EXHIBIT 1.A.(3)(a)
DISTRIBUTION AGREEMENT
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AGREEMENT made this ______ day of ______________, by and between
Lutheran Brotherhood Variable Insurance Products Company, a Minnesota
corporation ("LBVIP"), on its own behalf and on behalf of the LBVIP Variable
Insurance Account (the "Variable Account"), and Lutheran Brotherhood
Securities Corp., a Pennsylvania corporation ("LBSC").
WITNESSETH:
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WHEREAS, LBVIP has established and maintains the Variable Account, a
separate investment account, pursuant to the laws of Minnesota for the
purpose of selling flexible premium variable life insurance contracts
("Contracts"), to commence after the effectiveness of the Registration
Statement relating thereto filed with the Securities and Exchange Commission
on Form S-6 pursuant to the Securities Act of 1933, as amended (the "1933
Act"); and
WHEREAS, the Variable Account will be registered as a unit investment
trust under the Investment Company Act of 1940 (the "1940 Act"); and
WHEREAS, LBSC is registered as a broker-dealer under the Securities
Exchange Act of 1934 (the "Securities Exchange Act") and is a member of the
National Association of Securities Dealers, Inc. ("NASD"); and
WHEREAS, LBVIP and LBSC wish to enter into an agreement to have LBSC
act as the Company's principal underwriter for the sale of the Contracts
through the Variable Account;
NOW, THEREFORE, the parties agree as follows:
1. APPOINTMENT OF THE DISTRIBUTOR
LBVIP agrees that during the term of this Agreement it will take
all action which is required to cause the Contracts to comply as
an insurance product and a registered security with all applicable
federal and state laws and regulations. LBVIP appoints LBSC and
LBSC agrees to act as the principal underwriter for the sale of
Contracts to the public, during the term of this Agreement, in
each state and other jurisdiction in which such Contracts may
lawfully be sold. LBSC shall offer the Contracts for sale and
distribution at premium rates set by LBVIP. Applications for the
Contracts shall be solicited only by representatives duly and
appropriately licensed or otherwise qualified for the sale of such
Contracts in each state or other jurisdiction. LBVIP shall
undertake to appoint LBSC's qualified registered representatives
as life insurance agents of LBVIP. Completed applications for
Contracts shall be transmitted directly to LBVIP for acceptance or
rejection in accordance with underwriting rules established by
LBVIP. Initial premium payments under the Contracts shall be made
by check payable to LBVIP and shall be held at all times by LBSC
or its registered representatives in a fiduciary capacity and
remitted promptly to LBVIP. Anything in this Agreement to the
contrary notwithstanding, LBVIP retains the ultimate right to
control the sale of the Contracts and to appoint and discharge
life insurance agents of LBVIP. LBSC shall be held to the
exercise of reasonable care in carrying out the provisions of this
Agreement.
2. SALES AGREEMENTS
LBSC is hereby authorized to enter into separate written
agreements, on such terms and conditions as LBSC may determine not
inconsistent with this Agreement, with one or more registered
representatives who agree to participate in the distribution of
Contracts. Such registered representatives shall be registered as
securities agents with the NASD. LBSC and its registered
representatives soliciting applications for Contracts shall also
be duly and appropriately licensed, registered or otherwise
qualified for the sale of such Contracts (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 LBVIP is authorized to offer the Contracts.
LBSC shall have the responsibility for ensuring that its
registered representatives are properly supervised. LBSC shall
assume any legal responsibilities of LBVIP for the acts,
commissions or defalcations of such registered representatives
insofar as they relate to the sale of the Contracts. Applications
for Contracts solicited by LBSC through its registered
representatives shall be transmitted directly to LBVIP. All
premium payments under the Contracts shall be made by check to
LBVIP and, if received by LBSC, shall be held at all times in a
fiduciary capacity and remitted promptly to LBVIP.
3. LIFE INSURANCE LICENSING
LBVIP shall be responsible for ensuring that the registered
representatives are duly qualified under the insurance laws of the
applicable jurisdictions to sell the Contracts.
