DISTRIBUTION AGREEMENT
BETWEEN MEMBERS LIFE INSURANCE COMPANY AND
CUNA BROKERAGE SERVICES, INC. FOR REGISTERED ANNUITY CONTRACTS
THIS AGREEMENT ("Agreement") is made effective as of the 9 t h day of September,
2013 by and between MEMBERS Life Insurance Company, a stock insurance company
domiciled in the State of Iowa ("MLIC") with its principal office located in
Waverly, Iowa, and CUNA Brokerage Services, Inc. ("CBSI"), a registered
broker-dealer domiciled in the State of Wisconsin with its principal office
located in Waverly, Iowa.
ARTICLE 1
APPOINTMENT
1.1 MLIC appoints CBSI to be the principal underwriter and distributor
for MLIC's annuity contracts, including both variable annuity contracts and
registered modified annuity contracts, which require distribution under the
auspices of a registered broker-dealer. The annuity contracts to be distributed
by CBSI pursuant to this Agreement are listed on Schedule B to this Agreement
(together, the "Registered Annuity Products").
ARTICLE 2
DUTIES OF CBSI
2.1 REGISTRATION UNDER THE 1934 ACT
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CBSI is registered as a broker-dealer under the provisions of the Securities
Exchange Act of 1934 (1934 Act) and has secured and will maintain
authorizations, licenses, qualifications, and permits necessary to perform its
obligations under this Agreement in those states requested by MLIC.
2.2 MEMBERSHIP IN THE FINANCIAL INDUSTRY REGULATORY AUTHORITY
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CBSI currently holds and shall maintain a membership in the Financial Industry
Regulatory Authority (FINRA).
2.3 RESPONSIBILITY FOR SECURITIES ACTIVITIES
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CBSI shall assume full responsibility for the securities activities of all
persons engaged directly or indirectly in the distribution operations for the
Registered Annuity Products, including but not limited to training, supervision,
and control as contemplated under appropriate provisions of the 1934 Act and
regulations thereunder and by the rules of FINRA. All persons directly or
indirectly involved in such activities relating to the Registered Annuity
Products shall be registered representatives or registered principals of CBSI as
appropriate to their activities. Also, each registered representative selling
the Registered Annuity Products and at least one registered principal shall be
properly licensed as an insurance agent of MLIC.
Further, CBSI represents and warrants that during the term of this Agreement, it
will maintain and implement (a) policies and procedures designed to comply with
all applicable rules of FINRA, including but not limited to rules relating to
suitability of annuity recommendations, (b) a training program for its
registered representatives designed to ensure that such persons gather
information concerning a customer's
financial status, tax status, investment objective and other relevant
information prior to recommending the purchase or exchange of an annuity
contract, and (c) a reasonable system of sales supervision designed to achieve
compliance with the rules of FINRA. CBSI agrees to provide a report to MLIC upon
request, certifying that CBSI is in compliance with items (a) through (c) above.
Each such report shall be certified by a senior manager of CBSI who has
responsibility for items (a) through (c). CBSI understands and acknowledges that
MLIC may conduct an inspection and/or audit of CBSI on a periodic basis to
ensure compliance with items (a) through (c) above, and CBSI agrees to make
reasonable accommodation to MLIC to enable MLIC to inspect documents directly
related to the sale and suitability of any Registered Annuity Product, which
documents CBSI shall be responsible for maintaining.
2.4 APPOINTMENT OF REGISTERED PERSONS AND MAINTENANCE OF PERSONNEL RECORDS
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CBSI shall have the authority and responsibility for the appointment and
registration of those persons who will be registered representatives and
registered principals. CBSI shall direct the maintenance of all personnel
records of such persons.
2.5 MAINTENANCE OF NET CAPITAL
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CBSI shall maintain required net capital at levels which will comply with
maximum aggregate indebtedness provisions under the provisions of the 1934 Act,
any regulation thereunder, and any FINRA rules.
2.6 REQUIRED REPORTS
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CBSI shall have the responsibility for preparation and submission of any reports
or other materials required by any regulatory authority having proper
jurisdiction.
2.7 LIMITATION ON AUTHORITY
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CBSI is not authorized to give any information or to make any representations
concerning the Registered Annuity Products other than the statements contained
in the current registration statement filed with the Securities and Exchange
Commission or such sales literature as may be authorized by MLIC.
