BROKER-DEALER SELLING AGREEMENT
AGREEMENT by and among The Lincoln National Life Insurance Company, a
life insurance company organized under the laws of Indiana, Lincoln Life &
Annuity Company of New York, a life insurance company organized under the
laws of New York (collectively "Company" or, as appropriate, the Issuing
Insurer), Lincoln Financial Distributors, Inc. (LFD) a registered
Broker-Dealer with the Securities and Exchange Commission ("SEC") under the
Securities Exchange Act of 1934 and a member of the Financial Industry
Regulatory Authority, or its successor, ("FINRA"); BROKER-DEALER
NAME("Broker-Dealer"), also a registered Broker-Dealer with the Securities
and Exchange Commission under the Securities Exchange Act of 1934 and a
member of the FINRA; and; INSURANCE AGENCY NAME("Agency"); and each
additional insurance agency signatory hereto (each of which shall also be
referred to herein as "Agency").
WITNESSETH:
WHEREAS, the Company proposes to have Broker-Dealer's registered
representatives ("Representatives") who are also licensed to sell insurance
in appropriate jurisdictions solicit and sell certain variable insurance
contracts (the "Insurance Securities") more particularly described in this
Agreement and which are deemed to be securities under the Securities Act of
1933, and to sell certain non-variable insurance contracts (the "Fixed
Policies") more particularly described in this Agreement (collectively the
"Policies"); and
WHEREAS, the Company has appointed LFD as the principal distributor of
the Insurance Securities and proposes to delegate, to the extent legally
permitted, training and supervisory duties of persons involved with the
solicitation and offer or sale of any of the Insurance Securities to
Broker-Dealer; and
WHEREAS, as full compensation, the Issuing Insurer will pay to
Broker-Dealer, or, if required by state law, to Agency, the compensation
provided for in Schedule A1 on premiums paid to the Company on Policies sold
by Broker-Dealer after this Agreement becomes effective;
NOW THEREFORE, in consideration of the premises and the mutual covenants
hereinafter contained, the parties hereto agree as follows:
1. APPOINTMENT OF BROKER-DEALER. The Company and LFD hereby appoint
Broker-Dealer and Agency to sell the Policies through its Representatives and
to provide certain administrative services to facilitate solicitations for
and sales of the Policies.
Broker-Dealer agrees that its authority is limited to the solicitation
and marketing of the Policies in accordance with this Agreement and
Broker-Dealer agrees that it will not make, alter, modify or discharge any
contract or extend any provision thereof, or extend the time for payment of
premiums or waive any premium, forfeiture or guarantee dividends or estimate
future interest, mortality or expense factors except through the use of
authorized illustrations and projections approved by the Company, or deliver
any contract unless the applicant is at the time of delivery in good health
and insurable condition, or incur any debts or liability against the Company,
or LFD, or receive any money for the Company except the initial modal premium
necessary to place in force or to reinstate a contract or a policy in the
form of a check payable to the Company, or misrepresent, or fail to disclose
accurately, the terms or nature of the Company's products, or pay any
premiums on policies or contracts other than the representative's own or the
representative's immediate family members, share any part of management
compensation with a representative recruited by or assigned to the
Broker-Dealer or violate any published Company policy on IOLI/SOLI life
settlement sales, or whether or not permitted by law, pay or allow any rebate
of premiums or commissions in any matter, directly or indirectly. Nothing in
this Agreement shall create or be construed to create an exclusive authority
to represent the Company or LFD to effect sales of Policies, either with
respect to a specific geographic territory, or otherwise.
2. THE POLICIES. The Policies issued by the Company to which this
Agreement applies are listed in Schedule B1. Schedule B1 may be amended at
any time by the Company. The Company in its sole discretion and without
notice to Broker-Dealer, may suspend sales of any Policies or may amend any
policies or contracts evidencing such Policies if, in the Company's opinion,
such suspension or
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amendment is: (1) necessary for compliance with federal, state, or local
laws, regulations, or administrative order(s); or, (2) necessary to prevent
administrative or financial hardship to the Company. In all other
situations, the Company shall provide 30 days notice to Broker-Dealer prior
to suspending sales of any Policies or amending any policies or contracts
evidencing such Policies. Neither Broker-Dealer nor its Representatives
shall be authorized to sell or market any Policy unless a Schedule for such
Policy has been made a part of this Agreement. With respect to Insurance
Securities comprising variable annuity contracts, no Schedule for such
Products will be effective unless executed by an authorized officer of the
Company and authorized representative of Broker-Dealer.
3. SECURITIES LICENSING. Broker-Dealer shall, at all times when
performing its functions under this agreement, be registered as a securities
broker with the SEC and be a member of the FINRA and licensed or registered
as a securities broker-dealer in the states and other local jurisdictions
that require such licensing or registration in connection with variable
insurance contract sales activities or the supervision of Representatives who
perform such activities in the respective location. Broker-Dealer hereby
represents and warrants to LFD and Company that it is not currently under
investigation, formal or informal, by any securities or insurance regulatory
authority.
4. INSURANCE LICENSING. Broker-Dealer shall, at all times when
performing its functions under this agreement, be validly licensed as an
insurance agency in the states and other local jurisdictions that require
such licensing or registration in connection with Broker-Dealer's variable or
fixed insurance contract sales activities; or, in those states in which
Broker-Dealer cannot or does not obtain a corporate agent's license, shall
maintain a contractual relationship with an agency, which shall be validly
licensed as an insurance agency in such jurisdiction or jurisdictions.
