EX.99B3(a)
SALES SUPPORT AGREEMENT
Between
THE PENN INSURANCE AND ANNUITY
And
XXXXXX, XXXXXXXX & XXXX, INC.
Individual Variable and Fixed Annuity Contracts
Dated as of March 1, 1995
C-16
AGREEMENT made as of the 1st day of March, 1995, by and between THE PENN
INSURANCE AND ANNUITY COMPANY ("PIA"), a Delaware Corporation, and XXXXXX,
XXXXXXXX & XXXX, INC. ("HTK"), a Pennsylvania Corporation.
W I T N E S S E D:
WHEREAS, PIA is engaged in the business of issuing individual variable
and fixed annuity contracts to the public;
WHEREAS, HTK is licensed as a life insurance agent of PIA under state
insurance laws, is registered as a broker-dealer under the Securities Exchange
Act of 1934 and is a member of the National Association of Security Dealers,
Inc. ("NASD"); and
WHEREAS, PIA desires that HTK provide sales support services in
connection with the sale of individual variable and fixed annuity contracts by
designated life insurance agents of PIA, and HTK desires to provide such
services;
NOW THEREFORE, in consideration of the premises and mutual covenants
herein contained, the parties agree as follows:
1. PIA will furnish HTK with the names of its life insurance agents who
indicate a desire to sell individual variable and fixed annuity
contracts identified in Schedule I attached hereto (hereinafter
referred to as the "Contracts").
2. HTK, after investigation will select the life insurance agents of PIA
who are to become qualified under federal securities laws and rules
of the NASD to engage in the sale of Contracts and will use its best
efforts to cause such life insurance agents to be qualified. Life
insurance agents so qualified will be "persons associated with" HTK
under the Securities Exchange Act of 1934 and the applicable rules of
the NASD. Upon such qualification of a life insurance agent, the
qualification shall be certified in writing to PIA by HTK.
3. Prior to permitting a life insurance agent to sell Contracts as an
associated person of HTK, PIA, HTK and the life insurance agent will
enter into an agreement pursuant to which the life insurance agent
will acknowledge that he or she will be an associated person of HTK
in connection with his or selling Contracts and that the life
insurance agent's right to continue to sell Contracts is subject to
his or her continued compliance with such agreement and the rules and
procedures established by HTK.
4. It is contemplated that other personnel of PIA may become qualified
as associated persons of HTK in order to carry out securities
activities with respect to the sale of Contracts. HTK will train such
personnel as requested by PIA, and will use its best
efforts to cause such personnel to become qualified as associated
persons. Upon such qualification, the qualification shall be
certified in writing to PIA by HTK.
5. HTK will fully comply with the requirements of NASD and of the
Securities Exchange Act of 1934 and will supervise diligently the
security activities of life insurance agents of PIA who are
associated persons of HTK. Upon request by HTK, PIA will furnish or
request any life insurance agent who is an associated person to
furnish (at PIA's or the life insurance agent's expense) such
appropriate records that may be necessary to insure diligent
supervision.
6. In the event any associated person fails or refuses to submit to
supervision by HTK in accordance with this Agreement, or otherwise
fails to meet the rules and standards imposed by HTK on the
associated person, HTK shall certify such fact to HTK and shall
immediately notify the associated person that he or she is no longer
authorized to engage in securities activities with respect to the
sale of Contracts, and HTK and PIA shall take whatever additional
action may be necessary to terminate such securities activities of
the associated person.
7. HTK will assume full responsibility for the security activities of
its associated persons with respect to the sale of Contracts and for
initial and continued compliance by itself and its associated persons
with applicable federal and state security laws and rules of the
NASD. HTK may demand and shall be entitled to receive such assurances
from PIA as HTK deems appropriate to demonstrate compliance with the
Securities Act of 1933 and the Investment Company Act of 1940.
8. Compensation and reimbursement of expenses payable to life insurance
agents in connection with sales of Contracts shall be paid by PIA
under PIA's agency contracts and will not be an expense of HTK. All
premium payments paid under Contracts by owners shall be paid to PIA
and will not be income to HTK. HTK shall have no interest in any
commissions or other remunerate payable to life insurance agents by
PIA or in any premium payments paid under Contracts to PIA. For
regulatory purposes of the NASD and the Securities Exchange Act of
1934, commissions paid by Penn Mutual shall be appropriately
reflected in the books and records maintained by or on behalf of HTK.
