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Exhibit 3(b)
SELLING AGREEMENT
THIS AGREEMENT is effective as of this ______ day of _____________, 2001 by and
among The Travelers Insurance Company ("TIC"), The Travelers Life and Annuity
Company ("TLAC") (collectively the "Insurance Companies") Travelers Distribution
LLC. ("Underwriter") and _______________________________________ ("Broker/
Dealer") together with its affiliated insurance agencies (collectively
the "Selling Entities") as are designated on the signature pages to this
agreement.
This agreement supercedes any previous selling agreements in force among the
parties. In consideration of the mutual promises contained in this agreement,
the parties agree as follows:
1. Purpose and Background. The Underwriter, the Insurance Companies,
Broker/Dealer and Selling Entities enter into this agreement for the purpose of
authorizing Broker/Dealer, through certain of its life insurance licensed agents
to solicit applications for such life insurance (including variable life),
annuity contracts (including fixed, variable, and modified guaranteed annuity
products), long term care insurance contracts and such other insurance products
as shall be mutually agreed upon (collectively the "Insurance Contracts") as are
listed on the Schedule Pages attached to this agreement as Exhibit 1 (the
"Schedule Pages"). The Schedule Pages may be amended from time to time to add
other Insurance Contracts.
2. Licensing and Appointment. The Insurance Companies have each respectively
appointed Underwriter to serve as the distributor and principal underwriter of
the variable life or variable annuity Insurance Contracts. The Underwriter is
registered with the Securities and Exchange Commission ("SEC"), the National
Association of Securities Dealers, Inc. ("NASD") and all other appropriate state
securities regulatory authorities as a broker/dealer. Broker/Dealer possesses
(or affiliated insurance agencies under its control - defined as "Selling
Entities" in this agreement - possess) all required insurance licenses necessary
to sell the Insurance Contracts.
Accordingly Underwriter hereby appoints Broker/Dealer to distribute the Variable
Insurance Contracts listed on the Schedule Pages through its Registered
Representatives ("Registered Representatives").
3. Securities Licensing/NASD Compliance. Broker/Dealer shall at all times, when
performing its functions under this agreement, be registered as a securities
broker/dealer with the SEC and the NASD 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 sales of Variable
Insurance Contracts.
Broker/Dealer and Selling Entities agree to abide by all applicable state and
federal rules and regulations promulgated thereunder. For the purpose of
compliance with any such laws or
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regulations, Broker/Dealer acknowledges and agrees that, in performing
broker/dealer services covered by this Agreement, it is acting in the capacity
of an independent broker as defined by the by-laws of the NASD and not as an
agent or employee of either Underwriter or any registered investment company.
4. Insurance Licensing. Broker/Dealer (and, if appropriate, Selling Entities)
agrees that at all times when performing its functions under this agreement, the
entity on whose behalf agents and Registered Representatives act when soliciting
sales of the Insurance Contracts, will have a valid insurance agency license in
jurisdictions that require such licensing or registration. If applicable,
Broker/Dealer represents that it, or its insurance agency affiliate, is properly
authorized under applicable state law to receive insurance commissions generated
from sales of the Insurance Contracts.
Broker/Dealer and Selling Entities each represent that they will engage in the
solicitation and sale of Insurance Contracts in accordance with applicable
insurance and securities laws and regulations.
Broker/Dealer represents and warrants that it is authorized and licensed as an
agent under applicable state insurance laws to solicit the Insurance Contracts.
In the event Broker/Dealer is not licensed as such, an insurance agency
affiliated with Broker/Dealer shall be licensed as an agent under applicable
state insurance laws to solicit the contracts of insurance contemplated
hereunder. Such Selling Entity will be designated as a party to this Agreement.
5. Appointment of Broker/Dealer. The Insurance Companies hereby authorize the
Broker/Dealer to sell those Insurance Contracts listed on the Schedule Pages, as
such pages may be amended from time to time, including the Variable Insurance
Contracts, through its Registered Representatives. Broker/Dealer and Selling
Entities are also appointed to perform certain administrative services necessary
to facilitate the solicitation and sales of such Insurance Contracts.
Broker/Dealer or, if applicable, Selling Entities, each are appointed general
agencies of Insurance Companies and each are authorized to sell the Insurance
Contracts listed on the Schedule Pages.
