BROKER-DEALER AGENCY SELLING AGREEMENT
FOR VARIABLE CONTRACTS
This Agreement is made among the following three parties:
1. RELIASTAR BANKERS SECURITY LIFE INSURANCE COMPANY
0000 Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxx, Xxx Xxxx 00000
a New York domiciled stock life insurance company
(hereinafter "INSURER"); and,
2. WASHINGTON SQUARE SECURITIES, INC.
00 Xxxxxxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
an affiliate of Insurer, registered as a broker-dealer with
the Securities and Exchange Commission ("SEC") and a member
of the National Association of Securities Dealers, Inc.
("NASD")(hereinafter "GENERAL DISTRIBUTOR"); and,
3. ______________________________
Company's Full Name
______________________________
Street
______________________________
City State ZIP
registered as a broker-dealer with the SEC and a member of the
NASD and licensed as an insurance agency (hereinafter
"BROKER-DEALER").
RECITALS:
WHEREAS, Broker-Dealer is licensed as an insurance agency in order to
satisfy state insurance law requirements with respect to the sale of variable
insurance products which are registered securities with the SEC.
WHEREAS, the parties wish to enter into an agreement for the distribution
of Variable Contracts by Broker-Dealer; and
WHEREAS, Insurer has appointed General Distributor as principal underwriter
and distributor (as those terms are defined by the Investment Company Act of
1940) of the Variable Contracts and has authorized General Distributor to enter
into selling agreements with registered broker-dealers for the solicitation and
sale of Variable Contracts; and,
WHEREAS, Insurer and General Distributor propose to have Broker-Dealer's
registered representatives who are licensed as life insurance/variable contract
agents in appropriate jurisdictions ("Representatives") solicit and sell
Variable Contracts and,
WHEREAS, Insurer and General Distributor propose to have Broker-Dealer
provide certain supervisory and administrative services as hereinafter described
with respect to the solicitation and sales of Variable Contracts.
NOW THEREFORE, in consideration of the premises and the mutual covenants
hereinafter set forth, the parties now agree as follows:
1. VARIABLE CONTRACTS
In this Agreement, the words "Variable Contract" shall mean those variable life
insurance policies and variable annuity contracts identified in Section 1 of the
Compensation Schedule attached hereto, and as may hereafter be amended.
Insurer may in its sole discretion and without notice to Broker-Dealer, suspend
sales of any Variable Contracts or amend any policies or contracts evidencing
such Variable Contracts if, in Insurer's opinion, such suspension or amendment
is: (1) necessary for compliance with federal, state, or local laws,
regulations, or administrative order(s); or, (2) necessary to prevent
administrative or financial hardship to Insurer. In all other situations,
Insurer shall provide 30 days notice to Broker-Dealer prior to suspending sales
of any Variable Contracts or amending any policies or contracts evidencing such
Variable Contracts.
Insurer may issue and propose additional or successor products, in which event
Broker-Dealer will be informed of the product and its related Commission
Schedule. If Broker-Dealer does not agree to distribute such product(s), it must
notify Insurer in writing within 30 days of receipt of the Commission Schedule
for such product(s). If Broker-Dealer does not indicate disapproval of the new
product(s) or the terms contained in the related Commission Schedule,
Broker-Dealer will be deemed to have thereby agreed to distribute such
product(s) and agreed to the related Commission Schedule which shall be attached
to and made a part of this Agreement.
2. AGENCY APPOINTMENT
On the effective date, Insurer and General Distributor appoint
Broker-Dealer and Broker-Dealer accepts the appointment to solicit sales of and
to sell Variable Contracts, pursuant to the terms of this Agreement.
3. DUTIES OF BROKER-DEALER
(a) SUPERVISION OF REPRESENTATIVES. Broker-Dealer shall have full
responsibility for the training and supervision of all Representatives
who are engaged directly or indirectly in the offer or sale of the
Variable Contracts, and all such persons shall be subject to the
control of Broker-Dealer with respect to such persons' securities
regulated activities in connection with the Variable Contracts.
