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Exhibit 3
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MARKETING COORDINATION AND
ADMINISTRATIVE SERVICES AGREEMENT
This Agreement entered into this 1st day of May, 2000, between Nationwide Life
and Annuity Insurance Company ("Nationwide"), and Nationwide Investment Services
Corporation ("NISC").
Nationwide proposes to develop, issue and administer, and NISC proposes to
provide the exclusive national distribution services for certain annuity and
life products (the "Products"). The parties hereby agree as follows:
A. ADMINISTRATION OF PRODUCTS
1. APPOINTMENT OF PRODUCT ADMINISTRATION
Nationwide is hereby appointed Product Administrator for the
Products.
2. DUTIES OF NATIONWIDE
Nationwide will perform in a proper and timely manner, those
functions enumerated in the column marked "Nationwide" in the
"Analysis of Administrative Functions," attached hereto as
EXHIBIT A, and incorporated herein by reference.
3. DUTIES OF NISC
NISC will perform in a proper and timely manner, those
functions enumerated in the column marked "NISC" in the
"Analysis of Administrative Functions," attached hereto as
EXHIBIT A, and incorporated herein by reference.
B. MARKETING COORDINATION AND SALES ADMINISTRATION
1. DISTRIBUTION OF PRODUCTS
The Products will be distributed through registered
representatives of NASD broker-dealer firms, appointed by
Nationwide, who shall be duly qualified and licensed as agents
(the "Agents"), in accordance with applicable state insurance
authority.
2. NISC shall be the exclusive National Distributor of the
Products.
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3. APPOINTMENT AND TERMINATION OF AGENTS
Appointment and termination of Agents shall be processed and
executed by Nationwide. NISC reserves the right to require
Nationwide to consult with it regarding licensing decisions.
4. ADVERTISING
NISC shall not print, publish or distribute any advertisement,
circular or document relating to the Products or relating to
Nationwide unless such advertisement, circular or document has
been approved in writing by Nationwide. Such approval shall
not be unreasonably withheld, and shall be given promptly,
normally within five (5) business days. Neither Nationwide nor
any of its affiliates shall print, publish or distribute any
advertisement, circular or document relating to the Products
or relating to NISC unless such advertisement, circular or
document has been approved in writing by NISC. Such approval
shall not be unreasonably withheld, and shall be given
promptly, normally within five (5) business days. However,
nothing herein shall prohibit any person from advertising the
Products on a generic basis.
5. MARKETING CONDUCT
The parties will jointly develop standards, practices and
procedures respecting the marketing of the Products. Such
standards, practices and procedures are intended to help
Nationwide meet its obligations as an issuer under the
securities laws, to assure compliance with state insurance
laws, and to help NISC meet its obligations under the
securities laws as National Distributor. These standards,
practices and procedures are subject to continuing review and
neither Nationwide nor NISC will object unreasonably to
changes to such standards, practices and procedures
recommended by the other to comply with the intent of this
provision.
6. SALES MATERIAL AND OTHER DOCUMENTS
a. SALES MATERIAL
1) Nationwide shall develop and prepare all
promotional material to be used in the
distribution of the Products, in
consultation with NISC.
2) Nationwide is responsible for the printing
and the expense of providing such
promotional material.
3) Nationwide is responsible for approval of
such promotional material by state insurance
regulators, where required.
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4) NISC and Nationwide agree to abide by the
Advertising and Sales Promotion Material
Guidelines, attached hereto as EXHIBIT B,
and incorporated herein by reference.
b. PROSPECTUSES
1) Nationwide is responsible for the
preparation and regulatory clearance of any
required registration statements and
prospectuses for the Products.
2) Nationwide is responsible for the printing
of Product prospectuses in such quantities
as the parties agree are necessary to assure
sufficient supplies.
3) Nationwide is responsible for supplying
Agents with sufficient quantities of Product
prospectuses.
c. CONTRACTS, APPLICATIONS AND RELATED FORMS
1) Nationwide, in consultation with NISC, is
responsible for the design and printing of
adequate supplies of Product applications,
contracts, related forms, and such service
forms as the parties agree are necessary.
2) Nationwide is responsible for supplying
adequate quantities of all such forms to the
Agents.
7. APPOINTMENT OF AGENTS
a. NISC will assist Nationwide in facilitating the
appointment of Agents by Nationwide.
b. Nationwide will forward all appointment forms and
applications to the appropriate states and maintain
all contacts with the states.
c. Nationwide will maintain appointment files on Agents,
and NISC will have access to such files as needed.
8. LICENSING AND APPOINTMENT GUIDE
Nationwide shall provide to NISC a Licensing and Appointment
Guide (as well periodic updates thereto), setting forth the
requirements for licensing and appointment, in such quantities
as NISC may reasonably require.
