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EXHIBIT 1.A(3)(a)
PRINCIPAL UNDERWRITING AGREEMENT
THIS PRINCIPAL UNDERWRITING AGREEMENT made and effective as of
February 5, 2001 by and between AFSG SECURITIES CORPORATION ("AFSG"), a
Pennsylvania corporation, and PEOPLES BENEFIT LIFE INSURANCE COMPANY ("Peoples
Benefit"), an Iowa corporation, on its own behalf and on behalf the separate
investment accounts of PEOPLES BENEFIT set forth in Exhibit A attached hereto
and made a part hereof (collectively, the "Account").
WITNESSETH:
WHEREAS, the Account was established or acquired by Peoples Benefit
under the laws of the State of Iowa, pursuant to a resolution of Peoples
Benefit Board of Directors in order to set aside the investment assets
attributable to certain flexible premium life variable insurance policies and
certain flexible premium, multi-funded annuity contracts ("Contracts") issued
by Peoples Benefit;
WHEREAS, Peoples Benefit has registered or will register the Account
with the Securities and Exchange Commission ("SEC") as a unit investment trust
under the Investment Company Act of 1940 (the "1940 Act") or will not register
the Account in proper reliance upon an exclusion from registration under the
1940 Act;
WHEREAS, Peoples Benefit has registered or will register the
Contracts under the Securities Act of 1933 (the "1933 Act") or that the
Contracts are not registered because they are properly exempt from
registration under the 1933 Act or will be offered exclusively in transactions
that are properly exempt from registration under the 1933 Act;
WHEREAS, AFSG is and will continue to be registered as a
broker-dealer with the SEC under the Securities Exchange Act of 1934 (the
"1934 Act"), and a member of the National Association of Securities Dealers,
Inc. (the "NASD") prior to the offer and sale of the Contracts; and
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WHEREAS, Peoples Benefit proposes to have the Contracts sold and
distributed through AFSG, and AFSG is willing to sell and distribute such
Contracts under the terms stated herein;
NOW, THEREFORE, the parties, intending to be legally bound, hereby
agree as follows:
1. Appointment as Distributor/Principal Underwriter. Peoples
Benefit grants to AFSG the exclusive right to be, and AFSG agrees to serve as,
distributor and principal underwriter of the Contracts during the term of this
Agreement. AFSG agrees to use its best efforts to solicit applications for the
Contracts and otherwise perform all duties and functions, which are necessary
and proper for the distribution of the Contracts.
2. Prospectus. AFSG agrees to offer the Contracts for sale in
accordance with the registration statements and prospectus therefor then in
effect. AFSG is not authorized to give any information or to make any
representations concerning the Contracts other than those contained in the
current prospectus therefor filed with the SEC or in such sales literature as
may be authorized by Peoples Benefit.
3. Consideration. All premiums, purchase payments or other
moneys payable under the Contracts shall be remitted promptly in full together
with such application, forms and any other required documentation to Peoples
Benefit or its designated servicing agent and shall become the exclusive
property of Peoples Benefit. Checks or money orders in payment under the
Contracts shall be drawn to the order of "Peoples Benefit Life Insurance
Company" and funds may be remitted by wire if prior written approval is
obtained from Peoples Benefit.
4. Copies of Information. On behalf of the Account, Peoples
Benefit shall furnish AFSG with copies of all prospectuses, financial
statements and other documents which AFSG reasonably requests for use in
connection with the distribution of the Contracts.
5. Representations. AFSG represents that it is (a) duly
registered as a broker-dealer under the 1934 Act, (b) a member in good
standing of the NASD and (c) to the extent necessary to offer the Contracts,
duly registered or otherwise qualified under the securities laws of any state
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or other jurisdiction. AFSG shall be responsible for carrying out its sales
and underwriting obligations hereunder in continued compliance with the NASD
Rules and federal and state securities and insurance laws and regulations.
Further, AFSG represents and warrants that it will adopt, abide by and enforce
the principles set forth in the Principles and Code of Ethical Market Conduct
of the Insurance Marketplace Standards Association as adopted by the Company.
6. Other Broker-Dealer Agreements. AFSG is hereby authorized to
enter into written sales agreements with other independent broker-dealers for
the sale of the Contracts. All such sales agreements entered into by AFSG
shall provide that each independent broker-dealer will assume full
responsibility for continued compliance by itself and by its associated
persons with the NASD Rules and applicable federal and state securities and
insurance laws, shall provide that each independent broker-dealer will adopt,
abide by and enforce the principles set forth in the Principles and Code of
Ethical Market Conduct of the Insurance Marketplace Standards Association as
adopted by the Company, and shall be in such form and contain such other
provisions as Peoples Benefit may from time to time require. All associated
persons of such independent broker-dealers soliciting applications for the
Contracts shall be duly and appropriately registered by the NASD and licensed
and appointed by Peoples Benefit for the sale of Contracts under the insurance
laws of the applicable states or jurisdictions in which such Contracts may be
lawfully sold. All applications for Contracts solicited by such broker-dealers
through their representatives, together with any other required documentation
and premiums, purchase payments and other moneys, shall be handled as set
forth in paragraph 3 above.
7. Insurance Licensing and Appointments. Peoples Benefit shall
apply for the proper insurance licenses and appointments in appropriate states
or jurisdictions for the designated persons associated with AFSG or with other
independent broker-dealers that have entered into sales agreements with AFSG
for the sale of Contracts, provided that Peoples Benefit reserves the right to
refuse to appoint any proposed registered representative as an agent or
broker, and to terminate an agent or broker once appointed.
