PRINCIPAL UNDERWRITING AND DISTRIBUTION AGREEMENT
This Principal Underwriting and Distribution Agreement (the "Agreement") is
made effective as of the __ day of ______, 2017, between Brighthouse Life
Insurance Company of NY ("Insurance Company") (on behalf of itself and certain
of its separate accounts (the "Separate Accounts")) and Brighthouse Securities,
LLC ("Principal Underwriter"). The Insurance Company and Principal Underwriter
are herein sometimes referred to individually as a "party" and collectively as
the "parties."
WHEREAS, the Insurance Company desires to obtain from the Principal
Underwriter the underwriting and distribution services provided for herein; and
WHEREAS, the Principal Underwriter desires to provide to the Insurance
Company the underwriting and distribution services provided for herein;
NOW, THEREFORE, the parties agree as follows:
1. ISSUE AND SALE OF CONTRACTS.
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Insurance Company proposes to issue and sell certain variable, registered
fixed, fixed, and privately placed annuity contracts; and variable, fixed and
privately placed life insurance policies (collectively the "Contracts") to the
public through various third party broker dealers and insurance agencies with
the Principal Underwriter serving as distributor. The Principal Underwriter
agrees to provide underwriting and distribution services subject to the terms
and conditions hereof. The Contracts to be offered are more fully described in
the policy forms, registration statements and prospectuses hereinafter
mentioned.
2. GRANT AND ACCEPTANCE OF RIGHTS TO DISTRIBUTE VARIABLE CONTRACTS.
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Insurance Company grants Principal Underwriter the exclusive right, during
the term of this Agreement, subject to applicable insurance law requirements
and registration requirements of the Securities Act of 1933 (the "1933 Act")
and the Investment Company Act of 1940 (the "Investment Company Act") (as
applicable) and the provisions of the Securities Exchange Act of 1934 (the
"1934 Act"), to be the wholesale distributor of the variable Contracts (the
"Variable Contracts") issued through the Separate Accounts, the registered
fixed Contracts (the "Registered Fixed Contracts") and the privately placed
Contracts (the "Private Placement Contracts"), and the Principal Underwriter
accepts such rights. Principal Underwriter will wholesale the Variable,
Registered Fixed and Private Placement Contracts under such terms as set by
Insurance Company and will make such contracts available to duly registered
broker dealers and their registered representatives for sale to the public. As
such, Principal Underwriter is authorized to enter into selling agreements with
duly registered broker dealers authorizing them to sell the Variable,
Registered Fixed and Private Placement Contracts to customers appropriately
suited to buy such Variable, Registered Fixed or Private Placement Contracts as
specified in the applicable prospectus or offering memorandum. All registered
broker dealers must be acceptable to the Insurance Company. All such selling
agreements with registered broker dealers entered into by Principal Underwriter
shall provide that each such broker-dealer will assume full responsibility for
continued compliance by itself and its associated
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persons with the Financial Industry Regulatory Authority ("FINRA") Rules
(including applicable rules that are still referred to as "NASD Rules" because
such rules were originally adopted by FINRA's predecessor organization, the
National Association of Securities Dealers, Inc.) and applicable federal and
state securities laws. The selling agreements shall require that all associated
persons of such registered broker-dealers soliciting applications for the
Contracts shall be duly and appropriately licensed or appointed for the sale of
the Contracts under the Federal and state securities laws and the insurance
laws of the applicable states or jurisdictions in which such Contracts may be
lawfully sold.
3. GRANT AND ACCEPTANCE OF RIGHTS TO DISTRIBUTE FIXED CONTRACTS.
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Insurance Company grants Principal Underwriter the right, during the term of
this Agreement, subject to applicable insurance law requirements, to be the
wholesale distributor of the fixed Contracts (the "Fixed Contracts"), and the
Principal Underwriter accepts such rights. Principal Underwriter will wholesale
the Fixed Contracts under such terms as set by Insurance Company. Principal
Underwriter is authorized to contract with duly licensed insurance agencies,
agents and brokers reasonably acceptable to Insurance Company for the sale of
the Fixed Contracts to purchasers permitted to buy such Contracts as specified
in the applicable policy form.