Broker-Dealer will cause the Representatives to be trained in the sale
of the Variable Contracts, will cause such Representatives to qualify
under applicable federal and state laws to engage in the sale of the
Variable Contracts; will cause such Representatives to be registered
representatives of Broker-Dealer before such Representatives engage in
the solicitation of applications for the Variable Contracts; and will
cause such Representatives to limit solicitation of applications for
the Variable Contracts to jurisdictions where Insurer has authorized
such solicitation. Broker-Dealer shall cause such Representatives'
qualifications to be certified to the satisfaction of General
Distributor and shall notify General Distributor if any Representative
ceases to be a registered representative of Broker-Dealer or ceases to
maintain the proper licensing required for the sale of the Variable
Contracts. All parties shall be liable for their own negligence and
misconduct under this paragraph.
(b) REPRESENTATIVES INSURANCE COMPLIANCE. Broker-Dealer, prior to allowing
its Representatives to solicit for sales or sell the Variable
Contracts, shall require such representatives to be validly insurance
licensed, registered and appointed by Insurer as a variable
contract/life insurance agent in accordance with the jurisdictional
requirements of the place where the solicitations and sales take place
as well as the solicited person's or entity's place of residence.
Broker-Dealer shall assist Insurer in the appointment of
Representatives under the applicable insurance laws to sell Variable
Contracts. Broker-Dealer shall fulfill all Insurer requirements in
conjunction with the submission of licensing/appointment papers for
all applicants as insurance agents of Insurer. All such
licensing/appointment papers shall be submitted to Insurer or its
designee by Broker-Dealer. Notwithstanding such submission, Insurer
shall have sole discretion to appoint, refuse to appoint, discontinue,
or terminate the appointment of any Representative as an insurance
agent of Insurer.
(c) COMPLIANCE WITH NASD RULES OF FAIR PRACTICE AND FEDERAL AND STATE
SECURITIES LAWS. Broker-Dealer shall fully comply with the
requirements of the National Association of Securities Dealers, Inc.,
the Securities Exchange Act of 1934 and all other applicable federal
and state laws. In addition, Broker-Dealer will establish and maintain
such rules and procedures as may be necessary to cause diligent
supervision of the securities activities of the Representatives as
required by applicable law or regulation. Upon request by General
Distributor, Broker-Dealer shall furnish such records as may be
necessary to establish such diligent supervision.
(d) NOTICE OF REPRESENTATIVE'S NONCOMPLIANCE. In the event a
Representative fails or refuses to submit to supervision of
Broker-Dealer or otherwise fails to meet the rules and standards
imposed by Broker-Dealer on its Representatives, Broker-Dealer shall
advise General Distributor of this fact and shall immediately notify
such Representative that he or she is no longer authorized to sell the
Variable Contracts and Broker-Dealer shall take whatever additional
action may be necessary to terminate the sales activities of such
Representative relating to such contracts and policies.
(e) PROSPECTUSES, SALES PROMOTION MATERIAL AND ADVERTISING. Broker-Dealer
shall be provided, without any expense to Broker-Dealer, with
prospectuses relating to the Variable Contracts and such other
supplementary sales material as General Distributor determines is
necessary or desirable for use in connection with sales of the
Variable Contracts.
NO SALES PROMOTION MATERIALS OR ANY ADVERTISING RELATING TO THE
VARIABLE CONTRACTS, INCLUDING WITHOUT LIMITATION GENERIC ADVERTISING
MATERIAL WHICH DOES NOT REFER TO INSURER BY NAME, SHALL BE USED BY
BROKER-DEALER UNLESS THE SPECIFIC ITEM HAS BEEN APPROVED IN WRITING BY
GENERAL DISTRIBUTOR PRIOR TO SUCH USE.
In addition, Broker-Dealer shall not print, publish or distribute any
advertisement, circular or any document relating to Insurer unless
such advertisement, circular or document shall have been approved in
writing by Insurer prior to such use. Upon termination of this
Agreement, all prospectuses, sales promotion material, advertising,
circulars, documents and software relating to the sales of Insurer's
contracts shall be promptly turned over to Insurer free from any claim
or retention of rights by the Broker-Dealer.
Insurer represents that the prospectus and registration statement
relating to the Variable Contracts contain no untrue statements of
material fact or omission to state material fact, the omission of
which makes any statement contained in the prospectus and registration
statement misleading. Insurer agrees to indemnify Broker-Dealer from
and against any claims, liabilities and expenses which may be incurred
under the Securities Act of 1933, the Investment Company Act of 1940,
common law or otherwise arising out of a breach of the agreement in
this paragraph.
