Master General Agent Agreement
for American Enterprise Life Insurance Company
Variable Annuities
This MASTER GENERAL AGENT AGREEMENT ("Agreement") is entered into by
and between American Enterprise Life Insurance Company ("Company"), American
Express Financial Advisors Inc. ("Distributor"), Securities America, Inc.
("Master General Agent" or "MGA"), and Securities America, Inc., (the
broker-dealer for MGA, for purposes of this Agreement, "Master General Agent's
Broker" or "MGA's Broker"), effective as of June 1, 1998 (the "Effective Date").
MGA's affiliates which have executed an Affiliate Participation Agreement set
forth in Exhibit B of this Agreement or a substantially similar agreement
acceptable to Company and Distributor ("Participation Agreement") will also be
parties to this Agreement, as of the effective date of the Participation
Agreement.
Recitals
The purpose of this Agreement is to establish the terms and conditions
under which MGA and MGA's Broker will arrange for banks and insurance agencies
affiliated and/or under contract with banks to market and sell Company's
variable annuities. Company, Distributor, MGA and MGA's Broker intend that MGA
and MGA's Broker will be responsible for managing and supervising the marketing
and sales of Company's variable annuities pursuant to this Agreement, unless
Company, Distributor, MGA and MGA's Broker agree that some or all of MGA's
and/or MGA's Broker's duties may be delegated to a particular bank or insurance
agency affiliated or under contract with a bank and its broker-dealer ("General
Agent") and/or to General Agent's introducing broker-dealer ("General Agent's
Broker").
In consideration of the mutual covenants contained herein, the parties agree as
follow:
1. DEFINITIONS. As used in this Agreement, the following terms shall have the
following meanings:
1.1 "Affiliate" is an entity which is affiliated with MGA, which
performs all or a portion of MGA's duties, and which is duly
licensed or otherwise qualified as an insurance agency in one
or more of the states in the Territory.
1.2 "Distributor" is an affiliate of Company which Company has
engaged to serve as principal underwriter and distributor for
Company's variable annuities.
1.3 "General Agent" is a financial institution or an insurance
agency affiliated and/or under contract with a financial
institution, duly licensed or otherwise qualified as an
insurance agency, which itself or through Producers who are
its employees or independent contractors, solicits and sells
Products to the general public.
1.4 "General Agent's Broker" is a broker-dealer affiliated or
under contract with a General Agent to act as broker-dealer
with respect to the sale of variable annuities by General
Agent and Producers of General Agent, and which is duly
registered as a broker-dealer with the Securities and Exchange
Commission ("SEC"), the National Association of Securities
Dealers ("NASD"), and states where required. General Agent may
also be GA's Broker if properly registered as a broker-dealer.
1.5 "Master General Agent" or "MGA" is the party to this Agreement
which Company desires to have recruit Affiliates, General
Agents and Producers, as defined herein.
1.6 "Master General Agent's Broker" or "MGA's Broker" is an entity
affiliated and/or under contract with MGA and any Affiliates
to act as broker-dealer with respect to the sale of variable
annuities by Producers of MGA and General Agents and which is
duly registered as a broker-dealer with the SEC, the NASD, and
any states where required. MGA may also be MGA's Broker for
purposes of this Agreement, if properly registered as a
broker-dealer as required hereunder.
1.7 "Producer" is a duly licensed individual who sells Products as
an employee or independent contractor of the MGA, an Affiliate
or a General Agent, and who is appropriately registered with
the NASD as a representative of MGA's Broker, except that a
Producer may be registered with the NASD as a representative
of General Agent's Broker, but only if Company, Distributor,
MGA and MGA's Broker agree that some or all of MGA's Broker's
duties may be modified and delegated to General Agent and
General Agent's Broker in accordance with Section 4, "Duties,
Obligations and Limitations of MGA and MGA's Broker".
1.8 "Products" are those variable annuity products issued by
Company which will be marketed or sold by MGA, MGA's Broker,
General Agents, General Agents' Brokers, and their Producers
under this Agreement, and which are set forth in Exhibit A and
its Addenda attached hereto.
1.9 "Replacement" is the sale of a Product which is funded by the
annuity purchaser with money obtained from the liquidation of
another life insurance policy or annuity contract issued
either by Company or by any other life insurance company.
1.10 "Territory" is those states and jurisdictions in which MGA and
MGA's Broker are permitted to market and sell the Products,
either directly through MGA and MGA's Broker or through
General Agents and Producers, and which states are listed on
Exhibit A.
2. TERM OF AGREEMENT. Unless otherwise terminated pursuant to Section 8,
"Termination" hereof, the term of this Agreement shall be for a period
of one-year commencing immediately upon the Effective Date (the
"Term"). This Agreement shall automatically renew thereafter for
successive one-year periods (each, a "Renewal Period"), unless any
party (1) notifies all other parties within 30 days of the expiration
of the Term or of any Renewal Period of the intention not to renew, or
(2) otherwise terminates this Agreement pursuant to the terms hereof.
3. APPOINTMENT OF MGA AND MGA'S BROKER.
3.1 Appointment of MGA and MGA's Broker. Company and Distributor
hereby appoint and authorize MGA and MGA's Broker to perform
the services and responsibilities as set forth in this
Agreement on behalf of Company in accordance with the terms
and conditions of this Agreement, and MGA and MGA's Broker
hereby accept the appointment. MGA's and MGA's Broker's
authority will be nonexclusive, and will be limited to the
performance of the services and responsibilities set forth in
this Agreement.
3.2 Territory. Such appointment shall only extend to those states
and jurisdictions within the Territory in which, and only for
so long as MGA and MGA's Broker are licensed or otherwise duly
qualified to sell the Products, and which are shown on Exhibit
A.
3.3 Selection and Appointment of Affiliates. In those states
within the Territory in which MGA is not licensed or otherwise
qualified to act as an insurance agency, or for General Agents
for which MGA desires to have a particular affiliate perform
some of the duties of MGA, MGA shall be permitted to designate
a duly licensed insurance agency affiliate of MGA as an
Affiliate to perform MGA's duties under this Agreement. No
Affiliate shall be authorized to act as such until Affiliate
has executed a Participation Agreement and Company,
Distributor, MGA and MGA's Broker have authorized Affiliate to
act as such. MGA and Affiliate shall be jointly and severally
responsible and liable to Company for the faithful performance
of all the obligations and duties of MGA and Affiliate as set
forth in this Agreement. References in this Agreement to MGA
will include Affiliate with respect to the states and
Producers as to which Affiliate has been authorized to act and
has agreed to act as MGA.
4. DUTIES, OBLIGATIONS AND LIMITATIONS OF MGA AND MGA'S BROKER. Commencing on
the Effective Date, MGA and MGA's Broker will faithfully perform all of
MGA's and MGA's Broker's duties within the scope of the agency relationship
created under this Agreement, to the best of MGA's and MGA's Broker's
knowledge, skill and judgment. MGA and MGA's Broker shall be jointly and
severally responsible and liable to Company and Distributor for the
faithful performance of all obligations or duties except those which this
Agreement specifically identifies as duties of MGA's Broker. Company,
Distributor, MGA and MGA's Broker may agree that some or all of MGA's or an
Affiliate's or MGA's Broker's duties and responsibilities may be modified
with respect to one or more General Agents and such General Agent's
Producers, by delegating such duties and responsibilities to such General
Agent and such General Agent's Broker, when the Company, Distributor,
General Agent and General Agent's Broker have executed an agreement between
themselves, in a form acceptable to Company and Distributor, and Company,
Distributor, MGA and MGA's Broker have amended this Agreement to provide
for such modification and delegation. The duties of MGA and MGA's Broker,
respectively, shall include but not be limited to the following:
4.1 Recruitment of Producers. MGA, itself or through an Affiliate,
and MGA's Broker may recruit Producers to sell under the
supervision of MGA and MGA's Broker. Alternatively, MGA may
allow a General Agent or General Agent's Broker to recruit
Producers who are employees or independent contractors of
General Agent and MGA's Broker. A Producer so recruited may
not solicit or sell Products prior to that Producer's
obtaining the required state insurance license(s) in the
states in the Territory where such Producer will solicit and
sell Products; being registered with the NASD as
representatives of either MGA's Broker or General Agent's
Broker; being appointed as an agent by Company; and completing
training conducted by MGA and MGA's Broker on the Products,
Product marketing methods, and on regulatory and Company
policy and compliance requirements.
