Exhibit 3(a)
UNDERWRITING AGREEMENT
AGREEMENT dated December 1, 2001, by and between GE Life and Annuity
Assurance Company (" GELAAC"), a Virginia corporation, on its own behalf and on
behalf of GELAAC Separate Account I, GELAAC Separate Account II, GELAAC Separate
Account III, GELAAC Separate Account 4, GELAAC Separate Account 5 and GELAAC
Separate Account 6 (the "Separate Accounts"), and CAPITAL BROKERAGE CORPORATION
(doing business in Indiana, Minnesota, New Mexico, and Texas as GE Capital
Brokerage Corporation) ("CBC"), a Washington corporation with its principal
office at 000 Xxxxxxx Xxxxxx, X.X. Xxx 0000, Xxxxxxx, Xxxxxxxxxxx, 00000-0000
W I T N E S S E T H:
WHEREAS, the Separate Accounts are segregated asset accounts established
and maintained by GELAAC pursuant to the laws of the Commonwealth of Virginia
for certain MGA, modified guaranteed annuities, variable annuities and variable
life insurance policies to be issued by GELAAC (hereinafter referred to as the
"Contract(s)"), under which income, gains and losses, whether or not realized,
from assets allocated to such Separate Accounts, will be, in accordance with the
Contracts, credited to or charged against such Separate Accounts without regard
to other income, gains or losses of GELAAC;
WHEREAS, GELAAC has registered the Separate Accounts, with exception of
Separate Account 5, as a unit investment trust-type investment companies under
the Investment Company Act of 1940 (the"1940 Act");
WHEREAS, CBC has registered as a broker-dealer under the Securities
Exchange Act of 1934 (the "1934 Act") and is a member firm of the National
Association of Securities Dealers, Inc. (the "NASD"); and
WHEREAS, GELAAC has registered the Contracts under Securities Act of 1933
(the "1933 Act") and proposes to issue and sell the Contracts to the public
through CBC, acting as the principal underwriter of the Contracts;
NOW, THEREFORE, in consideration of the mutual agreements made herein,
GELAAC and CBC hereby agree as follows:
1. Underwriter.
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(a) GELAAC grants to CBC the exclusive right, during the term of this
Agreement, subject to the registration requirements of the 1933 Act and the 1940
Act and the provisions of the 1934 Act, to be the principal underwriter of the
Contracts. CBC agrees to use its best efforts to distribute the Contracts, and
to undertake to provide sales and services relative to the Contracts and
otherwise to perform all duties and functions necessary and proper for the
distribution of the Contracts. It is the intent of the parties hereto that
substantially similar successor Contracts hereafter issued by GELAAC in addition
to or in substitution for the Contracts shall be covered by
this Agreement so long as this Agreement has not been previously terminated
prior to date of introduction thereof.
(b) To the extent necessary to offer the Contracts, CBC shall be duly
registered or otherwise qualified under the securities laws of any state or
other jurisdiction. All registered representatives of CBC soliciting
applications for the Contracts shall be duly and appropriately licensed,
registered or otherwise qualified for the sale of such Contracts (and the riders
offered in connection therewith) under the federal securities laws, the state
insurance laws and any applicable state securities laws of each state or other
jurisdiction in which such Contracts may lawfully be sold and in which GELAAC is
licensed to sell the Contracts. CBC shall be responsible for the training,
supervision, and control of its own registered representatives for purposes of
the Rules of the NASD and federal and state securities law requirements
applicable to them in connection with the offer and sale of the Contracts.
(c) CBC agrees to offer the Contracts for sale in accordance with the
prospectuses therefor then in effect. CBC is not authorized to give any
information or to make any representations concerning the Contracts other than
those contained in the current prospectuses filed with the Securities and
Exchange Commission ("Commission") or in such sales literature as may be
authorized by GELAAC.
(d) Payments made in connection with the Contracts whether premium or
otherwise are the exclusive property of GELAAC. Such payments received by CBC
shall be held in a fiduciary capacity and shall be transmitted immediately to
GELAAC or its designated servicing agent in accordance with the administrative
procedures of GELAAC. GELAAC will credit all payments made by or on behalf of
Policyowners owners of Contracts "Contract owners" to their respective accounts,
and will allocate amounts to the investment subdivisions of the Separate
Accounts in accordance with the instructions of Policyowners and the provisions
of the Contracts.
