insurance Agency.
(b) Failure of any party to insist on strict compliance with any of the
conditions of this Agreement shall not be construed as a waiver of any of the
conditions, but the same 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. Failure of any party to terminate the Agreement
for any of the causes set forth in this Agreement will not constitute a waiver
of that party's right to terminate this Agreement at a later time for any of
these causes.
16. AMENDMENTS
Except as stated in Paragraph 15, no amendment to this Agreement will be
effective unless it is in writing and signed by all parties hereto.
17. INDEPENDENT CONTRACTORS
Broker-Dealer and its Registered Representatives, and Associated Insurance
Agency and its Agents are independent contractors with respect to PALAC and
PAD. Nothing contained in this Agreement is intended to create a relationship
of employee and employer between Prudential Annuities and Broker-Dealer and/or
its Registered Representatives, or Associated Insurance Agency and its Agents.
18. NOTIFICATION OF COMPLAINTS OR DISCIPLINARY PROCEEDINGS
(a) Broker-Dealer and Associated Insurance Agency agree to notify Prudential
Annuities immediately of any Contract owner complaints or disciplinary
proceedings against Broker-Dealer, Associated Insurance Agency or any
Registered Representatives or Agents relating to the Contracts or any
threatened or filed arbitration action or civil litigation arising out of
solicitation or servicing of the Contracts. Additionally, Broker-Dealer and
Associated Insurance Agency shall promptly forward to Prudential Annuities at
its Home Office, by certified mail, any notice of claim, any legal process or
notice of claims served on Broker-Dealer or Associated Insurance Agency in a
suit or proceeding against Broker-Dealer or Associated Insurance Agency arising
out of the conduct of business under this Agreement.
(b) Broker-Dealer and Associated Insurance Agency shall cooperate with
Prudential Annuities in investigating and responding to any Contract owner
complaint, attorney demand, or inquiry received from state insurance
departments or other regulatory agencies or legislative bodies, and in any
settlement or trial of any actions arising out of the conduct of business under
this Agreement.
(c) Any response by Broker-Dealer or Associated Insurance Agency to an
individual Contract owner complaint arising out of the conduct of business
under this Agreement must be sent to Prudential Annuities for its approval
before being sent to the Contract owner. Any responses to such Contract owner
complaints must be sent to
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Prudential Annuities not less than five (5) business days before being sent to
the Contract owner, except that if a more prompt response is required, the
proposed response may be communicated to Prudential Annuities by telephone,
facsimile or in person.
(d) Broker-Dealer and Associated Insurance Agency are not authorized, and
are expressly forbidden, from settling or offering to settle any complaint or
litigation from a Contract owner, assignee, beneficiary or other party in
interest to a Contract.
(e) Failure to comply with Prudential Annuities' procedures for
notification, investigation and response to Contract owner complaints by
Broker-Dealer, Associated Insurance Agency, any Registered Representatives or
Agents may be grounds for immediate termination of this Agreement as well as
other limitations contained in Paragraph 13.
19. BOOKS, ACCOUNTS AND RECORDS
Broker-Dealer and Associated Insurance Agency agree to maintain books,
accounts and records so as to clearly and accurately disclose the nature and
details of transactions relating to the Contracts. Prudential Annuities
reserves the right to examine and inspect said records during normal business
hours. Additionally, Broker-Dealer and Associated Insurance Agency shall
promptly submit such books, accounts and records, upon request, to the
regulatory and administrative bodies that have jurisdiction over PALAC and PAD
or any applicable court of competent jurisdiction.
20. LIMITATIONS
(a) No party other than PALAC shall have authority on behalf of PALAC to
incur any indebtedness or liability, to make, alter, or discharge any Contract
issued by PALAC, to waive any forfeiture provision or to grant, permit, or
extend the time of making any Payments, or to alter the forms which PALAC may
prescribe or substitute other forms in place of those prescribed by PALAC or to
enter into any proceeding in a court of law or before a regulatory agency in
the name of or on behalf of PALAC.