4. PERFORMANCE OF SERVICES.
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In performing the underwriting and distribution services under this
Agreement, Principal Underwriter agrees as follows:
(a) Principal Underwriter shall use its best efforts to wholesale the
Contracts, and otherwise to perform all duties and functions which
are necessary and proper for the wholesale distribution of the
Contracts.
(b) Principal Underwriter shall offer the Variable, Registered Fixed
and Private Placement Contracts for sale in accordance with the
prospectuses or offering memoranda then in effect, as applicable.
(c) Principal Underwriter shall be responsible for any filings of
advertisements, marketing literature and educational materials
required to be made with the FINRA.(d) Principal Underwriter agrees
to join the Insurance Company, upon the Insurance Company's request
and after independent review of such matters, in any joint
applications required to be filed with the Securities and Exchange
Commission ("SEC") under the 1934 Act, the 1933 Act and the
Investment Company Act.
5. COMPENSATION.
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As further provided in this Section, Insurance Company agrees to reimburse
Principal Underwriter at cost for services provided by Principal Underwriter
pursuant to this Agreement. Insurance Company shall pay to Principal
Underwriter a fee in an amount equal to all expenses, direct and indirect,
reasonably and equitably determined by Principal Underwriter to be
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attributable to the underwriting and wholesale distribution services provided
by Principal Underwriter to Insurance Company pursuant hereto, including
commissions and other compensation related costs paid by Principal Underwriter,
except to the extent that applicable law requires otherwise.
The bases for determining all such charges to Insurance Company shall be
consistent with applicable law. Such bases shall be modified and adjusted where
necessary or appropriate to reflect fairly and equitably the actual incidence
of cost incurred by Principal Underwriter on behalf of Insurance Company.
6. PAYMENT.
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Principal Underwriter shall submit to Insurance Company, within thirty
(30) business days after the end of each calendar month (or such other interval
not greater than quarterly as such parties may agree), a written statement
showing the charges estimated to be due from Insurance Company to Principal
Underwriter for services pursuant to this Agreement in the preceding calendar
month (or interval), as well as any charges not included in any previous
statement. Any balance payable as shown in such written statement shall be paid
within thirty (30) days following receipt of such written statement by
Insurance Company, subject to later adjustment if and as determined in
accordance with Section 5 hereof. The charges shown in any such statement may
be based on good faith estimates by Principal Underwriter of the charges
attributable to such services, which estimate may take into account charges for
services provided hereunder in the preceding billing periods.
No later than the end of the first quarter of the calendar year following
the calendar year in which the services charged for hereunder were provided,
Principal Underwriter shall submit to Insurance Company a statement showing in
reasonable detail the actual charges for such services. Any difference between
such actual charges and the estimated charges for such services as shown in any
previous statement provided by Principal Underwriter to the Insurance Company
pursuant to this Section 6 shall be paid by Principal Underwriter or Insurance
Company, as the case may be, within thirty (30) days following receipt of such
written statement by Insurance Company, subject to later adjustment if and as
determined in accordance with the next paragraph of this Section 6.
Principal Underwriter's determination of the charges hereunder shall be
conclusive as between the parties, except that if Insurance Company objects to
any such determination, it shall so advise Principal Underwriter in accordance
with Section 19(i) hereof within thirty (30) days of receipt of notice of said
determination. Unless the parties can reconcile such objection, or otherwise
agree, they shall select a firm of independent accountants which shall
determine the charges properly allocable to Principal Underwriter and shall,
within a reasonable time not to exceed one hundred eighty (180) days, submit
such determination, together with the basis therefor, in writing to both
parties, whereupon such determination shall be binding. The expenses of any
such determination by a firm of independent certified public accountants shall
be borne as determined to be equitable by such accountants.