Broker-Dealer represents that it is in full compliance with all applicable
federal and state statutes, laws, regulations and SEC No-Action letters and
any rules and regulations of the FINRA, pertaining to the appropriate
relationship between a Broker-Dealer and an insurance agency which are
separate and distinct entities, not able to sell variable insurance products
without entering into a contractual relationship as described herein.
Broker-Dealer shall provide the Company with a list of all licensed insurance
agencies relied upon by Broker-Dealer to comply with this paragraph (each,
herein, "Agency") and covenants to maintain the completeness and accuracy of
such list, and shall cause each such agency to become appointed and
contracted with Company.
5. REPRESENTATIVES' INSURANCE COMPLIANCE. Prior to allowing any
Representative to solicit for sales or sell the Policies, Broker-Dealer shall
require such Representative to be validly insurance licensed, registered and
appointed by Company as a variable life agent in accordance with the
applicable jurisdictional requirements for the solicitation and sale of the
Policies.
6. APPOINTMENTS. Broker-Dealer shall assist the Company in the
appointment of Representatives under the applicable insurance laws to sell
the Policies. Broker-Dealer shall fulfill all requirements set forth in the
General Letter of Recommendation, attached as Schedule C1 with respect to the
Company, in conjunction with the submission of licensing/appointment papers
for all applicants as insurance agents of the Company. All such
licensing/appointment papers should be submitted by Broker-Dealer to the
Company or its duly appointed agent. Notwithstanding such submission, the
Company shall have sole discretion to appoint, refuse to appoint,
discontinue, or terminate the appointment of any Representative as an
insurance agent of the Company. Upon termination of the appointment,
Broker-Dealer shall promptly advise Representative of such termination of
authorization to sell the Policies and shall otherwise take all additional
action necessary to terminate the sales activities of such Representative
contemplated under this Agreement.
a. Broker-Dealer shall promptly notify the Company should the
Broker-Dealer terminate any of its appointed Representatives for performance,
non-performance or breach of this Agreement, including, but not limited to,
any unauthorized use of sales materials, any misrepresentations or any sales
practices concerning the Policies or who are found to be in violation of any
federal or state securities or insurance laws involving fraud, deceit, or
knowing misrepresentations.
Failure to comply will be considered a violation of the terms of this
Agreement and will be subject to the terms of Article 33 of the Agreement.
7. SECURING APPLICATIONS AND SUITABILITY. All applications for the
Company Policies shall be made on applications forms supplied by the Company
and all payments collected by Broker-Dealer or any
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Representative of Broker-Dealer shall be remitted promptly in full, together
with such application forms and any other required documentation, directly to
the Company at the address indicated on such application or to such other
address as the Company may, from time-to-time, designate in writing.
Broker-Dealer shall review all such applications for completeness and
suitability, consistent with Company policies and procedures. Checks in
payment on any such Policy shall be drawn to the order of "The Lincoln
National Life Insurance Company" or "Lincoln Life & Annuity Company of New
York", whichever is applicable. No payments for Policies may be made in
currency or securities. All applications are subject to acceptance or
rejection by the Company at its sole discretion. Broker-Dealer shall notify
the Issuing Insurer when the sale of any Policy constitutes the replacement
of an existing insurance contract.
Broker-Dealer shall, through an FINRA Principal, evaluate and approve
each application as being suitable for the policyowner according to the
standards of suitability for variable products set forth in the Lincoln
Market Conduct Manual for Fixed and Variable Life Insurance and Annuities
Market Conduct Manual and FINRA Rules 2310 and 2330. Broker Dealer will also
require that every recommendation to surrender a variable life insurance
policy or annuity contract will be suitable based upon the above referenced
standards. Broker Dealer may determine suitability according to standards
more stringent than those set forth in the Market Conduct Manual or FINRA
Rules 2310 and 2330. Broker Dealer will maintain written suitability
standards and guidelines. Broker Dealer will implement data collection
procedures that are designed to obtain in documentary form relevant
information concerning each policyowner's insurance needs and financial
objectives. Company may periodically request certification of compliance
with this provision from Broker Dealer. Broker Dealer will ensure that
Representatives are trained on suitability standards set forth in the Market
Conduct Manual and FINRA Rules 2310 and 2330. Broker Dealer shall maintain
records of attendance by Representatives at said training. Broker Dealer
shall maintain documentation to support the suitability of each transaction
as required by the FINRA, SEC and various state Insurance and Securities
Departments. All records shall be maintained in a format and for periods of
time as required by the FINRA, SEC and the various state Insurance and
Securities Departments. Upon request, Broker Dealer shall provide to Company
and/or LFD access to books and records that document and support the
suitability of all recommendations made to purchase or surrender a fixed or
variable product.
8. MONEY RECEIVED BY BROKER-DEALER. All money payable in connection
with any of the Policies, whether as premium or otherwise, and whether paid
by or on behalf of any policyholder, contract owner or anyone else having an
interest in the Policies, is the property of the Company and shall be deemed
received and held by Broker-Dealer as a fiduciary to the Company and shall,
together with applications, forms and other required documents, be
transmitted immediately in accordance with the administrative procedures of
the Company without any deduction or offset for any reason, including, by way
of example but not limitation, any deduction or offset for compensation
claimed by Broker-Dealer.