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8. Recordkeeping. Peoples Benefit and AFSG shall cause to be
maintained and preserved for the periods prescribed such accounts, books, and
other documents as are required of them by the 1940 Act, and 1934 Act, and any
other applicable laws and regulations. The books, accounts and records of
Peoples Benefit, of the Account, and of AFSG as to all transactions hereunder
shall be maintained so as to disclose clearly and accurately the nature and
details of the transactions. Peoples Benefit (or such other entity engaged by
Peoples Benefit for this purpose), on behalf of and as agent for AFSG, shall
maintain AFSG's books and records pertaining to the sale of Contracts to the
extent as mutually agreed upon from time to time by Peoples Benefit and AFSG;
provided that such books and records shall be the property of AFSG, and shall
at all times be subject to such reasonable periodic, special or other audit or
examination by the SEC, NASD, any state insurance commissioner and/or all
other regulatory bodies having jurisdiction. Peoples Benefit shall be
responsible for sending on behalf of and as agent for AFSG all required
confirmations on customer transactions in compliance with applicable
regulations, as modified by an exemption or other relief obtained by Peoples
Benefit. AFSG shall cause Peoples Benefit to be furnished with such reports as
Peoples Benefit may reasonably request for the purpose of meeting its
reporting and record-keeping requirements under the insurance laws of the
State of Iowa and any other applicable states or jurisdictions. Peoples
Benefit agrees that its records relating to the sale of Contracts shall be
subject to such reasonable periodic, special or other audit or examination by
the SEC, NASD, and any state insurance commissioner and/or all other
regulatory bodies having jurisdiction.
9. Commissions. Peoples Benefit shall have the responsibility
for paying on behalf of AFSG (a) any compensation to other independent
broker-dealers and their associated persons due under the terms of any sales
agreements entered into pursuant to paragraph 6 above, between AFSG and such
broker-dealers as agreed to by Peoples Benefit and (b) all commissions or
other fees to associated persons of AFSG which are due for the sale of the
Contracts in the amounts and on such terms and conditions as Peoples Benefit
and AFSG determine. Notwithstanding the
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preceding sentence, no broker-dealer, associated person or other individual or
entity shall have an interest in any deductions or other fees payable to AFSG
as set forth herein.
10. Expense Reimbursement. Peoples Benefit shall reimburse AFSG
for all costs and expenses incurred by AFSG in furnishing the services,
materials, and supplies required by the terms of this Agreement.
11. Indemnification. Peoples Benefit agrees to indemnify AFSG
for any losses incurred as a result of any action taken or omitted by AFSG, or
any of its officers, agents or employees, in performing their responsibilities
under this Agreement in good faith and without willful misfeasance, gross
negligence, or reckless disregard of such obligations.
12. Regulatory Investigations. AFSG and Peoples Benefit agree to
cooperate fully in any insurance or judicial regulatory investigation or
proceeding arising in connection with Contracts distributed under this
Agreement. AFSG and Peoples Benefit further agree to cooperate fully in any
securities regulatory inspection, inquiry, investigation or proceeding or any
judicial proceeding with respect to Peoples Benefit, AFSG, their affiliates
and their representatives to the extent that such inspection, inquiry,
investigation or proceeding or judicial proceeding is in connection with
Contracts distributed under this Agreement. Without limiting the foregoing:
(a) AFSG will be notified promptly of any customer complaint or
notice of any regulatory inspection, inquiry investigation or proceeding or
judicial proceeding received by Peoples Benefit with respect to AFSG or any
representative or which may affect Peoples Benefit's issuance of any Contracts
marketed under this Agreement; and
(b) AFSG will promptly notify Peoples Benefit of any customer
complaint or notice of any regulatory inspection, inquiry, investigation or
judicial proceeding received by AFSG or any representative with respect to
Peoples Benefit or its affiliates in connection with any Contracts distributed
under this Agreement.
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In the case of a customer complaint, AFSG and Peoples Benefit will
cooperate in investigating such complaint and shall arrive at a mutually
satisfactory response.
13. Termination.
(a) This Agreement may be terminated by either party hereto upon
60 days' prior written notice to the other party.
(b) This Agreement may be terminated upon written notice of one
party to the other party hereto in the event of bankruptcy or insolvency of
such party to which notice is given.
(c) This Agreement may be terminated at any time upon the mutual
written consent of the parties hereto.
(d) AFSG shall not assign or delegate its responsibilities under
this Agreement without the written consent of Peoples Benefit.
(e) Upon termination of this Agreement, all authorizations,
rights and obligations shall cease except the obligations to settle accounts
hereunder, including payments or premiums or contributions subsequently
received for Contracts in effect at the time of termination or issued pursuant
to applications received by Peoples Benefit prior to termination.
14. Regulatory Impact. This Agreement shall be subject to, among
other laws, the provisions of the 1940 Act and the 1934 Act and the rules,
regulations, and rulings thereunder and of the NASD, from time to time in
effect, including such exemptions from the 1940 Act as the SEC may grant, and
the terms hereof shall be interpreted and construed in accordance therewith.
AFSG shall submit to all regulatory and administrative bodies having
jurisdiction over the operations of the Account, present or future; and will
provide any information, reports or other material which any such body by
reason of this Agreement may request or require pursuant to applicable laws or
regulations.
15. Severability. If any provision of this Agreement shall be
held or made invalid by a court decision, statute, rule or otherwise, the
remainder of this Agreement shall not be affected thereby.
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16. Choice of Law. This Agreement shall be construed, enforced
and governed by the laws of the State of Iowa.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be signed by their respective duly authorized officials as of the day and year
first above written.
AFSG SECURITIES CORPORATION PEOPLES BENEFIT LIFE INSURANCE COMPANY
By: s/Xxxx Wachendorf_____________ By: _s/ Xxxx Reaburn_______________
Title: __Vice President______________ Title: __Vice President_______________
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EXHIBIT A
1. Peoples Benefit Variable Life Account A
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