4. SUITABILITY
LBVIP wishes to ensure that Contracts sold by LBSC will be issued
to purchasers for whom the Contract will be suitable. LBSC shall
take reasonable steps to ensure that the various registered
representatives appointed by it shall not make recommendations to
an applicant to purchase a Contract in the absence of reasonable
grounds to believe that the purchase of the Contract is suitable
for such applicant. While not limited to the following, a
determination of suitability shall be based on information
furnished to a registered representative after reasonable inquiry
of such applicant concerning the applicant's insurance and
investment objectives, financial situation and needs, and the
likelihood that the applicant will continue to make the premium
payments contemplated by the Contracts.
5. PROMOTION MATERIALS
LBVIP shall have the responsibility for furnishing to LBSC and its
registered representatives sales promotion materials and
individual sales proposals related to the sale of the Contracts.
LBSC shall not use any such materials that have not been approved
by LBVIP.
6. COMPENSATION
LBVIP shall arrange for the payment of commissions directly to
those registered representatives of LBSC who are entitled thereto
in connection with the sale of the Contracts on behalf of LBSC, in
the amounts and on such terms and conditions as LBVIP and LBSC
have determined in the FLEXIBLE PREMIUM VARIABLE LIFE SCHEDULE OF
COMMISSION RATES attached hereto as Exhibit A and Exhibit B and
incorporated by reference herein; provided, however, that such
terms, conditions and commissions as are set forth in or as are
not inconsistent with the Prospectus included as part of the
Registration Statement for the Contracts and effective under the
1933 Act. LBVIP may, at its option, adjust the FLEXIBLE PREMIUM
VARIABLE LIFE SCHEDULE OF COMMISSION RATES for contracts and
riders hereafter sold, by giving written notice to LBSC thirty
days in advance of such change.
LBVIP shall reimburse LBSC for the costs and expenses incurred by
LBSC 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.
7. RECORDS
LBSC shall have the responsibility for maintaining the records of
representatives licensed, registered and otherwise qualified to
sell the Contracts. LBSC shall maintain such other records as are
required of it by applicable laws and regulations. The books,
accounts and records of LBVIP, the Variable Account and LBSC shall
be maintained so as to clearly and accurately disclose the nature
and details of the transactions. All records maintained by LBSC
or in connection with this Agreement shall be the property of
LBVIP and shall be returned to LBVIP upon termination of this
Agreement, free from any claims or retention of rights by LBSC.
LBSC shall keep confidential any information obtained pursuant to
this Agreement and shall disclose such information, only if LBVIP
has authorized such disclosure, or if such disclosure is expressly
required by applicable federal or state regulatory authorities.
8. INVESTIGATIONS AND PROCEEDINGS
(a) LBSC and LBVIP agree to cooperate fully in any insurance
regulatory investigation, proceeding or judicial proceeding
arising in connection with the Contracts distributed under
this Agreement. LBSC and LBVIP further agree to cooperate
fully in any securities regulatory investigation, proceeding
or judicial proceeding with respect to LBVIP, LBSC, their
affiliates and their agents or representatives to the extent
that such investigation or proceeding is in connection with
Contracts distributed under this Agreement. LBSC shall
furnish applicable federal and state regulatory authorities
with any information or reports in connection with its
services under this Agreement which such authorities may
request in order to ascertain whether the LBVIP's operations
are being conducted in a manner consistent with any
applicable law or regulation.
(b) In the case of a written customer complaint, LBSC and LBVIP
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.
9. TERMINATION
This Agreement shall terminate automatically upon its assignment
by either party without the prior written consent of both parties.
This Agreement may be terminated at any time by either party on
60 days' written notice to the other party, without the payment of
any penalty. Upon termination of this Agreement all
authorizations, rights and obligations shall cease except the
obligation to settle accounts hereunder, including commissions on
premiums subsequently received for Contracts in effect at time of
termination, and the agreements contained in paragraph 8 hereof.
10. REGULATION
This Agreement shall be subject to the provisions of the 1933 Act,
the 1940 Act and the Securities Exchange Act and the rules,
regulations and rulings promulgated 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.
11. 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.
12. APPLICABLE LAW
This Agreement shall be construed and enforced in accordance with
and governed by the laws of the State of Minnesota.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
LUTHERAN BROTHERHOOD VARIABLE INSURANCE
PRODUCTS COMPANY
By
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LUTHERAN BROTHERHOOD SECURITIES CORP.
By
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