If Insurance Company is required to refund premiums or return accumulation
values and waive surrender charges on any Contract for any reason; then no
commission will be payable on such payments, and previously paid commissions,
shall be refunded to the Insurance Company,.
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Insurance Company shall not advance funds to Principal Underwriter except to
pay for services pursuant to this Agreement.
7. INDEMNIFICATION.
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Insurance Company shall indemnify, defend, and hold harmless Principal
Underwriter from and against all liabilities and expenses arising out of any
claims, demands, proceedings, suits, or actions, and any reasonable attorney's
fees and costs in connection therewith (collectively the "Legal Expenses"),
arising out of Principal Underwriter's underwriting and Wholesaling
distribution services and its promotion of the Contracts pursuant to this
Agreement; provided that Insurance Company shall not indemnify Principal
Underwriter for any Legal Expenses arising out of any intentional, willful, or
grossly negligent act or omission by Principal Underwriter, or its officers or
employees.
Principal Underwriter shall indemnify, defend, and hold harmless Insurance
Company from and against all liabilities and expenses, including any reasonable
attorney's fees and costs in connection therewith (collectively the "Legal
Expenses") arising out of any intentional, willful, grossly negligent,
fraudulent or unauthorized acts or omissions by Principal Underwriter, its
employees, wholesalers, agents or principals, including but not limited to
improper promotion and/or marketing of the Contracts, unauthorized use of sales
materials or advertisements, or any oral or written misrepresentations.
8. DOCUMENTS TO BE FURNISHED.
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On behalf of the Separate Accounts, Insurance Company shall furnish
Principal Underwriter with copies of all prospectuses, financial statements,
offering memoranda and other documents which Principal Underwriter reasonably
requests for use in connection with the distribution of the Variable,
Registered Fixed and Private Placement Contracts. Insurance Company shall
provide to Principal Underwriter such number of copies of the current effective
prospectuses or offering memoranda as Principal Underwriter shall request.
Insurance Company shall also furnish Principal Underwriter with copies of
all documents which Principal Underwriter reasonably requests for use in
connection with the distribution of the Fixed Contracts.
9. RESTRICTIONS ON REPRESENTATIONS.
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Principal Underwriter is not authorized to give any information or to make
any representations concerning the Contracts or the Separate Accounts of
Insurance Company other than those contained in the current registration
statements or prospectuses relating to the Separate Accounts filed with the SEC
or such offering memoranda or sales literature as may be authorized for use by
Insurance Company. Principal Underwriter shall not have authority, on behalf of
Insurance Company, to waive any Contract provision, to extend the time of
paying any purchase payments, or to receive any monies or purchase payments
(except for the sole purpose of forwarding monies or purchase payments to
Insurance Company). Principal Underwriter shall not expend, nor contract for
the expenditure of, the funds of Insurance Company. Principal Underwriter
acknowledges and agrees that Insurance Company shall have the right at any time
to suspend or limit the offering of the Contracts.
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10. PREPARATION AND FILING OF CONTRACTS AND PROSPECTUSES.
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Insurance Company shall be responsible for preparing the Contract forms and
filing them with applicable state insurance regulatory authorities, and for
preparing the prospectuses and registration statements and filing them with the
SEC and state regulatory authorities, to the extent required. Insurance Company
also shall be responsible for any filings of advertising and sales literature
required to be made with state regulatory authorities. Insurance Company agrees
to forward to Principal Underwriter copies of any and all amendments to the
registration statement. Insurance Company agrees to advise Principal
Underwriter immediately of: (1) any request by the SEC (i) for amendment of the
registration statement or (ii) for additional information that Insurance
Company determines is material to Principal Underwriter; (2) the issuance by
the SEC of any stop order suspending the effectiveness of the registration
statement or the initiation of any proceedings for that purpose; and (3) the
occurrence of any material event, if known by Insurance Company, that makes
untrue any material statement made in the registration statement or that
requires the making of a change therein in order to make any material statement
made therein not misleading.