9. At the request of HTK, some or all of the books and records required
to be maintained by a registered broker-dealer under the Securities
Exchange Act of 1934 in connection with the sale of Contracts will be
maintained by PIA as agent for HTK. PIA agrees that such records are
and shall remain the property of HTK, will be maintained and
preserved in conformity with the requirements of Rules 17a-3 and
17a-4 under the Securities Exchange Act of 1934, to the extent that
such requirements are applicable to the Contracts, and will be
subject to examination by
the Securities Exchange Commission in accordance with Section 17(a)
of the Securities Exchange Act of 1934.
10. A confirmation with respect to each purchase payment made under
Contracts will be sent to the owner of such Contract in accordance
with Rule 10b-10 under the Securities Exchange Act of 1934.
11. In payment for the services performed under this Agreement, PIA
shall compensate as provided in Schedule I attached hereto.
12. The compensation for services provided under this Agreement shall be
paid within 15 days after the end of the calendar month in which
premium payments are accepted by PIA. Should PIA for any reason
return a premium payment, HTK shall repay PIA the total amount of
any compensation which PIA may have paid to HTK with respect to such
premium payments.
13. HTK will cooperate with PIA in investigating and settling all claims
that are made against PIA in connection with the sale of Contracts
by life insurance agents of PIA who are associated with HTK. HTK
shall promptly forward to PIA any notice of claim or relevant
information concerning a potential claim which may come into its
possession, and shall promptly forward to PIA any legal papers
served on HTK involving the sale of Contracts.
14. HTK will indemnify and hold harmless PIA and each director and
officer of PIA against any losses, damages or liabilities, insofar
as such losses, damages and liabilities arise out of or are based
upon the failure of HTK and its officers, employees and
representatives to comply with the provisions of this Agreement.
15. PIA will indemnify and hold harmless HTK and each director and
officer of HTK against any losses, damages or liabilities, to which
HTK or such director or officer becomes subject, under the
Securities Act of 1933 or otherwise, insofar as such losses, damages
and liabilities arise out of or are based upon any inaccurate or
inadequate statement in the Registration Statement for the
Contracts.
16. This Agreement shall continue in effect until terminated. Either
party may terminate the Agreement by giving the other party thirty
days prior written notice.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the day and year written
above.
THE PENN INSURANCE AND ANNUITY
COMPANY
Attest
______________________________ By____________________________
X. Xxxxxxxx Illoway
Vice President
XXXXXX XXXXXXXX & XXXX, INC.
Attest
______________________________ By____________________________
Xxxxxxx X. Cloud
President
SCHEDULE I DATED MARCH 1, 1995
To
SALES SUPPORT AGREEMENT
Between
THE PENN INSURANCE AND ANNUITY COMPANY ("PIA")
And
XXXXXX, XXXXXXXX XXXX, INC. ("HTK")
DATED AS OF MARCH 1, 1995
Individual Variable and Fixed Annuity Contracts
Individual Variable and Fixed Annuity Contracts - Flexible Purchase Payments -
Form IA-94 and variations thereof as required under state insurance laws
Compensation
1. With respect to agents/registered representatives who are compensated under
the high commission schedule for sales of Contracts identified in this
Schedule I (Option A), PIA shall pay HTK .20% of purchase payments made under
the Contracts and a percentage of the Contract Values at the annual rate of
.01%.
2. With respect to agents/registered representatives who are compensated under
the medium commission schedule for sales of Contracts identified in this
Schedule I (Option B), PIA shall pay HTK .15% of purchase payments made
under the Contracts and a percentage of the Contract Values at the annual
rate of .02%.
3. With respect to agents/registered representatives who are compensated under
the low commission schedule for sales of Contracts identified in this
Schedule I (Option C), PIA shall pay HTK .10% of purchase payments made under
the Contracts and a percentage of the Contract Values at the annual rate of
.03%.
With respect to each Contract, the asset based compensation described in the
forgoing sections (i.e. percentage of Contract Values) shall commence in the
first calendar quarter following the completion of the first contract year. The
compensation shall be paid in installments at the end of each calendar quarter.
