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EXHIBIT 1.A.(3)(A)
DISTRIBUTION AGREEMENT
AGREEMENT dated as of ________, 2001 by and between LIFE INSURANCE
COMPANY OF THE SOUTHWEST ("Insurer"), a Texas corporation, on its behalf and on
behalf of each separate account identified in Schedule 1 hereto, and EQUITY
SERVICES, INC. ("Distributor"), a Vermont corporation.
WITNESSETH:
WHEREAS, Distributor is a broker-dealer that engages in the
distribution of variable insurance products and other investment products; and
WHEREAS, Insurer desires to issue certain variable insurance products
described more fully below to the public through Distributor acting as principal
underwriter;
NOW, THEREFORE, in consideration of their mutual promises, Insurer and
Distributor hereby agree as follows:
1. Definitions
a. Policies -- The class or classes of variable insurance products set
forth on Schedule 1 to this Agreement as in effect at the time this Agreement is
executed, and such other classes of variable insurance products that may be
added to Schedule 1 from time to time in accordance with Section 11.b of this
Agreement, and including any riders to such policies and any other policies
offered in connection therewith. For this purpose and under this Agreement
generally, a "class of Policies" shall mean those Policies issued by Insurer on
the same policy form or forms and covered by the same Registration Statement.
b. Registration Statement -- At any time that this Agreement is in
effect, each currently effective registration statement filed with the SEC under
the 1933 Act on a prescribed form, or currently effective post-effective
amendment thereto, as the case may be, relating to a class of Policies,
including financial statements included in, and all exhibits to, such
registration statement or post-effective amendment. For purposes of Section 9 of
this Agreement, the term "Registration Statement" means any document which is or
at any time was a Registration Statement within the meaning of this Section 1.b.
c. Prospectus -- The prospectus included within a Registration
Statement, except that, if the most recently filed version of the prospectus
(including any supplements thereto) filed pursuant to Rule 497 under the 1933
Act subsequent to the date on which a Registration Statement became effective
differs from the prospectus included within such Registration Statement at the
time it became effective, the term "Prospectus" shall refer to the most recently
filed prospectus filed under Rule 497 under the 1933 Act, from and after the
date on which it shall have been filed. For purposes of Section 9 of this
Agreement, the term "any Prospectus" means any document which is or at any time
was a Prospectus within the meaning of this Section 1.c.
d. Fund -- An investment company in which the Variable Account invests.
e. Variable Account -- A separate account supporting a class or classes
of Policies and specified on Schedule 1 as in effect at the time this Agreement
is executed, or as it may be amended from time to time in accordance with
Section 11.b of this Agreement.
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f. 1933 Act -- The Securities Act of 1933, as amended.
g. 1934 Act -- The Securities Exchange Act of 1934, as amended.
h. 1940 Act -- The Investment Company Act of 1940, as amended.
i. SEC -- The Securities and Exchange Commission.
j. NASD -- The National Association of Securities Dealers, Inc.
k. Regulations -- The rules and regulations promulgated by the SEC
under the 1933 Act, the 1934 Act and the 1940 Act as in effect at the time this
Agreement is executed or thereafter promulgated.
l. Selling Broker-Dealer -- A person or entity registered as a
broker-dealer and licensed as a life insurance agent or affiliated with a person
or entity so licensed, and authorized to distribute the Policies pursuant to a
sales agreement as provided for in Section 4 of this Agreement.
m. Representative -- When used with reference to Distributor or a
Selling Broker-Dealer, an individual who is an associated person, as that term
is defined in the 1934 Act, thereof.
n. Application -- An application for a Policy.
o. Premium -- A payment made under a Policy by an applicant or
purchaser to purchase benefits under the Policy.
p. Customer Service Center -- The service center identified in the
Prospectus as the location at which Premiums and Applications are accepted.