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9. OTHER
a. PRODUCT TRAINING
Nationwide is responsible for any Product training
for the Agents.
b. FIELD SALES MATERIAL
1) Nationwide, in consultation with NISC, is
responsible for the development, printing
and distribution of non-public field sales
material to be used by Agents.
2) NISC shall have the right to review all
field sales materials and to require any
modification mandated by regulatory
requirements.
c. PRODUCTION REPORTS
Nationwide will deliver to NISC the items listed in
Production Reports to be Provided, attached hereto as
EXHIBIT C, and incorporated herein by reference.
d. CUSTOMER SERVICE
Each party will notify the other of all material
pertinent inquiries and complaints it receives, from
whatever source and to whomever directed, and will
consult with the other in responding to such
inquiries and complaints.
e. RECORDS AND BOOKS
All books and records maintained by Nationwide in
connection with the offer and sale of variable
annuity interests funded by a Separate Account are
maintained and preserved in conformity with the
requirements of Rule 17a-3 and 17a-4 under the 1934
Exchange Act, to the extent such requirements are
applicable to the variable annuity operations.
All such books and records are maintained and held by
Nationwide on behalf of and as agent for NISC, whose
property they are and shall remain. Such books and
records are at all times subject to inspection by the
Securities and Exchange Commission and the National
Association of Securities Dealers, Inc.
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C. GENERAL PROVISIONS
1. WAIVER
The forbearance or neglect of either party to insist upon
strict compliance by the other with any of the provisions of
this Agreement, whether continuing or not, or to declare a
forfeiture of termination against the other, shall not be
construed as a waiver of any rights or privileges of the
forbearing party in the event of a further default or failure
of performance.
2. LIMITATIONS
Neither party shall have authority on behalf of the other to:
make, alter or discharge any contractual terms of the
Products; waive any forfeiture; extend the time of making any
contributions to the products; guarantee dividends; alter the
forms which either may prescribe; nor substitute other forms
in place of those prescribed by the other.
3. BINDING EFFECT
This Agreement shall be binding on and shall inure to the
benefit of the parties to it and their respective successors
and assigns, provided that neither party shall assign or
sub-contract this Agreement or any rights or obligations
hereunder without prior written consent of the other.
4. INDEMNIFICATION
Each party ("Indemnifying Party") hereby agrees to release,
indemnify and hold harmless the other party, its officers,
directors, employers, agents, servants, predecessors or
successors from any claims or liability arising out of the
acts or omissions of the Indemnifying Party not authorized by
this Agreement, including the violation of any federal or
state law or regulation.
5. NOTICES
All notices, requests, demands and other communication under
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 postage prepaid by First Class Mail, Registered or
Certified mail, by overnight mail, properly addressed as
follows:
TO NATIONWIDE:
Nationwide Life Insurance Company
Xxxxxxx X. Xxxxxx, Vice President-Sales
Three Xxxxxxxxxx Xxxxx
Xxxxxxxx, Xxxx 00000
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TO NISC:
Nationwide Investment Services Corporation
Xxxxxxx Xxxxx, Vice President-Compliance Xxxxxxx
Xxx Xxxxxxxxxx Xxxxx
Xxxxxxxx, Xxxx 00000
6. GOVERNING LAW
This Agreement shall be construed in accordance with and
governed by the laws of the State of Ohio.
7. ARBITRATION
The parties agree that misunderstandings or disputes arising
from this Agreement shall be decided by arbitration, conducted
upon request of either party before three arbitrators (unless
the parties agree on a single arbitrator) designated by the
American Arbitration Association, and in accordance with the
rules of such Association. The expenses of the arbitration
proceedings conducted hereunder shall be borne equally by both
parties.
8. CONFIDENTIALITY
Any information, documents and materials, whether printed or
oral, furnished by either party or its agents or employees to
the other shall be held in confidence. No such information
shall be given to any third party, other than to such
sub-contractors of NISC as may be permitted herein, or under
requirements of a lawful authority, without the express
written consent of the other party.
D. TERM OF AGREEMENT
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This Agreement, including the Exhibits attached hereto, shall remain in
full force and effect until terminated, and may be amended only by
mutual agreement of the parties in writing. Any decision by either
party to cease issuance or distribution of any specific Product shall
not effect a termination of the Agreement unless such termination is
mutually agreed upon, or unless notice is given pursuant to Section
E.2. hereof.
E. TERMINATION
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1. Either party may terminate this Agreement for cause at any
time, upon written notice to the other, if the other knowingly
and willfully: (a) fails to comply with the laws or
regulations of any state or governmental agency or body having
jurisdiction over the sale of insurance or securities; (b)
misappropriates any money or property belonging to the other;
(c) subjects the other to any actual or potential liability
due to misfeasance, malfeasance, or nonfeasance; (d) commits
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any fraud upon the other; (e) has an assignment for the
benefit of creditors; (f) incurs bankruptcy; or (g) commits a
material breach of this Agreement.