9. SUPERVISION OF REPRESENTATIVES.
a. To the extent the Company and its representatives assist
Broker-Dealer and its representatives in the preparation of the sale of the
Policies, the Company shall have full responsibility for the training and
supervision of its representatives, and such representatives will be
qualified under applicable federal and state law. The Company's
representatives may receive compensation for such sales activity in addition
to the compensation paid by the Company to Broker-Dealer or Agency as
provided in Schedule A1.
b. Broker-Dealer shall have full responsibility for the training and
supervision of all Representatives associated with Broker-Dealer who are
engaged directly or indirectly in the offer or sale of the Insurance
Securities, and all such persons shall be subject to the control of and
supervision of Broker-Dealer with respect to such persons' securities
regulated activities, and to the control of Broker-Dealer or its appropriate
licensed insurance agency subsidiary with respect to such person's insurance
regulated activities, in connection with the solicitation and sale of and
other communication with respect to the Policies. Broker-Dealer, prior to
allowing its Representatives to solicit for sales or sell the Policies, shall
require such Representatives to be validly insurance licensed, registered and
appointed by the Company as fixed and/or variable contract agents in
accordance with the jurisdictional requirements of the place where the
solicitations and sales take place as well as the solicited person's or
entity's place of residence; will cause such Representatives to qualify under
applicable federal and state laws to engage in the sale of the Insurance
Securities; will cause such Representatives to be registered representatives
of Broker-
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Dealer before such Representatives engage in the solicitation of applications
for the Insurance Securities; and will cause such Representatives to limit
solicitation of applications for the Policies to jurisdictions where the
Company has authorized such solicitation. Broker-Dealer shall cause such
Representatives' qualifications to be certified to the satisfaction of LFD;
and shall notify LFD if any Representative ceases to be a registered
representative of Broker-Dealer or ceases to maintain the proper licensing
required for the sale of any of the Policies.
c. Each party shall be liable for its own negligence and misconduct
hereunder.
10. COMPLIANCE WITH FINRA RULES AND FEDERAL AND STATE SECURITIES LAWS.
Broker-Dealer and LFD each shall fully comply with the requirements of the
FINRA and of the Securities Exchange Act of 1934 and all other applicable
federal or state laws and will establish such rules and procedures as may be
necessary to cause diligent supervision of the securities activities of the
Broker-Dealer's Representatives and the Company's representatives,
respectively. Upon request, Broker-Dealer shall furnish such appropriate
records as may be necessary to establish proper licensing and diligent
training and supervision of Representatives.
11. NOTICE OF REPRESENTATIVE'S NONCOMPLIANCE. In the event a
Representative fails or refuses to submit to supervision of Broker-Dealer or
otherwise fails to meet the rules and standards imposed by Broker-Dealer on
its Representatives, Broker-Dealer shall advise LFD of this fact and shall
immediately notify such Representative that he or she is no longer authorized
to sell the Policies, and Broker-Dealer shall take whatever additional action
may be necessary to terminate the sales activities of such Representative
relating to the Policies.
12. INVESTIGATIONS: CUSTOMER COMPLAINTS. Broker-Dealer agrees to
cooperate fully in any insurance, securities or other regulatory or judicial
investigation or proceeding arising in connection with the Policies, Company,
LFD, Broker-Dealer and/or any of the Representatives. Broker-Dealer shall
permit applicable federal and state insurance and other regulatory
authorities to audit their records and shall furnish the foregoing
authorities with any information such authorities may request in order to
ascertain whether Broker-Dealer is complying with all applicable laws and/or
regulations. Broker-Dealer agrees to cooperate with Company and LFD in
resolving all customer complaints with respect to the Policies, Broker-Dealer
and/or the Representatives.
13. PROSPECTUSES, SALES PROMOTION MATERIAL AND ADVERTISING.
a. Broker-Dealer shall be provided with prospectuses relating to the
Insurance Securities and such other material as LFD determines to be
necessary or desirable for use in connection with sales of such Policies. No
sales promotion materials or any advertising relating to the Insurance
Securities shall be used by Broker-Dealer unless the specific item has been
approved in writing by LFD, which consent shall not be unreasonably withheld
or delayed. Broker-Dealer shall require its Representative to deliver a
then-current prospectus prior to the solicitation or sale of the Policies.
b. Broker-Dealer shall be provided with advertising and sales material
relating to the fixed Policies and such other material as the Company
determines to be necessary or desirable for use in connection with sales of
such Policies. No sales promotion materials or any advertising relating to
the Fixed Policies shall be used by Broker-Dealer or Agency unless the
specific item has been approved in writing by the Company, which consent
shall not be unreasonably withheld or delayed. While the Company stationery
may be made available to the Broker-Dealer and/or Agency, it is to be used
only when promoting the Company's products exclusively.
c. In addition, neither Broker-Dealer nor Agency shall print, publish or
distribute any advertisement, circular or any document relating to the
Company unless such advertisement, circular or document shall have been
approved in writing by the Company; provided, however, that nothing herein
shall prohibit Broker-Dealer from advertising fixed or variable insurance in
general or on a generic basis.
14. COMPANY PROPERTY. Broker-Dealer and Agency agree that all
policyholder files, lists of policy owners or insured persons, records and
premium accounts are the property of the Company, and may be audited or
inspected as the Company may require. All computer software containing the
rates and values of products issued by the Company whether or not distributed
through LFD, all rate books,
Page 4 of 14
computer printouts, policies, brochures, prospectuses, sales promotion
materials, whether in hard copy or computer format, containing the name/logo
of the Company, LFD, or any affiliated company, are furnished to
Broker-Dealer and Agency in confidence, and Broker-Dealer and Agency agree to
refrain from reproducing, publishing, or disclosing such material other than
in the ordinary course of business. Broker-Dealer and Agency further agrees
that all such property shall be returned to the Company upon demand or upon
termination of this Agreement if so required by the Company. Upon
termination of this Agreement for any reason, the Broker-Dealer and Agency
further agree not to use any such material for their commercial purposes or
for that of any other entity.
