EXHIBIT 1.A.3(a)
PRINCIPAL UNDERWRITING AGREEMENT
THIS PRINCIPAL UNDERWRITING AGREEMENT made and effective as of the 1st
day of October, 1999, by and between AFSG SECURITIES CORPORATION ("AFSG"), a
Pennsylvania corporation, and LIFE INVESTORS INSURANCE COMPANY OF AMERICA
("LIICA"), an Iowa corporation, on its own behalf and on behalf the separate
investment accounts of LIICA set forth in EXHIBIT A attached hereto and made a
part hereof (collectively, the "Account").
WITNESSETH:
WHEREAS, the Account was established or acquired by LIICA under the
laws of the State of Iowa, pursuant to a resolution of LIICA's Board of
Directors in order to set aside the investment assets attributable to certain
flexible premium life variable insurance policies and certain flexible premium,
multi-funded annuity contracts ("Contracts") issued by LIICA;
WHEREAS, LIICA has registered or will register the Account with the
Securities and Exchange Commission ("SEC") as a unit investment trust under the
Investment Company Act of 1940 (the "1940 Act") or will not register the Account
in proper reliance upon an exclusion from registration under the 1940 Act;
WHEREAS, LIICA has registered or will register the Contracts under the
Securities Act of 1933 (the "1933 Act") or that the Contracts are not registered
because they are properly exempt from registration under the 1933 Act or will be
offered exclusively in transactions that are properly exempt from registration
under the 1933 Act;
WHEREAS, AFSG is and will continue to be registered as a broker-dealer
with the SEC under the Securities Exchange Act of 1934 (the "1934 Act"), and a
member of the National Association of Securities Dealers, Inc. (the "NASD")
prior to the offer and sale of the Contracts; and
WHEREAS, LIICA proposes to have the Contracts sold and distributed
through AFSG, and AFSG is willing to sell and distribute such Contracts under
the terms stated herein;
NOW, THEREFORE, the parties, intending to be legally bound, hereby
agree as follows:
1. APPOINTMENT AS DISTRIBUTOR/PRINCIPAL UNDERWRITER. LIICA grants to
AFSG the exclusive right to be, and AFSG agrees to serve as, distributor and
principal underwriter of the Contracts during the term of this Agreement. AFSG
agrees to use its best efforts to solicit applications for the Contracts and
otherwise perform all duties and functions, which are necessary and proper for
the distribution of the Contracts.
2. PROSPECTUS. AFSG agrees to offer the Contracts for sale in
accordance with the registration statements and prospectus therefor then in
effect. AFSG is not authorized to give any information or to make any
representations concerning the Contracts other than those contained in the
current prospectus therefor filed with the SEC or in such sales literature as
may be authorized by LIICA.
3. CONSIDERATION. All premiums, purchase payments or other moneys
payable under the Contracts shall be remitted promptly in full together with
such application, forms and any other required documentation to LIICA or its
designated servicing agent and shall become the exclusive property of LIICA.
Checks or money orders in payment under the Contracts shall be drawn to the
order of "Life Investors Insurance Company of America" and funds may be remitted
by wire if prior written approval is obtained from LIICA.
4. COPIES OF INFORMATION. On behalf of the Account, LIICA shall furnish
AFSG with copies of all prospectuses, financial statements and other documents
which AFSG reasonably requests for use in connection with the distribution of
the Contracts.
5. REPRESENTATIONS. AFSG represents that it is (a) duly registered as a
broker-dealer under the 1934 Act, (b) a member in good standing of the NASD and
(c) to the extent necessary to offer the Contracts, duly registered or otherwise
qualified under the securities laws of any state
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or other jurisdiction. AFSG shall be responsible for carrying out its sales and
underwriting obligations hereunder in continued compliance with the NASD Rules
and federal and state securities and insurance laws and regulations. Further,
AFSG represents and warrants that it will adopt, abide by and enforce the
principles set forth in the Principles and Code of Ethical Market Conduct of the
Insurance Marketplace Standards Association as adopted by the Company.
6. OTHER BROKER-DEALER AGREEMENTS. AFSG is hereby authorized to enter
into written sales agreements with other independent broker-dealers for the sale
of the Contracts. All such sales agreements entered into by AFSG shall provide
that each independent broker-dealer will assume full responsibility for
continued compliance by itself and by its associated persons with the NASD Rules
and applicable federal and state securities and insurance laws, shall provide
that each independent broker-dealer will adopt, abide by and enforce the
principles set forth in the Principles and Code of Ethical Market Conduct of the
Insurance Marketplace Standards Association as adopted by the Company, and shall
be in such form and contain such other provisions as LIICA may from time to time
require. All associated persons of such independent broker-dealers soliciting
applications for the Contracts shall be duly and appropriately registered by the
NASD and licensed and appointed by LIICA for the sale of Contracts under the
insurance laws of the applicable states or jurisdictions in which such Contracts
may be lawfully sold. All applications for Contracts solicited by such
broker-dealers through their representatives, together with any other required
documentation and premiums, purchase payments and other moneys, shall be handled
as set forth in paragraph 3 above.
7. INSURANCE LICENSING AND APPOINTMENTS. LIICA shall apply for the
proper insurance licenses and appointments in appropriate states or
jurisdictions for the designated persons associated with AFSG or with other
independent broker-dealers that have entered into sales agreements with AFSG for
the sale of Contracts, provided that LIICA reserves the right to refuse to
appoint any proposed registered representative as an agent or broker, and to
terminate an agent or broker once appointed.