2. Authorization and Appointment
a. Scope of Authority. Insurer hereby authorizes Distributor on an
exclusive basis, and Distributor accepts such authority, subject to the
registration requirements of the 1933 Act and the 1940 Act and the provisions of
the 1934 Act and conditions herein, to be the distributor and principal
underwriter for the sale of the Policies to the public in each state and other
jurisdiction in which the Policies may lawfully be sold during the term of this
Agreement. Insurer hereby authorizes Distributor to grant authority to Selling
Broker-Dealers to solicit Applications and Premiums to the extent Distributor
deems appropriate and consistent with the marketing program for the Policies or
a class of Policies, subject to the conditions set forth in Section 4 of this
Agreement. The Policies shall be offered for sale and distribution at premium
rates set from time to time by Insurer. Distributor shall market the Policies
actively, directly and/or through Selling Broker-Dealers in accordance with
Section 4 of this Agreement, subject to compliance with applicable law,
including rules of the NASD.
b. Limits on Authority. Distributor shall act as an independent
contractor and nothing herein contained shall constitute Distributor or its
agents, officers or employees as agents, officers or employees of Insurer solely
by virtue of their activities in connection with the
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sale of the Policies hereunder. Distributor and its Representatives shall not
have authority, on behalf of Insurer: to make, alter or discharge any Policy or
other insurance policy or annuity entered into pursuant to a Policy; to waive
any Policy forfeiture provision; to extend the time of paying any Premium; or to
receive any monies or Premiums (except for the sole purpose of forwarding monies
or Premiums to Insurer). Distributor shall not expend, nor contract for the
expenditure of, the funds of Insurer. Distributor shall not possess or exercise
any authority on behalf of Insurer other than that expressly conferred on
Distributor by this Agreement.
3. Solicitation Activities
a. Distributor Representatives. No Distributor Representative shall
solicit the sale of a Policy unless at the time of such solicitation such
individual is duly registered with the NASD and duly licensed with all
applicable state insurance and securities regulatory authorities, and is duly
appointed as an insurance agent of Insurer.
b. Solicitation Activities. All solicitation and sales activities
engaged in by Distributor and the Distributor Representatives with respect to
the Policies shall be in compliance with all applicable federal and state
securities laws and regulations and NASD rules, as well as all applicable
insurance laws and regulations and the Insurer's rules and procedures (to the
extent not inconsistent with the foregoing). In particular, without limiting the
generality of the foregoing:
(1) Neither Distributor nor any Distributor Representative
shall offer, attempt to offer, or solicit Applications for, the Policies in any
state or other jurisdiction unless Insurer has notified Distributor that such
Policies may lawfully be sold or offered for sale in such state, and has not
subsequently revised such notice.
(2) Neither Distributor nor any Distributor Representative
shall give any information or make any representation in regard to a class of
Policies in connection with the offer or sale of such class of Policies that is
not in accordance with the Prospectus for such class of Policies, or in the
then-currently effective prospectus or statement of additional information for a
Fund, or in current advertising materials for such class of Policies authorized
by Insurer.
(3) All Premiums paid by check or money order that are
collected by Distributor or any of its Representatives shall be remitted
promptly, and in any event not later than noon of the next business day
following receipt of such Premium, in full, together with any Applications,
forms and any other required documentation, to the Insurer. Checks or money
orders in payment of Premiums shall be drawn to the order of the Insurer. If any
Premium is held at any time by Distributor, Distributor shall hold such Premium
in a fiduciary capacity and such Premium shall be remitted promptly, and in any
event not later than noon of the next business day following receipt of such
Premium, to Insurer. Distributor acknowledges that all such Premiums, whether by
check, money order or wire, shall be the property of Insurer. Distributor
acknowledges that Insurer shall have the unconditional right to reject, in whole
or in part, any Application or Premium.
c. Representations and Warranties of Distributor. Distributor
represents and warrants to Insurer that Distributor is and shall remain
registered during the term of this Agreement as a broker- dealer under the 1934
Act, is a member with the NASD, and is duly registered under applicable state
securities laws, and that Distributor is and shall remain during the term of
this Agreement in compliance with Section 9(a) of the 1940 Act.
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4. Selling Broker-Dealers. Insurer shall ensure that sales of the
Policies by Selling Broker-Dealers comply with the following conditions.
a. Every Selling Broker-Dealer shall be both registered as a
broker-dealer with the SEC and a member of the NASD and licensed as an insurance
agent with authority to sell variable products or associated with an insurance
agent so licensed. Any individuals to be authorized to act on behalf of Selling
Broker-Dealer shall be duly registered with the NASD as representatives of
Selling Broker-Dealer with authority to sell variable products, and shall be
licensed as insurance agents with authority to sell variable products. Insurer
shall verify that Selling Broker-Dealer and its Representatives are duly
licensed under applicable state insurance law to sell the Policies (or, if
Broker-Dealer is not so licensed, that it is associated with a person or entity
so licensed).