15. MARKETING SUPPORT. LFD will provide to Broker-Dealer appropriate
marketing support for variable products covered by this Agreement. The
support may be provided by LFD home office personnel, or by third-party
wholesaling firms or individuals. LFD will provide Broker-Dealer with
advance notice of its intentions to utilize any marketing support.
Broker-Dealer must provide LFD with written notification of any objection it
may have to LFD's use of such non-affiliated marketing support.
16. RIGHT OF REJECTION. The Company, in its sole discretion, may reject
any applications or payments remitted by Representatives through
Broker-Dealer and may refund an applicant's payments. If Company should
reject any application for a Policy, Company will immediately return any
funds directly to the prospective purchaser, and Broker-Dealer will be
notified of such refused application. In the event such refunds are made and
if Broker-Dealer or Agency has received compensation based on an applicant's
payment that is refunded, Broker-Dealer shall promptly repay such
compensation to the Company. If repayment is not promptly made, the Company
may at its sole option deduct any amounts due it from Broker-Dealer or Agency
from future commissions otherwise payable to Broker-Dealer or Agency pursuant
to this agreement. This provision shall survive termination of this
Agreement.
17. COMPENSATION.
a. COMMISSIONS, FEES AND ALLOWANCES. Sales compensation payable to
Broker-Dealer in connection with the Policies shall be paid by the Company to
the Agency, (or, only if Broker-Dealer is also a corporate insurance agency
permitted to receive such compensation, to Broker-Dealer in its capacity as
an Agency) and Broker-Dealer hereby appoints Agency to receive on its behalf
any and all compensation that may be due and payable to Broker-Dealer in
accordance with the provisions set forth in Schedule A1. The Company will
provide Broker-Dealer or Agency with a copy of its current Schedule of Sales
Compensation for the Policies. These fees and commissions will be paid as a
percentage of premiums received and accepted by the Company on applications
obtained by the various Representatives of Broker-Dealer. Compensation upon
termination of this Agreement shall be subject to the terms of Section 33.
Broker-Dealer and/or Agency shall be liable for any chargebacks or for any
other amounts advanced by or otherwise due to the Company hereunder.
b. CHANGES TO COMPENSATION SCHEDULE. The Company may, upon at least ten
(10) days prior written notice, change its Schedule of Sales Compensation.
Any such change shall apply to compensation due on applications received by
the Company after the effective date of such notice. Submission of business
after the modification of the Schedule of Sales Compensation will constitute
the acceptance of Broker-Dealer and/or Agency of such modification.
c. RESTRICTIONS.
i. If Broker-Dealer, Agency or any Representative shall rebate or
offer to rebate all or any part of a premium on a policy issued by the
Company in violation of applicable state insurance laws or regulations, or if
Broker-Dealer, Agency or any Representative shall withhold any premium on any
Policy issued by the Company, or if Broker-Dealer, Agency or any
Representative rebates or offers to rebate all or any part of a commission
paid or payable upon the sale of a Policy in violation of applicable state
insurance laws or regulations, the Company may, at its option, terminate this
Agreement.
ii. If Broker-Dealer, Agency or any Representative shall at any time
induce or endeavor to induce any owner of a Policy to relinquish the Policy
except under circumstances where there is reasonable grounds for believing
the Policy or interest therein is not suitable for such person, any and all
compensation due hereunder shall cease and terminate except for that already
earned.
Page 5 of 14
iii. Nothing in this Agreement shall be construed as giving
Broker-Dealer or Agency the right to incur any indebtedness on behalf of the
Company. Broker-Dealer and Agency each hereby authorizes the Company to set
off their respective liabilities to the Company against any and all amounts
otherwise payable to them by the Company, whether payable hereunder or with
respect to policies which are both administered and co-insured by Company.
d. INDEBTEDNESS.
i. The Company is authorized, at any time either before or after the
termination of the Agreement, to deduct compensation due from Company to
Broker-Dealer or Agency the entire amount of any funds, including, but not
limited to, advances or debts, owed by Broker-Dealer to Company or its
affiliates, associates, parents or subsidiaries, but only to the extent of
the actual amount owed by Broker-Dealer or Agency as determined by Company.
ii. Any compensation, regardless of how characterized, paid to
Broker-Dealer or Agency for premiums or considerations, including rollover
amounts, later returned or credited to the customer, or any overpayment of
such compensation shall be a debt due to Company from Broker-Dealer or Agency
and payable in accordance with (a) above.
iii. In addition to all other rights available to Company as a
creditor, Company shall have a first lien on all compensation payable under
the Agreement for any of the funds, advances or debts described herein.
iv. To the extent that any compensation due Broker-Dealer or Agency
from Company is insufficient to cover advances or other debt, the difference
shall become a debt due and payable immediately to Company unless other
arrangements have been made with Company. At the sole discretion of Company,
interest, at a lawful rate to be determined by Company, shall thereupon begin
to accrue.
v. In the event Company initiates collection efforts or legal action
to collect any indebtedness of Broker-Dealer or Agency or their agents,
Broker-Dealer or Agency shall reimburse Company for reasonable attorney fees
and expenses in connection therewith. As used in this Section, "Company"
shall be deemed to refer to, and shall include, all affiliates of The Lincoln
National Life Insurance Company.
e. COMPENSATION DISCLOSURES. Broker-Dealer will require its
Representatives to comply with all federal and state, securities and
insurance laws, rules and regulations governing the disclosure of
compensation with respect to Insurance Securities and insurance products. At
a minimum, Broker-Dealer will require, of itself and its Representatives,
that the following be disclosed: (i) that the Broker-Dealer and
Representative receives commissions based on a percentage of the premiums
paid by the customer or a fee based on the amount of the assets managed under
the investment products sold by them and (ii) if the Broker-Dealer or its
Representative receives any contingent compensation, that they may be paid
additional compensation based on such factors as the total volume of their
product sales, the length of time that customers continue to pay premiums or
keep assets invested in the products sold by them and/or the profitability of
those products.