Insurance Company represents to Principal Underwriter that the prospectus
included in a Separate Account's Registration Statement for each Variable or
Registered Fixed Contract, post-effective amendments thereto and any
supplements thereto, as filed or to be filed with the SEC, and that the
offering documents for each Private Placement Contract, as of their effective
dates, contain or will contain, all statements and information which are
required to be stated therein by the 1933 Act and/or any state law or
regulation and in all respects conform or will conform to the requirements
thereof. Neither any prospectus, nor any supplement thereof, or offering
memorandum or other offering document, includes or will include, any untrue
statement of a material fact, or omits or will omit to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading, provided, however, that the foregoing representations shall not
apply to information contained in or omitted from any prospectus or supplement
or offering memorandum or other offering document in reliance upon, and in
conformity with, written information furnished to Insurance Company by
Principal Underwriter specifically for use in the preparation thereof. The
foregoing representation also shall not apply to information contained in or
omitted from any prospectus or supplement of any underlying mutual fund.
11. RULE 10b-10 REQUIREMENTS.
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Insurance Company, or its appointed designee, as agent for Principal
Underwriter, shall confirm to each applicant for and purchaser of a Contract in
accordance with Rule 10b-10 under the 1934 Act the acceptance of purchase
payments and such other transactions as are required by Rule 10b-10 or
administrative interpretations thereunder, or by any other SEC or FINRA rule
requiring the delivery of such information.
12. OTHER REGULATORY MATTERS.
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Insurance Company and Principal Underwriter hereby agree to comply with all
applicable laws and regulations intended to prevent, detect, and report money
laundering and suspicious transactions and will take all necessary and
appropriate steps, consistent with applicable regulations and generally
accepted industry practices, to (1) obtain, verify, and retain information with
regard to customer identification and source of funds, and (2) to maintain
records of all Separate Account transactions.
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The parties to this Agreement shall (to the extent consistent with
applicable law) cooperate in providing information requested by any law
enforcement, regulatory or administrative authority. To the extent permitted by
applicable law and/or regulation, each party shall notify the other party of
any concerns that shall arise in connection with any Contract in the context of
relevant anti-money laundering legislation/regulations. Each party to this
Agreement shall hold harmless the other party for any actions that may arise
for good faith attempts to comply with all applicable laws, rules and/or
regulations of governmental agencies, law enforcement organizations and/or Self
Regulatory Organizations.
The parties agree that all Nonpublic Personal Information obtained in the
performance of duties and obligations under the Agreement shall be held in the
strictest confidence and will not be used for any other purpose except to
perform duties under the Agreement. Such information shall not be disclosed to
any third party without the express written consent of the affected individual
or as may be required by law. Each party will establish procedures to protect
the security and confidentiality of such information. Nonpublic Personal
Information shall mean any information about an individual, including financial
and health information, that is not publicly available.
13. MAINTENANCE OF BOOKS.
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Each party shall maintain its own books, accounts and records in such a way
to disclose clearly and accurately the nature and details of the transactions
between them, including such accounting information as is necessary to support
the charges under this Agreement, and such additional information as either of
the parties may reasonably request for purposes of its internal bookkeeping and
accounting operations. Principal Underwriter shall keep such books, accounts
and records, insofar as they pertain to the computation of charges hereunder,
available for audit, inspection and copying by Insurance Company and persons
authorized by it or any governmental agency having jurisdiction over the
parties during all reasonable business hours upon reasonable prior notice.