b. Every Selling Broker-Dealer (or, if applicable, its associated
general insurance agency) and each of its Representatives shall have been
appointed by Insurer, provided that Insurer reserves the right to refuse to
appoint any proposed person, or once appointed, to terminate such appointment.
c. Every Selling Broker-Dealer must enter into a written sales
agreement with Distributor which sales agreement, among other things, will
require such Selling Broker-Dealer to use its best efforts to solicit
applications for Policies and to comply with applicable laws and regulations,
including the Insurer's rules and regulations as reflected in the Insurer's
rules and procedures or otherwise communicated to agents appointed by Insurer,
and will contain such other provisions as the Distributor deems to be consistent
herewith.
d. In view of Insurer's desire to ensure that Policies will be sold to
purchasers for whom the Policies will be suitable, the written Sales Agreement
shall require that Selling Broker-Dealers and their Representatives not make
recommendations to an applicant to purchase a Policy in the absence of
reasonable grounds to believe that the purchase of the Policy is suitable for
the applicant. While not limited to the following, a determination of
suitability shall be based on information supplied by an applicant after a
reasonable inquiry concerning the applicant's other security holdings, insurance
and investment objectives, financial situation and needs, and the likelihood
that the applicant will continue to make any premium payments contemplated by
the Policy applied for and will keep the Policy in force for a sufficient period
of time so that Insurer's acquisition costs are amortized over a reasonable
period of time.
5. Marketing Materials
a. Preparation and Filing. Insurer shall be primarily responsible for
the design and preparation of all promotional, sales and advertising material
relating to the Policies. Distributor shall be responsible for filing such
material, as required, with the NASD and any state securities regulatory
authorities. Insurer shall be responsible for filing all promotional, sales or
advertising material, as required, with any state insurance regulatory
authorities. Insurer shall be responsible for preparing the Policy Forms and
filing them with applicable state insurance regulatory authorities and obtaining
any required approvals, and for preparing the Prospectuses and Registration
Statements and filing them with the SEC and state regulatory authorities, to the
extent required. The parties shall notify each other expeditiously of any
comments provided by the SEC, NASD or any securities or insurance regulatory
authority on such material, and will cooperate expeditiously in resolving and
implementing any comments, as applicable.
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b. Use in Solicitation Activities. Insurer shall be responsible for
furnishing Distributor with such Applications, Prospectuses and other materials
for use by Distributor and any Selling Broker- Dealers in their solicitation
activities with respect to the Policies. Insurer shall notify Distributor of
those states or jurisdictions which require delivery of a statement of
additional information with a prospectus to a prospective purchaser.
6. Compensation and Expenses
a. Insurer shall pay compensation for sales of the Policies in
accordance with Schedule 2 hereto. Until Distributor requests otherwise, Insurer
shall pay compensation payable to Distributor Representatives and to Selling
Broker-Dealers, on Distributor's behalf, subject to the provisions of Section 7
of this Agreement and applicable NASD rules.
b. Insurer shall pay all expenses in connection with:
(1) the preparation and filing of each Registration Statement
(including each pre-effective and post-effective amendment thereto) and the
preparation and filing of each Prospectus (including any preliminary and each
definitive Prospectus);
(2) the preparation, underwriting, issuance and administration
of the Policies;
(3) any registration, qualification or approval or other
filing of the Policies or Policy forms required under the securities or
insurance laws of the states in which the Policies will be offered.
(4) all registration fees for the Policies payable to the SEC;
(5) the printing and mailing of definitive Prospectuses for
the Policies and any supplements thereto for distribution to existing Policy
Owners;
(6) the printing and mailing of all promotional materials
relating to the Policies;
(7) NASD filing fees (to the extent the Insurer requests
expedited review).
c. Distributor shall pay the following expenses related to its
distribution of the Policies:
(1) NASD filing fees (to the extent expedited review is not
requested by Insurer); and
(2) any other expenses incurred by Distributor or its
employees for the purpose of carrying out the obligations of Distributor
hereunder.