(b) Broker-Dealer and Associated Insurance Agency shall not offer or pay any
rebate of premium or purchase payment or make any offer of or provide any other
inducement not specified in the Contracts, shall not make any misrepresentation
or incomplete comparison between contracts or companies for the purposes of
inducing a policy or contract of any other company to lapse, forfeit or
surrender such policy or contract and shall comply with all applicable laws and
regulations related to replacement of contracts or policies of insurance.
21. CONFIDENTIAL INFORFMATION & PRIVACY
(a) Each Party shall safeguard and hold confidential from disclosure to
unauthorized parties all "Confidential Information" of any other Party, which
term "Confidential Information" shall mean any and all information which is in
any way connected with, derived from or related to the business of such Party,
including without limitation, any business and financial records, any retail or
institutional customer information, computer programs, technical data,
investment information, lists, compilations, compositions, programs, plans,
devices, descriptions, drawings, methods, techniques, processes, designs,
theories concepts or ideas, and any information relating to the pricing or
marketing policy, suppliers or customers of a Party.
(b) Confidential Information shall not include information to the extent
such information is (i) already known to the receiving Party free of any
restriction at the time obtained, including information in the public domain;
(ii) subsequently learned from an independent third party free of restriction;
(iii) known through no wrongful act of either Party; or (iv) independently
developed by a Party without reference to information which is confidential.
(c) For purposes of this Section, only officers, directors, and employees of
Prudential Annuities, the Distributor, the Broker-Dealer and its Affiliates,
including their respective accountants, auditors, and attorneys, shall be
authorized parties, provided those individuals have a "need to know" the
Confidential Information that is
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consistent with their respective positions and legal obligations and
responsibilities. Before disclosing any Confidential Information, an authorized
individual will be advised that such information must be kept confidential.
(d) In the event that one Party (the "Disclosing Party") is requested or
required (by oral questions, interrogatories, requests for information or
documents in legal proceedings, subpoena, civil investigative demand or other
similar process) to disclose any of the Confidential Information to an
unauthorized party, the Disclosing Party shall provide the other Parties (the
"Non-Disclosing Parties") with prompt notice of any such request or requirement
so that the Non-Disclosing Parties may seek a protective order or other
appropriate remedy and/or waive compliance with the provisions of this
Agreement. If, in the absence of a protective order or other remedy or the
receipt of a waiver by the Non-Disclosing Parties, the Disclosing Party is
nonetheless, in the opinion of counsel, required to disclose Confidential
Information, the Disclosing Party may, without liability hereunder, disclose
only that portion of the Confidential Information which such counsel advises
the Disclosing Party is required to be disclosed, provided that the Disclosing
Party attempt to preserve the confidentiality of the Confidential Information,
including, without limitation, by cooperating with the Non-Disclosing Parties,
at the Non-Disclosing Partys' expense, to obtain an appropriate protective
order or other reliable assurance that confidential treatment will be accorded
the Confidential Information.
(e) Each Party further acknowledges and agrees that, in the event of a
breach by it of the provisions of this Section, one or more other Parties will
suffer irreparable harm and damages and, accordingly, shall be entitled to seek
injunctive or other equitable relief in a court of competent jurisdiction. The
provisions of this Section shall survive any termination of this Agreement.
(f) Without limiting the foregoing, the parties hereby acknowledge that they
are subject to the privacy regulations under Title V of the Xxxxx-Xxxxx-Xxxxxx
Act, 15 U.S.C. (S) 6801 et seq., pursuant to which regulations the parties are
required to obtain certain undertakings from each other with regard to the
privacy, use and protection of nonpublic personal financial information of
Broker/Dealer's and/or General Agent's clients or prospective clients or
Company's insureds or prospective insureds. Therefore, notwithstanding anything
to the contrary contained in this Agreement, the parties agree that: (1) they
shall not disclose or use any Client Data except to the extent necessary to
carry out their obligations under this Agreement and for no other purpose,
(2) they shall not disclose Client Data to any third party, including, without
limitation, their respective third party service providers except to the extent
necessary to carry out their obligations under this Agreement and then only
with an agreement in writing from the third party to use or disclose such
Client Data only to the extent necessary to carry out their respective
obligations under this Agreement and for no other purposes, (3) they shall
maintain, and shall require all third parties approved under subsection (2) to
maintain effective information security measures to protect Client Data from
unauthorized disclosure or use, and (4) they shall provide each other with
information regarding such security measures upon the reasonable request of the
other party and promptly provide the other with information regarding any
failure of such security measures or any security breach related to Client
Data. The obligations set forth in this Section shall survive termination of
the Agreement. For the purposes of this Agreement, Client Data means the
nonpublic personal information (as defined in 15 U.S.C. (S) 6809(4)) of the
parties' clients or prospective clients or insureds or prospective insureds
received by the other party in connection with the performance of its
obligations under the Agreement, including, but not limited to (I) an
individual's name, address, e-mail address, IP address, telephone number and/or
social security number, (II) the fact that an individual has a relationship
with the other party and their parents, affiliated or subsidiary companies, or
(III) an individual's account information.