4.2 Recruitment of General Agents. MGA and MGA's Broker shall use
their best efforts to recruit General Agents. General Agents so
recruited may not solicit the sale or allow their Producers to
solicit the sale of Products, or receive commission for sales of
Products by Producers, until Company, Distributor, General Agent
and General Agent's Broker have executed an agreement between
themselves, in a form acceptable to Company and Distributor, and
Company and Distributor have appointed General Agent as an agent
of Company.
4.3 Licensing and Appointment of General Agents and Producers. MGA shall be
responsible for the preparation and submission of proper appointment and
licensing forms, and the assurance that all Producers recruited by MGA,
MGA's Broker and General Agents are appropriately licensed as insurance
agents in the states where such Producers will solicit and sell Products.
MGA's Broker shall be responsible for the preparation and submission to the
NASD of proper representative registration forms, and the assurance that
all Producers are properly registered as representatives of MGA's Broker
with the NASD. MGA and MGA's Broker shall recommend Producers for
appointment with Company, but Company shall retain sole authority to make
appointments and may, by written notice to MGA and MGA's Broker, refuse to
permit any Producer to solicit contracts for the sale of the Products.
4.4 Compliance with Company Policies and Applicable Laws. MGA and MGA's Broker
will use reasonable efforts to comply with all instructions, rules
bulletins, manuals and underwriting guides issued in writing by Company to
MGA and MGA's Broker ("Company Rules"), and with all applicable federal and
state laws and regulations.
4.5 Supervision and Administration.
4.5.1MGA and MGA's Broker shall be responsible for supervision and
administration of the marketing, sales and customer service activities of
MGA, MGA's Broker, General Agents, General Agent's Broker and Producers.
MGA and MGA's Broker shall be responsible for all acts or omissions of each
General Agent, General Agent's Broker and Producer. MGA and MGA's Broker's
supervisory and administrative responsibilities include, but are not
limited to:
(a) ensuring that General Agents and Producers comply with Company Rules and
all federal and state laws and regulations applicable to the Products;
(b) training General Agents and Producers on Product features, Product
marketing methods, requirements for compliance with applicable laws and
regulations and Company Rules prior to allowing a General Agent or Producer
to sell a Product;
(c) providing General Agents and Producers advice and assistance with regard to
marketing and advertising of Products, and ensuring that no advertising is
used unless approved by Company in accordance with Section 4.11, "Approved
Advertising";
(d) supplying sales literature and application forms approved by Company to
General Agents and Producers;
(e) assisting General Agents and Producers in responding to customer inquiries;
(f) promptly delivering to General Agents and Producers relevant Company
communications and Company Rules concerning Products, such as changes in
rates, regulatory notices or new Product announcements;
(g) ensuring that Producers:
(i) submit premium payments directly and immediately to Company in accordance
with Section 4.6, "Collection and Submission of Premiums";
(ii) deliver Products to purchasers on a timely basis;
(iii)document transactions, including the fact of delivery, and maintain any
other documentation reasonably requested by Company;
(iv) have obtained and continuously will maintain the required state insurance
licenses in the state where such Producers will solicit and sell Products;
and
(vii)have been appointed by Company in accordance with the laws of the state(s)
in which the sale(s) occur and the customer resides;
(h) on all Replacement sales, ensuring that Producers provide sufficient
information to prospective annuity contract-holders as to the suitability
of the Replacement sale. Such information includes but may not be limited
to:
(i) the amount of the surrender charge to be incurred on the investment to be
liquidated;
(ii) all fees and possible charges, such as surrender charges, on the new
investment;
(iii)any change in the investment risk to the prospective annuity
contract-holder;
(iv) any change in the nature or the provider of any guarantees associated with
the Product and/or the surrendered product;
(v) any changes in the expenses associated with the Product and/or the
surrendered product; and
(vi) for life insurance-to-annuity Replacements, the difference in amount and
tax status of the death benefit, and the implications of surrendering this
insurance.
All such information will be retained by MGA for seven years counting from the
date of the initial solicitation, whether or not the Product was ever sold,
and will be made available to Company as is shown in Section 4.10,
"Accurate Record; Audit," herein.
(i) timely obtaining and maintaining all required state insurance licenses, and
notifying Company if MGA, any General Agent or Producer fails to maintain
the required state insurance license or becomes inactive;
(j) promptly informing Company of any violation of law or Company Rules by a
MGA, MGA's Broker, General Agent, General Agent's Broker or Producer; or of
any allegation by an annuity contract-holder or regulatory agency of
wrongdoing as regards the activities of MGA, MGA's Broker, General Agent,
General Agent's Broker or a Producer with respect to the Products; and
(k) any other duties necessary or appropriate to perform MGA's and MGA's
Broker's obligations under this Agreement.
4.5.2MGA's Broker will fully comply with, and will ensure MGA's, General
Agents' and Producers' compliance with the requirements of the NASD, the
SEC and all other applicable federal and state laws, and, with MGA, will
establish and maintain such rules and procedures as may be necessary to
cause diligent supervision of the securities activities of MGA's General
Agents and Producers. MGA's Broker's duties with respect to MGA's, General
Agents' and Producers' securities activities include but are not limited
to:
(a) in accordance with the requirements of the laws of the several states, and
rules of the NASD and SEC: (i) delivering a prospectus to each person
submitting an application; (ii) maintaining complete records indicating the
manner and extent of distribution of prospectuses, sales literature and
advertising; and; (iii) maintain and preserve books as required. MGA's
Broker agrees to make the aforementioned records and files available to
staff of Company and Distributor and personnel of state insurance
departments, the NASD, the SEC, or other regulatory agencies which have
regulatory authority over Company or Distributor;
(b) timely obtaining registrations as representatives of MGA's Broker with
the NASD;
(c) ensuring that all sales literature or advertising relating to Products
or the Company or Distributor, used by MGA, MGA's Broker, General
Agents or Producers hereunder has been approved in writing by Company
and/or Distributor;
(d) reviewing all Product applications for accuracy and completeness, and
to determine the suitability of the sale;
(e) delivering all contracts for Products transmitted to MGA, MGA's
Broker, General Agent or Producers by Company within ten days of
MGA's, MGA's Broker, General Agent or Producers' receipt of such
contracts; and
(f) any commissions and fees relating to the Products will be reflected in
the quarterly FOCUS reports and the fee assessment reports filed by
MGA's Broker with the NASD in accordance with the NASD Rules of Fair
Practice.
4.6 Collection and Submission of Premiums. Company and MGA will agree
which of the following provisions will govern MGA's duties related to
collection and submission of premiums with respect to each General
Agent, by specifying on Exhibit A the applicable provision for each
General Agent.