7. Compliance
a. Maintaining Registration and Approvals. Insurer shall be responsible
for maintaining the registration of the Policies with the SEC and any state
securities regulatory
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authority with which such registration is required, for gaining and maintaining
approval of the Policy forms where required under the insurance laws and
regulations of each state or other jurisdiction in which the Policies are to be
offered, and for ensuring that the Policies comply with the provisions of the
federal securities laws and rules thereunder.
b. Sales Load Compliance. Insurer shall be responsible for ensuring
that the sales load assessed on the Policies and compensation paid for the sales
of the Policies comply with the 1940 Act and rules, regulations and
interpretations thereunder, and NASD rules.
c. Confirmations and 1934 Act Compliance. Insurer, as agent for
Distributor, shall confirm to each applicant for and purchaser of a Policy in
accordance with Rule 10b-10 under the 1934 Act acceptance of Premiums and such
other transactions as are required by Rule 10b-10 or administrative
interpretations thereunder. Insurer shall maintain and preserve such books and
records with respect to such confirmations and all other required books of
account and related financial records relating to the distribution of the
Policies in conformity with the requirements of Rules 17a-3 and 17a-4 under the
1934 Act to the extent such requirements apply. Insurer shall maintain all such
books and records and hold such books and records on behalf of and as agent for
Distributor whose property they are and shall remain, and acknowledges that such
books and records are at all times subject to inspection by the SEC in
accordance with Section 17(a) of the 1934 Act.
d. Issuance and Administration of Policies. Insurer shall be
responsible for issuing the Policies and administering the Policies and the
Variable Account, including all Policy Owner communications, in accordance with
applicable law, provided, however, that Distributor shall have full
responsibility for the securities activities of all persons employed by the
Insurer who are engaged directly or indirectly in the Policy operations, and for
the training, supervision and control of such persons to the extent of such
activities.
8. Investigations, Proceedings and Customer Complaints
a. Investigations and Proceedings. Distributor and Insurer shall
cooperate fully in any securities or insurance regulatory investigation or
proceeding or judicial proceeding arising in connection with the offering, sale
or distribution of the Policies distributed under this Agreement. Without
limiting the foregoing, Insurer and Distributor shall notify each other promptly
of any notice of any regulatory investigation or proceeding or judicial
proceeding received by either party with respect to the Policies.
b. Customer Complaints. Distributor and Insurer shall cooperate fully
in responding to any customer complaints. Distributor and Insurer, will promptly
provide to the other a copy of all customer complaints received by either of
them concerning or related to the Policies. With respect to such complaint,
Distributor and Insurer shall determine which party shall be responsible for
responding to such complaint. Such determination shall take into account the
nature of the complaint, the violation alleged, and relevant laws and facts.
Distributor and Insurer will timely provide information as needed to enable the
other to respond to such complaints.
9. Indemnification
a. By Insurer. Insurer shall indemnify and hold harmless Distributor
and each person who controls or is associated with Distributor within the
meaning of such terms under the
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federal securities laws, and any officer, director, employee or agent of the
foregoing, against any and all losses, claims, damages or liabilities, joint or
several (including any investigative, legal and other expenses reasonably
incurred in connection with, and any amounts paid in settlement of, any action,
suit or proceeding or any claim asserted), to which Distributor and/or any such
person may become subject, under any statute or regulation, any NASD rule or
interpretation, at common law or otherwise, insofar as such losses, claims,
damages or liabilities:
(1) arise out of or are based upon any untrue statement or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, in light of the circumstances in which they
were made, contained in any (i) Registration Statement or in any Prospectus or
(ii) blue-sky application or other document executed by Insurer specifically for
the purpose of qualifying any or all of the Policies for sale under the
securities laws of any jurisdiction; provided that Insurer shall not be liable
in any such case to the extent that such loss, claim, damage or liability arises
out of, or is based upon, an untrue statement or alleged untrue statement or
omission or alleged omission made in reliance upon information furnished in
writing to Insurer by Distributor specifically for use in the preparation of any
such Registration Statement or any such blue-sky application or any amendment
thereof or supplement thereto;
(2) result from any breach by Insurer of any provision of this
Agreement.
