EX-99.23(h)(20)
ANTI-MONEY LAUNDERING AGREEMENT
THIS ANTI-MONEY LAUNDERING AGREEMENT ("Agreement") dated as of September 1,
2006, is entered into by and among Xxxxxxx National Life Insurance Company, a
Michigan life insurance company ("Xxxxxxx"), the JNL Series Trust, the JNL
Variable Fund LLC, and the JNLNY Variable Fund I LLC (each a "Fund," and
collectively, "Funds"). Jackson and the Funds are herein individually referred
to as a "Party," and collectively referred to as the "Parties."
RECITALS
WHEREAS, Xxxxxxx offers variable contracts to the retail public, and such
variable contracts are sold through affiliated and unaffiliated broker-dealers
and insurance agencies;
WHEREAS, the Funds are investment companies registered with the U.S.
Securities and Exchange Commission ("SEC") pursuant to the Investment Company
Act of 1940, as amended ("1940 Act"), and the Securities Act of 1933, as
amended;
WHEREAS, the Funds are subject in part to the provisions of the Bank
Secrecy Act, as amended by The International Money Laundering Abatement and
Financial Anti-Terrorism Act of 2001, Title III of the USA Patriot Act ("USA
Patriot Act"), and the regulations promulgated thereunder and have established
an anti-money laundering program ("AML Program") pursuant to Section 352 of the
USA Patriot Act;
WHEREAS, Xxxxxxx is a life insurance company subject in part to the
provisions of the Bank Secrecy Act, as amended by the USA Patriot Act, and the
regulations promulgated thereunder and has established an AML Program pursuant
to Section 352 of the USA Patriot Act;
WHEREAS, the Funds desire to delegate to Xxxxxxx the performance of certain
anti-money laundering ("AML")" functions, and Xxxxxxx desires to accept such
delegation and provide the Funds "AML Services," as described in this Agreement;
WHEREAS, shares of the Funds are sold directly to certain "Qualified
Retirement Plans," and the separate accounts of Xxxxxxx and Xxxxxxx National
Life Insurance Company of New York that comprise the variable contracts, the
Qualified Retirement Plans and the separate accounts are the Funds' "Customers"
for AML purposes, and due to the structure of such Qualified Retirement Plans
and variable contracts, the Funds generally do not have access to individual
Qualified Retirement Plan participant and individual contractholder information;
WHEREAS, Xxxxxxx has access to individual Qualified Retirement Plan
participant and contractholder information (including, but not limited to,
information such as contractholder names, tax identification numbers, addresses,
and other material non-public information), and affiliated and unaffiliated
broker-dealers have access to contractholder information;
WHEREAS, the affiliated and unaffiliated broker-dealers and insurance
agencies have been integrated into Xxxxxxx'x AML Program, and such
broker-dealers, individually, have established AML Programs pursuant to rules of
the National Association of Securities Dealers, Inc. ("NASD");
WHEREAS, by the provision of services by Xxxxxxx for the Funds, the Parties
contemplate that the use of Xxxxxxx'x existing operations and economies of scale
will provide cost savings and enhanced AML Services to the Funds; and
WHEREAS, the Parties intend to prescribe reasonable fees for the provision
of AML Services described herein to reflect actual costs in a fair and equitable
manner.
NOW, THEREFORE, in consideration of the premises and of the mutual promises
set forth herein, and intending to be legally bound hereby, the Parties agree as
follows:
ARTICLE I
XXXXXXX AML SERVICES
SECTION 1.1 AML SERVICES. Subject to the foregoing and to the terms,
conditions, and limitations of this Agreement, Xxxxxxx shall perform or provide
the AML Services described herein on behalf of the Funds, as follows:
(a) PROVISION OF AML SERVICES. Xxxxxxx shall provide AML Services and
undertake to administer and operate, in accordance with the
requirements of the Bank Secrecy Act, as amended by the USA Patriot
Act, its implementing regulations, and applicable rules adopted
thereunder, the following aspects of the Funds' AML Program including,
but not limited to:
(i) Monitoring and reporting of receipt of cash or cash equivalents;
(ii) Suspicious activity monitoring and reporting;
(iii) Comparisons with governmental lists, including the U.S. Treasury
Department's Office of Foreign Asset Control ("OFAC") "Specially
Designated National and Blocked Persons List" ("SDN List");
(iv) AML education for appropriate employees of the Funds, as
requested by the Funds, and their service providers, including
certain Xxxxxxx personnel;
(v) Verifications that registered representatives (and insurance
representatives) have received AML training at affiliated and
unaffiliated broker-dealers; and
(vi) Reporting and recordkeeping requirements associated with the
aforementioned services.
