Exhibit J.14
FORM OF SERVICE AGREEMENT
This AGREEMENT, dated December [_], 2010, is by and between Eagle Strategies LLC
("Eagle"), a Delaware limited liability company and an indirect wholly-owned
subsidiary of New York Life Insurance Company ("New York Life"), and New York
Life Insurance and Annuity Corporation ("NYLIAC"), a stock insurance company
incorporated in Delaware and a wholly-owned subsidiary of New York Life
("Agreement").
WHEREAS, Eagle is an investment adviser registered with the Securities and
Exchange Commission (the "Commission"), engaged in the business of
providing investment advisory services and products, and in such other
kinds of business activities that are reasonably and necessarily incidental
to this business;
WHEREAS, NYLIAC is an insurance company licensed to offer life insurance
and annuities in the District of Columbia and all fifty states;
WHEREAS, NYLIAC issues the New York Life Lifetime Wealth Variable Universal
Life policy (the "LWVUL") where policyowners may elect to receive asset
allocation and investment advisory services from a registered investment
adviser in connection with such LWVUL;
WHEREAS, NYLIAC desires to have Eagle act as the registered investment
adviser and provide such asset allocation and investment advisory services
in connection with the LWVUL; and
WHEREAS, LWVUL policyowners must enter into a separate agreement with Eagle
(the "Client Agreement") in order to receive such asset allocation and
investment advisory services in connection with the LWVUL.
NOW, THEREFORE, the parties hereby agree as follows:
1. RELATIONSHIP OF THE PARTIES
Neither Eagle nor NYLIAC shall act or hold itself as acting as agent of the
other, except by express mutual consent.
This Agreement does not supersede or purport to alter the provisions of any
agreements between Eagle, New York Life and/or NYLIAC. No provision of this
Agreement or its implementation shall be deemed to affect, supersede, alter,
annul or repeal any agreements that may exist or may be entered into by and
between NYLIAC and Eagle, by and between New York Life and Eagle, or by and
between the parties hereto, and/or any other affiliate or subsidiary of New York
Life.
2. ARRANGEMENTS NOT EXCLUSIVE
Arrangements provided in this Agreement are not exclusive and Eagle and NYLIAC
each retain the right to contract with any other person for the provision or
receipt of any services or facilities, whether or not provided under this
Agreement.
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3. PERFORMANCE OF SERVICES
(A) EAGLE'S SERVICES
Eagle shall provide asset allocation and investment advisory services to LWVUL
policyowners who enter into a Client Agreement with Eagle with respect to, such
services (the "Clients"). The asset allocation and investment advisory services
provided to the Clients are specified in the Client Agreement (the "Advisory
Services"). The Advisory Services will include recommending an initial asset and
premium allocation for the insurance dedicated funds available through LWVUL
(the "Funds") in NYLIAC Variable Universal Life Separate Account - I (the
"Separate Account") based on an assessment of the Client's investment objectives
and/or financial situation; providing on-going rebalancing of LWVUL asset
allocations; and managing the investment advisory relationship with the Client
(including meeting with the Client to discuss any changes in the Client's
investment objectives or financial situation, and recommending a change to a
different asset allocation if necessary).
Eagle will promptly notify NYLIAC if a Client terminates the Client Agreement.
In providing the Advisory Services, Eagle may retain one or more unaffiliated
third-party investment advisers to act as sub-advisers. Eagle will bear any and
all costs incurred in connection with retaining any such sub-advisers.
The Advisory Services will be provided in accordance with the applicable
provisions of the Investment Advisers Act of 1940, as amended (the "Advisers
Act") and the rules and regulations promulgated thereunder and under all the
applicable federal and state laws and regulations.
Eagle's services under this Agreement do not include providing insurance-related
advice to Clients.
(B) NYLIAC'S SERVICES
NYLIAC will make available, and administer the delivery of, the Advisory
Services offered in connection with the LWVUL. NYLIAC will also provide certain
administrative services with respect to the Advisory Services, including
effecting all initial allocation and rebalancing instructions provided by Eagle.
NYLIAC will deduct a monthly asset allocation access charge (the "Access
Charge") to cover the cost of NYLIAC's services described herein and the
Advisory Services offered in connection with the LWVUL. NYLIAC will only deduct
the Access Charge on LWVUL policies where Clients have a Client Agreement in
place that has not been terminated and such Client's Separate Account Value is
at least $2,500. The Access Charge will no longer be deducted if a Client's
Separate Account Value is less than $2,000. NYLIAC will notify Eagle if the
Separate Account Value of a Client with an existing Client Agreement falls below
$2,000.
NYLIAC will make available valuation and performance data with regard to the
Funds available through the LWVUL. NYLIAC will promptly notify Eagle if it is
considering changing the availability of any of the Funds in the Separate
Account.
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As provided in Section 6 hereof, NYLIAC's services under this Agreement do not
include providing investment advisory services to the Clients.
4. AVAILABLE FUNDS
From time to time, Eagle may request that additional insurance dedicated funds
be added to the Separate Account or that certain Funds be removed. The addition
to or deletion from the Separate Account of any insurance dedicated fund will be
in the sole discretion of NYLIAC, and NYLIAC shall be solely responsible for
determining which funds will be available through the LWVUL.
5. ASSOCIATED PERSONS AND ACCESS PERSONS
Eagle and NYLIAC agree that any employees of NYLIAC or New York Life who have
access to the investment recommendations of Eagle to the Clients will be treated
as associated persons of Eagle, and access persons of Eagle if and as required
under Rule 204A-1 of the Advisers Act. Such persons will be subject to relevant
policies and procedures of Eagle, including conflict of interest certifications,
xxxxxxx xxxxxxx policies and personal securities transaction reporting
requirements.
6. INVESTMENT ADVISORY AND INSURANCE LICENSING
Eagle and NYLIAC agree and acknowledge that NYLIAC is not a registered
investment adviser and that NYLIAC will not provide investment advisory services
to the Clients. Eagle and NYLIAC agree that Eagle is not licensed as either an
insurance company or an insurance agency and will not provide insurance-related
services or advice.
7. SEGREGATION OF RECORDS AND ASSETS
Eagle and NYLIAC, in performing services under this Agreement, shall maintain
their own separate accounts and books and records.
8. CONTROL
The performance of this Agreement shall not impair the control of the business
and operations of each of NYLIAC and Eagle by their respective Board of
Managers/Directors, as applicable.
9. CUSTODY
NYLIAC understands and agrees that by contracting with Eagle to receive the
services herein, NYLIAC may become subject to certain requirements pursuant to
Rule 206(4)-2 of the Investment Advisers Act of 1940, including an audit
performed by a third-party auditor.
10. FEES AND EXPENSES
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As compensation for providing the Advisory Services to Clients pursuant to the
Client Agreements, Eagle shall receive a fee from NYLIAC equal on an annual
basis to 50 bps multiplied by the value, as of each calendar month end of the
Separate Account attributable to LWVUL policyowners for which NYLIAC is
deducting an Access Charge. The fee is in all events a general obligation of
NYLIAC under this Agreement, notwithstanding any fees or charges it may collect
under the LWVUL. Such fee will be calculated monthly and be payable monthly in
arrears. Settlement must occur within 15 business days of month-end.
Notwithstanding anything to the contrary in this Agreement, Eagle will not have
any power, authority or right to itself direct any such payment from the
Separate Account under any circumstances.
Each party hereto shall record on its books and records any fee paid or received
hereunder.
Each party assumes and will pay its own expenses.
11. REPRESENTATIONS
A. NYLIAC and Eagle represent (each on its own behalf) that it is
not registered as nor does it act as a broker or dealer of
securities.
B. Eagle represents that it is an investment adviser registered with
the Commission under the Advisers Act.
C. NYLIAC represents that it is an insurance company duly organized
and in good standing under the laws of the State of Delaware.
D. NYLIAC represents that the LWVUL will be issued and sold in
compliance in all material respects with all applicable federal
and state laws.
E. Each party is duly authorized and has taken all relevant actions
to enter into and execute this agreement.
12. GOVERNING LAW
This Agreement shall be governed and construed in accordance with the laws of
the State of New York, without giving effect to the principle of conflicts of
laws.
13. PRIVACY AND SECURITY
a. Privacy. As part of this Agreement, Eagle may have access to
individually identifiable personal information of NYLIAC's and
Eagle's consumers ("Consumer Information"). Eagle agrees to use
such Consumer Information in accordance with both NYLIC and
Eagle's privacy policies. Eagle will establish administrative,
physical and technical safeguards to ensure the security and
confidentiality of all Consumer Information Eagle may collect,
use, disclose or maintain and to protect against unauthorized
access to or
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disclosure of Consumer Information. Eagle will follow policies
and procedures designed to ensure that Consumer Information will
be used in accordance with this Agreement.
b. Health Insurance Portability and Accountability Act. With respect
to services provided by Eagle to NYLIAC involving products
governed by the Health Insurance Portability and Accountability
Act privacy and security rules ("HIPAA"), Eagle will serve as a
"Business Associate" of NYLIAC as defined by 45 C.F.R. 160.103.
In such capacity, Eagle may have access to "Protected Health
Information" ("PHI") as defined in 45 C.F.R Section 160.103. PHI
includes information that is received from, or created and
received on behalf of, NYLIAC and is information about an
individual which relates to the past, present, or future physical
or mental health or condition of an individual; the provision of
health care to an individual; or the past, present, or future
payment for the provision of health care to an individual. PHI
also either identifies the individual or there is a reasonable
basis to believe the information can be used to identify the
individual. PHI pertains to both living and deceased individuals.
In its capacity as Business Associate, Eagle agrees to the following:
a. Eagle's use of PHI shall be limited to only those purposes that
are necessary to perform the services provided in this Agreement.
b. Eagle shall disclose PHI only to any subcontractors,
representatives, or agents that may be assisting Eagle in
carrying out its services.
c. Eagle may not use or disclose PHI in any manner that would
constitute a violation of 45 C.F.R. Parts 160 and 164 if so used
or disclosed by NYLIAC.
d. Eagle agrees to not use or further disclose PHI other than as
authorized by this Agreement or as required by law.
e. Eagle shall use appropriate safeguards to prevent uses or
disclosures of PHI other than as provided for by this Agreement.
f. If Eagle becomes aware of any use or disclosure of PHI not
provided for by this Agreement, it shall report such use or
disclosure to the appropriate parties within three business days
of gaining such knowledge.
g. Eagle shall require that its agents, representatives and
subcontractors, to whom it provides PHI under this Agreement, to
agree to the same restrictions and conditions that apply to Eagle
with respect to such information.
h. Within fifteen business days of a request, Eagle agrees to comply
with a request to accommodate an individual's access to his/her
PHI. In the event an individual contacts
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Eagle directly about access to PHI, Eagle shall notify the
appropriate parties of such request within three business days of
such contact.
i. Within fifteen business days of a request, Eagle agrees to comply
with a valid request to make amendments to PHI. Eagle shall
promptly incorporate any such amendments into the PHI. In the
event an individual contacts Eagle directly about making
amendments to PHI, Eagle shall notify the appropriate parties of
such request within three business days of such contact.
j. Eagle shall keep a record of disclosures of PHI and agree to make
information regarding disclosures of PHI available to NYLIAC
within fifteen days of a request by NYLIAC. Eagle shall provide,
at a minimum, the following information: (1) the date of
disclosure; (2) the name of the entity or person who received the
PHI, and the address of such entity or person, if known; (3) a
brief description of the PHI disclosed; (4) a brief statement
regarding the purpose and explanation of the basis of such
disclosure and (5) the names of all individuals whose PHI was
disclosed.
k. Eagle agrees to comply with any other restrictions on the use or
disclosure of PHI that NYLIAC may from time to time request.
l. Eagle shall make its internal practices, books and records
relating to uses and disclosures of PHI available to the
appropriate parties of NYLIAC, or to the Secretary of the U.S.
Department of Health and Human Services or its designee, for
purposes of determining NYLIAC and Business Associate compliance
with 45 C.F.R. Parts 160 and 164.
m. Upon the termination of Eagle's relationship, Eagle shall handle
NYLIAC's PHI in accordance with all applicable rules and
regulations.
14. NOTICE
All notices, statements or requests furnished under this Agreement shall be in
writing, and shall be deemed given, upon delivery to the person indicated below,
or if mailed, by certified or registered mail, addressed to such other party, as
designated below, such designated person or address may be changed from time to
time, by written notice as provided in this Section.
If to NYLIAC:
NYLIAC
00 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx Xxxxxxx
If to Eagle:
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Eagle Strategies LLC
00 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx Xxxxxx
CC: Office of General Counsel
15. ASSIGNMENT, DURATION AND TERMINATION
This Agreement may not be assigned by either NYLIAC or Eagle, except by mutual
written consent.
The initial term of this Agreement is one year from its effective date.
Thereafter, this Agreement shall continue for successive one year periods unless
terminated on not less than [90] days' written notice to the other party.
This Agreement may be terminated by either NYLIAC or Eagle, for any reason, at
any time, upon not less than 120 days' written notice to the other party. Either
party may terminate for cause immediately if continued performance under this
agreement would materially violate applicable state or federal laws, rules or
regulations.
16. MODIFICATION; WAIVER
This Agreement may be modified only by a written instrument executed by each of
the parties. Any of the terms and conditions of this Agreement may be waived in
writing at any time by the party entitled to their benefits.
17. ENTIRE AGREEMENT
This Agreement contains the entire agreement of the parties with respect to the
subject matter of this Agreement, and supersedes all other prior agreements,
understandings, statements, representations and warranties, oral or written,
express or implied, between the parties and their respective affiliates,
representatives and agents in respect of the subject matter of this Agreement.
18. RELATIONSHIP BETWEEN THE PARTIES
The parties agree that this is an arm's length transaction in which the parties'
undertakings and obligations are limited to the performance of their obligations
under this Agreement.
19. NO THIRD-PARTY BENEFICIARIES
Nothing in this Agreement will confer any rights upon any Person that is not a
party or a successor or permitted assignee of a party to this Agreement.
20. COUNTERPARTS
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This Agreement may be executed in one or more counterparts, all of which will
constitute one and the same instrument.
21. ACCESS.
NYLIAC and Eagle and their respective duly authorized representatives shall, at
all reasonable times, each be permitted access to all relevant books and records
of the other pertaining to charges allocated to or made pursuant to this
Agreement. The Commissioner of the Delaware Insurance Department and her
representatives shall at all reasonable times be permitted access to all books
and records of either party pertaining to services provided and charges
allocated or billed pursuant to this Agreement.
22. RECORDS.
Each party shall maintain separate accounts and records identifying the nature
and type of each service provided under this Agreement, together with supporting
statistical and other data and documentation, in order to permit identification
of those services provided hereunder, including without limitation for
regulatory and reporting purposes. All books, records, and files established and
maintained by each party to this Agreement by reason of this Agreement which, in
the absence of this Agreement, would have been established and maintained by the
other party shall be deemed the property of the other party and shall be subject
to examination, during normal business hours, by NYLIAC or Eagle, as the case
may be, or its authorized agents. Such books, records and files shall be
delivered to Eagle or NYLIAC, as the case may be, on demand.
23. AMENDMENTS.
This Agreement may not be amended, and none of its provisions may be modified,
except expressly by an instrument signed by the parties hereto. No failure or
delay of a party in exercising any power or right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such a right or
power, preclude any other or further exercise thereof or the exercise of any
other right or power. No waiver by a party of any provision of this Agreement or
consent to any departure therefrom shall be effective unless in writing and
signed by such party, and then such waiver or consent shall be effective only in
the specific instance and for the purpose expressly stated.
24. SEVERABILITY.
Any term or provision of this Agreement which is invalid or unenforceable in any
jurisdiction shall, as to that jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without rendering invalid or unenforceable
the remaining terms and provisions of this Agreement or affecting the validity
or enforceability of any of the terms or provisions of this Agreement in any
other jurisdiction. If any provision of this Agreement is so broad as to be
unenforceable, that provision shall be interpreted to be only as broad as is
enforceable.
25. HEADINGS
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The headings contained in the Agreement are inserted for convenience and are not
intended to be part of this Agreement.
IN WITNESS WHEREOF, NYLIAC and Eagle have caused this Agreement to be executed
as of the day and year first above written.
EAGLE STRATEGIES LLC
By:
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Name:
Title:
NEW YORK LIFE INSURANCE AND ANNUITY
CORPORATION
By:
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Name:
Title:
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