Item 24 (b)
Exhibit (3)
Underwriting or Distribution of contracts between the
Depositor and Principal Underwriter
MARKETING COORDINATION AND
ADMINISTRATIVE SERVICES AGREEMENT
This Agreement entered into this 27 day of July, 2000, between Nationwide Life
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.
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.
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.
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.
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
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
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
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 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
EXHIBIT A
ANALYSIS OF ADMINISTRATIVE FUNCTIONS
A. PRODUCT UNDERWRITING/ISSUE
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.
B. BILLING AND COLLECTION
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.
C. BANKING
NATIONWIDE
- 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.
D. PRICING/VALUATION/ACCOUNTING/TRADING
NATIONWIDE NISC
- Maintains and makes available, as reasonably - Cooperates in annual audit of separate
requested, records used in determining "Net Amount Available account financials conducted for purposes of
for Investment." financial statement certification and publication.
- Collects information needed in determining Variable - Will clear and settle Mutual Fund trades
Account unit values from the Funds including daily net asset on behalf of the separate accounts using the
value, capital gains or dividend distributions, and the National Securities Clearing Corporation FUND/Serv
number of Fund Shares acquired or sold during the System.
immediately preceding valuation period.
- Performs daily unit valuation calculation.
E. CONTRACT OWNER SERVICE/ RECORD MAINTENANCE
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 documentation
informational requests, beneficiary changes, and 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 (SURRENDERS, DEATH CLAIMS, LOANS)
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.
G. COMMISSIONS
NATIONWIDE NISC
- Ascertains, on receipt of applications, whether - Receives and performs record keeping for
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
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
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.
J. REGULATORY/STATEMENT REPORTS
NATIONWIDE NISC
- Prepares and files Separate Account Annual - Prepares and files periodic FOCUS Reports
Statements. with the NASDR and SEC, as applicable.
- Prepares and mails the appropriate, required IRS - Prepares and files annual audited financial
reports at the Contract Owner level. Files same with statements with required regulatory agencies.
required regulatory agencies.
- Prepares and files form N-SAR for the
Separate Account.
K. PREMIUM TAXES
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
NATIONWIDE NISC
- Provides periodic reports in accordance with the - Provides periodic reports in accordance with
Schedule of Reports to be prepared jointly by Nationwide the Schedule of Reports to be prepared jointly by
and NISC. (See EXHIBIT C) Nationwide and NISC. (See EXHIBIT C)
M. AGENT LICENSE RECORDKEEPING
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.
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
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.