2. Previous Underwriting Agreement.
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This Agreement terminates and replaces the Underwriting Agreement dated
December 12, 1997 by and between GELAAC's predecessor, The Life Insurance
Company of Virginia, its Separate Accounts and CBC.
3. Sales and Services Agreement.
CBC is hereby authorized to enter into separate written sales or services
agreements, on such terms and conditions as CBC may determine not inconsistent
with this Agreement, with broker-dealers that are registered as such under the
Securities Exchange Act and are members of the NASD and that agree to
participate in the distribution of the Contracts. All broker-dealers that agree
to participate in the distribution of the Contracts shall act as independent
contractors and nothing herein contained shall constitute the directors,
officers, employees, agents, or registered representatives of such
broker-dealers as employees of CBC or GELAAC for any purpose whatsoever.
4. Suitability.
GELAAC and CBC each wish to ensure that the Contracts distributed by CBC
will be issued to purchasers for whom the Contracts will be suitable. CBC shall
take reasonable steps to ensure that its own registered representatives shall
not make recommendations to an applicant to purchase a Contract in the absence
of reasonable grounds to believe that the purchase of the Contract is suitable
for such applicant under the NASD Conduct Rules regarding Recommendations to
Customers. While not limited to the following, a determination of suitability
shall be based on information furnished to a registered representative after
reasonable inquiry of such applicant concerning the applicant's financial
status, tax status and insurance and investment objectives and needs.
5. Prospectuses and Promotional Material.
GELAAC shall furnish CBC with copies of all prospectuses, statements of
additional information, financial statements and other documents and
materialswhich CBC reasonably requests for use in connection with the
distribution of the Contracts. GELAAC shall have responsibility for the
preparation, filing and printing of all required prospectuses and/or
registration statements in connection with the Contracts, and the payment of all
related expenses. CBC and GELAAC shall cooperate fully in the design, drafting
and review of sales promotion materials, and with respect to the preparation of
individual sales proposals related to the sale of the Contracts. CBC shall not
use or distribute any such materials not provided or approved by GELAAC.
6. Records and Reports.
CBC shall have the responsibility for maintaining records relating to its
registered representatives that are licensed, registered and otherwise qualified
to sell the Contracts and relating to broker-dealers engaged in the distribution
of the Contracts, and shall provide periodic reports thereof to GELAAC as
requested.
7. Administrative Services.
GELAAC agrees to maintain all required books of account and related
financial records on behalf of CBC. All such books of account and records shall
be maintained and preserved pursuant to Rule 17a-3 and 17a-4 under the 1934 Act
(or the corresponding provisions of any future Federal securities laws or
regulations). In addition, GELAAC will maintain records of all sales commissions
paid to registered representatives of CBC in connection with the sale of the
Contracts. All such books and records shall be maintained by GELAAC on behalf of
and as agent for CBC, whose property they are and shall remain for all purposes,
and shall at all times be subject to reasonable periodic, special, or other
examination by the Commission and all other regulatory bodies having
jurisdiction. GELAAC also agrees to send to CBC's customers all required
confirmations on customer transactions relating to Contracts. GELAAC shall also
make commission and such other disbursements as may be requested by CBC, in
connection with the operations of CBC, for the account and risk of CBC.
8. Compensation.
(a) For the sale of the Contracts, unless otherwise expressly agreed to in
writing by the parties, sales commissions shall be paid by GELAAC, and CBC
authorizes such payment, directly to those registered representatives of CBC who
are also agents of GELAAC and to those broker-dealers (or their affiliated
insurance agencies) who have entered into sales agreements with CBC. Such
payment shall be made pursuant to the insurance agent/agency agreement between
the agent/agency and GELAAC, and CBC shall not pay any sales commissions itself
to such persons upon their sale of the Contracts.