4.6.1Net Wire. MGA will assure General Agent's and its Producers'
collection of the premiums due on all Products --------------- and the
timely accounting for and submission of the premiums directly and
immediately to Company. A General Agent and its Producers may remit
premium payments to Company net of General Agent's share of
commissions payable pursuant to Exhibit A only if Company and MGA
agree on the specific procedures used by General Agent, and the
arrangement is reflected in Exhibit A. Premium payments shall be wired
from a settlement account or other account established by General
Agent for the benefit of Company, at a bank approved by Company, into
Company's account no later than the second business day after the
application has been signed by the customer.
4.6.2Check with Application. MGA will assure General Agent's and its
Producers' collection and timely remittance of the premiums due on all
Products to Company as specified herein. Company will receive premium
payments no later than the second business day after the application
has been signed by the customer.
4.6.3Gross Sweep. MGA will assure General Agent's and its Producers'
collection of the premium due on all Products and will timely account
for such premiums, directly depositing them into an account
established by General Agent for the benefit of Company, at a bank
approved by Company, and notifying Company immediately of the gross
receipts. Upon receipt of notification from General Agent or MGA,
Company will sweep the settlement account.
4.7 MGA and MGA's Broker Expenses. Except as otherwise provided in this
Agreement, or subsequently agreed to in writing by the Company, MGA
and MGA's Broker will be responsible for all costs and expenses of any
kind and nature incurred by MGA and MGA's Broker in the performance of
their duties under this Agreement.
4.8 Solicitation. MGA and MGA's Broker, through Producers, will solicit
applicants who appear to meet Company's and Distributor's underwriting
and suitability standards, provided that nothing in this Agreement
shall be deemed to require MGA or MGA's Broker to solicit any
particular customer's or customers' applications for an annuity.
4.9 Company Property. MGA and MGA's Broker will safeguard, maintain and
account for all policies, forms, manuals, equipment, supplies,
advertising and sales literature furnished to MGA, MGA's Broker and
Producers by Company and Distributor, and will destroy or return the
same to Company and Distributor promptly upon request.
4.10 Accurate Record; Audit. As required by applicable laws and Company's
policies and procedures, MGA and MGA's Broker will keep identifiable
and accurate records and accounts of all business and transactions
effected pursuant to this Agreement. Upon reasonable notice and at
reasonable times, continuing during a period of one year following the
termination or expiration of this Agreement, MGA and MGA's Broker will
permit Company or Distributor to visit, inspect, examine, audit, and
verify, at MGA's or MGA's Broker's offices or elsewhere, any of the
properties, accounts, files, documents, books, reports, work papers
and other records belonging to or in the possession or control of MGA
or MGA's Broker relating to the business covered by this Agreement,
and to make copies thereof and extracts therefrom, provided that such
audit shall not unreasonably interfere with MGA's or MGA's Broker's
normal course of business.
4.11 Approved Advertising. No sales promotions, promotional materials, nor
any advertising relating to the Products or the Company or
Distributor, shall be used by MGA, MGA's Broker or any General Agent,
General Agent's Broker or Producer unless the specific item has been
approved in writing by Company and/or Distributor.
4.12 Payment of Commission. MGA and MGA's Broker shall be responsible for
assuring that commission is paid or properly netted from an account of
Company.
4.13 Chargeback of Commissions. MGA will be charged back for MGA's portion
of commissions relating to certain surrenders of annuity products as
specified in Exhibit A and its addenda, as amended from time to time.
. 4.14 Fidelity Bond. MGA and MGA's Broker represent and warrant that
all directors, officers, employees and representatives of MGA, and
General Agents who are appointed pursuant to this Agreement as
Producers for Company or who have access to funds of Company,
including but not limited to funds submitted with applications for
Products 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 acceptable to
Company. The bond shall be maintained by MGA's Broker at MGA's
Broker's and/or MGA's expense, provided that, subject to Company's
agreement, the bond covering a General Agent and the Producers may be
maintained by General Agent at General Agent's expense. Company may
require evidence, satisfactory to it, that such coverage is in force.
MGA shall give prompt written notice to Company of cancellation or
change of coverage.
4.15 Limitations. MGA and MGA's Broker shall have no authority with respect
to Company, nor shall either represent itself as having such
authority, other than that specifically set forth in this Agreement.
Without limiting the foregoing, neither MGA nor MGA's Broker shall,
without the express written consent of Company and/or Distributor, as
applicable:
4.15.1 make, waive, alter or change any term, rate or condition stated in
any Company contract or Company- or Distributor-approved form, or
discharge any contract in the name of Company;
4.15.2 waive a forfeiture;
4.15.3 extend the time for the payment of premiums or other monies due to
Company;
4.15.4 institute, prosecute or maintain any legal proceedings on behalf of
Company or Distributor in connection with any matter pertaining to
Company's business, or accept service of process on behalf of Company
or Distributor;
4.15.5 transact business in contravention of the rules and regulations of
any insurance department and/or other governmental authorities having
jurisdiction over any subject matter embraced by this Agreement;
4.15.6 make, accept or endorse notes, or endorse checks payable to Company
or Distributor, or otherwise incur any expense or liability on behalf
of Company or Distributor;
4.15.7 offer to pay or pay, directly or indirectly, any rebate of premium
or any other inducement not specified in the Products to any owner or
annuitant;
4.15.8 misrepresent the Products for the purpose of inducing an annuity
contract-holder in any other company to lapse, forfeit or surrender
his/her insurance therewith;
4.15.9 give or offer to give any advice or opinion regarding the taxation
of any customer's income or estate in connection with the purchase of
any Product;
4.15.10 enter into an agreement with any person or entity to market or sell
the Products without the written consent of Company and Distributor;
or
4.15.11 use Company's or Distributor's names, logos, trademarks, service
marks or any other proprietary designation without the prior written
permission of Company.
5. COMPANY AND DISTRIBUTOR REPRESENTATIONS AND RESPONSIBILITIES.
5.1 Representations.
5.1.1Company represents and warrants that it is duly incorporated in the
state of Indiana and licensed in all states in the Territory, that all
Products have been filed with and approved by appropriate state
insurance departments, and that all sales literature has been filed
and approved with the insurance departments where required.
5.1.2Distributor represents and warrants that it is duly registered as a
broker-dealer with the SEC, the NASD, all fifty states and the
District of Columbia, and is qualified to do business in all states in
which Company is licensed and qualified to do business.
5.1.3Distributor and Company represent and warrant that Company, as issuer
and on behalf of the underlying investment account(s), has registered
the underlying investment account(s) of the variable contracts with
the SEC as a security under the Securities Act of 1933 ("1933 Act"),
and as a unit investment trust under the Investment Company Act of
1940.
5.1.4Company represents and warrants that the prospectus(es) and
registration statement(s) relating to the Products contain no untrue
statements of material fact or omission to state a material fact, the
omission of which makes any statement contained in the prospectus(es)
and registration statement(s) misleading.
5.1.5Company represents and warrants that Company will meet any
requirements of the state departments of insurance in the
jurisdictions in which the Products are available for sale regarding
both the filing and approval of advertising and sales literature and
the filing and approval for review with the NASD to ensure consistency
with the applicable rules of the 1933 Act and the Conduct Rules of the
NASD.
5.2 Prospectuses, Sales Literature and Advertising. Company and
Distributor will provide to MGA, MGA's Broker, General Agents and
General Agents' Broker, without any expense to MGA, MGA's Broker,
General Agents or General Agents' Brokers, prospectuses relating to
the Products, and such other sales literature and advertising as
Company determines is necessary or desirable for use in connection
with sales of the Products.
5.3 Transmission of Contracts for Delivery to Contract Owners. Company
will transmit contracts for Products for delivery to annuity contract
owners in accordance with administrative procedures acceptable to MGA,
MGA's Broker and Company.