Pursuant to the appointments described in this Section 5, Broker/Dealer and
Selling Entities must comply with the following requirements:
(a) All securities activities provided in connection with the sale of
Variable Insurance Contracts will be through Registered Representatives of
Broker/Dealer;
(b) Unregistered employees of Broker/Dealer will neither engage in
securities activities nor receive any compensation based on transactions in
Variable Insurance Contracts or the provision of securities advice;
(c) Broker/Dealer will maintain all necessary books and records relating
to
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transactions in Variable Insurance Contracts in accordance with applicable
securities and insurance laws and regulations;
(d) Customers purchasing Insurance Contracts will make their checks
payable to Insurance Companies. Cash, money orders and/or travelers checks are
not acceptable methods of payment. Broker/Dealer will comply with Insurance
Companies' Anti-Money Laundering policies as are communicated from time to time.
(e) Broker/Dealer will notify Insurance Company if the writing agent for
any policy changes, or if the writing agent or customer requests that the
writing agent for a policy be changed. Travelers will honor all such customer
requests.
For the purpose of compliance with any applicable state insurance laws or
regulations promulgated under them, Broker/Dealer (and, if applicable, Selling
Entities) acknowledges and agrees that, solely in performing the
insurance-selling functions reflected by this Agreement, it or its Registered
Representative is acting as the agent of the Insurance Companies and, in that
capacity, is authorized only to solicit applications from the public for the
Insurance Contracts.
6. Responsibility for Registered Representatives' Activities. Broker/Dealer will
select and supervise persons whom it will train to solicit applications for the
Insurance Contracts in conformance with applicable state and federal laws and
regulations. Persons engaged in the sale of Variable Insurance Contracts will be
Registered Representatives of Broker/Dealer in accordance with the rules of the
NASD.
The Insurance Companies shall have authority to determine whether to appoint or
terminate each Registered Representative or licensed agent as an insurance agent
of the Insurance Companies. Broker/Dealer agrees to cooperate in supplying
information or making recommendations necessary to complete such insurance agent
appointments.
Unless otherwise agreed upon, in jurisdictions which require that Insurance
Companies perform background investigations of agents prior to appointment,
Broker/Dealer agrees to provide such information as may be necessary to perform
such review, including but not limited to obtaining permission from each
Registered Representative who seeks such appointment.
To the extent agreed upon by the parties to this agreement, Broker/Dealer (and
Selling Entities) will certify as to the fitness of each individual that it
presents for appointment with the Insurance Companies. Such certification will
take the form of a General Letter of Recommendation which will describe the
representations Broker/Dealer will make for each agent. If applicable, a General
Letter of Recommendation will be added to this Agreement and incorporated
hereunder. Insurance Companies will have the right to periodically request
assurances or otherwise audit Broker/Dealer's records to ensure compliance with
the terms of the General Letter of Recommendation. Such assurances may take the
form of a questionnaire requesting updated assurances about the representations
contained in the General Letter of Recommendation and made for each agent
presented to the Insurance Companies for appointment.
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Upon request by Insurance Companies, Broker/Dealer and/or Selling Entities shall
furnish such appropriate records and permit such reasonable audit procedures as
may be necessary to establish supervision of its Registered Representatives in
connection with sales of the Insurance Contracts. Upon Insurance Companies'
review of such supervisory materials, Broker/Dealer shall make such changes to
its Registered Representatives' rules of conduct as Insurance Companies may
reasonably request but only to the extent that such requests relate to sale of
the Insurance Contracts.
Broker/Dealer shall notify Insurance Companies if any Registered Representative
ceases to be a Registered Representative of Broker/Dealer or ceases to maintain
the proper licensing required for the sale of the Insurance Contracts or fails
to meet material rules and standards imposed by either Broker/Dealer or the
Selling Entities including but not limited to continuing education requirements.
7. Suitability of Sales of Insurance Contracts. With regard to Variable
Insurance Contracts, Broker/Dealer will review all contract and policy
applications for suitability, completeness and correctness as to form.
Broker/Dealer shall also be responsible for ensuring compliance with NASD
suitability rules and standards applicable to sales of Variable Insurance
Contracts. Broker/Dealer is also responsible for ensuring that all sales are in
compliance with applicable state insurance laws and regulations.
Broker/Dealer will promptly, but in no case later than the end of the business
day that Broker/Dealer receives applications and payment, forward to the
applicable Insurance Company, at addresses provided, all such applications found
suitable and in good form, together with any payments received with such
applications. Broker/Dealer will immediately return to the applicant all
applications deemed by Broker/Dealer to be unsuitable or not complete and
correct as to form together with any payments received. The Insurance Companies
reserve the right to reject any Insurance Policy application and return any
payment made in connection with an application which is rejected. Insurance
Contracts issued will be forwarded to Broker/Dealer or, at the direction of
Broker/Dealer, to the Registered Representative for delivery to the Contract
Owner. Broker/Dealer shall obtain and retain a written receipt for each
Insurance Policy which Broker/Dealer delivers.