Xxxxxxx agrees to perform such aspects on behalf of the Funds AML
Program consistent with Xxxxxxx'x AML obligations as an insurance
company.
(b) REPORTING. Xxxxxxx shall promptly notify the Funds of violations or
breaches of Xxxxxxx'x AML Program.
(c) CONSENT TO PERMIT ACCESS AND INSPECTION: Xxxxxxx shall permit federal
examiners or other representatives of the U.S. Treasury Department's
Financial Crimes Enforcement Network ("FinCEN") or the SEC to obtain
information and records relating to the AML Program and to inspect
Xxxxxxx for purposes of the AML Program at any time, or from time to
time during business hours, to the extent required under applicable
laws and regulations. Xxxxxxx shall also provide the Funds with
reasonable assistance necessary for the Funds to assure compliance
with the AML Program and its related provisions, including access to
information and records relating to compliance with the AML Program.
(d) RULE 38A-1 COMPLIANCE AND REVIEWS. Xxxxxxx shall cooperate fully with
the Funds so as to meet the Funds' obligations under its compliance
program, as established pursuant to Rule 38a-1 under the 1940 Act,
including any reviews of Xxxxxxx'x AML Program. In addition, Xxxxxxx
shall cooperate fully with the Funds in the provision of any data,
reports, and responses to any inquiry, request for information,
inspection or audit by the SEC or FinCEN.
SECTION 1.2 OTHER AML RELATED SERVICES. The AML Services shall include the
availability of any and all such Xxxxxxx facilities and staff as reasonably
necessary to perform the AML Services described in Section 1.1 herein,
including, without limitation, data processing equipment, office facilities
(whether owned or leased) and communications equipment. Xxxxxxx may also provide
other AML related services and assistance to the Funds, as reasonably required
or requested and as agreed to from time to time by the Parties.
ARTICLE II
PROVISION OF SERVICES
SECTION 3.1 CAPACITY OF PERSONNEL AND STATUS OF FACILITIES. Whenever
Xxxxxxx utilizes its personnel to perform services for the Funds pursuant to
this Agreement, such personnel shall at all times remain employees of Xxxxxxx
subject solely to its direction and control, and Xxxxxxx shall alone retain full
liability for their compensation, employee benefits, payroll deductions and
legally required employer contributions and withholding tax obligations.
No facility of Xxxxxxx used in performing services for or subject to use by
the Funds pursuant to this Agreement shall be deemed to be transferred,
assigned, conveyed, or leased to the Funds by performance, use, or otherwise.
SECTION 3.2 STANDARD OF CARE IN RENDERING SERVICES. Xxxxxxx and the Funds
agree to use their best efforts and shall devote such time, as it deems
necessary or appropriate for the full performance of its duties and obligations
under the Agreement. In providing any services hereunder which require the
exercise of judgment by either party, Xxxxxxx and the Funds shall perform such
services in accordance with standards and guidelines established by the other
Party and communicated in writing. Notwithstanding any provisions of this
Agreement to the contrary, each Party shall refrain from acting in any manner
that would cause the other Party to breach its obligations to its clients or to
violate any requirement of applicable law and/or regulation. Each Party shall
promptly notify the other if it receives formal or informal notice, or otherwise
becomes aware in any respect, that the Funds, Xxxxxxx or any person associated
with the Funds or Xxxxxxx is or may be subject of any non-routine inquiry,
audit, investigation, suit, or proceeding of any governmental or self regulatory
agency arising out of the activities associated with this Agreement, or is or
may be named as a defendant or party to any suit, arbitration or court
proceeding brought by a client arising out of the activities associated with
this Agreement.
SECTION 3.3 CONTROL. The performance of Xxxxxxx under the Agreement with
respect to the business and operations in connection with Xxxxxxx'x AML Services
shall at all times be subject to the direction and control of the Xxxxxxx'x
Board of Directors and its designated authorized representatives. The
performance of the Funds under the Agreement with respect to the business and
operations in connection with the AML Services shall at all times be subject to
the direction and control of the Funds' Board of Managers/Trustees and its
designated authorized representatives. The performance of services by Xxxxxxx
and the Funds pursuant to this Agreement shall in no way impair the absolute
control of the business and operations of Xxxxxxx and the Funds by their
respective Boards and management. Xxxxxxx and the Funds shall act hereunder so
as to assure the separate operating and corporate identities of Xxxxxxx and the
Funds.