5.4 Confirmations. Upon Company's acceptance of any payment for a Product,
Distributor will deliver to each contract owner a statement confirming
the transaction in accordance with Rule 10b-10 under the 1934 Act.
5.5 Annuity Contract-holder Services. Company shall provide
administrative, accounting and other services to annuity
contract-holders as necessary and appropriate in the same manner as
such services are provided to Company's other annuity
contract-holders.
5.6 Reservation of Rights. Notwithstanding any other provision of this
Agreement or any other agreement between Company and/or Distributor
and MGA and/or MGA's Broker, Company reserves the unconditional right
to modify any of the Products in any respect whatsoever or to suspend
the sale of any Products in whole or in part at any time and without
prior notice. Company reserves the unconditional rights to refuse to
accept applications procured by MGA and MGA's Broker which fail to
meet underwriting or other standards of Company.
5.7 Company Rules. Company shall provide MGA and MGA's Broker with Company
Rules as soon as is practicable. All revisions, modifications and
replacements of such Company Rules shall be provided by Company and
Distributor to MGA and MGA's Broker promptly after issuance by Company
and/or Distributor.
5.8 Compensation. Company shall pay a total commission on premiums
collected pursuant to this Agreement based on the rates of commission
set forth on the attached Exhibit A and its Addenda, as such may be
amended from time to time by Company in accordance with Section 12,
"Amendment of Agreement". Company shall divide commissions among MGA
and General Agents in accordance with Exhibit A. Company has the right
to charge back MGA for MGA's portion of commissions paid in the event
of certain surrenders of annuity contracts as specified in Exhibit A
and its addenda, as amended from time to time. No commissions shall be
paid unless all of the following conditions precedent have been met to
Company's satisfaction:
5.8.1Licensing of Producer. Prior to the time of any solicitation of a
sale or a sale to a policy owner, any Producer making such
solicitation and sale shall be licensed and appointed with Company in
accordance with the laws of the state(s) where the sale was made and
the customer resides.
5.8.2Licenses and Contracts. No person or entity, except Producers
satisfying the provisions of Section 5.8.1, "Licensing of Producer,"
shall in any way share in any commissions payable hereunder unless
such person or entity is licensed in accordance with the laws of the
state(s) in which the sale was made and the customer resides; and
unless such person or entity shall have entered into an agreement with
Company or with MGA which specifies such person's or entity's rights
and obligations and which makes provision for payment, including
splitting, of commissions. Notwithstanding the preceding sentence, in
those states which permit payment of a commission to an entity which
is not licensed as an insurance agency, Company will pay commissions
to such an entity which is a party to this Agreement, but only after
such entity has provided evidence satisfactory to Company as to how
Company may make such payments in accordance with applicable state
insurance laws.
5.8.3Termination of General Agent. In the event a particular General Agent
informs Company, MGA or MGA's Broker that it will cease to be a
General Agent under this Agreement, Company and MGA agree that Company
will cease paying MGA's portion of commissions to MGA on Products sold
by General Agent's Producers hereunder as of the effective date of
General Agent's termination as such. Company will continue to pay
commissions on add-on investments and to charge back MGA's portion of
commissions to MGA for surrenders of Products sold by General Agent's
Producers hereunder prior to the effective date of such termination in
accordance with Exhibit A and its Addenda, unless MGA, General Agent
and Company agree on another method of payment of such amounts.
6. INDEMNIFICATION.
6.1 Indemnification of Company. MGA and MGA's Broker shall indemnify,
defend and hold harmless Company and Distributor from and against any
and all losses, claims, damages, liabilities, actions, costs or
expenses to which Company or Distributor may become subject (including
any legal or other expenses incurred by either of them in connection
with investigating any claim against them and defending any action
and, provided MGA and MGA's Broker will have given prior written
approval of such settlement or compromise, which consent will not be
unreasonably withheld or delayed, any amounts paid in settlement or
compromise) insofar as such losses, claims, damages, liabilities,
actions, costs or expenses arise out of or are based upon:
6.1.1The acts or omissions of MGA, an Affiliate, MGA's Broker or any
employee, agent or Producer of any of these entities while acting
(whether under actual or apparent authority, or otherwise) on behalf
of MGA, MGA's Broker, Company or Distributor in connection with this
Agreement;
6.1.2Any breach of any covenant or agreement made by MGA or MGA's Broker
under this Agreement; or
6.1.3The inaccuracy or breach of any representation or warranty made by
MGA or MGA's Broker under this Agreement.
This indemnification obligation shall not apply to the extent that such
alleged act or omission is attributable to Company and/or Distributor
either because (1) Company and/or Distributor directed the act or
omission, or (2) MGA's, an Affiliate's, MGA Broker's, General Agent's,
General Agent's Broker or a Producer's act or omission was the result
of its compliance with Company Rules.
6.2 Indemnification of MGA and MGA's Broker. Company and Distributor shall
indemnify, defend and hold harmless MGA and MGA's Broker from and
against any and all losses, claims, damages, liabilities, actions,
costs or expenses to which MGA and MGA's Broker may become subject
(including any legal or other expenses incurred by it in connection
with investigating any claim against it and defending any action and,
provided Company and Distributor will have given prior written
approval of such settlement or compromise, which consent will not be
unreasonably withheld or delayed, any amounts paid in settlement or
compromise) insofar as such losses, claims, damages, liabilities,
actions, costs or expenses arise out of or are based upon:
6.2.1The acts or omissions of Company and/or Distributor, or any employee
or agent of Company and/or Distributor (excluding MGA, MGA's Broker,
General Agents or Producers) while acting (whether under actual or
apparent authority, or otherwise) on behalf of Company or Distributor
in connection with this Agreement;
6.2.2Any breach of any covenant or agreement made by Company or
Distributor under this Agreement; or
6.2.3The inaccuracy or breach of any representation or warranty made by
Company or Distributor under this Agreement.
7. ARBITRATION. The parties agree to attempt to settle any
misunderstandings or disputes arising out of this Agreement through
consultation and negotiation in good faith and a spirit of mutual
cooperation. However, if those attempts fail, the parties agree that
any misunderstandings or disputes arising from this Agreement will be
decided by arbitration which will be conducted, upon request of either
party, before three arbitrators (unless both parties agree on one
arbitrator) designated by the American Arbitration Association located
in the city of Company's principal place of business. The parties
further agree that the arbitrator(s) will decide which party must bear
the expenses of the arbitration. This agreement to arbitrate shall not
preclude either party from obtaining provisional remedies such as
injunctive relief or the appointment of a receiver from a court having
jurisdiction, either before, during or after the pendency of the
arbitration. The institution and maintenance of such provisional
remedies shall not constitute a waiver of the right of a party to
submit a dispute to arbitration.
8. TERMINATION.
8.1 Termination for Cause. At any time during the Term of this
Agreement and any Renewal Period, Company and Distributor or
MGA and MGA's Broker may terminate this Agreement immediately
for cause upon written notice of such termination to the other
party. Such written notice shall state the cause with
specificity. As used in this Section, the term "cause" shall
include any one or more of the following:
8.1.1 the conviction of any party, its officers or
supervisory personnel of any felony, of fraud, or of
any crime involving dishonesty;
8.1.2 the intentional misappropriation by a party of funds
or property of any other party, or of funds received
for it or for annuity contract-holders by such other
party;
8.1.3 the cancellation, or the refusal to renew by the
issuing insurance regulatory authority, of any
license, certificate or other regulatory approval
required in order for any party to perform its duties
under this Agreement;
8.1.4 any action by a regulatory authority with
jurisdiction over the activities of a party that
would place the party in receivership or
conservatorship or otherwise substantially interfere
or prevent such party from continuing to engage in
the lines of business relevant to the subject matter
hereof; or
8.1.5 a party becoming a debtor in bankruptcy (whether
voluntary or involuntary) or the subject of an
insolvency proceeding.