(b) In recognition of the administrative services to be rendered by CBC in
coordinating the distribution activities required by this Agreement, GELAAC
shall pay to CBC such administrative fees as may be mutually agreed upon in
separate writings exchanged from time to time between GELAAC and CBC.
9. Investigation and Proceedings.
(a) CBC and GELAAC agree to cooperate fully in any insurance regulatory
investigation or proceeding or judicial proceeding arising in connection with
the Contracts distributed under this Agreement. CBC and GELAAC further agree to
cooperate fully in any securities regulatory inspection, inquiry, investigation
or proceeding or any judicial proceeding with respect to GELAAC or CBC to the
extent that such inspection, inquiry, investigation or proceeding is in
connection with the Contracts distributed under this Agreement. Without limiting
the foregoing:
(i) CBC will be notified promptly of any customer complaint or notice of
any regulatory inspection, inquiry, investigation or proceeding or
judicial proceeding received by GELAAC with respect to GELAAC or CBC
or any broker-dealer in connection with any Contracts distributed
under this Agreement or any activity in connection with any Contracts.
(ii) CBC will promptly notify GELAAC of any customer complaint or notice
of any regulatory inspection, inquiry, investigation or proceeding
received by CBC with respect to GELAAC or CBC or any broker-dealer in
connection with any Contracts distributed under this Agreement or any
activity in connection with any such Contracts.
(b) In the case of any such customer complaint, CBC and GELAAC will
cooperate in investigating such complaint and arrive at a mutually satisfactory
response.
10. Termination.
This Agreement shall be effective upon its execution and shall remain in
force for a term of one (1) year from the date hereof, and shall automatically
renew from year to year thereafter, unless either party notifies the other in
writing six (6) months prior to the expiration of an annual period. This
Agreement may not be assigned and shall automatically terminate if it is
assigned. Upon
termination of this Agreement all authorizations, rights and obligations shall
cease except (i) the obligation to settle accounts hereunder, including
commissions due or to become due and payable on Contracts in effect at the time
of termination or issued pursuant to applications received by GELAAC prior to
termination, and (ii) the obligations contained in Paragraph 8 hereof.
11. Exclusivity.
The services of CBC hereunder are not to be deemed exclusive and CBC shall
be free to render similar services to others so long as its services hereunder
are not impaired or interfered with thereby.
12. Regulation.
This Agreement shall be subject to the provisions of the 1940 Act and the
1934 Act and the rules, regulation, and rulings thereunder and of the NASD, from
time to time in effect, including such exemptions from 1940 Act as the
Securities and Exchange Commission may grant. CBC shall submit to all regulatory
and administrative bodies having jurisdiction over the operations of CBC, GELAAC
or the Separate Accounts, any information, reports or other material which any
such body by reason of this Agreement may request or require pursuant to
applicable laws or regulations. Without limiting the generality of the
foregoing, CBC shall furnish the Virginia State Corporation Commission or the
Bureau of Insurance thereof with any information or reports which the Commission
or the Bureau of Insurance may request in order to ascertain whether the
operations of GELAAC are being conducted in an manner consistent with the
Commission's regulations and any other applicable laws.
13. Indemnities.
(a) GELAAC agrees to indemnify and hold harmless CBC and each person who
controls or is associated with CBC within the meaning of the 1933 Act or the
1934 Act against any losses, claims, damages or liabilities, joint or several,
to which CBC or such controlling or associated person may become subject, under
the 1933 Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact, required to be
stated therein or necessary to make the statements therein not misleading,
contained:
(i) in the 1933 Act Registration Statements covering the Contracts or in
any related Prospectuses included thereunder, or
(ii) in any written information or sales material authorized for, and
supplied or furnished by GELAAC to CBC and its sales representatives.
GELAAC will reimburse CBC and each such controlling person, for any legal or
other expenses reasonably incurred by CBC or such controlling person in
connection with investigating or defending any such loss, claim, damage,
liability or action covered by this Paragraph 12(a); provided that GELAAC will
not be liable in any such case to the extent that such loss, claim, damage or
liability arises out of, or is based upon, an untrue statement or omission or
alleged untrue
statement or omission made in reliance upon information (including, without
limitation, negative responses to inquiries) furnished to GELAAC by or on behalf
of CBC or its affiliates specifically for use in the preparation of the said
Registration Statements or any related Prospectuses included therein or any
amendment thereto or supplement thereto. This indemnity agreement will be in
addition to any liability which GELAAC may otherwise have, the premises
considered.