The parties acknowledge that sales and solicitations may, where consistent with
state insurance laws and regulations, be conducted either without an application
or on a basis where an application is submitted subsequent to a sale. If such
sales procedures are permitted, Broker/Dealer agrees that it will continue to be
responsible for compliance with applicable laws concerning, among other things,
suitability and policy delivery requirements. Broker/Dealer agrees to hold
Insurance Companies and Underwriter harmless for any failure to follow such
rules or regulations.
8. Solicitation/Representations Concerning the Insurance Contracts.
Broker/Dealer will perform the selling functions required by this Agreement in
accordance with the terms and conditions of any applicable prospectus(es).
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Broker/Dealer will make only representations included in the prospectus or in
any authorized supplemental material. No sales solicitations, including the
delivery of supplemental sales literature or other such materials, shall occur,
be delivered to, or used with a prospective purchaser unless accompanied or
preceded by appropriate and then current prospectuses. Neither Broker/Dealer nor
Selling Entities will make representations concerning an Insurance Contract
contrary to the terms of the particular Insurance Contract.
Any material prepared or used by Broker/Dealer or its Registered
Representatives, which describes in whole or in part or refers by name or form
to any of the Insurance Companies' Insurance Contracts or underlying funds or
uses the name of the Insurance Companies, Underwriter, or Citigroup Inc., or the
logos or service marks of any of them, or the name, logos or service marks of
any "Affiliated Company" of any of them, as that term is defined in Section
2(a)(2) of the Investment Company Act of 1940, other than the Broker/Dealer or
any subsidiary of it, must be approved by Underwriter in writing prior to any
such use.
Broker/Dealer and Selling Entities acknowledge that information pertaining to
Underwriter and Insurance Companies is proprietary in nature. Selling Entities
agree that they will not disclose any information concerning Insurance Companies
or Underwriter's products, services or programs to any person for consideration
or otherwise unless Insurance Companies or Underwriter consent to such use in
writing. Broker/Dealer and Selling Entities agree that, following the
termination of this Agreement for any reason, they will not enter into any plan,
program, scheme or course of action which would systematically attempt to induce
any Contract Owner(s) away from Insurance Companies, except that Broker/Dealer
may always recommend a move to another company's product if such move would be
more suitable than Insurance Companies' product for a particular client or
clients or in the event of a detrimental change in the financial stability of
Insurance Companies which Broker/Dealer believes would jeopardize its clients.
9. Use of Confidential Information. The parties to this Agreement agree to
safeguard customer information provided during the application and underwriting
process by Contract Owners. Specifically, the parties understand that the
Insurance Companies provide a "Privacy Notice" substantially in the form
provided to Broker/Dealer from time to time as may be required by applicable
law. The parties agree to cooperate with each other to comply with the terms of
this Privacy Notice. The Companies and Underwriter represent that they shall not
use consumers' or customers' non-public personal information in any way not
anticipated under this Agreement, or in any way not permitted under applicable
statutes or regulations.
10. Compensation. Compensation payable to Broker/Dealer on sales of the
Insurance Contracts sold by Registered Representatives will be paid to
Broker/Dealer or, as necessary to meet any legal requirements, to Selling
Entities in accordance with the Compensation Schedule(s) set forth on the
Schedule Pages. Such Schedule Pages may be amended from time to time and
compensation will be paid in accordance with the Compensation Schedule in effect
at the time the premium payments are received by the applicable Insurance
Company (in the case of annuities) or at the time the applications are received
(in the case of life insurance).
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The Insurance Companies reserve the privilege of amending the Compensation
Schedules set forth in the Schedule Pages at any time with prior written notice
to Broker/Dealer. Submission of applications for Insurance Contracts following
receipt of such notice shall operate to ratify acceptance of such amendment.
11. Assignment of Agreement. This Agreement may not be assigned except by mutual
consent and will continue, subject to the termination by any party on written
notice to the other party except that, in the event Broker/Dealer ceases to be a
registered Broker/Dealer or a member of the NASD, this Agreement will
immediately terminate. Underwriter reserves the right to designate, at its sole
discretion, an alternative Principal Underwriter for the distribution of the
Contracts covered by this Agreement with prior written notice to Broker/Dealer
except in the event that TIC and/or TLAC replaces Underwriter as discussed
below.
The parties understand that, should TIC and/or TLAC replace Underwriter, any
such substituted party will automatically assume all of Underwriter's rights and
duties under this Agreement. TIC and or TLAC may assume such functions itself,
or assign these to affiliated, properly licensed broker-dealers. TIC and/or TLAC
will notify Broker/Dealer if any such substitution occurs.
