VARIABLE PRODUCTS COMPLIANCE AND ACCOUNTING AGREEMENT
THIS VARIABLE PRODUCTS COMPLIANCE AND ACCOUNTING AGREEMENT is made and executed
by and between EquiTrust Investment Management Services, Inc. ("EquiTrust"), a
Delaware corporation having its principal offices at 0000 Xxxxxxxxxx Xxxxxx,
Xxxx Xxx Xxxxxx, Xxxx; and Modern Woodmen of America (the "Society"), a
fraternal benefit society having its principal offices at 0000 0xx Xxxxxx, Xxxx
Xxxxxx, Xxxxxxxx 00000.
RECITAL
The Society desires to have EquiTrust provide accounting and compliance
services to the Society, as described herein, with respect to the Society's
variable annuity contracts and variable life insurance contracts which are
underwritten and sold by the Society.
NOW THEREFORE, in consideration of the mutual covenants and obligations
hereinafter expressed and for the consideration recited herein, the Society and
EquiTrust hereby covenant, stipulate and agree as follows:
PART 1 - SERVICES
1.1 SCOPE OF SERVICES. From and after the date of this Agreement, EquiTrust
agrees to provide to the Society certain compliance and accounting functions
with respect to the variable annuity contracts and variable life insurance
contracts issued by the Society, as identified and listed in the schedule of
contract and certificate forms and riders annexed hereto as Schedule A. Such
compliance and accounting functions shall consist of the activities set forth
and described in the Description of Services and Fees annexed hereto and
incorporated herein as Schedule B. Schedules A and B may be amended from time to
time by mutual written agreement of the Society and EquiTrust.
1.2 ADDITIONAL SERVICES. EquiTrust shall review any additional compliance or
accounting requirements at the request of the Society and EquiTrust will provide
the Society with a written proposal to include specific services to be provided,
an implementation schedule and any associated fees and expenses.
1.3 COMPENSATION. In consideration of the services provided under this Agreement
for and on behalf of the Society, the Society will pay EquiTrust quarterly such
compensation and reimburse EquiTrust for such expenses as are provided for in
the schedule of administrative fees annexed hereto as Schedule B. EquiTrust
agrees that the compensation payable pursuant to Schedule B shall be accepted by
EquiTrust as full compensation from the Society for the services described in
Schedule B.
1.4 SOCIETY DIRECTIVES. EquiTrust shall, in all cases and at all times, to the
extent there is reasonable notice thereof, observe and obey the rules,
regulations, instructions and directives of the Society as the Society may, from
time to time, promulgate for its operations, and shall not bind the Society in
contravention of any such rules, regulations, instructions or directives.
EquiTrust shall not, however, upon reasonable prior notice to the Society, be
responsible for observing or obeying any rule, regulation, instruction or
directive of the Society, if in so doing,
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EquiTrust, in the opinion of its counsel, would be in violation of any statute,
rule or regulation promulgated by any governmental authority with jurisdiction
thereover.
1.5 REFERRAL OF COMMUNICATIONS. EquiTrust shall handle all correspondence of a
routine nature and other general functions necessary to provide compliance and
accounting services pursuant to this Agreement and shall maintain files relative
thereto. EquiTrust shall immediately forward to the Society copies of all
attorney letters or other communications notifying EquiTrust of threatened or
actual litigation against EquiTrust or the Society. The Society shall forward to
EquiTrust, immediately upon receipt, all complaints and inquiries, and all
attorney letters containing complaints received by the Society but appropriate
for EquiTrust response. EquiTrust will dispatch responses within a reasonable
period or as required by appropriate law, whichever is sooner, and will copy the
Society on such responses to all complaints. The Society shall have an
opportunity to review EquiTrust's response to all attorney letters and EquiTrust
will not mail or otherwise transmit any such written responses to such attorney
letters without the prior approval of the Society.
1.6 INVESTMENT AUTHORITY. Any Officer, Senior Mutual Funds Accountant, Senior
Accountant or Mutual Funds Staff Accountant of EquiTrust is authorized to
purchase or sell, using Modern Woodmen of America authorized bank accounts,
Modern Woodmen of America Variable Account shares and Modern Woodmen of America
Variable Annuity Account shares in mutual funds with which Modern Woodmen of
America has Participation Agreements.
PART 2 - STANDARDS OF PERFORMANCE
2.1 LICENSURE. EquiTrust will be properly licensed with each state or other
jurisdiction as required in order to provide the services covered by this
Agreement.