2. Either party may terminate this Agreement, without regard to
cause, upon six months prior written notice to the other.
3. In the event of termination of this Agreement, the following
conditions shall apply:
a) The parties irrevocably acknowledge the continuing
right to use any Product trademark that might then be
associated with any Products, but only with respect
to all business in force at the time of termination.
b) In the event this Agreement is terminated the parties
will use their best efforts to preserve in force the
business issued pursuant to this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement to
be effective as of the date first above written.
NATIONWIDE LIFE INSURANCE COMPANY
By: __________________________
Xxxxxxx X. Xxxxxx
Title: Vice President - Sales
NATIONWIDE INVESTMENT SERVICES CORPORATION
By: ________________________
Xxxxxxx Xxxxx
Title: Vice President - Compliance Officer
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EXHIBIT A
ANALYSIS OF ADMINISTRATIVE FUNCTIONS
A. PRODUCT UNDERWRITING/ISSUE
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NATIONWIDE NISC
- Establishes underwriting criteria for application - Consults with regard to new business
processing and rejections. procedures and processing.
- Reviews the completed application. Applies
underwriting/issue criteria to application.
- Notifies Agent and/or customer of any error or
missing data necessary to underwrite application and
establish records for owner of Product ("Contract Owner").
- Prepares policy data page for approved business
and mails with policy to Contract Owner.
- Establishes and maintains all records required
for each Contract Owner, as applicable.
- Prepares and mails confirmation and other
statements to Contract Owners and Agents, as required.
- Prints, provides all forms ancillary to issue of
contract/policy forms for Products.
- Maintains supply of approved specimen policy
forms and all ancillary forms, distributes same to Agents.
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B. BILLING AND COLLECTION
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NATIONWIDE
- Receives premium/purchase payments and reconciles
amount received with remittance media.
- Updates Contract Owner records to reflect receipt of premium/purchase
payment and performs accounting/ investment allocation of each payment
received.
- Deposits all cash received under the Products in
accordance with the terms of the Products.
- Balances, edits, endorses and prepares daily
deposit.
C. BANKING
NATIONWIDE
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- Balances, edits, endorses and prepares daily deposit
- Places deposits in depository account
- Prepares daily cash journal summary reports and
maintains same for review by NISC
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D. PRICING/VALUATION/ACCOUNTING/TRADING
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NATIONWIDE NISC
- Maintains and makes available, as - Cooperates in annual audit of separate
reasonably requested, records used in determining account financials conducted for purposes of
"Net Amount Available for Investment." financial statement certification and publication.
- Collects information needed in - Will clear and settle Mutual Fund trades
determining Variable Account unit values from the on behalf of the separate accounts using the
Funds including daily net asset value, capital National Securities Clearing Corporation FUND/Serv
gains or dividend distributions, and the number of System.
Fund Shares acquired or sold during the
immediately preceding valuation period.
- Performs daily unit valuation
calculation.
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E. CONTRACT OWNER SERVICE/
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RECORD MAINTENANCE
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NATIONWIDE NISC
- Receives and processes all Contract Owner - Accommodates customer service function by
service requests, including but not limited to providing any supporting information or
informational requests, beneficiary changes, and documentation which may be in the control of NISC.
transfers of Contract Value among eligible
investment options.
- Maintains daily records of all changes
made to Contract Owner accounts.
- Researches and responds to all Contract
Owner/Agent inquiries.
- Keeps all required Contract Owner
records.
- Maintains adequate number of toll free lines to
service Contract Owner/Agent inquiries.
F. DISBURSEMENTS
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(SURRENDERS, DEATH
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CLAIMS, LOANS)
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NATIONWIDE NISC
- Receives and processes surrenders, loans,
and death claims in accordance with established
guidelines.
- Prepares checks for surrenders, loans,
and death claims, and forwards to Contract Owner
or Beneficiary. Prepares and mails confirmation
statement of disbursement to Contract Owner/
Beneficiary with copy to Agent.
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G. COMMISSIONS
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NATIONWIDE NISC
- Ascertains, on receipt of applications, - Receives and performs record keeping for
whether writing Agent is appropriately licensed. investment company payments made under a 12b-1
Plan.
- Pays commissions and other fees in
accordance with agreements relating to same.
H. PROXY PROCESSING
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NATIONWIDE NISC
- Receives record date information from
Funds Receives proxy solicitation materials from
Funds.
- Prepares Voting Instruction cards and
mails solicitation, if necessary.
- Tabulates and votes all Fund Shares in
accordance with SEC requirements.
I. PERIODIC REPORTS TO CONTRACT OWNERS
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NATIONWIDE NISC
- Prepares and mails quarterly and annual
Statements of Account to Contract Owners.