Broker-Dealer agrees to hold harmless and indemnify Insurer and
General Distributor against any and all claims, liabilities and
expenses which Insurer or General Distributor may incur from
liabilities arising out of or based upon any alleged or untrue
statement other than statements contained in the registration
statement, prospectus or approved sales material of any Variable
Contract.
In accordance with the requirements of the laws of the several states,
Broker-Dealer shall maintain complete records indicating the manner
and extent of distribution of any such solicitation material, shall
make such records and files available to staff of Insurer or its
designated agent in field inspections and shall make such material
available to personnel of state insurance departments, the NASD or
other regulatory agencies, including the SEC, which have regulatory
authority over Insurer or General Distributor. Broker-Dealer holds
Insurer, General Distributor and their affiliates harmless from any
liability arising from the use of any material which either (a) has
not been specifically approved by Insurer in writing, or (b) although
previously approved, has been disapproved, in writing, for further
use.
(f) SECURING APPLICATIONS. All applications for Variable Contracts shall
be made on application forms supplied by Insurer and all payments
collected by Broker-Dealer or any Representative thereof shall be
remitted promptly in full, together with such application forms and
any other required documentation, directly to Insurer at the address
indicated on such application or to such other address as Insurer may,
from time-to-time, designate in writing. Broker-Dealer shall review
all such applications for accuracy and completeness. Checks or money
orders in payment on any such Variable Contract shall be drawn to the
order of "ReliaStar Bankers Security Life Insurance Company." All
applications are subject to acceptance or rejection by Insurer at its
sole discretion. All records or information obtained hereunder by
Broker-Dealer shall not be disclosed or used except as expressly
authorized herein, and Broker-Dealer will keep such records and
information confidential, to be disclosed only as authorized or if
expressly required by federal or state regulatory authorities.
(g) COLLECTION OF PURCHASE PAYMENTS. Broker-Dealer agrees that all money
or other consideration tendered with or in respect of any application
for a Variable Contract and the Variable Contract when issued is the
property of Insurer and shall be promptly remitted in full to Insurer
without deduction or offset for any reason, including by way of
example but not limitation, any deduction or offset for compensation
claimed by Broker-Dealer.
(h) POLICY DELIVERY. Insurer will transmit Variable Contracts to
Broker-Dealer for delivery to Policyowners. Broker-Dealer hereby
agrees to deliver all such Variable Contracts to Policyowners within
ten (10) days of their receipt by Broker-Dealer from Insurer.
Broker-Dealer agrees to indemnify and hold harmless Insurer for any
and all losses caused by Broker-Dealer's failure to perform the
undertakings described in this paragraph. Broker-Dealer hereby
authorizes Insurer to set off any amount it owes Insurer under this
paragraph against any and all amounts otherwise payable to
Broker-Dealer by Insurer.
(i) FIDELITY BOND. Broker-Dealer represents that all directors, officers,
employees and Representatives of Broker-Dealer who are licensed
pursuant to this Agreement as Insurer's agents for state insurance law
purposes or who have access to funds of Insurer, including but not
limited to funds submitted with applications for the Variable
Contracts, or funds being returned to owners, are and shall be covered
by a blanket fidelity bond, including coverage for larceny and
embezzlement, issued by a reputable bonding company. This bond shall
be maintained by Broker-Dealer at Broker-Dealer's expense. Such bond
shall be, at least, of the form, type and amount required under the
NASD Rules of Fair Practice. Insurer may require evidence,
satisfactory to it, that such coverage is in force and Broker-Dealer
shall give prompt written notice to Insurer of any notice of
cancellation or change of coverage.
Broker-Dealer assigns any proceeds received from the fidelity bonding
company to Insurer to the extent of Insurer's loss due to activities
covered by the bond. If there is any deficiency amount, whether due to
a deductible or otherwise, Broker-Dealer shall promptly pay Insurer
such amount on demand and Broker-Dealer hereby indemnifies and holds
harmless Insurer from any such deficiency and from the costs of
collection thereof (including reasonable attorneys' fees).
(j) Broker Dealer will be governed strictly by all rules, regulations, and
instructions contained in the RBSL administrative handbook, together
with all other regulations instituted from time to time, and observe
and comply with the insurance laws and regulations of all states in
which the Broker Dealer operates.