8.2 Termination without Cause. Company or Distributor or MGA or
MGA's Broker may terminate this Agreement without cause upon
30 days prior written notice to the other parties.
8.3 Post Termination Limitations. Upon termination of this
Agreement, Company's obligation to pay commissions to MGA,
MGA's Broker, or Producers shall immediately cease; provided:
8.3.1 Company will pay commissions, as the same become due
and payable, upon Products for which the application
has been taken and the required premium has been
collected (or collectable from a third party) as of
the date of termination, and for which the Company
subsequently issues a policy.
8.3.2 Company will charge back against those commissions
identified in Exhibit A and Section 8.3.1 for
surrender of Products sold by MGA's and MGA's
Broker's or General Agent's or General Agent's
Broker's Producers prior to the termination of this
Agreement. Company will invoice MGA and MGA's Broker
for chargebacks unless Company and MGA agree upon
another method of payment of such amounts.
8.3.3 For a period of one year after termination, MGA,
MGA's Broker, Affiliates, General Agents and
Producers shall not in any way promote, recommend or
encourage the termination, surrender, or cancellation
of any Product sold pursuant to this Agreement.
9. INDEPENDENT CONTRACTOR. This Agreement is not a contract of employment.
Nothing contained in this Agreement shall be construed or deemed to
create the relationship of joint venture, partnership, or employer and
employee between Company and Distributor and MGA and MGA's Broker. Each
party is an independent contractor and shall be free, subject to the
terms and conditions of this Agreement, to exercise judgment and
discretion with regard to the conduct of business.
10. CONFIDENTIALITY. Each party agrees that, during the term of this
Agreement and at all times thereafter, it will not disclose to any
unaffiliated person, firm, corporation or other entity, nor use for its
own account, any of the other parties' trade secrets or confidential
information, including, without limitation, the terms of this
Agreement; non-public program materials; member or customer lists;
proprietary information; information as to the other party's business
methods, operations or affairs, or the processes and systems used in
its operations and affairs, or the processes and systems used in any
aspect of the operation of its business; all whether now known or
subsequently learned by it. Nothing in this Agreement shall require a
party to keep confidential any information that:
10.1 the party can prove was known to it prior to any disclosure by any
other party;
10.2 is or becomes publicly available through no fault of the party;
10.3 the party can prove was independently developed by it
outside the scope of this Agreement and with no
access to any confidential or proprietary information
of any other party;
10.4 is required to be disclosed to governmental
regulators or pursuant to judicial or administrative
process or subpoena;
10.5 is required in order to perform that party's obligation
under this Agreement;
10.6 is required to be disclosed by any applicable law; or
10.7 is mutually agreed upon by all parties to this Agreement.
If this Agreement is terminated, each party, within 60 days after such
termination will return to the other parties, respectively, any and all
copies, in whatever form or medium, of any material disclosing any of
the other parties' trade secrets or confidential information as
described above.
11. ASSIGNMENT. The parties to this Agreement may not assign, either wholly
or partially, this Agreement or any of the benefits accrued or to
accrue under it, or subcontract their interests or obligations under
this Agreement, without the written approval of all parties.
12. AMENDMENT OF AGREEMENT. Company and Distributor reserve the right to
amend this Agreement at any time, but no amendment shall be effective
until approved in writing by MGA and MGA's Broker, subject to the
provisions of Section 5.6, "Reservation of Rights," and Section 11,
"Assignment," herein. MGA and MGA's Broker hereby consent to amendment
of Exhibit A to remove a General Agent upon Company's receipt of a
written request of an authorized representative of a General Agent for
termination of that General Agent's status under this Agreement.
13. MISCELLANEOUS.
13.1 Applicable Law. This Agreement shall be governed by and interpreted
under the laws of the State of Minnesota.
13.2 Severability. Should any part of this Agreement be declared
invalid, the remainder of this Agreement shall remain in full
force and effect as if the Agreement had originally been
executed without the invalid provisions.
13.3 Notice. Any notice hereunder shall be in writing and shall be
deemed to have been duly given if sent by certified or
registered mail, postage prepaid, or via a national courier
service with the capacity to track its shipments, to the
following addresses:
If to Company: If to Distributor:
American Centurion Life Assurance Company American Express Financial Advisors Inc.
00 Xxxxx 0xx Xxxxxx 00 Xxxxx 0xx Xxxxxx
Xxxxxxxxxxx, XX 00000 Xxxxxxxxxxx, XX 00000
Attn: Compliance Officer (Unit 1818) Attn: Compliance Officer (Unit 1818)
If to MGA: If to MGA's Broker:
Securities America, Inc. Securities America, Inc.
0000 Xxxx Xxxxxx Xxxx 0000 Xxxx Xxxxxx Xxxx
Xxxxx 000 Xxxxx 000
Xxxxx, XX 00000 Xxxxx, XX 00000
Attn: Xxx Xxxxx, President of Attn: Xxx Xxxxx, President of
Insurance Operations Insurance Operations
13.4 Binding Effect. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective
successors and assigns, subject to the provisions of this
Agreement limiting assignment.
13.5 Headings. The headings in this Agreement are for convenience
only and are not intended to have any legal effect.
13.6 Defined Terms. The terms defined in this Agreement are to be
interpreted in accordance with this Agreement. Such defined
terms are not intended to conform to specific statutory
definitions of any state.
13.7 Entire Agreement. This Agreement constitutes the entire
agreement of the parties with respect to the subject matter
hereof and supersedes all previous communications,
representations, understandings and agreements, either oral or
written, between the parties or any official representatives
thereof. As of the Effective Date, except as set forth on
Exhibit A, any and all prior consents by Company to any entity
or individual acting as an MGA or General Agent are withdrawn.
13.8 Survival. All terms and conditions of Section 6,
"Indemnification"; Section 8.3, "Post Termination
Limitations"; and Section 10, "Confidentiality"; will survive
termination of this Agreement.
13.9 No Waiver. No failure to enforce, nor any breach of any term
or condition of this Agreement shall operate as a waiver of
such term or condition, or of any other term or condition, nor
constitute nor be deemed a waiver or release of any other
rights at law or in equity, or of claims which any party may
have against any other party for anything arising out of,
connected with, or based upon this Agreement. Any waiver,
including a waiver of this Section, must be in writing and
signed by the parties hereto.
IN WITNESS WHEREOF the parties hereto, intending to be legally bound, have
caused this Agreement to be executed by their duly authorized officers.
American Enterprise Life Insurance Company Securities America, Inc.
Company Master General Agent and
MGA's Broker
By: By:
Title: Title:
Date: Date:
American Express Financial Advisors Inc.
Distributor
By:
Title:
Date:
EXHIBIT A
Master General Agent: Products, Territory and Commissions
This Exhibit is intended to summarize the contents of Exhibit A and its Addenda,
and of the various Exhibits identifying the Affiliates and/or General Agents, as
they are added to the arrangements with Securities America, Inc. ("Master
General Agent"), Securities America, Inc. ("MGA's Broker"), Company and
Distributor under this Agreement.
If any discrepancy is found between this Exhibit and any agreements with General
Agents, the individual agreements will prevail over this Exhibit.