2.2 GENERAL STANDARD. All services to be provided by EquiTrust under this
Agreement shall be performed in a professional manner consistent with industry
standards and in accordance with all applicable laws and regulations.
2.3 RESERVATION OF MANAGEMENT AUTHORITY. Services as are rendered by EquiTrust
are subject to the express limitation that they shall in no way constitute a
relinquishment of the management responsibility of the Society, which shall not
be relieved of any obligation or liability to which it would otherwise be
subject by law as a result of these services being rendered. The authority
granted and delegated in Schedule B can be amended or removed pursuant to
section 3.2 in the sole discretion of the Society.
PART 3 - EFFECTIVE DATE, TERM; TERMINATION
3.1 EFFECTIVE DATE; TERM. This Agreement shall become and be effective on and
as of February 1, 2002, and, unless sooner terminated pursuant to Section 3.2
hereof, shall thereafter continue in full force and effect until February 1,
2007 (the "Initial Term"); provided, however, upon written notice to
EquiTrust on or before February 1, 2006, the Society, at its sole option, may
elect to extend the Initial Term for any period up to June 1, 2022; and
provided further, however, after the Initial Term, this Agreement, and all of
its terms and provisions, as the same may have previously been amended by the
parties, shall be automatically renewed and reconducted for successive 12
month renewal terms.
3.2 TERMINATION. After the conclusion of the Initial Term (including any
extension) or any renewal term, this Agreement may be terminated:
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a. by either party with respect to new business, upon 365 days prior
written notice to the other party;
b. by the Society with respect to business in force, upon 365 days prior
written notice to EquiTrust;
c. by the Society, with respect to new business and/or business in force,
upon written notice to EquiTrust in the event of the bankruptcy or
insolvency of EquiTrust, or
d. by either party upon prior written notice to the other party
specifying the other party's breach or default in the performance of
any material covenant or obligation of this Agreement and failure to
cure or remedy such breach or non-performance within 30 days of the
date on which notice of such breach or default is received, or such
longer period as may be permitted by the party giving notice.
This Agreement may be terminated prior to the completion of the Initial Term
(including any extension) only for the reasons stated in subparagraphs "c" and
"d" above, or by the express written agreement of the parties.
3.3 RIGHTS AND OBLIGATIONS UPON TERMINATION. Upon the termination of this
Agreement, with respect to new business and/or business in force, EquiTrust
shall supply the Society with all information necessary to provide the
compliance and accounting services related to the business covered by this
Agreement, including data electronically stored. So long as this Agreement
continues in force with respect to any business, the parties will continue to
provide services and information to each other in the same manner and with the
same diligence as from the inception of the Agreement.
PART 4 - INDEMNIFICATION
4.1 MUTUAL INDEMNIFICATION. EquiTrust agrees to indemnify and hold the Society
harmless from any liability, damages or losses which the Society may incur as a
result of any claims, actions or judgments, negligent or intentional, in
connection with EquiTrust's provision of services to the Society; provided,
however, EquiTrust shall not be responsible for decisions made by the Society or
for actions as directed by Society in writing. The Society similarly agrees to
indemnify and hold EquiTrust harmless for decisions made by the Society or
actions as directed by the Society in writing. Each party warrants to the other
that its services and obligations as performed under this Agreement, including,
but not limited to the materials used therein, will not infringe upon the
proprietary interests or rights of third parties and each party will further
indemnify, hold harmless and defend the other party, its directors, officers,
agents and employees, against any infringement liability, claim or action as a
result of the actions of the indemnifying party.
4.2 NOTICE OF CLAIM. If any claim is made by a party which would give rise to
a right of indemnification under Section 4.1, the party entitled to
indemnification (the "Indemnified Party") promptly will give notice of the
claim to the party required to provide indemnification (the "Indemnifying
Party"). The Indemnified Party will permit the Indemnifying Party to
participate in such defense at the Indemnifying Party's expense. The
Indemnifying Party will not, in the defense of any such claim or litigation,
consent to entry or any judgment or enter into any settlement without the
written consent of the Indemnified Party which will not be withheld
unreasonably. The Indemnified Party shall cooperate fully with the
Indemnifying Party and make available to the Indemnifying Party all pertinent
information under its control relating thereto.