18. BOOKS AND RECORDS. Broker-Dealer shall maintain the books, accounts
and records of the Representatives as required by applicable laws and
regulations. The books, accounts and records of Broker-Dealer relating to
Policy sales shall be maintained so as to clearly and accurately disclose the
nature and details of all transactions. Broker-Dealer shall, for itself and
through supervision of Representatives, take appropriate action to keep
confidential all information obtained pursuant to this Agreement (including,
without limitation, names of purchaser of Policies) and shall disclose such
information only if Company has authorized such disclosure in writing or if
such disclosure is expressly required by applicable federal or state
authorities. The Company shall have access to all books, accounts and
records of Broker-Dealer pertaining to the Policies.
19. POLICY DELIVERY. The Company may, upon written request of
Broker-Dealer, transmit Policies to Broker-Dealer or Agency for delivery to
Policyowners. Broker-Dealer hereby agrees to deliver all such Policies to
policyowners promptly upon its receipt thereof from the Company.
Broker-Dealer and
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Agency agree that the indemnification provisions of this Agreement include
any and all costs, expenses, loss, damages and attorneys' fees resulting from
Broker-Dealer's or Agency's failure to perform or inability to prove
performance of the undertakings described in this paragraph, and authorizes
the Company to set off any amount it owes the Company under this paragraph
against any and all amounts otherwise payable to or on behalf of
Broker-Dealer or Agency by the Company pursuant to this agreement. The
Company reserves the right to revoke or withdraw this privilege, in whole or
in part, at any time, and without prior notice.
20. INDEMNIFICATION.
a. The Company and LFD will indemnify and hold harmless Broker-Dealer
and each of its affiliates, officers or directors against any losses,
expenses (including reasonable attorneys' fees), claims, loss or damages or
liabilities to which Broker-Dealer or such affiliates, officers or directors
becomes subject insofar as such losses, claims, damages or liabilities arise
out of or are based upon the Company's performance, non-performance or breach
of this Agreement, or are based upon any untrue statement contained in any
Registration Statement (or post-effective amendment thereof) or in the
Prospectus or any amendment or supplements thereto.
b. Broker-Dealer will indemnify and hold harmless the Company, and LFD
and each of their current and former affiliates, directors and officers and
each person, if any, who controls or has controlled the Company and LFD
within the meaning of the Securities Act or the Exchange Act, against any
losses, expenses (including reasonable attorneys' fees), claims (including,
but not limited to, claims for commissions or other compensation), damages or
liabilities to which the Company and LFD and any such affiliates, director,
officer or controlling person may become subject insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of
or are based upon Broker-Dealer and/or its Representatives' performance,
non-performance or breach of this Agreement, including, but not limited to,
any unauthorized use of sales materials, any misrepresentations or any sales
practices concerning the Policies.
21. ARBITRATION. If any dispute, disagreement or controversy shall
arise in connection with any interpretation of this Agreement, its
performance or nonperformance, or the figures and calculations used, the
parties shall make every effort to meet and informally settle their
dispute(s). If the parties to this Agreement cannot agree on a written
statement to the dispute within thirty (30) days after it arises, or within a
longer period agreed upon by the parties, then the matter in controversy
shall be settled by arbitration, in accordance with the rules of the Board of
Arbitration of the National Association of Securities Dealers, Inc. The
determination of the arbitrator(s), or a majority of them, shall be final and
binding on all parties and judgment upon the award rendered by the
arbitrator(s) may be entered in any state or federal court having
jurisdiction. Any arbitration arising between the parties with respect to
this Agreement shall be conducted in Greensboro, NC, Concord, NH, Ft. Xxxxx,
IN, Hartford, CT or Philadelphia, PA.
22. WAIVER. Failure of any party to insist upon strict compliance with
any of the conditions of this Agreement shall not be construed as a waiver of
any of the conditions, but the same shall remain in full force and effect.
No waiver of any of the provisions of this Agreement shall be deemed, or
shall constitute a waiver of any other provisions, whether or not similar,
nor shall any waiver constitute a continuing waiver.
23. INDEPENDENT CONTRACTORS.
a. The Broker Dealer and LFD are independent contractors with respect to
Broker-Dealer, its Representatives and Agency. Nothing contained in this
Agreement shall create, or shall be construed to create, the relationship of
employer and employee between the Company or LFD and Broker-Dealer, its
Representatives or Agency.
b. Broker-Dealer shall, in its sole discretion, select the persons from
whom it will solicit applications for Policies, as well as the time, manner
and place of solicitation.
24. LIMITATIONS. No party other than the Company shall have the
authority to make, alter, or discharge any policy, contract, or certificate
issued by the Company, to waive any forfeiture or to grant, permit, or extend
the time for making any payments, or to guarantee earnings or rates, or to
alter the
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forms which the Company may prescribe or substitute other forms in place of
those prescribed by the Company, or to enter into any proceeding in a court
of law or before a regulatory agency in the name of or on behalf of the
Company.