ARTICLE IV
EFFECTIVE TERM
SECTION 4.1 EFFECTIVE TERM. This Agreement shall be effective beginning
September 1, 2006 and shall remain in effect until terminated pursuant to
Section 10.2 below ("Effective Term").
ARTICLE V
FEES AND PAYMENTS
SECTION 5.1 FEES. The Funds agree to pay Xxxxxxx for the AML Services
pursuant to this Agreement, including, but not limited to, reimbursements for
all direct and directly allocable expenses, reasonably and equitably determined
to be attributable to the Funds by Xxxxxxx, plus a reasonable charge for direct
overhead, the amount of such charge for overhead to be agreed upon in writing by
the Parties from time to time ("Funds Fees" or "Fees"), as set forth on Exhibit
A attached hereto, and as described herein.
SECTION 5.2 DETERMINATION OF FEES AND COST ANALYSIS. Xxxxxxx shall perform
a cost analysis at least annually to determine, as closely as possible, the
actual cost of the AML Services it provides to the Funds. Xxxxxxx shall forward
to the Funds the information developed by such analysis, and such information
shall be used as a basis for the future Funds Fees.
SECTION 5.3 PAYMENT. Within sixty (60) days of the beginning of each
calendar year, Xxxxxxx and the Funds shall agree upon for the upcoming year
Funds Fees that the Funds will pay to Xxxxxxx for AML Services. The Fees shall
be based on the preceding year's Funds Fees and any foreseeable change.
Beginning in January of each year during the Effective Term of this Agreement,
the Funds shall pay Xxxxxxx on or before the 15th of each month 1/12 of the
Funds Fee for that year. If during a calendar year the Parties agree to an
adjustment of either, the Funds Fee will be adjusted accordingly, and the amount
of the Funds' remaining monthly payments to Xxxxxxx for that year will be
recalculated to an amount equal to the unpaid balance of the adjusted Funds Fees
divided by the number of remaining monthly payments.
SECTION 5.4 SETTLEMENT ON TERMINATION. No later than ninety (90) days after
the end of the Effective Term, each Party shall deliver to the other Party a
detailed written statement for all Fees not included in any previous statement
through the end of the Effective Term. The amount owed or to be refunded,
respectively, hereunder shall be due and payable within thirty (30) days of
receipt of such statement.
ARTICLE VI
RECORDKEEPING
SECTION 6.1 OTHER RECORDS AND DOCUMENTS. All other books, records, and
files related to the AML Services, as established and maintained by Xxxxxxx or
the Funds by reason of their performance of its obligations under this Agreement
which, absent this Agreement, would have been held by the other Party, shall be
deemed the property of the other Party, and shall be subject to examination at
all times by the other Party and its authorized representatives or any
governmental agency having jurisdiction. Further, a Party shall immediately
notify the other Party of any regulatory requests to inspect and review such
books, records, and files related to the AML Services.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
SECTION 7.1 REPRESENTATIONS AND WARRANTIES OF THE PARTIES. Xxxxxxx and the
Funds each represents and warrants to the other that:
(a) It is duly organized and in good standing under the laws of the
jurisdiction under which such Party is incorporated or organized, and
has the power and authority to enter into the Agreement;
(b) It is in compliance with all applicable AML and currency transaction
reporting laws, regulations, rules and government guidance and
economic sanctions programs administered by OFAC;
(c) The execution, delivery, and performance of the Agreement has been
properly authorized by all necessary corporate or other action of the
board of directors or other similar governing committee or body of
such Party;
(d) The Agreement constitutes the valid and binding obligation of the
Party executing it which is enforceable according to its terms
(subject to the effect, if any, of laws relating to insolvency,
bankruptcy, reorganization, or similar laws affecting the enforcement
of creditors' rights, or by equitable principles relating generally to
enforcement); and
(e) The execution, delivery, and performance of the Agreement will not
breach, contravene, violate, or conflict with the terms of any
organizational documents under which the Party is organized, any
material agreement to which the Party is subject, or any applicable
law to which the Party or any affiliate thereof is or may be subject.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 INDEMNIFICATION. Each Party hereto (each, an "Indemnifying
Party"): (a) shall indemnify and hold harmless the other Party hereto (each, an
"Indemnified Party"), to the full extent lawful, from and against any and all
damages, losses, costs, expenses, and liabilities ("Losses") for which such
Indemnified Party may become liable as a result of any pending or threatened
suit, claim, action, or proceeding, or otherwise (a "Claim"), whether such Claim
proceeds to judgment or is settled or otherwise brought to a conclusion, to
which such Indemnified Party is or may become subject by virtue of breach of any
provision of the Agreement, or material violation of applicable law, by the
Indemnifying Party in connection with this Agreement; and (b) shall reimburse
each such Indemnified Party for all legal or other expenses reasonably incurred
by such Indemnified Party in connection with any such Claim; provided, however,
that no such Party shall be indemnified or reimbursed under the foregoing
provisions to the extent that in the final non-appealable judgment of a court of
competent jurisdiction such Claim or Loss is found to have arisen from such
Indemnified Party's fraud, intentional or willful misconduct, or gross
negligence, in the performance of its duties or obligations hereunder. The
indemnification provided for in this Section 8.1 represents the full extent of
liability that each Party hereto shall have to the other Party for any Loss or
Claim arising in connection with this Agreement, except that this Section 8.1 in
no way limits any rights the Parties may have against the other Party for the
Fees payable under the Agreement pursuant to Article V of this Agreement.