2.8 RECEIPT OF PREMIUMS
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CBSI acknowledges and agrees that all premiums obtained within the scope of its
activities relating to the Registered Annuity Products shall be held in a
fiduciary capacity.
ARTICLE 3
DUTIES OF MLIC
3.1 MAINTENANCE OF ACCOUNTING RECORDS
-----------------------------------------
Except as set for above, MLIC shall maintain and hold, on behalf of and as agent
for CBSI, those records pertaining to Registered Annuity Products required to be
maintained and preserved by the 1934 Act, any regulations thereunder, and any
applicable FINRA rules. All such books and records are, and shall at all times
remain, the property of CBSI and shall at all times be subject to inspection by
duly authorized officers, auditors, and representatives of CBSI and by the
Securities and Exchange Commission, FINRA, and other regulatory authorities
having proper jurisdiction.
3.2 CONFIRMATION OF TRANSACTIONS
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On behalf of CBSI and acting as agent for CBSI, MLIC shall confirm all
transactions required to be confirmed in the form and manner required by the
1934 Act, any regulations thereunder, and any FINRA rules.
3.3 FURNISHING MATERIALS
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MLIC shall furnish to CBSI copies of prospectuses, financial statements and
other documents which CBSI reasonably requests for use in connection with the
solicitation, sale and distribution of the Registered Annuity Products.
ARTICLE 4
COMPENSATION
4.1 As compensation for services to be performed pursuant to this Agreement,
MLIC shall pay a dealer concession to and on behalf of CBSI. The amount of the
dealer concession and the manner in which it will be paid is specified in
Schedule A.
ARTICLE 5
TERMINATION
5.1 This Agreement may be terminated at any time by either party upon
written notice to the other, and to the Iowa Insurance Division, stating the
date when such termination shall be effective, provided that this Agreement may
not be terminated or modified by either party if the effect would be to put CBSI
out of compliance with the "net-capital" requirements of the 1934 Act.
IN WITNESS WHEREOF, the undersigned, as duly authorized officers, have caused
this Agreement to be executed on behalf of their respective companies.
MEMBERS Life Insurance Company
BY: /s/ Xxxx Xxxxxx
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CUNA BROKERAGE SERVICES, INC.
BY: /s/ Xxxxx X. Xxxx
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SCHEDULE A
1. MLIC shall pay to CBSI for sales made by its registered
representatives and registered representatives of other broker
dealers that have executed selling agreements with CBSI , from the
gross premium MLIC receives from each Registered Annuity Product, as
a dealer concession:
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5 YEAR 7 AND 10 YEAR
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Gross Dealer
Concession Gross Dealer
(GDC) Concession (GDC)
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AGE OPTION Up front Trail Up front Trail
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0 - 1 4.00% 0.00% 5.00% 0.00%
75 2 0.65% 0.65% 0.65% 0.65%
3 3.00% 0.25% 4.00% 0.25%
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76 - 1 2.60% 0.00% 3.25% 0.00%
85 2 0.65% 0.65% 0.65% 0.65%
3 2.00% 0.25% 2.60% 0.25%
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2. CBSI shall pay to its registered representatives and to other broker
dealers the compensation specified in the various agreements between
the parties for products sold by such registered representatives on
behalf of MLIC.
3. CBSI will use the difference between the compensation paid to CBSI as
set forth in Paragraph 1 and the payments CBSI makes to its
registered representatives and the compensation payable to
non-affiliated broker dealers as described in Paragraph 2 in
providing overhead support related to the distribution systems
specified in the Distribution and Servicing Agreements.
4. Compensation adjustments made and chargebacks received by CBSI in the
event of rescission or cancellation for a justifiable reason, or in
the event of the death of the owner or annuitant within the first
year after policy issuance shall be remitted to MLIC promptly.
5. All amounts payable by MLIC hereunder shall be paid within 30 days of
receipt of proof of qualified dealer concessions due.
This Schedule A is approved, effective as of this 9th day of September, 2013.
MEMBERS Life Insurance Company
BY: /s/ Xxxx Xxxxxx
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CUNA BROKERAGE SERVICES, INC.
BY: /s/ Xxxxx X. Xxxx
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SCHEDULE B
MEMBERS Zone Annuity