25. FIDELITY BOND.
a. Broker-Dealer represents that all of its directors, officers,
employees and Representatives who are appointed pursuant to this Agreement as
the Company agents for state insurance law purposes or who have access to
funds of the Company, including but not limited to funds submitted with
applications for the Policies or funds being returned to owners, shall at all
times be covered by a blanket fidelity bond, including coverage for larceny
and embezzlement, issued by a reputable bonding company. This bond shall be
maintained by Broker-Dealer at Broker-Dealer's expense. Such bond shall be,
at least, of the form, type and amount required under the FINRA Conduct
Rules. Broker-Dealer and Agency shall maintain Errors and Omissions
insurance coverage in an amount satisfactory to the Company and LFD. The
Company may require evidence, satisfactory to it, that such coverage is in
force and Broker-Dealer and Agency shall give prompt written notice to the
Company of any notice of cancellation or change of coverage.
b. Broker-Dealer shall assign any proceeds received from the fidelity
bonding company, Errors and Omissions insurance or other liability coverage
to the Company to the extent of any loss to the Company due to activities
covered by the bond for which the Company and/or LFD are not responsible. If
there is any deficiency amount, whether due to a deductible or otherwise,
Broker-Dealer shall promptly pay the Company such amount on demand and
Broker-Dealer hereby indemnifies and holds harmless the Company from any such
deficiency and from the costs of collection thereof (including reasonable
attorneys' fees).
c. Broker-Dealer and Agency hereby represent and warrant that no
Broker-Dealer or Agency representative or employee assigned to provide
services or work hereunder have been convicted of any felony under any state
or federal law and Broker-Dealer and Agency agree to defend and indemnify
Company and LFD with respect to any action brought against Company and LFD to
the extent that such action is based upon a claim that the engagement by
Company and LFD of such representative or employee violated any state or
federal proscription against such engagement, including but not limited to
The Violent Crime Control and Law Enforcement Act of 1994.
26. ENTIRE AGREEMENT. This Agreement is the entire agreement and
understanding between parties hereto with respect to the subject matter
hereof and supersedes all prior agreements and understandings among such
parties. No course of dealing, course of performance or parol evidence shall
be used to supplement or modify any terms hereof; provided, however, any
obligation of Broker-Dealer to Company or any of its affiliates pursuant to a
prior agreement shall continue as an obligation thereunder.
27. BINDING EFFECT AND ASSIGNMENT. This Agreement shall be binding on
and shall inure to the benefit of the parties to it and their respective
successors and assigns; provided however, that neither Broker-Dealer nor
Agency may assign this Agreement or any rights or obligations hereunder
without the prior written consent of the Company.
28. SEVERABILITY. Any provision of this Agreement which is found to be
invalid, void or illegal shall in no way affect or invalidate any other
provision hereof and such other provisions shall remain in full force and
effect.
29. REGULATIONS. The parties agree to observe and comply with all
applicable local, state, and federal laws and rules or regulations, and to
fully co-operate with any regulatory authority having jurisdiction with
respect thereto.
Page 8 of 14
30. NOTICES. All notices or communications shall be sent in writing and
to the addresses shown below or to such other address as the party may
request by giving written notice to the other parties. Notices shall be
effective immediately upon date of postmark in the mail, if received, or upon
receipt if delivered by any other means, unless otherwise specifically
provided.
The Lincoln National Life Insurance Company or Lincoln Life & Annuity
Company of New York
c/o Lincoln Financial Distributors
000 Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000-0000
BROKER-DEALER NAME
ADDRESS
ADDRESS
(Insurance Agency)
---------------------------------------------
---------------------------------------------
---------------------------------------------
31. GOVERNING LAW. This Agreement shall be construed in accordance with
and governed by the laws of the state of domicile of the Issuing Insurer.
32. AMENDMENT OF AGREEMENT. The Company and LFD reserve the right to
amend this Agreement at any time, and the submission of an application to
purchase a policy by Broker-Dealer after notice of any such amendment shall
constitute agreement to any such amendment.
33. TERMINATION.
a. This Agreement may be terminated by any party, without cause, upon
thirty (30) days written notice to the other parties.
b. This Agreement may be terminated immediately by Company or LFD for
cause. For purposes of this section, "cause" shall mean failure to return
money to clients where appropriate, failure to account for any money received
from or on behalf of Company or LFD, any fraud, misrepresentation or
dishonesty in any relationship with Company or LFD, their affiliates, or any
past, present or proposed client, violation of any federal or state law or
regulation or violation of any of the terms of this Agreement. It may be
terminated by any party immediately for failure to perform satisfactorily and
shall be terminated if Broker-Dealer shall cease to be registered
broker-dealers under the Exchange Act or members in good standing with the
FINRA.
c. This Agreement will automatically terminate:
i. Upon the death or total and permanent physical or mental
disability of Broker-Dealer, if an individual.
ii. Upon dissolution of Broker-Dealer, if a corporation or a
partnership, including LLC and LLP.
iii. At the end of any calendar year during which Broker-Dealer has
not maintained the minimum life premium and persistency requirements, if any,
as set forth in Schedule A1.
d. Termination of this Agreement will result in the termination of all
agreements with Representatives of Broker-Dealer.
e. Payment of broker compensation at a level that is higher than the
level of broker compensation set forth in Schedule A1 will, at the option of
the Company, result in the termination of this Agreement.