14. OWNERSHIP AND CUSTODY OF RECORDS.
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All records, books and files established and maintained by Principal
Underwriter by reason of its performance of services under this Agreement,
which absent this Agreement would have been held by Insurance Company, shall be
deemed the property of Insurance Company and shall be maintained in accordance
with applicable law and regulation. Such records shall be available, upon
reasonable prior notice, during normal business hours for inspection by
Insurance Company, anyone authorized by Insurance Company, and any governmental
agency that has regulatory authority over Insurance Company's business
activities. Such records shall also be available upon reasonable prior notice,
during normal business hours for inspection by any governmental agency or
self-regulatory organization that has regulatory authority over Principal
Underwriter's business activities. Copies of such records, books and files
shall be delivered to Insurance Company upon reasonable prior notice. Principal
Underwriter shall promptly deliver to Insurance Company such records, books and
files upon termination of this Agreement.
Both parties to this Agreement agree to keep the necessary records as indicated
by applicable state and federal law and to render the necessary assistance to
one another for the accurate and timely preparation of such records. The books,
accounts and records of Insurance Company, the Separate
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Accounts and Principal Underwriter as to all transactions hereunder shall be
maintained so as to disclose clearly and accurately the nature and details of
the transactions. Insurance Company shall maintain such books and records of
Principal Underwriter pertaining to the sale of the Contracts and required by
the 1934 Act as may be mutually agreed upon from time to time by Insurance
Company and Principal Underwriter, provided that such books and records shall
be the property of Principal Underwriter, and shall at all times be subject to
such reasonable periodic, special or other examination by the SEC and all other
regulatory bodies having jurisdiction.
15. AUDIT.
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Insurance Company shall monitor the services performed by Principal
Underwriter no less than annually for quality assurance.
Insurance Company and persons authorized by it or any governmental agency
having jurisdiction over Insurance Company shall have the right, at Insurance
Company's expense, to conduct an audit of the relevant books, accounts and
records of Principal Underwriter upon giving reasonable notice of its intent to
conduct such an audit. In the event of such audit, Principal Underwriter shall
give to the party requesting the audit reasonable cooperation and access to all
books, accounts and records necessary to audit during normal business hours.
16. BOOKS OF ACCOUNT.
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During the term of this Agreement, all of Insurance Company's books of
account shall be maintained by Insurance Company and no books of account of
Insurance Company shall be maintained by Principal Underwriter. All of
Insurance Company's books of account shall be maintained in accordance with
applicable law. Principal Underwriter shall cause Insurance Company to be
furnished with such reports as Insurance Company may reasonably request for the
purpose of meeting reporting and recordkeeping requirements under the insurance
laws of the Commonwealth of Massachusetts and any other applicable states or
jurisdictions. A computer terminal linked to an electronic system that
generates the electronic records that constitute Insurance Company's books of
account shall be kept and maintained at Insurance Company's principal office.
During all normal business hours, upon reasonable prior notice, there shall be
ready availability and easy access through such terminal (either directly by
insurance regulatory personnel or indirectly with the aid of Insurance
Company's personnel) to the electronic media used to maintain the records
comprising Insurance Company's books of account. The electronic records shall
be convertible into records that are in a readable form.
17. CONFIDENTIALITY.
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The parties agree that during the term of this Agreement they may wish to
exchange information which the party providing such information deems
confidential. Therefore, the parties agree that the recipient of Confidential
Information (as defined below) shall not, at any time, duplicate or disclose
such information to any other person, firm, corporation or entity or use it for
its own benefit except to faithfully perform its obligations under this
Agreement and shall use the same degree of care to avoid disclosure,
duplication or use of such Confidential Information as the recipient of the
Confidential Information employs with respect to its own confidential
information of like importance.
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The obligation of confidentiality with respect to Confidential Information
will not apply to any information disclosed by the recipient of Confidential
Information (a) if and to the extent that disclosure by such recipient is
required by applicable law or any court, governmental agency or regulatory
authority or by subpoena or discovery request in pending litigation, (b) if the
information is or becomes available from public information (other than as a
result of prior unauthorized disclosure by such recipient), (c) if the
information is or was received from a third party not known by such recipient
to be under a confidentiality obligation with regard to such information or
(d) if the information was in the possession of such recipient other than by
reason of the services performed pursuant to this Agreement.