ARTICLE IX
CONFIDENTIALITY OF INFORMATION
SECTION 9.1 CONFIDENTIALITY. Neither Party will disclose Confidential
Information to any person or entity other than their respective Representatives
or use Confidential Information other than in connection with their activities
under this Agreement, unless and to the extent: (a) if the Confidential
Information relates to a Party or an affiliate thereof, such Party otherwise
agreed in writing to such usage; or (b) if the Confidential Information relates
to a client or prospective client of a Party or an affiliate, such client and
such Party or affiliate otherwise agrees in writing to such usage.
"CONFIDENTIAL INFORMATION" relating to any person or entity means all
information concerning the identity of, and the finances, business, operations,
prospects, procedures, or relationships relating to such person or entity, which
is received verbally or in writing by a Party from the other Party, unless and
to the extent such information either becomes generally available to the public
other than through disclosure by the receiving Party or becomes available to the
receiving Party on a non-confidential basis from a person other than the other
Party, who to the receiving Party's knowledge, is not prohibited from disclosing
the information. Without limitation of the foregoing, Xxxxxxx agrees to keep the
identity of each client and all information of any nature relating to each
client confidential and shall use such information only for the purposes set
forth in this Agreement and not otherwise. "Representatives" of a Party means
its directors, officers, employees, attorneys, agents, and other representatives
that are designated and provided in writing from time to time to the other party
upon request of the other party.
SECTION 9.2 EXCEPTIONS. Notwithstanding Section 9.1 herein, either Party
may disclose Confidential Information to the extent required by applicable law
or at the request of any regulatory or supervisory authority having jurisdiction
over that Party.
SECTION 9.3 CONFIDENTIALITY OF SUSPICIOUS ACTIVITY REPORTS. Neither Party
nor its Representatives shall disclose that a Suspicious Activity Report has
been filed or provide any information that would disclose that a report has been
prepared or filed, except where such disclosure is permitted under 31 C.F.R. ss.
103.15(d).
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1 RIGHT TO CONTRACT WITH THIRD PARTIES. Nothing herein shall be
deemed to grant either Party an exclusive right to provide services to the other
Party, and each Party retains the right to contract with any third party,
affiliated or unaffiliated, for the performance of services or for the use of
facilities as are available to or have been requested pursuant to this
Agreement. Nothing herein shall be deemed to prohibit either Party from
providing any or all of the Services to be provided under this Agreement to
other persons, whether or not affiliated with Xxxxxxx or the Funds.
SECTION 10.2 TERMINATION AND MODIFICATION. This Agreement shall remain in
effect until terminated by either Xxxxxxx or the Funds upon giving thirty (30)
days or more advance written notice. Upon termination, each Party shall promptly
deliver to the other Party all books and records that are, or are deemed by this
Agreement to be, the property of the other Party.
SECTION 10.3 INDEPENDENT CONTRACTOR STATUS. In rendering the Services
hereunder, each Party shall act as an independent contractor, and any duties of
either Party arising hereunder shall be owed exclusively to the other Party.