This indemnification agreement shall be in addition to any
liability that Insurer may otherwise have; provided, however, that no person
shall be entitled to indemnification pursuant to this provision if such loss,
claim, damage or liability is due to the willful misfeasance, bad faith, gross
negligence or reckless disregard of duty by the person seeking indemnification.
b. By Distributor. Distributor shall indemnify and hold harmless
Insurer and each person who controls or is associated with Insurer within the
meaning of such terms under the federal securities laws, and any officer,
director, employee or agent of the foregoing, against any and all losses,
claims, damages or liabilities, joint or several (including any investigative,
legal and other expenses reasonably incurred in connection with, and any amounts
paid in settlement of, any action, suit or proceeding or any claim asserted), to
which Insurer and/or any such person may become subject under any statute or
regulation, any NASD rule or interpretation, at common law or otherwise, insofar
as such losses, claims, damages or liabilities:
(1) arise out of or are based upon any untrue statement or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact required to be stated therein or necessary in order to
make the statements therein not misleading, in light of the circumstances in
which they were made, contained in any (i) Registration Statement or in any
Prospectus, or (ii) blue-sky application or other document executed by Insurer
specifically for the purpose of qualifying any or all of the Policies for sale
under the securities laws of any jurisdiction; in each case to the extent, but
only to the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon information furnished in
writing by Distributor to Insurer specifically for use in the preparation of any
such Registration Statement or any such blue-sky application or any amendment
thereof or supplement thereto;
(2) result because of any use by Distributor or any
Distributor Representative of promotional, sales or advertising material not
authorized by Insurer or any verbal or written misrepresentations by Distributor
or any Distributor Representative inconsistent with materials
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forwarded by Insurer or any unlawful sales practices concerning the Policies by
Distributor or any Distributor Representative under federal securities laws or
NASD regulations; or
(3) result from any breach by Distributor of any provision of
this Agreement.
This indemnification shall be in addition to any liability
that Distributor may otherwise have; provided, however, that no person shall be
entitled to indemnification pursuant to this provision if such loss, claim,
damage or liability is due to the willful misfeasance, bad faith, gross
negligence or reckless disregard of duty by the person seeking indemnification.
c. General. Promptly after receipt by a party entitled to
indemnification ("indemnified person") under this Section 9 of notice of the
commencement of any action as to which a claim will be made against any person
obligated to provide indemnification under this Section 9 ("indemnifying
party"), such indemnified person shall notify the indemnifying party in writing
of the commencement thereof as soon as practicable thereafter, but failure to so
notify the indemnifying party shall not relieve the indemnifying party from any
liability which it may have to the indemnified person otherwise than on account
of this Section 9. The indemnifying party will be entitled to participate in the
defense of the indemnified person but such participation will not relive such
indemnifying party of the obligation to reimburse the indemnified person for
reasonable legal and other expenses incurred by such indemnified person in
defending himself or itself.
The indemnification provisions contained in this Section 9
shall remain operative in full force and effect, regardless of any termination
of this Agreement. A successor by law of Distributor or Insurer, as the case may
be, shall be entitled to the benefits of the indemnification provisions
contained in this Section 9.
10. Termination. This Agreement shall terminate automatically if it is assigned
by a party without the prior written consent of the other party. This Agreement
may be terminated at any time for any reason or for no reason by either party
upon 60 days' written notice to the other party, without payment of any penalty.
(The term "assigned" shall not include any transaction exempted from Section
15(b)(2) of the 1940 Act.) This Agreement may be terminated immediately at the
option of either party to this Agreement upon the other party's material breach
of any provision of this Agreement or of any representation or warranty made in
this Agreement, unless such breach has been cured within 10 days after receipt
of notice of breach from the non-breaching party. Upon termination of this
Agreement all authorizations, rights and obligations shall cease except the
obligation to settle accounts hereunder, including commissions on Premiums
subsequently received for Policies in effect at the time of termination or
issued pursuant to Applications signed prior to termination.
11. Miscellaneous
a. Binding Effect. This Agreement shall be binding on and shall inure
to the benefit of the respective successors and assigns of the parties hereto
provided that neither party shall assign this Agreement or any rights or
obligations hereunder without the prior written consent of the other party.
b. Schedules. The parties to this Agreement may amend Schedule 1 to
this Agreement from time to time to reflect additions of any class of Policies
and Variable Accounts. The provisions of this Agreement shall be equally
applicable to each such class of Policies and
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each Variable Account that may be added to the Schedule, unless the context
otherwise requires. Insurer may amend Schedule 2 unilaterally, from time to
time. Any other change in the terms or provisions of this Agreement shall be by
written agreement between Insurer and Distributor.
c. Rights, Remedies, etc, are Cumulative. The rights, remedies and
obligations contained in this Agreement are cumulative and are in addition to
any and all rights, remedies and obligations, at law or in equity, which the
parties hereto are entitled to under state and federal laws. Failure of either
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.
d. Notices. All notices hereunder are to be made in writing and shall
be given:
if to Insurer, to:
D. Xxxxxxx Xxxxxx, Assistant General Counsel
National Life Insurance Company
One National Life Drive
Montpelier, Vermont 05604
if to Distributor, to:
Xxxxxxx Teese, Vice President -- Compliance
Equity Services, Inc.