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8. RECORDKEEPING. LIICA and AFSG shall cause to be maintained and
preserved for the periods prescribed such accounts, books, and other documents
as are required of them by the 1940 Act, and 1934 Act, and any other applicable
laws and regulations. The books, accounts and records of LIICA, of the Account,
and of AFSG as to all transactions hereunder shall be maintained so as to
disclose clearly and accurately the nature and details of the transactions.
LIICA (or such other entity engaged by LIICA for this purpose), on behalf of and
as agent for AFSG, shall maintain AFSG's books and records pertaining to the
sale of Contracts to the extent as mutually agreed upon from time to time by
LIICA and AFSG; provided that such books and records shall be the property of
AFSG, and shall at all times be subject to such reasonable periodic, special or
other audit or examination by the SEC, NASD, any state insurance commissioner
and/or all other regulatory bodies having jurisdiction. LIICA shall be
responsible for sending on behalf of and as agent for AFSG all required
confirmations on customer transactions in compliance with applicable
regulations, as modified by an exemption or other relief obtained by LIICA. AFSG
shall cause LIICA to be furnished with such reports as LIICA may reasonably
request for the purpose of meeting its reporting and record-keeping requirements
under the insurance laws of the State of Iowa and any other applicable states or
jurisdictions. LIICA agrees that its records relating to the sale of Contracts
shall be subject to such reasonable periodic, special or other audit or
examination by the SEC, NASD, and any state insurance commissioner and/or all
other regulatory bodies having jurisdiction.
9. COMMISSIONS. LIICA shall have the responsibility for paying on
behalf of AFSG (a) any compensation to other independent broker-dealers and
their associated persons due under the terms of any sales agreements entered
into pursuant to paragraph 6 above, between AFSG and such broker-dealers as
agreed to by LIICA and (b) all commissions or other fees to associated persons
of AFSG which are due for the sale of the Contracts in the amounts and on such
terms and conditions as LIICA and AFSG determine. Notwithstanding the preceding
sentence, no
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broker-dealer, associated person or other individual or entity shall have an
interest in any deductions or other fees payable to AFSG as set forth herein.
10. EXPENSE REIMBURSEMENT. LIICA shall reimburse AFSG for all costs and
expenses incurred by AFSG in furnishing the services, materials, and supplies
required by the terms of this Agreement.
11. INDEMNIFICATION. LIICA agrees to indemnify AFSG for any losses
incurred as a result of any action taken or omitted by AFSG, or any of its
officers, agents or employees, in performing their responsibilities under this
Agreement in good faith and without willful misfeasance, gross negligence, or
reckless disregard of such obligations.
12. REGULATORY INVESTIGATIONS. AFSG and LIICA agree to cooperate fully
in any insurance or judicial regulatory investigation or proceeding arising in
connection with Contracts distributed under this Agreement. AFSG and LIICA
further agree to cooperate fully in any securities regulatory inspection,
inquiry, investigation or proceeding or any judicial proceeding with respect to
LIICA, AFSG, their affiliates and their representatives to the extent that such
inspection, inquiry, investigation or proceeding or judicial proceeding is in
connection with Contracts distributed under this Agreement. Without limiting the
foregoing:
(a) AFSG will be notified promptly of any customer complaint or notice
of any regulatory inspection, inquiry investigation or proceeding or judicial
proceeding received by LIICA with respect to AFSG or any representative or which
may affect LIICA's issuance of any Contracts marketed under this Agreement; and
(b) AFSG will promptly notify LIICA of any customer complaint or notice
of any regulatory inspection, inquiry, investigation or judicial proceeding
received by AFSG or any representative with respect to LIICA or its affiliates
in connection with any Contracts distributed under this Agreement.
In the case of a customer complaint, AFSG and LIICA will cooperate in
investigating such complaint and shall arrive at a mutually satisfactory
response.
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13. TERMINATION.
(a) This Agreement may be terminated by either party hereto upon 60
days' prior written notice to the other party.
(b) This Agreement may be terminated upon written notice of one party
to the other party hereto in the event of bankruptcy or insolvency of such party
to which notice is given.
(c) This Agreement may be terminated at any time upon the mutual
written consent of the parties hereto.
(d) AFSG shall not assign or delegate its responsibilities under this
Agreement without the written consent of LIICA.
(e) Upon termination of this Agreement, all authorizations, rights and
obligations shall cease except the obligations to settle accounts hereunder,
including payments or premiums or contributions subsequently received for
Contracts in effect at the time of termination or issued pursuant to
applications received by LIICA prior to termination.
14. REGULATORY IMPACT. This Agreement shall be subject to, among other
laws, the provisions of the 1940 Act and the 1934 Act and the rules,
regulations, and rulings thereunder and of the NASD, from time to time in
effect, including such exemptions from the 1940 Act as the SEC may grant, and
the terms hereof shall be interpreted and construed in accordance therewith.
AFSG shall submit to all regulatory and administrative bodies having
jurisdiction over the operations of the Account, present or future; and will
provide 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.
15. 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.
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16. CHOICE OF LAW. This Agreement shall be construed, enforced and
governed by the laws of the State of Iowa.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by their respective duly authorized officials as of the day and year
first above written.
AFSG SECURITIES CORPORATION LIFE INVESTORS INSURANCE COMPANY
OF AMERICA
By: S/ XXXX X. XXXXXXXXXX By: S/ XXXX XXXXXXX
Title: VP Title: VP
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EXHIBIT A
1. Life Investors Variable Life Account A