SECTION 10.4 FORCE MAJEURE. If any condition beyond the control of the
Parties shall wholly or partially prevent the performance by either Party of its
obligations hereunder, including, without limitation, any act of God or the
public enemy, fire, explosion, flood, earthquake, war, riot, adverse weather
conditions, breakdowns in equipment or facilities, strike, slowdown, work
stoppage or other labor trouble or delays in receiving or failures to receive
any permits, licenses or approvals from any governmental authority, then the
Party shall be excused to the extent made necessary by such cause or condition
and during the continuance thereof, and the Party shall incur no liability by
reason of its failure to perform the obligations so excused. Such cause or
condition shall not, however, relieve either Party of the obligation to pay the
Fees due for the Services rendered prior to such stoppage.
SECTION 10.5 ASSIGNMENT. This Agreement and any rights pursuant hereto
shall be assignable only upon the written consent of the Parties. Except as and
to the extent specifically provided in this Agreement, nothing in this
Agreement, expressed or implied, is intended to confer on any person other than
the Parties hereto or their respective legal successors any rights, remedies,
obligations or liabilities, or to relieve any person other than the Parties
hereto or their respective legal successors from any obligations or liabilities
that would otherwise be applicable. This Agreement shall be binding upon, extend
to and inure to the benefit of the Parties hereto and each of their respective
legal successors and assigns . SECTION 10.6 NO PARTNERSHIP OR JOINT VENTURE. The
Parties are not, and shall not be deemed to be, partners or joint venturers with
each other solely by reason of this Agreement.
SECTION 10.7 GOVERNING LAW. This Agreement and the rights and obligations
of the Parties hereunder shall be governed by and construed and interpreted in
accordance with the law of the State of Michigan.
SECTION 10.8 ARBITRATION. In the event of any irreconcilable dispute
between the Parties, such dispute shall be submitted to arbitration. Either
Party may submit the dispute to arbitration by notifying the other of its
submission and naming its representative in arbitration. The other Party shall
name its representative in arbitration within thirty (30) days after receiving
such notice. Each such representative of the Parties shall nominate three
persons to serve as umpire. The umpire shall be chosen by drawing lots after
each representative has rejected two of the nominees named by the opposing
representative. The representatives and umpire shall be disinterested insurance
company executives. The arbitration shall be relieved from judicial formalities
including but not limited to rules of evidence. The arbitration decision shall
be final and binding upon the Parties. Each Party shall bear the expense of its
own representative and one-half the other expenses of the arbitration
proceedings. The arbitration, if any, shall take place in Lansing, Michigan,
unless otherwise mutually agreed by the Parties.
SECTION 10.9 NOTICE. All notices, statements or requests pursuant to this
Agreement shall be deemed to have been duly made when delivered by hand to an
officer of the other Party, deposited with the U.S. Postal Service as
first-class certified or registered mail with postage prepaid or a nationally
recognized overnight courier service, or transmitted by facsimile to:
(a) If to Jackson to:
Xxxxxxx National Life Insurance Company
0 Xxxxxxxxx Xxx
Xxxxxxx, Xxxxxxxx 00000
FAX: (000) 000-0000
Attention: General Counsel
(b) If to the Funds to:
0 Xxxxxxxxx Xxx
Xxxxxxx, Xxxxxxxx 00000
FAX: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx, President
SECTION 10.10 ENTIRE AGREEMENT. This Agreement expresses the entire
Agreement between the Parties, there being no representation, warranty or other
agreement not herein expressly set forth or provided for. No amendment,
supplement or other modification of this Agreement shall be binding on the
Parties unless made in writing and executed by all of the Parties hereto.
SECTION 10.11 SEVERABILITY. Any provision of this Agreement, which is
prohibited or unenforceable in any jurisdiction, shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 10.12 SECTION HEADINGS. Section headings contained herein are for
reference purposes only and shall not affect the meaning or interpretation of
this Agreement.
SECTION 10.13 COUNTERPARTS. This Agreement may be executed in separate
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed
in duplicate by their respective officers duly authorized as of the date and
year first above written.
XXXXXXX NATIONAL LIFE INSURANCE COMPANY
By:____/S/ Xxxx Peck___________________________
Name: Xxxx Xxxx
Title: Vice President
JNL SERIES TRUST
By____/s/ Xxxx X. Nerud________________________
Name: Xxxx X. Xxxxx
Title: Chief Financial Officer
JNL VARIABLE FUND LLC
By____/s/ Xxxx X. Nerud________________________
Name: Xxxx X. Xxxxx
Title: Chief Financial Officer
JNLNY VARIABLE FUND I LLC
By____/s/ Xxxx X. Nerud________________________
Name: Xxxx X. Xxxxx
Title: Chief Financial Officer
EXHIBIT A
FEES AND EXPENSES
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Fee for AML Services (2006) $400
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