- Prepares and mails all semi-annual and
annual reports of Variable Account(s) to Contract
Owners.
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J. REGULATORY/STATEMENT REPORTS
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NATIONWIDE NISC
- Prepares and files Separate Account - Prepares and files periodic FOCUS Reports
Annual Statements. with the NASDR and SEC, as applicable.
- Prepares and mails the appropriate, - Prepares and files annual audited
required IRS reports at the Contract Owner level. financial statements with required regulatory
Files same with required regulatory agencies. agencies.
- Prepares and files form N-SAR for the
Separate Account.
- Prepares and files form N-SAR for the
Separate Account.
K. PREMIUM TAXES
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NATIONWIDE NISC
- Collects, pays and accounts for premium
taxes as appropriate.
- Prepares and maintains all premium tax
records by state.
- Maintains liabilities in General Account
ledger for accrual of premium tax collected.
- Integrates all company premium taxes due
and performs related accounting.
L. FINANCIAL AND MANAGEMENT REPORTS
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NATIONWIDE NISC
- Provides periodic reports in accordance - Provides periodic reports in accordance
with the Schedule of Reports to be prepared with the Schedule of Reports to be prepared
jointly by Nationwide and NISC. (See EXHIBIT C) jointly by Nationwide and NISC. (See EXHIBIT C)
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M. AGENT LICENSE RECORDKEEPING
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NATIONWIDE NISC
- Receives, establishes, processes, and - Maintains securities registrations and
maintains Agent appointment records. assumes supervisory responsibility for
representatives of affiliated sales and marketing
companies involved in the wholesale distribution
of Nationwide variable contract products.
- Maintains training, supervisory, and
other required records for and on behalf of
registered representatives of NISC.
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EXHIBIT B
ADVERTISING AND SALES PROMOTION MATERIAL GUIDELINES
FOR APPROVAL BY NATIONWIDE AND NISC
In order to assure compliance with state and federal regulatory requirements and
to maintain control over the distribution of promotional materials dealing with
the Products, Nationwide and NISC require that all variable contract promotional
materials be REVIEWED and APPROVED by both Nationwide and NISC PRIOR to their
use. These guidelines are intended to provide appropriate regulatory and
distribution controls.
1. Sufficient lead time must be allowed in the submission of all
promotional material. Nationwide and NISC shall approve in writing all
promotional material. Such approval shall not be unreasonably withheld,
and shall be given promptly, normally within five (5) days.
2. All promotional material will be submitted in "draft" form to permit
any changes or corrections to be made prior to the printing.
3. Nationwide and NISC will provide each other with details as to each and
every use of all promotional material submitted. Approval for one use
will not constitute approval for any other use. Different standards of
review may apply when the same advertising material is intended for
different uses. The following information will be provided for each
item of promotional material:
a. In what jurisdiction(s) the material will be used.
b. Whether distribution will be to broker/dealer, entity,
participant, etc.
c. How the material will be used (e.g., brochure, mailing, web
site, etc.).
d. The projected date of initial use.
4. Each party will advise the other of the date it discontinues the use of
any material.
5. Any changes to previously approved promotional material must be
resubmitted, following these procedures. When approved material is to
be put to a different use, request for approval of the material for the
new use must be submitted.
6. Nationwide will assign a form number to each item of advertising and
sales promotional material. This number will appear on each piece of
advertising and sales promotional material. It will be used to aid in
necessary filings, and to maintain appropriate controls.
7. Nationwide and NISC will provide WRITTEN APPROVAL for all material to
be used.
8. Nationwide will be responsible to effect necessary state filings.
9 NISC will coordinate SEC/NASD filings of sales and promotional
material.
10. All telephone communication and written correspondence regarding
promotional materials should be directed to Office of Product and
Market Compliance, Nationwide Life Insurance Company, Xxx Xxxxxxxxxx
Xxxxx, Xxxxxxxx, Xxxx 00000
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EXHIBIT C
PRODUCTION REPORTS TO BE PROVIDED
Nationwide agrees to provide the following reports to NISC:
1. Daily Receipt Report: Indicates which Agents are generating sales
2. Daily Approval Report: Indicates which applications have been approved
3. Daily Activity Summary: Indicates top firms' sales and liquidation by month,
year-to-date as well as total assets by firm.
4. Dealer Activity Indicates top firms' sales and
Summary by Territory: liquidation by month, year-to-date
5. Summary of Sales by Indicates sales by territory/dealer/branch, including
Territory and Dealer: non-commissionable amounts and actual commission
payments, as well as chargebacks (Internal use only)
6. Commission Report: Indicates commission paid and chargebacks, matched to
Commission checks.
In addition, Nationwide will provide reports detailing current appointments and
other information, as reasonably requested by NISC.