-------------------------------------- ------------------------------ ---------------------------- ---------------------------------
Master General Agent (MGA) or Remittance of Premiums Territory Products & Commission Split: MGA/GA
Affiliate, & MGA's Broker (see Paragraph 4.6) (See MGA Exhibit A addenda for
specific breakdowns based on ages)
-------------------------------------- ------------------------------ ---------------------------- ---------------------------------
-------------------------------------- ------------------------------ ---------------------------- --------------------------------
Securities America, Inc. Gross Sweep AZ. CA, CO, FL, IL, MI, Personal Portfolio Plus: Option I.
(MGA's Broker: Securities America, TN, WI only. See Addendum A
INC.)
Personal Portfolio Plus 2
Product redesign effective July 1,
1999. See Addendum B.
Personal Portfolio Plus 2
Temporary commission increase, July 23,
1999 through December 31, 1999. See
Addendum C.
-------------------------------------- ------------------------------ ---------------------------- --------------------------------
Securities America Insurance Agency, Gross Sweep TX only. Personal Portfolio Plus: Option I.
See Addendum A
Inc.
Personal Portfolio Plus 2
Product redesign effective July 1, 1999.
See Addendum B.
Personal Portfolio Plus 2
Temporary commission increase, July 23, 1999
through December 31, 1999. See Addendum C.
-------------------------------------- ------------------------------ ---------------------------- --------------------------------
American Enterprise Life Insurance Company Securities America, Inc.
Company Master General Agent and MGA's Broker
By: By:
Title: Title:
Date: Date:
(Signatures continued on next page.)
EXHIBIT A
Master General Agent: Products, Territory and Commissions
American Express Financial Advisors Inc.
Distributor
By:
Title:
Date:
Last Revision Date: July 22, 1999 Effective Revision Date: July 23, 1999
Purpose of Last Revision: Temporary commission increase effective July 23, 1999
lapses on December 31, 1999. Florida and Wisconsin have been added to your
selling Territory.
Addendum A: Schedule of Commissions
Addendum to the Master General Agent Agreement for Variable Annuity Sales
between American Enterprise Life Insurance Company ("Company") and the American
Express Financial Advisors Inc. ("Distributor") and Securities America, Inc.
("Master General Agent") and Securities America, Inc. ("Master General Agent's
Broker") dated June 1, 1998 ("Agreement"). This Addendum is effective June 1,
1998. The Products to be offered through the Master General Agent are Flexible
Premium Variable Annuities (AEL Personal Portfolio Plus) and they are to be
offered only in the Territories shown on Exhibit A.
This Addendum shows the three options for compensation available to this Master
General Agent and Master General Agent's Broker.
COMMISSION
----------------------- --------------------- -------------------- ---------------------
AGE OPTION I OPTION II OPTION III
Up to 75 6.0% 5.0% 5.0%
----------------------- --------------------- -------------------- ---------------------
----------------------- --------------------- -------------------- ---------------------
76-85 3.0% 2.5% 2.5%
----------------------- --------------------- -------------------- ---------------------
SUPPLEMENTAL TRAIL COMMISSION (Applicable to Options II and III only)
------------------------------------ ------------- ----------------------------- ----------------------------
OPTION I OPTION II OPTION III
------------- ----------------------------- ----------------------------
------------- -------------- -------------- -------------- --------------
QTRLY ANNUAL QTRLY ANNUAL
------------------------------------
------------- -------------- -------------- -------------- --------------
Trail rate where contract in N/A 3.75bp 15bp 2.5bp 10bp
surrender charge period
------------------------------------ ------------- -------------- -------------- -------------- --------------
------------------------------------ ------------- -------------- -------------- -------------- --------------
Trail rate where contract outside N/A 8.75bp 35bp 12.5bp 50bp
surrender charge period
------------------------------------ ------------- -------------- -------------- -------------- --------------
The Master General Agent selects Option ________________________ (Choose
only one option. This same option will apply to any and all
------------------------- Affiliates.)
CHARGEBACK: In the event of the surrender of an annuity within twelve months of
the issue date, there will be a chargeback of commissions paid with respect to
premium received in accordance with the following schedule. The chargeback
schedule applies separately to each payment upon cancellation or withdrawal.
Time Elapsed Since Payment Date Commission Chargeback
0-6 months 100%
7-18 months 50%
Thereafter 0%
The chargeback will be waived in the event of the death of the annuitant or
owner.
Agreed to on ______________________, 1998.
American Enterprise Life Insurance Company Securities America, Inc.
Company Master General Agent and
Master General Agent's
Broker
By: By:
Title: Title:
Date: Date:
Addendum B to Exhibit A: Products, Territory and Commissions
Addendum to Exhibit A of the Master General Agent Agreement between American
Enterprise Life Insurance Company ("Company"), American Express Financial
Advisors Inc. ("Distributor"), Securities America, Inc. ("Master General Agent")
and Securities America, Inc. (the broker-dealer for Master General Agent; for
purposes of this Agreement, "Master General Agent's Broker") dated June 1, 1998.
This Addendum is effective July 1, 1999. The Products to be offered through the
Master General Agent are Flexible Premium Variable Annuities (AEL Personal
Portfolio Plus2), and they are to be offered only in the Territory shown in
Exhibit A.
COMMISSION:
The commission payable for contracts described in this Addendum will be as
follows:
(a) 6.00% of all premiums for issue ages of both owner and annuitant not
exceeding 80 (qualified and non-qualified).
(b) 3.00% of all premiums for issue ages of either owner or annuitant of 81-85,
but neither may exceed 85 (qualified and non-qualified).
(c) No commission is payable for contracts described in this Addendum where
the age of the annuitant or owner exceeds age 85. No commission
will be paid on sales outside the Territory. No commission will be
paid on the sale of an annuity under this Agreement if that sale
involves replacement of an asset or investment issued by Company or
by any other insurance company owned or controlled by American Express
Company.
In all cases, the amount of commission shown above is the total commission
available for distribution from Company, whether under this Agreement or under
any other agreement between or among Company, Master General Agent, and any
other parties.
CHARGEBACK:
In the event of the surrender of an annuity, there will be a chargeback of all
commissions paid with respect to premium received in accordance with the
following schedule.
ISSUE AGES TO 75:
Time Elapsed Since Payment Date Commission Chargeback
0-3 months 100%
4-6 months 50%
Thereafter 0%
ISSUE AGES 76-80:
Time Elapsed Since Payment Date Commission Chargeback
0-6 months 100%
7-12 months 50%
Thereafter 0%
ISSUE AGES 81-85:
Time Elapsed Since Payment Date Commission Chargeback
0-3 months 100%
4-6 months 50%
Thereafter 0%
Addendum B to Exhibit A: Products, Territory and Commissions
(continued)
The chargeback will be waived in the event of the death of the annuitant or
owner. The chargeback schedules apply separately to each payment upon
cancellation or withdrawal.
Agreed to on , 1999.
American Enterprise Life Insurance Company Securities America, Inc.
Company Master General Agent and
MGA's Broker
By: ________________________________ By: ___________________
Title: _______________________________ Title: ________________
American Express Financial Advisors Inc.
Company
By: ________________________________
Title: _______________________________
Addendum C to Exhibit A:
Products, Territory and Commissions
Addendum to Exhibit A of the Master General Agent Agreement between
American Enterprise Life Insurance Company ("Company"), American Express
Financial Advisors Inc. ("Distributor"), Securities America, Inc. ("Master
General Agent") and Securities America, Inc. (the broker-dealer for Master
General Agent; for purposes of this Agreement, "Master General Agent's
Broker") dated June 1, 1998. This Addendum is effective July 23, 1999. This
Addendum lapses on December 31, 1999.
The Products to be offered through the Master General Agent are Flexible Premium
Variable Annuities (AEL Personal Portfolio Plus2), and they are to be offered
only in the Territory shown in Exhibit A.