Page 9 of 14
f. In the event of such termination, commissions, fees and allowances
for the first contract year and for renewal years, with respect to
applications submitted by Broker-Dealer and its Representatives prior to the
date of termination, shall be payable, based upon the compensation schedule
set forth in Schedule A1 in effect at the time of termination. Provided,
however, if such termination is due to a misappropriation of funds, fraud or
for any reason based on action prohibited by the criminal laws of the
jurisdiction in which the act is committed, no further compensation shall be
paid.
34. CONFIDENTIAL INFORMATION AND PROTECTION OF NON-PUBLIC PERSONAL
INFORMATION. Each party agrees to maintain the other party's Confidential
Information (defined below) in strict confidence and in a manner to safeguard
against unauthorized access, disclosure, use, destruction, loss or alteration
in accordance with the Xxxxx-Xxxxx-Xxxxxx Act, Regulation S-P, the relevant
state and federal regulations pursuant thereto and state privacy laws (all
the foregoing referred to as "Privacy Law.")
a. "Confidential Information" shall mean (1) any data or information
that is proprietary to disclosing party and not generally known to the
public, whether in tangible or intangible form, including, but not limited
to, the following information relating to a party's marketing strategies,
business systems, databases, and (2) any customer or consumer specific data
deemed to be "nonpublic personal information" under the Privacy Law.
b. Specifically, with regard to nonpublic personal information, the
parties agree that they are prohibited from using consumer or customer
non-public personal information other than (1) to execute the terms and
conditions of this Agreement as permitted by Privacy Law or (2) as required
by state or federal law, regulation or rule. The parties agree not to
disclose consumer or customer non-public personal information to any third
parties without prior written permission of the disclosing party. Each party
shall promptly report to the other party any unauthorized disclosure or use
of any Confidential Information of which it becomes aware.
c. Upon request, each party shall return to the other party or destroy
(and provide an appropriate written destruction certificate) all Confidential
Information in its possession or control. No disclosure by a party hereto of
Confidential Information of such party to the other party shall constitute a
grant to the other of any interest or right whatsoever in such Confidential
Information, which shall remain the sole property of the disclosing party.
d. Each party hereto shall have the right to make reasonable requests to
inspect, during normal business hours, the other party's facilities, data and
records, associated audit reports, summaries of test results or equivalent
measures taken by a party to ensure compliance with the Privacy Law for the
purposes of verifying that the confidentiality provisions of this Agreement
are being complied with. The terms of this section will survive the
termination of this Agreement.
35. ANTI-MONEY LAUNDERING. The parties hereby agree to abide by and
comply with the provisions of the International Money Laundering Abatement
and Financial Anti-Terrorism Act of 2001 (USA Patriot Act). The parties
further agree to take all actions necessary to comply with any new or
additional regulations promulgated under said Act.
36. THE VIOLENT CRIME CONTROL AND LAW ENFORCEMENT ACT. Wholesaler,
Broker-Dealer and Agency represent and warrant to Company that no agent,
employee or representative of the Wholesaler, Broker-Dealer or Agency
providing services according to the terms of this Agreement have been
convicted of any felony involving dishonesty or breach of trust under any
state or federal law. Wholesaler, Broker-Dealer and Agency agree to defend
and indemnify Company with respect to any action brought against Company to
the extent that such action is based upon a claim that the engagement by
Company of such agent, employee or representative of the Wholesaler,
Broker-Dealer or Agency violated any state or federal proscription against
such engagement, including but not limited to the Violent Crime Control and
Law Enforcement Act of 1994, as may be amended.
37. COMPLIANCE CERTIFICATION(S). The Company may require periodic
certifications by Broker-Dealer with respect to its compliance of its
Representatives with all of the particular compliance requirements set forth
in this Agreement (i.e., Anti-Money Laundering, Compensation Disclosures,
Suitability) as well as the compliance with the Company's and LFD's rules and
policies. Failure to timely
Page 10 of 14
respond to such requests for certification may, in Company's and LFD's sole
discretion, result in compensation being withheld until such certification is
provided or termination of this Agreement.
38. EFFECTIVE DATE. This Agreement shall be effective on .
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
By:
-------------------------------------
Print Name: Xxxxxxx X. Xxxxxxx
-----------------------------
Title: Assistant Vice President
----------------------------------
Date:
-----------------------------------
LINCOLN LIFE & ANNUITY COMPANY OF NEW YORK
By:
-------------------------------------
Print Name: Xxxxxxx X. Xxxxxxx
-----------------------------
Title: Assistant Vice President
----------------------------------
Date:
-----------------------------------
LINCOLN FINANCIAL DISTRIBUTORS, INC.
By:
-------------------------------------
Print Name: Xxxxxxx X. Xxxxxxx
-----------------------------
Title: Assistant Vice President
----------------------------------
Date:
-----------------------------------
BROKER-DEALER NAME
TIN:
By:
-------------------------------------
Print Name:
-----------------------------
Title:
----------------------------------
Date:
-----------------------------------
INSURANCE AGENCY NAME
TIN:
By:
-------------------------------------
Print Name:
-----------------------------
Title:
----------------------------------
Date:
-----------------------------------
Page 11 of 14
SUBSIDIARY SIGNATURES
SUBSIDIARY NAME:
-----------------------------------
Business Address:
-----------------------------------
-----------------------------------
-----------------------------------
Signature:
-----------------------------------
Name:
-----------------------------------
Tax ID #:
-----------------------------------
SUBSIDIARY NAME:
-----------------------------------
Business Address:
-----------------------------------
-----------------------------------
-----------------------------------
Signature:
-----------------------------------
Name:
-----------------------------------
Tax ID #:
-----------------------------------
SUBSIDIARY NAME:
-----------------------------------
Business Address:
-----------------------------------
-----------------------------------
-----------------------------------
Signature:
-----------------------------------
Name:
-----------------------------------
Tax ID #:
-----------------------------------
SUBSIDIARY NAME:
-----------------------------------
Business Address:
-----------------------------------
-----------------------------------
-----------------------------------
Signature:
-----------------------------------
Name:
-----------------------------------
Tax ID #:
-----------------------------------
Page 12 of 14
ADDENDUM
This addendum ("Addendum") adds to the Selling Agreement between The Lincoln
National Life Insurance Company and/or Lincoln Life Annuity Company of New
York, and Lincoln Financial Distributors, Inc. ("LFD"), a member FINRA
("Lincoln") and BROKER-DEALER NAME ("Broker/Dealer") dated ("Agreement").