National Life Drive
Montpelier, Vermont 05604
or such other address as such party may hereafter specify in
writing. Each such notice to a party shall be either hand delivered or
transmitted by registered or certified United States mail with return receipt
requested, or by overnight mail by a nationally recognized courier, and shall be
effective upon delivery. Failure to provide written notice shall not constitute
a defense to any action unless the party who did not receive written notice was
materially prejudiced thereby.
f. Interpretation; Jurisdiction. This Agreement constitutes the whole
agreement between the parties hereto with respect to the subject matter hereof,
and supersedes all prior oral or written understandings, agreements or
negotiations between the parties with respect to such subject matter. No prior
writings by or between the parties with respect to the subject matter hereof
shall be used by either party in connection with the interpretation of any
provision of this Agreement. This Agreement shall be construed and its
provisions interpreted under and in accordance with the internal laws of the
state of [Vermont] without giving effect to principles of conflict of laws.
g. Severability. This is a severable Agreement. In the event that any
provision of this Agreement would require a party to take action prohibited by
applicable federal or state law or prohibit a party from taking action required
by applicable federal or state law, then it is the intention of the parties
hereto that such provision shall be enforced to the extent permitted under the
law, and, in any event, that all other provisions of this Agreement shall remain
valid and duly enforceable as if the provision at issue had never been a part
hereof.
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h. Section and Other Headings. The headings in this Agreement are
included for convenience of reference only and in no way define or delineate any
of the provisions hereof or otherwise affect their construction or effect.
i. Counterparts. This Agreement may be executed in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
j. Regulation. This Agreement shall be subject to the provisions of the
1933 Act, 1934 Act and 1940 Act and the Regulations and the rules and
regulations of the NASD, from time to time in effect, including such exemptions
from the 1940 Act as the SEC may grant, and the terms hereof shall be
interpreted and construed in accordance therewith.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by such authorized officers on the date specified below.
LIFE INSURANCE COMPANY OF THE SOUTHWEST
By:
----------------------------
Name:
Title:
EQUITY SERVICES, INC.
By:
----------------------------
Name:
Title:
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SCHEDULE 1
REGISTRATION VARIABLE
VARIABLE POLICY FORM STATEMENT ACCOUNT
1. Variable Life Form S-6 File No. 333-57402 LSW Variable
policy Life Insurance
Account
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SCHEDULE 2
SCHEDULES OF SALES COMMISSIONS
Agents are compensated for sales of this Policy on a commission and service fee
basis. The compensation is calculated as a percentage of premium paid up to the
Commissionable Target Premium (a target amount used only to determine commission
payments), plus a percentage of premium paid in excess of Commissionable Target
Premium. The schedule of percentage is as follows:
Percent of Premium up to Commissionable Target Premium:
Policy Year Commission Service Fee
----------- ---------- -----------
1 50%
2-4 4.0%
5 4.0%
6-10 4.0%
11+ 1.5%
Percent of Premium in excess of Commissionable Target Premium:
Policy Year Commission Service Fee
----------- ---------- -----------
1 3%
2-4 3.0%
5 3.0%
6-10 3.0%
11+ 1.5%
INCREASES IN FACE AMOUNT:
Duration of Increase Commission Percent
-------------------- ------------------
1-5 46.0%
6-10 46.0%
11+ 48.5%
INTERNAL REPLACEMENTS:
After the Commissionable Target Premium has been reduced (for coverage
amounts less than or equal to the amount of coverage on policy(ies) being rolled
into VUL) the rate applied to premium up to Commissionable Target Premium for
the agent's commission should be 50%.
TERM CONVERSIONS (AFTER ISSUE):
Regular commissions are generated on the term conversion credit and
then charged back to the agents at 50%.
There are no changes to General Agent compensation or SFYC.
All documents and systems should be changed immediately to reflect
these revisions.
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