COMMISSION:
The commission payable for contracts described in this Addendum will be as
follows:
(a) 6.50% of all premiums for issue ages of both owner and annuitant
not exceeding 80 (qualified and non-qualified).
(b) 3.25% of all premiums for issue ages of either owner or annuitant
of 81-85, but neither may exceed 85 (qualified and non-qualified).
(c) No commission is payable for contracts described in this Addendum
where the age of the annuitant or owner exceeds age 85. No
commission will be paid on sales outside the Territory. No
commission will be paid on the sale of an annuity under this
Agreement if that sale involves replacement of an asset or
investment issued by Company or by any other insurance company
owned or controlled by American Express Company.
In all cases, the amount of commission shown above is the total commission
available for distribution from Company, whether under this Agreement or under
any other agreement between or among Company, Master General Agent, any General
Agent, and any other parties.
CHARGEBACK:
In the event of the surrender of an annuity within six months of the issue date,
there will be a chargeback of all commissions paid with respect to premium
received in accordance with the following schedule.
ISSUE AGES TO 75:
Time Elapsed Since Payment Date Commission Chargeback
0-3 months 100%
4-6 months 50%
Thereafter 0%
ISSUE AGES 76-80:
Time Elapsed Since Payment Date Commission Chargeback
0-6 months 100%
7-12 months 50%
Thereafter 0%
ISSUE AGES 81-85:
Time Elapsed Since Payment Date Commission Chargeback
0-3 months 100%
4-6 months 50%
Thereafter 0%
Addendum C to Exhibit A:
Products, Territory and Commissions
(continued)
The chargeback will be waived in the event of the death of the annuitant or
owner. The chargeback schedules apply separately to each payment upon
cancellation or withdrawal.
Agreed to on , 1999.
American Enterprise Life Insurance Company Securities America, Inc.
Company Master General Agent and
MGA's Broker
By: By:
Title: Title:
American Express Financial Advisors Inc.
MGA's Broker
By:
Title: ______________________________________
EXHIBIT B
Affiliate Participation Agreement
Securities America Insurance Agency, Inc. ("Affiliate") agrees to act as an
Affiliate of Securities America, Inc. ("MGA") and American Enterprise Life
Insurance Company ("Company") in the following states for the following annuity
products issued by Company, in accordance with the terms and conditions of the
Agreement between MGA and MGA's Broker and Company and Distributor dated June 1,
1998 ("Agreement"), incorporated herein by this reference, as it may be amended
from time to time.
TERRITORY: Texas
PRODUCTS: Personal Portfolio Plus
Affiliate acknowledges, warrants, covenants and agrees that:
1. All terms used herein shall have the definitions used in the
Agreement.
2. Affiliate assumes all of the duties and responsibilities of
MGA under the Agreement except: (a) Affiliate may not appoint
other Affiliates; and (b) Affiliate's rights, duties and
responsibilities shall only extend to the Territory and
Products listed above.
3. Affiliate and MGA are jointly and severally liable for the
performance of MGA's duties and responsibilities under the
Agreement with respect to the activities of each other and the
General Agents and Producers in the Territory shown above.
4. Affiliate warrants that it has the licenses required to sell
annuities and perform the duties and responsibilities of MGA
in the Territory shown above.
5. MGA, by this appointment, agrees that it will forward to
Affiliate any notices from Company which affect Affiliate.
Affiliate agrees that notice from Company to MGA is valid and
effective notice to it.
6. Company and MGA appoint Affiliate, as defined in the
Agreement, in the Territory and for the Products listed above.
Affiliate accepts such appointment.
7. All other provisions of the Agreement will apply to and govern
Affiliate's activities pursuant to this Agreement, including,
but not limited to the provisions concerning amendments to
this Agreement.
8. This Affiliate Participation Agreement may be terminated in
accordance with the termination provision of the main
Agreement.
IN WITNESS WHEREOF Affiliate and MGA have signed this Affiliate Participation
Agreement as of ___________________________, 1998.
Securities America Insurance Agency, Inc. Securities America, Inc.
Affiliate Master General Agent
By: By:
Title: Title:
Send complete form to:
American Enterprise Life Insurance Company
00 Xxxxx 0xx Xxxxxx
Xxxxxxxxxxx, XX 00000
Attn: Contract Manager
T8 / Unit 1818
Accepted and appointment of Affiliate made on
By: .
For American Enterprise Life Insurance Company
Addendum A to Exhibit A: Products, Territory and Commissions
Addendum to Exhibit A of the Master General Agent Agreement between American
Enterprise Life Insurance Company ("Company"), American Express Financial
Advisors Inc. ("Distributor"), Securities America, Inc. ("Master General
Agent"), and Securities America, Inc. ("MGA's Broker") dated Effective_Date.
This Addendum is effective Addendum_Effective_d.
The Products to be offered through Master General Agent are Flexible Premium
Variable Annuities (AEL Signature Variable Annuity), and they are to be offered
only in the Territory shown in Exhibit A.
COMMISSION:
The commission payable for a given contract described in this Addendum will be
paid according to one of the following tables. For each separate annuity
contract sold, one of the following three options can be selected. During the
life of each such contract, the selected option cannot be changed. If no
election is shown on the application when it is submitted to Company, commission
will be paid according to Option B.
OPTION A:
--------------------------------------- -------------------------------
Age of Older of Annuitant or Owner Per Cent of Premium Payable
at Sale
--------------------------------------- -------------------------------
--------------------------------------- -------------------------------
Ages 0 - 75 6.25%
--------------------------------------- -------------------------------
--------------------------------------- -------------------------------
Ages 76 - 80 4.75%
--------------------------------------- -------------------------------
--------------------------------------- -------------------------------
Ages 81 - 90 3.25%
--------------------------------------- -------------------------------
OPTION B:
-------------------------------- --------------------------- ---------------------------------------
Supplemental Trail Commission:
Age of Older of Annuitant or Per Cent of Premium (Annual rate;
Owner Payable at Sale payable quarterly at 1/4 of value
shown)
-------------------------------- --------------------------- ---------------------------------------
-------------------------------- --------------------------- ---------------------------------------
Ages 0 - 75 5.25% 25 basis points
-------------------------------- --------------------------- ---------------------------------------
-------------------------------- --------------------------- ---------------------------------------
Ages 76 - 80 4.00% 25 basis points
-------------------------------- --------------------------- ---------------------------------------
-------------------------------- --------------------------- ---------------------------------------
Ages 81 - 90 2.75% 25 basis points
-------------------------------- --------------------------- ---------------------------------------
OPTION C:
------------------------------ ------------------------ ----------------------------------- -----------------------------
Supplemental Trail Supplemental Trail
Age of Older of Annuitant or Per Cent of Premium Commission: Years 2-7. Commission: Years 8 +.
Owner Payable at Sale (Annual rate; (Annual rate;
payable quarterly at 1/4 of value payable quarterly at 1/4 of
shown) value shown)
------------------------------ ------------------------ ----------------------------------- -----------------------------
------------------------------ ------------------------ ----------------------------------- -----------------------------
Ages 0 - 75 4.25% 25 basis points 75 basis points
------------------------------ ------------------------ ----------------------------------- -----------------------------
------------------------------ ------------------------ ----------------------------------- -----------------------------
Ages 76 - 80 3.25% 25 basis points 75 basis points
------------------------------ ------------------------ ----------------------------------- -----------------------------
------------------------------ ------------------------ ----------------------------------- -----------------------------
Ages 81 - 90 2.25% 25 basis points 75 basis points
------------------------------ ------------------------ ----------------------------------- -----------------------------
Conditions of payment of the Supplemental Trail Commission are attached hereto.