Except for a conflict between the terms of the Agreement and this Addendum,
the terms of the Agreement shall apply to this Addendum. In the event of a
conflict between the terms of this Addendum and the terms of the Agreement,
this Addendum shall control.
WHEREAS Broker/Dealer and Lincoln are registered broker-dealers and subject
to the requirements of the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001,
31 U.S.C. 5311 et seq. (the "Act"); and
WHEREAS Broker/Dealer and Lincoln are required to comply with the Customer
Identification Program ("CIP") provisions of the Act; and
WHEREAS Broker/Dealer sells Lincoln's life insurance and annuity products and
has access to the information necessary to provide CIP services on behalf of
Lincoln;
THEREFORE, in consideration of the mutual obligations contained herein, the
parties agree as follows:
1. Broker/Dealer certifies that it has implemented an anti-money
laundering program that complies with the requirements of the Act.
2. Broker/Dealer certifies that it has implemented a CIP that complies
with all requirements of the Act.
3. Lincoln certifies that it has implemented an anti-money laundering
program that complies with the requirements of the Act.
4. For the term of this Addendum, Broker/Dealer agrees to provide required
CIP services for any Lincoln annuity or variable life insurance contracts
that are sold by Broker/Dealer's agents, brokers or contractors.
FURTHERMORE, Broker/Dealer shall certify it meets the requirements of the Act
to Lincoln upon request.
AGREED TO AND ACCEPTED:
THE LINCOLN NATIONAL LIFE INSURANCE LINCOLN LIFE & ANNUITY COMPANY
COMPANY OF NEW YORK
By: By:
----------------------------------- ------------------------------------
Printed Name: Xxxxxxx X. Xxxxxxx Printed Name: Xxxxxxx X. Xxxxxxx
------------------------- --------------------------
Title: Assistant Vice President Title: Assistant Vice President
-------------------------------- ---------------------------------
Date: Date:
--------------------------------- ----------------------------------
LINCOLN FINANCIAL DISTRIBUTORS, INC. BROKER-DEALER NAME
TIN:
By: By:
----------------------------------- ------------------------------------
Printed Name: Xxxxxxx X. Xxxxxxx Printed Name:
------------------------- --------------------------
Title: Assistant Vice President Title:
-------------------------------- ---------------------------------
Date: Date:
--------------------------------- ----------------------------------
Page 13 of 14
SCHEDULE C1
General Letter of Recommendation
BROKER-DEALER hereby certifies to The Lincoln National Life Insurance
Company and Lincoln Life & Annuity Company of New York (collectively the
"Company") that all the following requirements will be fulfilled in
conjunction with the submission of appointment papers for all applicants as
agents of the Company submitted by BROKER-DEALER. BROKER-DEALER will, upon
request, forward proof of compliance with same to the Company in a timely
manner.
1. We have made a thorough and diligent inquiry and investigation relative to
each applicant's identity, residence, business reputation, and experience
and declare that each applicant is personally known to us, has been
examined by us, is known to be of good moral character, has a good business
reputation, is reliable, is financially responsible and is worthy of
appointment as a variable annuity agent of the Company. This inquiry and
background investigation has included a credit and criminal check on each
applicant. Based upon our investigation, we vouch for each applicant and
certify that each individual is trustworthy, competent and qualified to
act as an agent for the Company to hold himself out in good faith to the
general public.
2. We have on file a U-4 form which was completed by each applicant. We
have fulfilled all the necessary investigative requirements for the
registration of each applicant as a registered representative through our
FINRA member firm, and each applicant is presently registered as an FINRA
registered representative.
The above information in our files indicates no fact or condition which
would disqualify the applicant from receiving a license or appointment and
all the findings of all investigative information is favorable.
3. We certify that all educational requirements have been met for the
specific state each applicant is licensed in, and that, all such persons
have fulfilled the appropriate examination, education and training
requirements.
4. We certify that each applicant will receive close and adequate
supervision, and that we will make inspection when needed of any or all
risks written by these applicants, to the end that the insurance interest
of the public will be properly protected.
5. We will not permit any applicant to transact insurance as an agent until
duly licensed and appointed by the Company. No applicants have been given
a contract or furnished supplies, nor have any applicants been permitted to
write, solicit business, or act as an agent in any capacity, and they will
not be so permitted until the certificate of authority applied for is
received.
6. Broker-Dealer shall promptly notify the Company should the Broker-Dealer
terminate any of its appointed Representatives for performance,
non-performance or breach of this Agreement, including, but not limited to,
any unauthorized use of sales materials, any misrepresentations or any
sales practices concerning the Policies or who are found to be in violation
of any federal or state securities or insurance laws involving fraud,
deceit, or knowing misrepresentations.
Page 14 of 14