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PART 5 - GENERAL PROVISIONS
5.1 AUTHORIZED OFFICERS. The Society authorizes each of its officers identified
in Schedule C, attached hereto and incorporated herein by reference (hereinafter
referred to as "Authorized Officers"), within the scope of the officers'
authority as described in Schedule C, to: (i) coordinate communications with
EquiTrust with respect to this Agreement; (ii) provide to EquiTrust written
requests and instructions with respect to the services provided for herein; and
(iii) clarify with EquiTrust the specific scope and timing of records
maintained, reports prepared and other services performed by EquiTrust. The
Society authorizes its President, National Secretary, Assistant National
Secretary, Treasurer/Investment Manager, General Counsel, Actuary and Director
of Agencies to agree in writing with EquiTrust on changes in the compensation
payable by the Society to EquiTrust to reflect changes in the scope and timing
of the services. If EquiTrust receives any letter or other writing from an
Authorized Officer of the Society authorizing an officer of the Society to sign
documents on behalf of the Society, then such officer shall be considered an
Authorized Officer for purposes of this Agreement and Schedule C shall be
considered amended accordingly. The Society may amend Schedule C from time to
time by giving notice to EquiTrust of the amendment.
5.2 CONFIDENTIAL INFORMATION. In performing the obligations arising under this
Agreement, each party may have access to and receive disclosure of certain
confidential or proprietary information of the other party (hereinafter
"Confidential Information"). Each party shall take all reasonable steps
necessary to protect the confidential and proprietary nature of all Confidential
Information of the other party by affording thereto the same types of protection
which the party in possession of Confidential Information of the other party
affords its own confidential and proprietary information. Except as provided in
this Agreement or as reasonably required to perform the services referenced
herein, neither party shall, directly or indirectly, disclose or make available
to any third party, or use for any purpose, any Confidential Information
belonging to the other party. Notwithstanding the foregoing, Confidential
Information shall not include: (i) any information which is or becomes generally
available to the public or the insurance industry, other than as a result of a
breach of this Agreement by the party obtaining the Confidential Information;
(ii) any information which is lawfully obtained by the party from a third party,
provided that the third party is not, to the knowledge of the party obtaining
the information, bound by a nondisclosure agreement with respect thereto; or
(iii) any information which subsequently develops from independent sources.
5.3 SOCIETY PROPERTY. All contract and certificate forms, records and supplies
furnished by the Society to EquiTrust, will be stored at EquiTrust's offices in
West Des Moines, Iowa, and shall remain the property of the Society and shall be
turned over to the Society promptly on demand. All other contract and
certificate forms or other supplies, and all underwriting files or other files
pertaining to an annuitant's or insured's coverage, whether retained by the
Society or EquiTrust, shall be copied upon request and said copies provided to
the other party. All licenses and other materials relating to government
licensing or authorizations of the Society with respect to this Agreement shall
be and remain the property of the Society and shall be turned over to the
Society by EquiTrust promptly upon demand.
5.4 INSPECTION OF BOOKS AND RECORDS. The Society, or others on its behalf, shall
have the right at any reasonable time to inspect all books and documents
relating to the services provided pursuant to this Agreement. EquiTrust shall
provide any and all information concerning the services provided hereunder which
may be required in order to administer this Agreement and to
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permit the Society to comply with governmental regulations, examinations, audits
and inspections.
5.5 CORPORATE AUTHORITY. EquiTrust and the Society expressly represent and
warrant that each has the authority to enter into this Agreement and that each
is not or will not be, by virtue of entering into this Agreement or otherwise,
in breach of any other agreement with any other society, company, association,
firm, person or corporation.
5.6 OFFICER AUTHORITY. The officers signing this Agreement on behalf of the
Society and EquiTrust represent and warrant that they are authorized to execute
this document on behalf of such corporations pursuant to their bylaws or a
resolution of their boards of directors.
5.7 INDEPENDENT CONTRACTOR. EquiTrust is an independent contractor. Nothing
contained in this Agreement shall be construed to create the relationship of
employer and employee between the Society and EquiTrust, nor shall EquiTrust's
employees be considered employees of the Society for any purposes.