4. COMPENSATION
(a) VARIABLE CONTRACTS. Insurer, on behalf of General Distributor, shall
pay a dealer concession to Broker-Dealer on all sales of Variable
Contracts through its Representatives, in accordance with the form of
the Compensation Schedule attached hereto, which is in effect when
purchase payment on such Variable Contracts are received by Insurer.
Dealer concessions will be paid as a percentage of premiums received
in cash or other legal tender and accepted by Insurer on applications
obtained by Broker-Dealer's Representatives unless otherwise indicated
in Compensation Schedule A. Upon termination of this Agreement, all
compensation payable hereunder shall cease; however, Broker-Dealer
shall continue to be liable for any chargebacks or for any other
amounts advanced by or otherwise due Insurer hereunder.
Insurer will pay all such Compensation to the Broker-Dealer.
Broker-Dealer agrees to hold Insurer and General Distributor harmless
from all claims of its Representatives for compensation in respect of
Representative's sales of Variable Contracts.
(b) COMMISSION STATEMENTS. Broker-Dealer will be provided with copies of
its Representatives' commission statements together with
Broker-Dealer's own commission statement for each commission payment
period in which commissions are payable. Broker-Dealer agrees that,
except as to clerical errors and material undisclosed facts, if any,
such statements constitutes a complete and accurate statement of the
commission account unless written notice is provided to Insurer within
120 days after the date of the statement, which notice specifically
sets forth the objections or exceptions thereto.
(c) COMPENSATION SCHEDULES. The initial Compensation Schedule is attached
(see Table A). Insurer and General Distributor reserve the right to
change, amend, or cancel any Compensation Schedule as to business
produced after such change by mailing notice of such change in the
form of a new Compensation Schedule to Broker-Dealer. Such change
shall be effective, unless otherwise specified, ten (10) days after
the notice is mailed.
(d) RIGHTS OF REJECTION AND SETTLEMENT. Insurer reserves the right to
reject any and all applications and collections submitted, to
discontinue writing any form of policy, to take possession of and
cancel any policy and return the premium or any part of it, and to
make any compromise settlement in respect of a policy. Broker-Dealer
will not be entitled to receive or retain any compensation on premiums
or parts of premiums Insurer does not receive and retain because of
such rejection, discontinuance, cancellation, or compromise
settlement. If compensation has been paid to which Broker-Dealer is
not entitled, any amount credited will be charged back, and if the
account balance is insufficient to cover the credited amount,
Broker-Dealer as applicable agrees to promptly repay the credited
amount.
5. TERMINATION
This Agreement may be terminated, without cause, by any party upon thirty (30)
days prior written notice; and may be terminated, for failure to perform
satisfactorily or other cause, by any party immediately; and shall be terminated
if Broker-Dealer ceases to be registered as a Broker-Dealer under the Securities
Exchange Act of 1934 and a member of the NASD or, if Broker-Dealer ceases to
maintain its insurance agent license(s) in good standing in the jurisdictions in
which it conducts business.
6. ARBITRATION
Any dispute, claim or controversy arising out of or in connection with this
Agreement shall be submitted to arbitration pursuant to the NASD's arbitration
facilities. If the subject matter of the dispute, claim or controversy is not
within the scope of matters which may arbitrated through the NASD arbitration
facilities, then such dispute, claim or controversy shall, upon the written
request of any party, be submitted to three arbitrators, one to be chosen by
each party, and the third by the two so chosen. If either party refuses or
neglects to appoint an arbitrator within thirty (30) days after the receipt of
the written notice from the other party requesting it to do so, the requesting
party may appoint two arbitrators. If the two arbitrators fail to agree in the
selection of a third arbitrator within thirty (30) days of their appointment,
each of them shall name two, of whom the other shall decline one and the
decision shall be made by drawing lots. All arbitrators shall be active or
retired executive officers of insurance companies not under the control of any
party to this Agreement. Each party shall submit its case to the arbitrators
within thirty (30) days of the appointment of the third arbitrator. The
arbitration shall be held in Minneapolis, Minnesota at the times agreed upon by
the arbitrators. The decision in writing of any two arbitrators, when filed with
the parties hereto shall be final and binding on both parties. Judgment may be
entered upon the final decision of the arbitrators in any court having
jurisdiction. Each party shall bear the expense of its own arbitrator and shall
jointly and equally bear with the other party the expense of the third
arbitrator and of the arbitration.
7. GENERAL PROVISIONS
(a) ADDITIONS, AMENDMENTS, MODIFICATIONS & WAIVERS. This Agreement shall
not be effective until approved by Insurer and General Distributor.