(b) CBC agrees to indemnify and hold harmless GELAAC and each of its
directors (including any person named in the 1933 Act Registration Statements
covering the Contracts, with his/her consent, as nominee for directorship), each
of its officers who signed a Registration Statement and each person, if any, who
controls GELAAC within the meaning of the 1933 Act or the 1934 Act, against any
losses, claims, damages or liabilities to which GELAAC and any such director or
officer or controlling person may become subject, under the 1933 Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon:
(i) any untrue statement or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact required to
be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made,
not misleading, contained in the Registration Statements or in any
related Prospectuses included therein, to the extent, but only to the
extent, that such untrue statement or omission or alleged untrue
statement or omission was made in reliance upon information
(including, without limitation, negative responses to inquiries)
furnished to GELAAC by or on behalf of CBC or its affiliates as the
case may be, specifically for use in the preparation of the
Registration Statements or related Prospectuses included therein or
any amendment thereto or supplement thereto; or
(ii) any unauthorized use of sales materials or any verbal or written
misrepresentations or any unlawful sales practices concerning the
Contracts by CBC.
CBC will reimburse GELAAC and any director or officer or controlling person of
GELAAC for any legal or other expenses reasonably incurred by GELAAC or such
director, officer or controlling person in connection with investigating or
defending any such loss, claim, damage, liability or action covered by this
Paragraph 12(b). This indemnity agreement will be in addition to any liability
which CBC may otherwise have, the premises considered.
(c) After receipt by a party entitled to indemnification ("indemnified
party") under this Section 12 of notice of the commencement of any action, if a
claim in respect thereof is to be made against any person obligated to provide
indemnification under this Section 12 ("indemnifying party"), such indemnified
party will notify the indemnifying party in writing of the commencement thereof
as soon as practicable thereafter, and the omission so to notify the
indemnifying party will not relieve it from any liability under this Section 12,
except to the extent that the omission results in a failure of actual notice to
the indemnifying party and such indemnifying party is damaged solely as a result
of the failure to give such notice. In case any such action is brought against
any indemnified party and it notifies an indemnifying party of the commencement
thereof, the indemnified party shall be entitled, to the extent it may wish,
jointly with any other indemnified
party similarly notified, to participate in the defense thereof, with separate
counsel. Such participation shall not relieve such indemnifying party of the
obligation to reimburse the indemnified party for reasonable legal and other
expenses incurred by such indemnified party in defending itself or himself,
except for such expenses incurred after the indemnifying party deposited funds
sufficient to effect the settlement, with prejudice, of the claim in respect of
which indemnity is sought. Any such indemnifying party shall not be liable to
any such indemnified party on account of any settlement of any claim or action
effected without the consent of such indemnifying party.
The indemnity agreements contained in this Section 12 shall remain
operative and in full force and effect, regardless of (i) any investigation made
by or on behalf of CBC or any controlling person thereof or by or on behalf of
GELAAC, (ii) delivery of any Contracts and payments therefor, or (iii) any
termination of this Agreement. A successor by law of CBC or of any the parties
to this Agreement, as the case may be, shall be entitled to the benefits of the
indemnity agreements contained in this Section 12.
14. Severability.
If any provision of this Agreement shall be held or made invalid by a court
decision, statute, rule or otherwise the remainder of this Agreement shall not
be affected thereby.
15. Applicable Law.
This Agreement shall be construed and enforced in accordance with and
governed by the laws of the Commonwealth of Virginia.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
GE LIFE AND ANNUITY ASSURANCE COMPANY
Attest: By: _________________________________
__________________________ Title: ______________________________
Secretary
Date: _______________________________
CAPITAL BROKERAGE CORPORATION
Attest: By: _________________________________
__________________________ Title: ______________________________
Secretary
Date: _______________________________