5.8 ARBITRATION. In the event of any dispute arising between EquiTrust and the
Society with reference to the rights or liabilities of either party under this
Agreement, the dispute shall be referred to three arbitrators (other than
present or former officers or employees of EquiTrust, the Society, any
affiliated company or any company with a monetary interest in the dispute)
familiar with the business of insurance. One of the arbitrators shall be chosen
by EquiTrust, another by the Society and a third by the first two. The decision
of the arbitrators shall be binding and final. The standards to be used in the
proceedings will be the Commercial Arbitration Rules of the American Arbitration
Association. Each party shall initially pay the costs and fees of the arbitrator
it selects, and the costs and fees of the third arbitrator shall be divided
equally by the parties; PROVIDED, HOWEVER, that the prevailing party in any
arbitration proceeding conducted pursuant to this Section shall be entitled to
recover from the other party any costs or expenses incurred by the prevailing
party in connection with the arbitration, including the fees of arbitrators and
the reasonable fees of attorneys, actuaries, accountants and other experts.
5.9 ASSIGNMENT. Neither party may assign or delegate all or any part of its
rights and duties under this Agreement without the prior written consent by an
Authorized Officer of the granting party.
5.10 NON-WAIVER. The waiver of any breach of any term, covenant or condition of
this Agreement shall not be deemed a waiver of any subsequent breach of the same
or any other term, covenant or condition. No term, covenant or condition of this
Agreement shall be deemed to have been waived unless such waiver is in writing
and signed by the party charged therewith.
5.11 NOTICES. Any notice required or permitted under this Agreement shall be
deemed sufficiently given and effective five (5) business days after deposit
with the United States Postal Service, postage-prepaid, registered or certified,
return-receipt-requested, by facsimile or other electronic transmission or upon
receipt if delivered personally. Such notice shall be directed as follows:
EQUITRUST INVESTMENT MANAGEMENT MODERN WOODMEN OF AMERICA
SERVICES, INC.
Xxxxxxx X. Xxxx Xxxxx X. Xxxxxx
Chief Executive Officer President
0000 Xxxxxxxxxx Xxxxxx 0000 0xx Xxxxxx
Xxxx Xxx Xxxxxx, Xxxx 00000 Xxxx Xxxxxx, Xxxxxxxx 00000
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5.12 TITLES AND HEADINGS. The titles and headings appearing in this Agreement
are included for convenience only and shall not be taken into account in the
interpretation, construction or application of this Agreement.
5.13 AMENDMENT. Any amendment to this Agreement shall be in writing and signed
by authorized representatives of both parties.
5.14 ENTIRE AGREEMENT. This Agreement, together with the several Schedules
appended hereto and incorporated herein, constitutes the entire agreement
between the parties relative to the subject matter hereof, superseding any and
all prior understandings or agreements between the parties and any subsidiary,
parent or affiliated company and may not be amended except by written instrument
executed by the parties.
IN WITNESS WHEREOF, EquiTrust and the Society have caused this Agreement to be
subscribed and executed, in triplicate original, by their undersigned officers,
duly authorized hereunto, on the dates hereinafter indicated.
EQUITRUST INVESTMENT MANAGEMENT MODERN WOODMEN OF AMERICA
SERVICES, INC.
By: /s/ Jo Xxx Xxxxxxxxx By: /s/ Xxxxx X. Xxxxxxx
--------------------------- ------------------------------
Jo Xxx Xxxxxxxxx Xxxxx X. Xxxxxxx
Executive Vice President President
Date: July 5, 2001 Date: July 6, 2001
------------------------- ----------------------------
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SCHEDULE A
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SCHEDULE OF CONTRACTS, CERTIFICATE FORMS AND RIDERS
--------------------------------------------------------------------------------
FORM NAME AND TYPE FORM NUMBER
------------------ -----------
Flexible Premium Variable VULMWA (02-02)
Universal Life Certificate
Waiver of Charges Rider VMWA-024 (02-02)
Cost of Living Increase Rider VMWA-091 (02-02)
Guaranteed Insurability Rider VMWA-092 (02-02)
Death Benefit Guarantee Rider VMWA-575 (02-02)
Accelerated Benefits Rider 91 ACCBR
Flexible Premium Deferred VAMWA (02-02)
Variable Annuity Certificate
Incremental Death Benefit Rider VAIDBR (02-02)
Variable Supplemental Contract VSCMWA (02-02)
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SCHEDULE C
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AUTHORIZED OFFICERS
----------
President - Xxxxx X. Xxxxxxx
National Secretary - Xxxxx X. Xxxxxxxxx
Assistant National Secretary - Xxxxxx X. Xxxxx
Treasurer/Investment Manager - Xxxx X. Xxxxxxx
General Counsel - C. Xxxxxx Xxxxx
Actuary - Xxxxx X. Xxxxxxxxx
Director of Agencies - W. Xxxxx Xxxxxx
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