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Exhibit 1(A3)(ai)
UNDERWRITING AGREEMENT
AGREEMENT made this 6th day of December 1985, by and among Provident
Mutual Life Insurance Company of Philadelphia, a Pennsylvania corporation
("PMLIC"), PML Securities Company, a Pennsylvania corporation ("PML"), and
Provident Mutual Variable Growth Separate Account, Provident Mutual Variable
Money Market Separate Account, Provident Mutual Variable Bond Separate Account,
Provident Mutual Variable Managed Separate Account, and Provident Mutual
Variable Zero Coupon Bond Separate Account (collectively the "Accounts"),
separate investment accounts of PMLIC.
WITNESSETH:
WHEREAS, PMLIC has established and maintains the Accounts, pursuant to the
laws of Pennsylvania for the purpose of selling variable life insurance policies
("Policies"), the sale of which is to commence after the effective date of the
Registration Statement filed with the Securities and Exchange Commission
("Commission") on Form S-6 pursuant to the Securities Act of 1933 ("1933 Act");
and
WHEREAS, the Accounts are registered under the Investment Company Act of
1940 ("1940 Act"); and
WHEREAS, PML is registered as a broker-dealer under the Securities
Exchange Act of 1934 ("1934 Act") and is a member of the National Association of
Securities Dealers, Inc. ("NASD"); and
WHEREAS, PMLIC, the Accounts and PML wish to enter into an agreement to
have PML act as PMLIC's principal underwriter for the sale of the Policies
through the Accounts;
NOW, THEREFORE, the parties agree as follows:
A. DISTRIBUTION SERVICES
1. PML shall act as the principal underwriter for the sale of Policies to
the public, during the term of this Agreement, in each state and other
jurisdictions in which such Policies may lawfully be sold. PML shall offer the
Policies for sale and distribution at premium rates set by PMLIC. Completed
applications for Policies shall be transmitted directly to PMLIC for acceptance
or rejection in accordance with underwriting rules established by PMLIC. Initial
premium payments under the Policies shall be made by check payable to PMLIC and
shall be transmitted promptly by PML or its representatives to PMLIC.
2. PML shall be responsible for supervising and controlling its
representatives soliciting applications for Policies, for taking all necessary
and appropriate steps to ensure compliance by its representatives on a
continuous basis with applicable laws and regulations concerning the offer and
sale of policies, and for ensuring that its representatives are duly and
appropriately licensed or otherwise qualified for the sale of the Policies in
each applicable state or other jurisdiction.
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3. PMLIC agrees that during the term of this Agreement it will take any
action which is required to cause the Policies to comply as an insurance product
and a registered security with all applicable federal and state laws and
regulations. PMLIC agrees that during the term of this Agreement it will take
reasonable steps to discharge, on behalf of PML, the responsibilities set forth
in paragraph 2 above.
4. PML is hereby authorized to enter into separate written agreements, on
such terms and conditions as PML may determine not inconsistent with this
Agreement, with one or more organizations which agree to participate in the
distribution of the Policies. Such organization (hereafter "Broker") shall be
registered both as a broker/dealer under the 1934 Act and as a member of the
NASD. PML shall obtain the approval of PMLIC prior to entering into an agreement
with any such organization.
5. PML shall take reasonable steps to ensure that any Broker and its
representatives soliciting applications for Policies shall be duly and
appropriately licensed, registered or otherwise qualified for the sale of such
Policies (and the riders and other policies offered in connection therewith)
under the insurance laws and any applicable blue-sky laws of each state or other
jurisdiction in which PMLIC is licensed to sell the Policies.
6. PML shall take reasonable steps to ensure that each Broker supervises
its representatives in compliance with applicable laws and regulations. Broker
shall assume any legal responsibilities of PMLIC for the acts, commissions,
omissions, or defalcations of such representatives insofar as they relate to the
sale of the Policies. Applications for Policies solicited by a Broker through
its agents or representatives shall be transmitted directly to PMLIC, and if
received by PML, shall be forwarded to PMLIC. All premium payments under the
Policies shall be made by check to PMLIC and remitted promptly to PMLIC.
7. PMLIC shall undertake to appoint the qualified representatives of PML
or any Broker appointed by PML as life insurance agents of PMLIC. PMLIC reserves
the right to refuse to appoint any proposed agent, or once appointed to
terminate the same.
B. COMPLIANCE AND RECORDKEEPING
1. PML is authorized to appoint the organizations described in paragraph 4
of Article A above as independent general agents of PMLIC for the sale of the
Policies. PMLIC is responsible for ensuring that Brokers are duly qualified,
under the insurance laws of the applicable jurisdictions, to sell the Policies.
2. PMLIC and PML wish to ensure that Policies sold by PML will be issued
to purchasers for whom the Policies will be suitable. On behalf of PML, PMLIC
shall take reasonable steps to ensure that the various representatives appointed
by it shall not make recommendations to an applicant to purchase a Policy in the
absence of reasonable grounds to believe that the purchase of the Policy is
suitable for such applicant. While not limited to the following, a determination
of suitability shall be based on information furnished to a representative after
reasonable inquiry of such applicant concerning the applicant's insurance and
financial needs, objectives and situation, and the likelihood that the
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applicant will continue to make the premium payments contemplated by the
Policies. PML is not authorized to give any information or to make any
representations concerning the Policies other than those contained in the
current prospectus filed with the Commission or in such sales literature as may
be authorized by PMLIC.
3. PMLIC shall have the responsibility for furnishing PML and its
representatives with prospectuses, financial statements, sales promotion
materials as well as individual sales proposals related to the sale of the
Policies, and other documents which PML reasonably requests for use in
connection with the distribution of the Policies. PML shall not use any sales
materials that have not been approved by PMLIC; provided, however, that PML
shall have responsibility for approving and filing all sales literature and
advertisements with the NASD and SEC as required by law or rule.
4. On behalf of PML, PMLIC shall have the responsibility for maintaining
the record of representatives licensed, registered and otherwise qualified under
Federal Securities law to sell the Policies. On behalf of PML, PMLIC shall have
the responsibility for calculating and furnishing periodic reports to PMLIC of
the commissions and service fees payable to agents, brokers, general agents and
sales managers of PMLIC and its affiliates and for furnishing periodic reports
to PMLIC as to the sale of Policies made pursuant to this Agreement. On behalf
of PML, PMLIC shall also maintain such other records as are required of it by
applicable laws and regulations. The books, accounts and records of PMLIC, the
Accounts, and PML, shall be maintained so as to clearly and accurately disclose
the nature and details of the transactions.
5. PML and PMLIC agree to cooperate fully in any insurance regulatory
investigation or proceeding or judicial proceeding arising in connection with
the Policies distributed under this Agreement. PML and PMLIC further agree to
cooperate fully in any securities regulatory investigation or proceeding or
judicial proceeding with respect to PMLIC, PML, their affiliates and their
agents or representatives to the extent that such investigation or proceeding is
in connection with Policies distributed under this Agreement. Without
limitation:
(a)PML will be notified promptly of any customer complaint or notice
of any regulatory investigation or proceeding or judicial proceeding
received by PMLIC with respect to PML or any agent or representative or
which may affect PMLIC's issuance of any Policy marketed under this
Agreement.
(b)PML will promptly notify PMLIC of any customer complaint or
notice of any regulatory investigation or proceeding received by PML or
its affiliates with respect to PML or any agent or representative in
connection with any Policy distributed under this Agreement or any
activity in connection with any such Policy.
(c)In the case of a substantive customer complaint, PML and PMLIC
will cooperate in investigating such complaint and any response to such
complaint will be sent to the other party to this Agreement for approval
not less than five business days prior to its being sent to the customer
or regulatory authority, except that, if a more prompt response is
required, the proposed response shall be communicated by telephone or
telegraph.
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C. COMPENSATION
1. On behalf of PML, PMLIC shall arrange for the payment of commissions
directly to those registered representatives of PML who are entitled thereto in
connection with the sale of the Policies in the amounts and on such terms and
conditions as PMLIC and PML shall determine.
2. PMLIC shall arrange for the payment of commissions directly to those
Brokers who sell Policies under Agreements entered into pursuant to paragraph 4
of Article A above, in amounts as may be agreed to by PMLIC and specified in
such written agreements.
3. PMLIC shall reimburse PML for the costs and expenses incurred by PML in
furnishing or obtaining the services, materials and supplies required by the
terms of this Agreement in the initial sales efforts and the continuing
obligations hereunder.
D. MISCELLANEOUS
1. This Agreement shall be effective upon the execution hereof. This
Agreement:
(a) shall automatically be terminated in the event of its
assignment;
(b) may be terminated by any party at any time upon 60 days' written
notice to the other parties hereto;
(c) may be terminated upon written notice of a party to another
party hereto in the event of bankruptcy or insolvency of such party to
which notice is given; and
(d) may be terminated at any time upon the mutual written consent of
the parties hereto.
Upon termination of this Agreement, all authorizations, rights, and obligations
shall cease except the obligations to settle accounts hereunder, including
commissions attributable to payments or premiums or contributions subsequently
received for Policies in effect at the time of termination or issued pursuant to
applications received by PMLIC prior to termination.
2. This Agreement shall be subject to the provisions of the 1940 Act and
the 1934 Act and the rules, regulations, and rulings thereunder and of the
applicable rules and regulations of the NASD, from time to time in effect, and
the terms hereof shall be interpreted and construed in accordance therewith.
3. PML shall act as an independent contractor and nothing herein contained
shall constitute PML or its agents or employees as employees of PMLIC in
connection with the sale of the Policies.
4. 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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5. This Agreement shall be construed and enforced in accordance with and
governed by the laws of the Commonwealth of Pennsylvania.
6. PML agrees that all accounts and records which it maintains for PMLIC
and the Accounts shall be the property of PMLIC and the Accounts and that it
will surrender promptly to the designated officers of PMLIC any or all such
accounts and records upon request.
7. PML shall submit to all regulatory and administrative bodies having
jurisdiction over the operations of PMLIC and/or the Accounts, present or
future, any materials, reasonably related to the administrative and marketing
services provided hereunder, as may be reasonably required by any governmental
agency having jurisdiction.
8. PMLIC and the Accounts shall own and control all pertinent records
relating to the variable life insurance operations.
9. In the event of termination for any reason all records shall promptly
be returned to PMLIC free from any claim or retention of rights by PML.
10. PML shall not disclose or use any records or information obtained
pursuant to this agreement in any manner whatsoever except as expressly
authorized herein and further PML will keep confidential any information
obtained pursuant to the service relationship set forth herein and disclose such
information only if PMLIC has authorized such disclosure or such disclosure is
expressly required by applicable federal or state regulatory authorities.
11. PML shall be liable for its own misconduct and negligence.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
ATTEST: /s/ illegible PML SECURITIES COMPANY
---------------------------
BY: /s/ illegible
-----------------------------------
ATTEST: /s/ illegible PROVIDENT MUTUAL LIFE INSURANCE
--------------------------- COMPANY OF PHILADELPHIA
BY: /s/ illegible
-----------------------------------
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ATTEST: /s/ illegible PROVIDENT MUTUAL VARIABLE GROWTH
----------------------------------- SEPARATE ACCOUNT
BY /s/ Xxxxxxx X. XxXxxxxxxx
-------------------------------------
ATTEST: /s/ illegible PROVIDENT MUTUAL VARIABLE MONEY MARKET
----------------------------------- SEPARATE ACCOUNT
BY: /s/ Xxxxxxx X. XxXxxxxxxx
-------------------------------------
ATTEST: /s/ illegible PROVIDENT MUTUAL VARIABLE BOND SEPARATE
----------------------------------- ACCOUNT
BY /s/ Xxxxxxx X. XxXxxxxxxx
-------------------------------------
ATTEST: /s/ illegible PROVIDENT MUTUAL VARIABLE MANAGED
----------------------------------- SEPARATE ACCOUNT
BY: /s/ Xxxxxxx X. XxXxxxxxxx
-------------------------------------
ATTEST: /s/ illegible PROVIDENT MUTUAL VARIABLE ZERO COUPON
----------------------------------- SEPARATE BOND ACCOUNT
BY: /s/ Xxxxxxx X. XxXxxxxxxx
-------------------------------------
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AMENDMENT TO UNDERWRITING AGREEMENT
THIS AMENDMENT to the Underwriting Agreement by and among PML Securities Company
("PML"), Provident Mutual Life Insurance Company of Philadelphia, ("PMLIC"), and
Provident Mutual Variable Growth Separate Account, Provident Mutual Variable
Bond Separate Account, Provident Mutual Variable Money Market Separate Account,
Provident Mutual Variable Managed Separate Account and Provident Mutual Variable
Zero Coupon Bond Separate Account (collectively the "Accounts") is made this 9th
day of September, 1988.
WITNESSETH:
WHEREAS, PML, PMLIC and the Accounts entered into an Underwriting Agreement on
December 6 1985; and
WHEREAS, it is the desire of the parties thereto to amend said Agreement;
NOW THEREFORE, it is agreed among the parties hereto to amend said Underwriting
Agreement as follows:
1. Add the following to item D.l.:
(e) may be terminated for "cause" at any time by PMLIC. "Cause" is
defined and limited for this purpose to mean willful misfeasance,
bad faith, or gross negligence by PML in the performance of its
duties or reckless disregard by it of its obligations and duties
under this Agreement.
2. Add the following at the end of item D.6.:
PMLIC, the Accounts or the authorized representatives of said
parties shall have the right to copy any such records in the
possession of PML.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to the
Underwriting Agreement among the parties to be duly executed as of the day
and year first above written.
[SEAL] PML SECURITIES COMPANY
Attest: /s/ Xxxxxx X. Xxxxxx Xx. By: /s/ illegible
-------------------------- -------------------------------------
[SEAL] PROVIDENT MUTUAL LIFE INSURANCE
COMPANY OF PHILADELPHIA
Attest: /s/ Xxxxxx X. Xxxxxx Xx. By: /s/ illegible
-------------------------- -------------------------------------
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PROVIDENT MUTUAL VARIABLE GROWTH
SEPARATE ACCOUNT
Attest: By: /s/ illegible
-------------------------- -------------------------------------
PROVIDENT MUTUAL VARIABLE BOND
SEPARATE ACCOUNT
Attest: By: /s/ illegible
-------------------------- -------------------------------------
PROVIDENT MUTUAL VARIABLE MONEY
MARKET SEPARATE ACCOUNT
Attest: By: /s/ illegible
-------------------------- -------------------------------------
PROVIDENT MUTUAL VARIABLE
MANAGED SEPARATE ACCOUNT
Attest: By: /s/ illegible
-------------------------- -------------------------------------
PROVIDENT MUTUAL VARIABLE
ZERO COUPON SEPARATE ACCOUNT
Attest: By: /s/ illegible
-------------------------- -------------------------------------