22. ANTI-MONEY LAUNDERING
(a) The Parties agree to comply with all applicable anti-money laundering
laws, regulations, rules and government guidance, including the reporting,
record keeping and compliance requirements of the Bank Secrecy Act ("BSA") as
amended by the International Money Laundering Abatement and Financial
Anti-Terrorism Act of 2002, Title III of the United and Strengthening America
by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act
of 2001 (USA PATRIOT Act), its implementing regulations, and related SEC and
NASD Rules. These requirements, for such Customer Identification Program,
include requirements to identify and report currency transactions and
suspicious activity, to verify customer identify, to conduct customer due
diligence and to
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implement anti-money laundering compliance programs. Each Party represents to
the other Parties that, to the extent required by the USA PATRIOT Act, it will
establish and maintain a comprehensive anti-money laundering compliance program.
(b) The Parties further agree to comply with the economic sanction programs
administered by the United States Treasury Department's Office of Financial
Assets Control ("OFAC") and, to the extent required by such programs, establish
and maintain a comprehensive compliance program which includes, among other
things, procedures for checking customer names and wire transfers against OFAC
lists.
(c) The Parties agree to promptly take whatever action is required by law,
regulations, rule or its internal policies whenever it discovers questionable
activity or potential indications of suspicious activity or questionable
activity or potential indications of suspicious activity or OFAC matches are
detected. To the extent requested by a Party discovering questionable activity
or potential indications of suspicious activity involving the owner of
beneficial owner of a Contract, the other Parties, to the extent allowed by
law, shall assist the requesting Party in the investigation of such activity.
(d) Broker-Dealer agrees to provide Prudential Annuities with an annual
certification declaring (i) that it has implemented its anti-money laundering
program in accordance with Section 352 of the USA PATRIOT Act, and (ii) that it
or its agent will perform the specified requirements of Broker-Dealer's
Customer Identification Program in the manner contemplated by Section 326 of
the USA PATRIOT Act and pertinent regulations thereunder.
23. EXPENSES
Broker-Dealer and Associated Insurance Agency shall bear all of their
expenses in performance of this Agreement.
24. RIGHT TO DISCONTINUE CONTRACTS
PALAC reserves the right to modify, change or discontinue offering any of
the Contracts at any time in any jurisdiction. To the extent permitted under
the Contracts, PALAC reserves the right to terminate a Contract in accordance
with its terms or the extent permitted by law or regulation.
25. SCOPE OF AGREEMENT
All Schedule(s) attached to this Agreement are incorporated into and made
part of this Agreement. Schedules are subject to change at any time with proper
notice to Broker-Dealer and Associated Insurance Agency. Breach of any of the
Schedules constitutes breach of this Agreement.
26. REVOCATION OF PRIOR AGREEMENTS
Upon execution of this Agreement, all previous agreements between PALAC,
PAD, Broker-Dealer and Associated Insurance Agency relating to the subject
matter hereof are terminated. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersedes
all prior oral and written understandings, agreements or negotiations. No prior
writings shall be used by Broker-Dealer or Associated Insurance Agency in
connection with the interpretation of any provision of this Agreement.
Notwithstanding, the foregoing, execution of this Agreement shall not affect
any obligations, which have already accrued under any prior agreement. Any and
all acts, or failures to act, occurring during the term of such prior agreement
are governed by the terms of such prior agreement.