The term "Confidential Information" shall include any trade secret or
information that is for the time being confidential to the provider of the
information and is not in the public domain.
Except as provided herein, no rights to the Confidential Information are
transferred to the recipient of the Confidential Information. All Confidential
Information and any copies shall, at the option and written request of the
provider of the Confidential Information, either be promptly returned to the
provider of the Confidential Information or be destroyed.
18. EFFECTIVENESS AND TERMINATION.
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This Agreement shall be effective upon the execution hereof and will remain
in effect unless terminated as hereinafter provided. This Agreement may at any
time be terminated by any party hereto upon 60 days written notice to the other
parties.
19. MISCELLANEOUS.
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(a) Amendment. This Agreement may be amended only upon mutual agreement of
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the parties hereto in writing.
(b) Successors and Assigns. This Agreement shall be binding upon the parties
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hereto and their transferees, successors and assigns. The benefits of and the
right to enforce this Agreement shall accrue to the parties and their
transferees, successors and assigns.
(c) Assignment. Neither this Agreement nor any of the rights, obligations or
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liabilities of either party hereto shall be assigned without the written
consent of the other party.
(d) Interpretation. This Agreement is subject to and its terms are to be
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interpreted and construed in accordance with the provisions of the Investment
Company Act, the 1933 Act, the 1934 Act, and the rules, regulations, and
rulings thereunder and is subject to the provisions of the FINRA Rules. Without
limiting the generality of the foregoing, the term "assigned" shall not include
any transaction exempted from section 15(b)(2) of the Investment Company Act.
The Underwriter shall submit to all regulatory and administrative entities
having jurisdiction over the operations of the Accounts, present or future; and
will provide any information, reports or other material which any such entity
by reason of this Agreement may request or require pursuant to applicable laws
or regulations.
(e) Intended Beneficiaries. Nothing in this Agreement shall be construed to
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give any
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person or entity other than the parties hereto any legal or equitable claim,
right or remedy. Rather, this Agreement is intended to be for the sole and
exclusive benefit of the parties hereto.
(f) Counterparts. This Agreement may be executed in counterparts, each of
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which shall be deemed an original but all of which shall together constitute
one and the same instrument.
(g) Applicable Law. This Agreement shall be interpreted, construed, and
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enforced in accordance with the laws of New York without reference to the
conflict of law provisions thereof.
(h) Severability. If any portion of this Agreement shall be found to be
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invalid or unenforceable by a court or tribunal or regulatory agency of
competent jurisdiction, the remainder shall not be affected thereby, but shall
have the same force and effect as if the invalid or unenforceable portion had
not been inserted.
(i) Notices. All notices, requests, demands and other communications under
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this Agreement shall be in writing and shall be deemed to have been given on
the date of service if served personally on the party to whom notice is to be
given, or on the date of mailing if sent by First Class Mail, Registered or
Certified, postage prepaid and properly addressed.
(j) Receivership. If Insurance Company is placed in receivership or seized
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by an insurance regulator: (1) all of the rights of Insurance Company under
this Agreement shall extend to the receiver or regulator; (2) all books and
records will immediately be made available to the receiver or regulator;
(3) Principal Underwriter has no automatic right to terminate this Agreement;
and (4) Principal Underwriter will continue to maintain systems and programs
necessary to effectuate this Agreement and will make such systems and programs
available to the receiver or regulator for so long as Principal Underwriter
continues to receive timely payment for services rendered.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
signed on their behalf by their respective officers thereunto duly authorized.
BRIGHTHOUSE LIFE INSURANCE COMPANY OF NY
By:
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Name:
Title
BRIGHTHOUSE SECURITIES, LLC
By:
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Name:
Title
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