12. Indemnification. Each party shall hold harmless defend, exonerate and
indemnify each other party to this Agreement for any loss or expense the other
party suffered that results from the indemnifying party's breach of this
Agreement or violation of applicable law with respect to its services required
under this Agreement. Such indemnification extends to the employees, officers,
directors, affiliates and agents of each of the parties to this Agreement.
13. Fund Transfer Requests. Broker/Dealer is responsible and will supervise the
activities of its Registered Representatives with regard to requests for
investment option transfers requested on behalf of Contract Owners.
Broker/Dealer will not permit its Registered Representatives to request
investment option transfers unless such authority has been granted in writing to
the Registered Representative by a Contract Owner and proof of such authority
has been provided to and acknowledged by the Insurance Companies. Broker/Dealer
agrees that it will cause its Registered Representatives to use such forms as
may be reasonably required by Insurance Companies.
Broker/Dealer represents that it will indemnify Insurance Companies, their
employees, agents and affiliated parties from any loss occasioned by any claimed
or actual improper or unauthorized investment option transfer or surrender
request made by Broker/Dealer or its Registered Representative on behalf of a
Contract Owner.
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14. Notices. All notices to the Insurance Companies or Underwriter relating to
this Agreement should be sent to the attention of:
Travelers Life & Annuity
Xxx Xxxxx Xxxxxx
Xxxxxxxx, XX 00000-0000
Attention: General Counsel
All notices to Broker/Dealer will be duly given if mailed or faxed to the
address provided to Insurance Companies by Broker/Dealer from time to time.
15. Independent Contractors. Underwriter and Insurance Companies are independent
contractors with respect to Broker/Dealer, Selling Entities, and Registered
Representatives.
16. Governing Law. This Agreement shall be construed in accordance with and
governed by the laws of the state of Connecticut.
17. Amendment of Agreement. Insurance Companies reserve the right to amend this
Agreement at any time, and the submission of an application by Broker/Dealer
after notice of any such amendment has been received by the other parties shall
constitute the other parties' agreement to any such amendment. Following
provision of notice of a change in compensation schedules, submission of
additional business shall operate to ratify acceptance of such schedules.
18. Termination. This Agreement may be terminated, without cause, by any party
upon thirty (30) days' prior written notice, and may be terminated, for failure
to perform satisfactorily or other cause, by any party immediately and shall be
terminated if Broker/Dealer shall cease to be a registered broker/dealer under
the Securities Exchange Act of 1934, as amended, or a Member of the NASD.
Notwithstanding, the following sections shall survive any such termination:
Sections 3, 4, 6, 8, 10, 12, 14, 16, 19, 20, 21 and 24.
19. Waiver Upon Termination. Failure of any party to terminate this Agreement
for any of the causes set forth in this Agreement will not constitute a waiver
of the right to terminate this Agreement at a later time for any of these
causes.
20. Books and Records. Broker/Dealer shall maintain all books and records
required by applicable laws and regulations in connection with the offer and
sale of the Insurance Contracts. The books, accounts and records of
Broker/Dealer relating to the sale of the Insurance Contracts shall be
maintained so as to clearly and accurately disclose the nature and details of
all transactions. Underwriter and Insurance Companies reserve the right to
request reasonable periodic inspection of such books and records as relate to
the sale and solicitation of the Insurance Contracts.
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21. Cooperation with Regulatory Investigations. Broker/Dealer, Selling Entities,
Insurance Companies and Underwriter agree to cooperate fully in any insurance,
securities or other regulatory investigation, inquiry, inspection, or proceeding
or in any judicial proceeding arising in connection with the Insurance
Contracts. Broker/Dealer and Insurance Companies shall cooperate with each other
to resolve any customer complaint and each agrees to promptly notify the other,
upon receipt of notice, of any investigation, claim or proceeding involving the
Insurance Contracts or any situation which would materially affect the
respective party's ability to perform its obligations hereunder. Each of the
parties to this Agreement agrees that it will promptly notify the other parties
of any material claim of which it becomes aware involving the sale or
solicitation of the Insurance Contracts.
22. Fidelity Bond and Errors and Omissions Coverage. Broker/Dealer represents
that all of its directors, officers, employees and Registered Representatives
are and shall be continuously covered by a blanket fidelity bond covering for
larceny and embezzlement and issued by a reputable bonding company. This bond
shall be maintained at Broker/Dealer's expense and shall be at least of the
form, type and amount required under the NASD Conduct Rules. Broker/Dealer and
Selling Entities represent that its agents are covered by Errors and Omissions
insurance.
23. Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed in all respects an original.
24. Arbitration. The parties to this Agreement agree to refer any dispute
arising under this Selling Agreement to arbitration. Such arbitration proceeding
will be held in Hartford, Connecticut (or such other location as may be mutually
agreed upon) and will be governed by the Code of Arbitration Procedures of the
National Association of Securities Dealers.
In reliance on the representations set forth and in consideration of the
undertakings described herein, the parties represented below do hereby contract
and agree. IN WITNESS WHEREOF, the parties have signed this agreement as
indicated above.
The Travelers Insurance Company The Travelers Life & Annuity
Company
Travelers Distribution LLC ----------------------------
Broker Dealer
------------------------------ ----------------------------
Insurance Agency Insurance Agency
------------------------------ ----------------------------
Insurance Agency Insurance Agency
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Exhibit 1
Selling Agreement Schedule Page
Broker/Dealer and Selling Entities are authorized to solicit applications for
the life insurance contracts, annuity contracts, and the other insurance
products listed below:
[Lists products currently available]
All products described herein are subject to state availability. Compensation
Schedules for each product described above are listed on the following pages.
The Compensation Schedules may be changed at any time, consistent with the terms
of this Selling Agreement.
Payment of compensation for any product is subject to the following conditions
and limitations, in addition to any applicable provision of the Selling
Agreement:
1. Chargebacks of Commissions. If the Insurance Companies return all or a
portion of a premium paid with respect to an Insurance Contract, Broker/Dealer
(and/or Selling Entity if applicable) shall be obligated to refund to Insurance
Companies commissions received as follows:
(a) consistent with the Selling Agreement, the Insurance Contract
solicited is returned as not taken under the policy or contract
"free look" provisions;
(b) premiums are refunded due to overpayments, errors in billing or in
the timing of automatic premium collection deductions, or errors
resulting in policy reissue;
(c) the check delivered in payment of any contract premium does not
clear;
(d) the Insurance Contract is terminated or the premium is refunded
because the Broker/Dealer, Selling Entity or Registered
Representative who sold the Insurance Contract committed an act,
error or omission that contributed to the termination of the
Insurance Contract or the need to return premium;
(e) the issuing Insurance Company rejects the application;
(f) a judicial or regulatory authority directs the issuing Insurance
Company to return premium payments with or without assessment of a
surrender charge;
(g) the applicant's initial premium on a 1035 exchange is returned
because the expected rollover amount from another policy or
contract is not transferred due to the exchange not meeting the
legal requirements to qualify for a tax-free exchange;
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(h) the issuing Insurance Company returns unearned premium on a life
insurance contract as required by the provisions of the Insurance
Contract;
(i) the issuing Insurance Company determines that it has a legal
liability to return premiums on a life insurance contract after
the Insurance Contract is issued;
(j) the issuing Insurance Company and Broker/Dealer mutually agree to
return all or a portion of a premium with respect to a particular
Insurance Contract;
(k) the Insurance Policy is surrendered within six months from the
date of issuance. In any case, Insurance Companies may offset
amounts paid in commission on surrendered contracts from future
sales in the event that a chargeback is triggered by operation of
this Agreement; or
(l) Broker/Dealer engages in any fraudulent or illegal activity in
connection with the sale or administration of Insurance Contracts.
2. Free Look Provision. If any Contract is redeemed at any time or if within the
applicable free look period after confirmation by the Insurance Companies of any
premium payments credited to a Contract, that Contract is tendered for full or
partial surrender, or the life at risk thereunder dies, then, at the option of
the Insurance Companies, no commission will be payable with respect to such
premium payments and any commission previously paid for said premium payments
must be refunded to the applicable Insurance Company. Insurance Companies agree
to notify Broker/Dealer within ten (10) business days after the request for
repurchase or redemption or notification of death of the life at risk is
received by the applicable Insurance Company.
3. Rebating. If Broker/Dealer or Selling Entity or any Registered Representative
or agent of Broker/Dealer or Selling Entity rebates or offers to rebate all or
any part of a premium on an Insurance Contract issued by the Insurance Companies
in violation of applicable state insurance laws or regulations, or if
Broker/Dealer or any Registered Representative of Broker/Dealer shall withhold
any premium on an Insurance Contract issued by the Insurance Companies, the same
may be grounds for termination of this Selling Agreement by Insurance Companies.
4. Churning. If Broker/Dealer induces or attempts to induce any Contract Owner
to relinquish an Insurance Contract except under circumstances where there is
reasonable grounds for believing the contract or certificate is not suitable for
such person, Broker-Dealer's right to receive any compensation under this
Agreement shall cease and terminate.