27. TERMINATION
(a) This Agreement may be terminated at the discretion of any party to this
Agreement upon thirty (30) days written notice to the other parties, or at the
option of any party hereto upon the breach by any other party of
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the representations, warranties and/or covenants and terms of this Agreement.
Prudential Annuities will mail written notice of termination to the last known
mailing address of Broker-Dealer or Associated Insurance Agency. Broker-Dealer
and Associated Insurance Agency should mail any written notice of termination
to PALAC at the address shown in Paragraph 27. Paragraph 10, 11, 13 and 21
shall survive any such termination.
(b) This Agreement shall automatically terminate without notice upon
occurrence of any of the following events:
(i) Broker-Dealer or Associated Insurance Agency files for bankruptcy or
dissolution, or financial or corporate reorganization under federal or state
insolvency laws or if organized as a partnership, bankruptcy or dissolution
of any of the partners, except that in such case the Agreement shall only
terminate as to the bankrupt or dissolved partner.
(ii) Fraud or gross negligence by Broker-Dealer or Associated Insurance
Agency in the performance of any duties imposed by this Agreement or
withholding or misappropriation, for Broker-Dealer or Associated Insurance
Agency's own use, funds belonging to PALAC or PALAC's Contract owners,
applicants, beneficiaries or payees.
(iii) When and if Broker-Dealer or Associated Insurance Agency materially
breach this Agreement or materially violate applicable Federal or state
laws, including but not limited to federal securities laws or state
insurance laws in any jurisdiction in which Broker-Dealer or Associated
Insurance Agency transact business, whether or not in relation to Prudential
Annuities or Contracts issued by PALAC.
(iv) When and if Broker-Dealer or Associated Insurance Agency fail to
obtain renewal of a necessary license in any jurisdiction, but only as to
that jurisdiction.
(v) When and if Broker-Dealer is disqualified for continued membership
with FINRA or registration with the SEC, but only as to Registered Contracts.
28. NOTICE
(a) In the event of sale, transfer or assignment of a controlling interest
in Broker-Dealer or Associated Insurance Agency, notice shall be provided in
writing to PALAC no less than thirty (30) days before the closing date.
(b) All notices to Prudential Annuities relating to this Agreement should be
delivered by certified or express mail to:
General Counsel
Prudential Annuities Life Assurance Corporation
Xxx Xxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxxx 00000
All notices to Broker-Dealer and Associated Insurance Agency will be mailed to
their respective address listed below.
29. SEVERABILITY
The provisions of this Agreement are severable. Should any provision of this
Agreement be held unenforceable, those provisions not affected by such
determination shall remain in full force and effect.
30. GOVERNING LAW
This Agreement will be construed in accordance with the laws of the State of
Connecticut exclusive of conflicts of law rules.
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31. HEADINGS
The headings in this Agreement are for reference purposes only and shall not
be deemed part of this Agreement or affect its meaning or interpretation.
By executing this Sales Agreement, Broker-Dealer and any Associated Insurance
Agencies acknowledge that each has read this Agreement in its entirety and is
in agreement with the terms and conditions outlining the rights and duties of
PALAC, PAD, Broker-Dealer and any Associated Insurance Agencies under this
Agreement.
IN WITNESS WHEREOF, the undersigned parties have executed this Agreement to be
effective as set forth above, upon the Effective Date below.
PRUDENTIAL ANNUITIES LIFEASSURANCE PRUDENTIAL ANNUITIES DISTRIBUTORS,
CORPORATION INCORPORATED
By: By:
------------------------------------ ------------------------------------
Title: Title:
------------------------------------ ------------------------------------
BROKER-DEALER ASSOCIATED INSURANCE AGENCY
------------------------------------------- ---------------------------------------------
(Name) (Name)
------------------------------------------- ---------------------------------------------
(Street Address) (Street Address)
-------------------------------------------
(City, State, Zip) (City, State, Zip)
By: By:
------------------------------------ ------------------------------------
Title: Title:
------------------------------------ ------------------------------------
For States:
---------------------------------
Tax ID#: Tax ID#:
---------------------------------- ---------------------------------
PLEASE ATTACH ADDITIONAL SIGNATURE
PAGES IF MORE THAN ONE ASSOCIATED
INSURANCE
AGENCY EXISTS
EFFECTIVE DATE: ____________________________
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