Insurer and General Distributor reserve the right to amend this
Agreement at any time, and the submission of an application for the
purchase of a Variable Contract by Broker-Dealer after notice of any
such amendment has been sent shall constitute Broker-Dealer's
agreement to any such amendment. No additions, amendments or
modifications of this Agreement or any waiver of any provision will be
valid unless approved, in writing, by one of Insurer's duly authorized
officers. In addition, no approved waiver of any default, or failure
of performance by Broker-Dealer will affect Insurer's or General
Distributor's rights with respect to any later default or failure of
performance.
(b) INDEPENDENT CONTRACTOR RELATIONSHIP. This Agreement does not create
the relationship of employer and employee between the parties to this
Agreement. Insurer and General Distributor are independent contractors
with respect to Broker-Dealer and its Representatives.
(c) ASSIGNMENTS. Broker-Dealer will not assign or transfer, either wholly
or partially, this Agreement or any of the benefits accrued or to
accrue under it, without the written prior consent of a duly
authorized officer of the Insurer and General Distributor.
(d) SERVICE OF PROCESS. If Broker-Dealer receives or is served with any
notice or other paper concerning any legal action against Insurer or
General Distributor, Broker-Dealer agrees to notify Insurer
immediately (in any event not later than the first business day after
receipt) by telephone and further agrees to transmit any papers that
are served or received by facsimile to (000) 000-0000 and by overnight
mail to Insurer's Office of General Counsel.
(e) SEVERABILITY. It is understood and agreed by the parties to this
Agreement that if any part, term or provision of this Agreement is
held to be invalid or in conflict with any law or regulation, the
validity of the remaining portions or provisions will not be affected,
and the parties' rights and obligations will be construed and enforced
as if this Agreement did not contain the particular part, term or
provision held to be invalid.
(f) GOVERNING LAW. It is agreed by the parties to this Agreement that the
Agreement and all of its provisions will be governed by the laws of
the State of Minnesota.
(g) LIMITATIONS. No party other than Insurer shall have the authority on
behalf of Insurer to make, alter, or discharge any policy, contract,
or certificate issued by Insurer, to waive any forfeiture or to grant,
permit, nor extend the time for making any payments nor to guarantee
earnings or rates, nor to alter the forms which Insurer may prescribe
or substitute other forms in place of those prescribed by Insurer, nor
to enter into any proceeding in a court of law or before a regulatory
agency in the name of or on behalf of Insurer, nor to open any bank
account in the full legal name of Insurer, any derivation thereof or
any tradename thereof.
8. TERRITORY
Broker-Dealer's territory is limited geographically to those jurisdictions in
which the Variable Contracts may lawfully be offered, provided that
Broker-Dealer's right to solicit sales of and to sell the Variable Contracts in
such jurisdictions is not exclusive.
9. EFFECTIVE DATE
This Agreement shall be effective ________________, 199__.
IN WITNESS WHEREOF, we set our hands this ____ day of _________________,
199__.
INSURER:
RELIASTAR BANKERS SECURITY LIFE
INSURANCE COMPANY
By: _____________________________
Title: _____________________________
GENERAL DISTRIBUTOR:
WASHINGTON SQUARE SECURITIES, INC.
By: _____________________________
Title: _____________________________
BROKER-DEALER:
--------------------------------------
By: _____________________________
Title: _____________________________
TABLE A
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DEALER'S CONCESSION
================================================================================
KIND OF POLICY TOTAL CONCESSIONS
================================================================================
Individual Single Payment Deferred Annuity Contracts 6%
Additional Purchase Payment Deferred Annuity Contract 6%
Immediate Annuity Contract 2.5%
================================================================================
The Dealer hereby agrees that any commissions paid on a Variable Annuity
Contract that is canceled under the provisions of the Contract's right to
examine clause, a/k/a the "20-day free look" clause, will be repaid to ReliaStar
Bankers Security. ReliaStar Bankers Security may also charge such amounts
against the Dealer's account.
No commissions will be paid on purchases on Contracts resulting from exchanges
or transfers from Separate Accounts A through I or M sponsored by ReliaStar
Bankers Security or between Separate Accounts Q and NQ sponsored by ReliaStar
Bankers Security, or for transfers among investment media within each such
Separate Account Q or NQ.