In no event will Supplemental Trail Commission be paid on a contract less than
one year old.
No commission will be paid on sales outside the states shown in the Territory on
Exhibit A. No commission will be paid on the sale of an annuity under this
Agreement if that sale involves replacement of an asset or investment issued by
Company or by any other insurance company owned or controlled by American
Express Company. In all cases, the amount of commission described above is the
total compensation available for distribution from Company, or any of its
subsidiaries, affiliates, or other related entities owned or controlled by
American Express Company, whether under this Agreement or under any other
agreement between or among Company, Master General Agent, or any other party.
See Addendum B, below, for details of payment of Supplemental Trail Commission.
CHARGEBACK:
In the event of the surrender of an annuity within six months of the payment
date, there will be a charge- back of commissions paid with respect to premiums
received in accordance with the following schedule:
Time Elapsed Since Payment Date Commission Chargeback
0-3 months 100%
Over 3 months to 6 months 50%
Over 6 months 0%
Chargebacks will be assessed in their entirety against Master General Agent. The
chargeback will be waived in the events of death of an annuitant or owner, or in
case of annuitization or partial withdrawal. The chargeback schedule applies
separately to each payment upon cancellation or withdrawal. The chargeback
schedule applies during the free look period, or for any full withdrawal.
Agreed to on , 199__.
American Enterprise Life Insurance Company SAI Insurance Agency, Inc.
Company Master General Agent
By: By:
Title: Title:
American Express Financial Advisors Inc. SAI Securities, Inc.
Distributor Broker-Dealer
By: By:
Title: Title:
ADDENDUM B TO
SELLING AGREEMENT
by and between American Enterprise Life Insurance Company ("Company"), American
Express Service Corporation (Distributor), SAI Insurance Agency, Inc. ("Master
General Agent") and SAI Securities, Inc. ("MGA's Broker") dated ___________,
1999. This Addendum is effective ________________, 1999.
Supplemental Trail Commission:
1. In addition to the compensation shown in other Addenda to this Agreement,
Company agrees to pay to Master General Agent a Supplemental Trail Commission as
shown in #2, below, subject to all the conditions in #3 below.
2. Payment. At the end of each calendar quarter, Company shall calculate and pay
the Supplemental Trail Commission as follows:
Supplemental Trail Compensation = Eligible Value x Annual Rate
4
Where:
A. Annual Rate of the Supplemental Trail Commission as shown in one of
the Compensation Options tables appended here:
OPTION B:
-------------------------------- --------------------------- ---------------------------------------
Supplemental Trail Commission:
Age of Older of Annuitant or Per Cent of Premium (Annual rate;
Owner Payable at Sale payable quarterly at 1/4 of value
shown)
-------------------------------- --------------------------- ---------------------------------------
-------------------------------- --------------------------- ---------------------------------------
Ages 0 - 75 5.25% 25 basis points
-------------------------------- --------------------------- ---------------------------------------
-------------------------------- --------------------------- ---------------------------------------
Ages 76 - 80 4.00% 25 basis points
-------------------------------- --------------------------- ---------------------------------------
-------------------------------- --------------------------- ---------------------------------------
Ages 81 - 90 2.75% 25 basis points
-------------------------------- --------------------------- ---------------------------------------
OPTION C:
------------------------------ ------------------------ ----------------------------------- -----------------------------
Supplemental Trail Supplemental Trail
Age of Older of Annuitant or Per Cent of Premium Commission: Years 2-7. Commission: Years 8 +.
Owner Payable at Sale (Annual rate; (Annual rate;
payable quarterly at 1/4 of value payable quarterly at 1/4 of
shown) value shown)
------------------------------ ------------------------ ----------------------------------- -----------------------------
------------------------------ ------------------------ ----------------------------------- -----------------------------
Ages 0 - 75 4.25% 25 basis points 75 basis points
------------------------------ ------------------------ ----------------------------------- -----------------------------
------------------------------ ------------------------ ----------------------------------- -----------------------------
Ages 76 - 80 3.25% 25 basis points 75 basis points
------------------------------ ------------------------ ----------------------------------- -----------------------------
------------------------------ ------------------------ ----------------------------------- -----------------------------
Ages 81 - 90 2.25% 25 basis points 75 basis points
------------------------------ ------------------------ ----------------------------------- -----------------------------
B. Eligible Contracts means contracts sold to customers under this
Agreement, which have reached their first contract anniversary as of the
calendar quarter end.
C. Eligible Value means accumulation value (including earnings
accrued), as of the quarter end for which the Supplemental Trail Commission is
being calculated, of all Eligible Contracts for which Option B or C, above, has
been selected. Each option's trail will be calculated separately. Trail checks
will be made payable to the Master General Agent, and will be sent directly to
Master General Agent for distribution.
3. Conditions of Payment:
A. Payment for each quarter's Supplemental Trail Commission shall be
final, and no credits or additions or adjustments shall be made to it. Each
quarter is evaluated independently. Chargebacks will be accounted for in the
quarter in which the contract is returned to the Company.
B. Company will supply supporting information for the calculation,
along with payment, to Master General Agent within 45 business days of the end
of each calendar quarter.
C. The Supplemental Trail Commission does not apply to sales outside
the Territory or to sales which are otherwise excluded from normal commission
payments under Exhibit A and/or any other Addenda to this Agreement (e.g.,
unlicensed sales, sales for which Master General Agent could not otherwise be
compensated, etc.).
D. In the event that notice of termination of this entire Agreement is
given by any party hereto, the obligation to pay the Supplemental Trail
Commission will survive for three years from the effective date of such
termination. No Supplemental Trail Commission will be payable for the quarter in
which that third anniversary of termination occurs, or thereafter.
E. Subject to Condition D above, Supplemental Trail Commission will be
paid to the Master General Agent for as long as each Eligible Contract continues
to remain an Eligible Contract as herein defined, and for as long as the Master
General Agent continues to be licensed as an insurance agency and appointed with
Company.
F. The obligation to pay Supplemental Trail Commission runs from
Company to Master General Agent only. All distribution of Supplemental Trail
Commission is the Master General Agent's responsibility. No claim made by or on
behalf of any individual representative for Supplemental Trail Commission will
be honored by Company, and no expense, including (without limitation) attorney
fees, that an Master General Agent or a representative may incur to determine
the individual representative's entitlement to Supplemental Trail Commission,
will be absorbed by or reimbursed by Company.
G. In all cases, the amount of commission described above is the total
compensation available for distribution from Company, or any of its
subsidiaries, affiliates, or other related entities owned or controlled by
American Express Company, whether under this Agreement or under any other
agreement between or among Company, Master General Agent, or any other party.
See Addendum A, above, for details of payment of commission at time of sale.
CHARGEBACK:
In the event of the surrender of an annuity within six months of the issue date,
there will be a chargeback of all commissions paid with respect to premium
received in accordance with the following schedule.
Time Elapsed Since Payment Date Commission Chargeback
0-3 months 100%
4-6 months 50%
Thereafter 0%
Chargebacks will be assessed in their entirety against Master General Agent. The
chargeback will be waived in the events of death of an annuitant or owner, or in
case of annuitization or partial withdrawal. The chargeback schedule applies
separately to each payment upon cancellation or withdrawal. The chargeback
schedule applies during the free look period, or for any full withdrawal.
Agreed to on , 1999.
American Enterprise Life Insurance Company SAI Insurance Agency, Inc.
Company Master General Agent
By: By:
Title: Title:
American Express Financial Advisors Inc. SAI Securities, Inc.
Distributor MGA's Broker
By: By:
Title: Title:
