EXHIBIT 1.A.(8)(d)
FORM OF PARTICIPATION AGREEMENT
AMONG
ADVANTUS SERIES FUND, INC.
ADVANTUS CAPITAL MANAGEMENT, INC.
AND
PFL LIFE INSURANCE COMPANY
PARTICIPATION AGREEMENT
AMONG
ADVANTUS SERIES FUND, INC.
ADVANTUS CAPITAL MANAGEMENT, INC.
AND
PFL LIFE INSURANCE COMPANY
DATED _________________
THIS AGREEMENT, made and entered into as of the ___ day of _______, 2000, by and
among PFL Life Insurance Company (hereinafter "Company"), an Iowa corporation,
on its own behalf and on behalf of each segregated asset account of the Company
set forth on Schedule A hereto, as may be amended from time to time (each such
account hereinafter referred to as "Account") and the Advantus Series Fund,
Inc., a Minnesota corporation (hereinafter the "Fund") and Advantus Capital
Management, Inc. (hereinafter the "Adviser"), a Minnesota corporation.
WHEREAS, the Fund engages in business as an open-end management investment
company and is available to act as the investment vehicle for separate accounts
established for variable life insurance policies and variable annuity contracts
(hereinafter collectively, the "Variable Insurance Products") to be offered by
affiliated and unaffiliated insurance companies which have entered into
participation agreements with the Fund and the Adviser (hereinafter
"Participating Insurance Companies") and Qualified Plans (as defined herein)
outside of the separate account context, (including, without limitation, those
trusts, plans, accounts, contracts or annuities described in Sections 401(a),
403(a), 403(b), 408(a), 408(b), 414(d), 457(b), 408(k), and 501(c)(18) of the
Internal Revenue Code of 1986, as amended (the "Code")), and any other trust,
plan, account, contract or annuity that is determined to be within the scope of
Treasury regulation 1.817.5(f)(3)(iii) ("Qualified Plans" or "Plans"); and
WHEREAS, the beneficial interest in the Fund is divided into several series of
shares, each designated a "Portfolio" and representing the interest in a
particular managed portfolio of securities and other assets and liabilities; and
WHEREAS, the Fund will obtain an order from the Securities and Exchange
Commission, granting it and Participating Insurance Companies and variable
annuity and variable life insurance separate accounts exemptions from the
provisions of Sections 9(a), 13(b), 15(a) and 15(b), of the Investment Company
Act of 1940 and Rule 6e-2(b)(15) and 6e-3(T)(b)(15) under that Act, to the
extent necessary to permit shares of the Fund to be sold to and held by variable
annuity and variable life insurance separate accounts of both affiliated and
unaffiliated life insurance companies (hereinafter the "Mixed and Shared Funding
Exemptive Order") and the Fund will provide a copy of that Mixed and Shared
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Funding Order to Company prior to the commencement of business under this
agreement; and
WHEREAS, the Fund is registered as an open-end management investment company
under the 1940 Act and its shares are registered under the Securities Act of
1933, as amended (hereinafter, the "1933 Act"); and
WHEREAS, the Adviser is duly registered as an investment adviser under the
federal Investment Advisers Act of 1940 (hereinafter, the "Advisers Act") and
any applicable state securities law; and
WHEREAS, the Company has registered or will register certain variable life
insurance policies and variable annuity contracts under the 1933 Act, unless an
exemption is available and each such contract or policy will provide for the
allocation of net amounts received by the Company to an Account or Sub-Account
for investment in the Fund and its Portfolios as that selection may be made by a
participant or contract or policy owner, as applicable under that contract or
policy; and
WHEREAS, each Account is a duly organized, validly existing segregated asset
account, established by resolution of the Board of Trustees or the Board of
Directors of the Company, to set aside and invest assets attributable to the
aforesaid Variable Insurance Products; and
WHEREAS, the Company has registered or will register each Account as a unit
investment trust under the 1940 Act, unless an exemption from registration is
available; and
WHEREAS, to the extent permitted by applicable insurance laws and regulations,
the Company intends to purchase shares in the Portfolios on behalf of each
Account to fund certain of the aforesaid Variable Insurance Products and the
Adviser is authorized to sell such shares to unit investment trusts such as each
Account at net asset value;
NOW, THEREFORE, in consideration of their mutual promises, the Company, the Fund
and the Adviser agree as follows:
ARTICLE I.
Purchase and Redemption of Fund Portfolio Shares
------------------------------------------------
1.1 For purposes of this Article I, the Company shall be the Fund's agent
for receipt of purchase orders and requests for redemption relating to each
Portfolio from each Account or Sub-Account, provided that the Company notifies
the Fund of such purchase orders and requests for redemption by 8:00 a.m.
Central time on the next following Business Day, as defined in Section 1.3. The
currently available Portfolios are as shown on Schedule B attached hereto.
1.2 The Fund agrees to make shares of the Portfolios available to the
Accounts and the Sub-Accounts of such Accounts for purchase at the net asset
value per share next computed after receipt of a purchase order by the Fund (or
its agent), as established in
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accordance with the provisions of the then current prospectus of the Fund
describing Portfolio purchase procedures on those days on which the Fund
calculates its net asset value pursuant to rules of the Commission, and the Fund
shall use its best efforts to calculate such net asset value on each day on
which the New York Stock Exchange ("NYSE") is open for trading. The Company will
transmit orders from time to time to the Fund for the purchase of shares of the
Portfolios. The Directors of the Fund (the "Directors") may refuse to sell
shares of any Portfolio to any person, or suspend or terminate the offering of
shares of any Portfolio if such action is required by law or by regulatory
authorities having appropriate jurisdiction or if, in the sole discretion of the
Directors acting in good faith and in light of their fiduciary duties under
federal and any applicable state laws, such action is deemed in the best
interests of the shareholders of such Portfolio.
1.3 The Company shall submit payment for the purchase of shares of a
Portfolio on behalf of an Account or Sub-Account no later than the close of the
Federal Reserve Bank, which is 3:00 p.m. Central time, on the next Business Day
after the Fund receives the purchase order. Payment shall be made in federal
funds transmitted by wire to the Fund. Upon receipt by the Fund of the federal
funds so wired, such funds shall cease to be the responsibility of the Company
and shall become the responsibility of the Fund for this purpose. "Business Day"
shall mean any day on which the New York Stock Exchange is open for trading and
on which the Fund calculates its net asset value pursuant to the rules of the
Commission. If payment in federal funds for any purchase is not received by the
Fund or its designated custodian or is received after such time, the Company
shall promptly, upon written request, reimburse the Fund for any charges, costs,
fees, interest or other expenses incurred by the Fund as a result of
transactions effected by the Fund based upon such purchase order.
1.4 The Fund will redeem for cash any full or fractional shares of any
Portfolio, when requested by the Company on behalf of an Account, at the net
asset value next computed after receipt by the Fund (or its agent) of the
request for redemption, as established in accordance with the provisions of the
then current prospectus of the Fund describing Portfolio redemption procedures.
The Fund shall make payment for such shares in the manner established from time
to time by the Fund. Redemption with respect to a Portfolio will normally be
paid to the Company for an Account or Sub-Account in federal funds transmitted
by wire to the Company before the close of the Federal Reserve Bank, which is
3:00 p.m. Central time on the next Business Day after the receipt of the request
for redemption. If payment in federal funds for any redemption request is
received by the Company after such time, the Fund shall promptly upon the
Company's written request, reimburse the Company for any charges, costs, fees,
interest, or other expenses incurred by the Company as a result of such failure
to provide redemption proceeds within the specified time. Notwithstanding the
foregoing, such payment may be delayed if the Portfolio's cash position so
requires or if extraordinary market conditions exist, but in no event shall
payment be delayed for a greater period than is permitted by the 0000 Xxx.
1.5 Payments for the purchase of shares of the Fund's Portfolios by the
Company under Section 1.3 and payments for the redemption of shares of the
Fund's Portfolios under Section 1.4 may be netted against one another on any
Business Day for the purpose of determining the amount of any wire transfer of
that Business Day.
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1.6 Issuance and transfer of the Fund's Portfolio shares will be by book
entry only. Stock certificates will not be issued to the Company, an Account or
a Sub-Account. Portfolio Shares purchased from the Fund will be recorded in the
appropriate title for each Account or the appropriate sub-account of each
Account.
1.7 The Fund shall furnish, on or before the ex-dividend date, notice to
the Company of any income dividends or capital gain distributions payable on the
shares of any Portfolio of the Fund. The Company hereby elects to receive all
such income dividends and capital gain distributions as are payable on a
Portfolio's shares in additional shares of the Portfolio. The Fund shall notify
the Company of the number of shares so issued as payment of such dividends and
distributions.
1.8 The Fund shall calculate the net asset value of each Portfolio on each
Business Day, as defined in Section 1.3. The Fund shall make the net asset value
per share for each Portfolio available to the Company or its designated agent on
a daily basis as soon as reasonably practical after the net asset value per
share is calculated (normally by 5:30 p.m. Central time) and shall use
reasonable efforts to make such net asset value per share available by 6:00 p.m.
Central time each Business Day.
1.9 The Fund agrees that its Portfolio shares will be sold only to
Participating Insurance Companies and their separate accounts and to certain
qualified pension and retirement plans to the extent permitted by the Mixed and
Shared Funding Exemptive Order. The Fund agrees that it will not sell shares of
its Portfolios to any other insurance company or separate account unless an
agreement containing provisions substantially the same as Section 2.4 and
Articles I and V of this Agreement is in effect to govern sales. No shares of
any Portfolio will be sold directly to the general public. The Company agrees
that it will use Fund shares only for the purposes of funding the Variable
Insurance Products through the Accounts listed in Schedule A, as amended from
time to time.
1.10 The Company agrees that all net amounts available under the Variable
Insurance Products referenced herein shall be invested in the Fund or in such
other investment companies advised by the Adviser or its affiliates as may be
mutually agreed to in writing by the parties hereto, or in the Company's general
account, provided that such amounts may also be invested in an investment
company other than the Fund if: (a) the Company gives the Fund and the Adviser
forty-five (45) days written notice of its intention to make such other
investment company available as a funding vehicle for these Variable Insurance
Products; or (b) such other investment company is available as a funding vehicle
for these Variable Insurance Products at the date of this Agreement.
1.11 The Fund agrees that all Participating Insurance Companies shall have
the obligations and responsibilities regarding pass-through voting and conflicts
of interest corresponding to those contained in Section 2.09 and Article IV of
this Agreement.
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ARTICLE II.
Obligations of the Parties; Fees and Expenses
---------------------------------------------
2.1 The Fund shall prepare and be responsible for filing with the
Commission and any state regulators requiring such filing all shareholder
reports, notices, proxy materials (or similar materials such as voting
instruction solicitation materials), prospectuses and statements of additional
information of the Fund. The Fund shall bear the costs of registration and
qualification of its shares of the Portfolios, preparation and filing of the
documents listed in this Section 2.1 and all taxes to which an issuer is subject
on the issuance and transfer of its shares.
2.2 At the option of the Company, the Fund or the Adviser shall either (a)
provide the Company with as many copies of portions of the Fund's current
prospectus, annual report, semi-annual report and other shareholder
communications, including any amendments or supplements to any of the foregoing,
pertaining specifically to the Portfolios as the Company shall reasonably
request; or (b) provide the Company with a camera ready copy, PDF file or other
electronic file of such documents in a form suitable for printing and from which
information relating to series of the Fund other than the Portfolios has been
deleted to the extent practicable. The Fund or the Adviser shall provide the
Company with a copy of its current statement of additional information,
including any amendments or supplements, in a form suitable for duplication by
the Company. Expenses of furnishing such documents for marketing purposes shall
be borne by the Company and expenses of furnishing such documents for current
contract owners invested in the Fund shall be borne by the Fund or the Adviser.
2.3 The Fund (at its expense) shall provide the Company with copies of any
Fund-sponsored proxy materials in such quantity as the Company shall reasonably
require for distribution to contract owners. The Fund shall bear the costs of
distributing proxy materials (or similar materials such as voting solicitation
instructions). The Company shall bear the cost of distributing prospectuses and
statements of additional information to contract owners. The Company assumes
sole responsibility for ensuring that such materials are delivered to contract
owners in accordance with applicable federal and state securities laws.
2.4 Except as provided in Section 2.6, the Company shall not use any
designation comprised in whole or part of the names or marks "Advantus Series
Fund, Inc." or "Advantus Capital Management, Inc." without prior written consent
of the Fund or the Adviser, and upon termination of this Agreement for any
reason, the Company shall cease all use of any such name or xxxx as soon as
reasonably practicable.
2.5 The Company and its agents shall not give any information or make any
representations or statements on behalf of the Fund or concerning the Fund or
the Adviser or an Adviser in connection with the sale of the Variable Insurance
Products other than information or representations contained in and accurately
derived from the registration statement or prospectus for the Fund shares (as
such registration statement and prospectus may be amended or supplemented from
time to time), annual and semi-annual reports of the Fund, Fund-sponsored proxy
statements, or in sales literature or other promotional material prepared or
approved by the Fund or its designee, except as required by legal
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process or regulatory authorities or with the written permission of the Fund or
its designee. All sales literature or other promotional material developed by
the Company shall be furnished to the Fund or the Adviser at least fifteen
Business Days prior to its use. No such material shall be used if the Fund or
the Adviser reasonably objects to such use within fifteen Business Days after
receipt of such material.
2.6 The Fund shall use its best efforts to provide the Company, on a timely
basis, with such information about the Fund, the Portfolios and the Adviser and
any Sub-Advisers, in such form as the Company may reasonably require, as the
Company shall reasonably request in connection with the preparation of
registration statements, prospectuses, annual and semi-annual reports and
marketing materials pertaining to the Variable Insurance Products.
2.7 The Fund shall not give any information or make any representations or
statements on behalf of the Company or concerning the Company, the Accounts or
the Variable Insurance Products other than information or representations
contained in and accurately derived from the registration statement or
prospectus for the Variable Insurance Products (as any such required
registration statement and prospectus may be amended or supplemented from time
to time), or in materials prepared or approved by the Company for distribution
including sales literature or other promotional materials, except as required by
legal process or regulatory authorities or with the written permission of the
Company. All sales literature or other promotional material developed by the
Fund or the Adviser shall be furnished to the Company at least fifteen Business
Days prior to its use. No such material shall be used if the Company reasonably
objects to such use within fifteen Business Days after receipt of such material.
2.8 So long as, and to the extent that, the Commission interprets the 1940
Act to require pass-through voting privileges for contract owners, the Company
will provide pass-through voting privileges to contract owners whose Contract
values are invested, through the registered Accounts, in shares of one or more
Portfolios of the Fund. The Fund shall require all Participating Insurance
Companies to calculate voting privileges in the same manner consistent with
voting instructions timely-received from contract owners and the Company shall
be responsible for assuring that the Accounts calculate voting privileges in the
manner established by the Fund. With respect to each registered Account, the
Company will vote shares of each Portfolio of the Fund held by a registered
Account for which no timely voting instructions from contract owners are
timely-received as well as those shares of the Fund which the Company itself
owns, in the same proportion as those shares held by that registered Account for
which voting instructions are timely-received. The Company shall be responsible
for assuring that each of its registered Separate Accounts participating in the
Fund calculates voting privileges in a manner consistent with the parties other
Participating Insurance Companies. The obligation to calculate voting privileges
in a manner consistent with all other registered Separate Accounts investing in
the Fund is a contractual obligation of the Company and of all Participating
Insurance Companies under the agreements governing participation in the Fund.
The Company reserves the right to vote Fund shares in any Account in its own
right, to the extent permitted by law.
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2.9 The Fund will comply with all provisions of the 1940 Act requiring
voting by shareholders, and, in particular, each Fund will either provide for
annual meetings (except to the extent that the Commission may interpret Section
16 of the 1940 Act not to require such meetings) or comply with Section 16(c) of
the 1940 Act (although the Fund is not one of the trusts described in the
Section 16(c) of the 1940 Act), as well as with Section 16(a) of the 1940 Act
and, if and when applicable, Section 16(b) of the 1940 Act. further, the Fund
will act in accordance with the Commission's interpretation of the requirements
of Section 16(a) with respect to periodic elections of directors and with
whatever rules the Commission may promulgate with respect thereto.
2.10 The Fund and Adviser shall pay no fee or other compensation to the
Company under this Agreement except as provided on Schedule C, if attached.
Nevertheless, the Fund or the Adviser or an affiliate may make payments (other
than pursuant to a Rule 12b-1 Plan) to the Company or its affiliates or to the
Adviser in amounts agreed to by the Adviser in writing and such payments may be
made out of fees otherwise payable to the Adviser or its affiliates, profits of
the Adviser or its affiliates, or other resources available to the Adviser or
its affiliates.
ARTICLE III.
Representations and Warranties
------------------------------
3.1 The Company represents and warrants that it is an insurance company
duly organized and in good standing under the laws of the State of Iowa and that
it has legally and validly established each Account as a segregated asset
account under such law as of the date set forth in Schedule A.
3.2 The Company represents and warrants that it has registered or, prior to
any issuance or sale of the Variable Insurance Contract(s), will register each
Account as a unit investment trust in accordance with the provisions of the 1940
Act to serve as a segregated asset account for the Variable Insurance Products,
unless an exemption from registration is available.
3.3 For its unregistered Accounts that are exempt from registration under
the 1940 Act in reliance upon Section 3(c)(1) or Section 3(c)(7) thereof, the
Company represents and warrants that:
(a) the principal underwriter for each such unregistered Account and
its sub-accounts is registered as a broker-dealer under the Securities and
Exchange Act of 1934 (the "1934 Act");
(b) the shares of the Portfolios of the Fund are and will continue to
be the only investment securities held by the corresponding Separate Account
sub-accounts; and
(c) with regard to each Portfolio, the Company, on behalf of the
corresponding Account sub-account, will:
(i) vote such shares held by it in the same proportion as the
vote of all other holders of such shares; and
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(ii) refrain from substituting shares of another security for
such shares unless the SEC has approved such substitution in the
manner provided in Section 26 of the 0000 Xxx.
3.4 The Company represents and warrants that the Variable Insurance
Products will be registered under the 1933 Act, unless an exemption from
registration is available, prior to any issuance or sale of the Variable
Insurance Products; the Variable Insurance Products will be issued and sold in
compliance in all material respects with all applicable federal and state laws;
and the sale of the Variable Insurance Products shall comply in all material
respects with state insurance suitability requirements.
3.5 The Company represents and warrants that all of its directors,
officers, employees, investment advisers, and other individuals or entities
dealing with the money and/or securities are and shall be at all times covered
by a blanket fidelity bond or similar coverage in an amount not less than $5
million. The aforesaid bond shall include coverage for larceny and embezzlement
and shall be issued by a reputable bonding company. The Company agrees to make
all reasonable efforts to see that this bond or another bond containing these
provisions is always in effect, and agrees to notify the Fund and the Adviser in
the event that such coverage no longer applies.
3.6 The Fund represents and warrants that it is duly organized and validly
existing under the laws of the State of Minnesota and that it does and will
comply in all material respects with the 1940 Act and the rules and regulations
thereunder and with the diversification rules applicable to the Fund and its
Portfolios under Subchapter M of the Internal Revenue Code of 1986, as amended
(hereinafter "Code").
3.7 The Fund represents and warrants that the Portfolio shares offered and
sold pursuant to this Agreement will be registered under the 1933 Act and the
Fund shall be registered under the 1940 Act prior to and at the time of any
issuance or sale of such shares. The Fund shall amend its registration statement
under the 1933 Act and the 1940 Act from time to time as required in order to
effect the continuous offering of its shares. The Fund shall register and
qualify its shares for sale in accordance with the laws of the various states
only if and to the extent deemed advisable by the Fund or the Adviser.
3.8 The Fund represents and warrants that it is currently qualified as a
"regulated investment company" under Subchapter M of the Code, that it will make
every effort to maintain such qualification and will notify the Company
immediately upon having a reasonable basis for believing it has ceased to so
qualify or might not so qualify in the future.
3.9 The Fund and its Adviser each represents and warrants that the
investment advisory or management fees paid to the Adviser are legitimate and
not excessive and are derived from an advisory contract which does not result in
a breach of fiduciary duty.
3.10 The Fund represents and warrants that should it ever desire to make
any payments to finance distribution expenses pursuant to Rule 12b-1 under the
1940 Act, the Directors, including a majority who are not "interested persons"
of the Fund under the
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1940 Act ("disinterested Directors"), will formulate and approve any plan under
Rule 12b-1 to finance distribution expenses. To the extent that any Class of the
Fund may finance its distribution expenses pursuant to a Plan adopted under Rule
12b-1, the Fund undertakes to comply with any then current SEC and SEC staff
interpretations concerning Rule 12b-1 or any successor provisions.
3.11 The Fund represents and warrants that it, its directors, officers,
employees and others dealing with the money or securities, or both, of a
Portfolio shall at all times be covered by a blanket fidelity bond or similar
coverage for the benefit of the Fund in an amount not less than the minimum
coverage required by Rule 17g-1 or other regulations under the 1940 Act. Such
bond shall include coverage for larceny and embezzlement and be issued by a
reputable bonding company.
3.12 The Adviser represents and warrants that it is duly organized and
validly existing under the laws of the State of Minnesota and that it is
currently registered and will, during the term of this Agreement, remain
registered as an investment adviser under the Advisers Act.
ARTICLE IV.
Potential Conflicts
-------------------
4.1 The parties acknowledge that a Portfolio's shares may be made available
for investment to other Participating Insurance Companies. In such event, the
Directors will monitor the Fund for the existence of any material irreconcilable
conflict between the interests of the contract owners of all Participating
Insurance Companies. An irreconcilable material conflict may arise for a variety
of reasons, including: (a) an action by any state insurance regulatory
authority; (b) a change in applicable federal or state insurance, tax, or
securities laws or regulations, or a public ruling, private letter ruling,
no-action or interpretative letter, or any similar action by insurance, tax, or
securities regulatory authorities; (c) an administrative or judicial decision in
any relevant proceeding; (d) the manner in which the investments of any
Portfolio are being managed; (e) a difference in voting instructions given by
variable annuity contract and variable life insurance contract owners; or (f) a
decision by an insurer to disregard the voting instructions of contract owners.
The Fund shall promptly and in writing inform all Participating Insurance
Companies and Qualified Plans, of any determination by the Directors that an
irreconcilable material conflict exists and of the implications thereof.
4.2 The Company agrees to promptly report any potential or existing
conflicts of which it is aware to the Directors. The assets of a Fund
(collectively, the "Participants") will report any potential or existing
conflicts to the respective responsible Board(s). Participating Insurance
Companies will be responsible for assisting the Fund in carrying out the
responsibilities of the Fund under these conditions by providing the Directors
with all information reasonably necessary for the Board to consider any issues
raised. This includes, but is not limited to, an obligation by each
Participating Insurance Company, including the Company, to inform the respective
responsible Board whenever contract owner voting instructions are disregarded.
The responsibility to report such information and conflicts to and to assist the
Fund will be a contractual obligation of all Participating Insurance Companies
and Qualified Plans investing in the Fund under their
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agreements governing participation in the Fund and these responsibilities will
be carried out with a view only to the interests of the contract owners and
participants in the Qualified Plans.
4.3 If it is determined by a majority of Directors, or a majority of the
disinterested Directors of the Fund, that a material irreconcilable conflict
exists, then the relevant Participating Insurance Companies and Qualified Plans,
including the Company, at their expense and to the extent reasonably practicable
(as determined by a majority of the disinterested Directors or trustees, as the
case may be), shall take whatever steps are necessary to remedy or eliminate the
material irreconcilable conflict, up to and including: (a) withdrawing the
assets allocable to some or all of the Separate Accounts from the affected Fund
or any Portfolio and reinvesting such assets in a different investment medium,
including another Portfolio of the Fund, or submitting the question as to
whether such segregation should be implemented to a vote of all affected
contract owners and, as appropriate, segregating the assets of any appropriate
group (i.e., variable annuity contract owners or variable life insurance
contract owners of one or more Participating Insurance Companies) that votes in
favor of such segregation, or offering to the affected contract owners the
option of making such a change; (b) withdrawing the assets allocable to some or
all of the Qualified Plans from the affected Fund or any Portfolio and
reinvesting such assets in a different investment medium, including another
Portfolio of the Fund; and (c) establishing a new registered management
investment company or managed separate account.
4.4 If a material irreconcilable conflict arises because of a decision by
the Company or a Participating Company to disregard contract owner voting
instructions, and that decision represents a minority position or would preclude
a majority vote, then the Company may be required, at the Fund's election, to
withdraw its Separate Account's investment in the Fund and no charge or penalty
will be imposed as a result of such withdrawal. The responsibility to take
remedial action in the event of the Fund's determination of a material
irreconcilable conflict and to bear the cost of such remedial action shall be a
contractual obligation of all Participating Insurance Companies, including the
Company under this Agreement, and all Qualified Plans under their agreements
governing participation in the Fund and these responsibilities will be carried
out with a view only to the interests of contract owners and participants in the
Qualified Plans. Any such withdrawal and termination must take place within six
(6) months after the Fund gives written notice that this provision is being
implemented. Until the end of such six (6) month period, the Fund shall continue
to accept and implement orders by the Company for the purchase and redemption of
shares of the Fund.
4.5 If a material irreconcilable conflict arises because a particular state
insurance regulator's decision applicable to the Company conflicts with a
majority of other state regulators to which the Company is subject, then the
Company will withdraw the affected Account's investment in the Fund and
terminate this Agreement with respect to such Account within six (6) months
after the Directors inform the Company in writing it has determined that such
decision has created an irreconcilable material conflict; provided, however,
that such withdrawal and termination shall be limited to the extent required by
the foregoing material irreconcilable conflict as determined by a majority of
the disinterested Directors. Until the end of such six (6) month period, the
Fund shall
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continue to accept and implement orders by the Company for the purchase and
redemption of shares of the Fund.
4.6 For purposes of Sections 4.3 through 4.6 of this Agreement, a majority
of the disinterested Directors shall determine whether any proposed action
adequately remedies any irreconcilable material conflict, but in no event will
the Fund be required to establish a new funding medium for the Variable
Insurance Products. In the event that the disinterested Directors determine that
any proposed action does not adequately remedy any irreconcilable material
conflict, then the Company will withdraw the Account's investment in the Fund
and terminate this Agreement within six (6) months after the Directors inform
the Company in writing of the foregoing determination; provided, however, that
such withdrawal and termination shall be limited to the extent required by any
such material irreconcilable conflict as determined by a majority of the
disinterested Directors.
4.7 The Company shall at least annually submit to the Directors such
reports, materials or data as the Directors may reasonably request so that the
Directors may fully carry out the duties imposed upon them by the Mixed and
Shared Funding Exemptive Order, and said reports, materials and data shall be
submitted more frequently if reasonably deemed appropriate by the Directors. The
obligation of the Participating Insurance Companies, including the Company, and
Qualified Plans to provide these reports, materials, and data under this
Agreement to a Fund's Board, when the Board so reasonably requests, shall be a
contractual obligation of each Participating Insurance Company and Qualified
Plan under the agreements governing participation in the Fund. All reports of
potential or existing conflicts received by Fund, and all Board action with
regard to determining the existence of a conflict, notifying Participating
Insurance Companies and Qualified Plans of a conflict, and determining whether
any proposed action adequately remedies a conflict, will be properly recorded in
the minutes of the Board or other appropriate records.
4.8 Participating Insurance Companies, including the Company, will
determine appropriate prospectus disclosure for its Variable Insurance Products
in order to inform owners of Variable Insurance Products of the potential risks
of mixed and shared fund.
4.9 If and to the extent that Rule 6e-2 or 6e-3(T) is amended, or similar
rule is adopted, so as to provide exemptive relief from any provision of the
1940 Act or the rules promulgated thereunder with respect to mixed or shared
funding (as defined in the Mixed and Shared Funding Exemptive Order) on terms
and conditions materially different from those contained in the Mixed and Shared
Funding Exemptive Order, then the Fund and/or the Participating Insurance
Companies, as appropriate, shall take such steps as may be necessary to comply
with Rule 6e-2, 6e-3(T), or Rule 6e-3, as amended, or any other rule, as
adopted, to the extent such rules are applicable.
ARTICLE V.
Diversification and Qualification
---------------------------------
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5.1 Both the Fund and the Adviser each represent and warrant that the Fund
will at all times sell the shares of each Series and invest the assets of each
Series in such a manner as to ensure that the Variable Insurance Products will
be treated as life insurance or annuity contracts, as the case may be, under the
Code and the regulations issued thereunder. Without limiting the scope of the
foregoing, each of the Fund and the Adviser represent and warrant that the Fund
and each Portfolio thereof will at all times comply with Section 817(h) of the
Code and Treasury Regulation ss.1.817-5, as amended from time to time, and any
Treasury interpretations thereof, relating to the diversification requirements
for variable annuity, endowment, or life insurance contracts and any amendments
or other modifications or successor provisions to such Section or Regulations.
5.2 The Fund represents that it will not be subject to federal income
taxation under current laws and regulations, consistent with the provisions of
Subchapter M of the Code.
5.3 The Fund or the Adviser will notify the Insurer immediately upon having
a reasonable basis for believing that the Fund or any Portfolio has ceased to
comply with the aforesaid Section 817(h) diversification requirements or might
not so comply in the future.
5.4 Each of the Fund and the Adviser acknowledges that full compliance with
the requirements referred to in Sections 5.1 and 5.2 hereof is absolutely
essential because any failure to meet those requirements would result in the
Variable Insurance Products not being treated as life insurance or annuity
contracts, as the case may be, for federal income tax purposes, which would have
adverse tax consequences for Contract owners and could also adversely affect the
Company's corporate tax liability. Each of the Fund and the Adviser also
acknowledges that it is solely within its power and control to meet those
requirements. Accordingly, without in any way limiting the effect of Section 8.2
hereof and without in any way limiting or restricting any other remedies
available to the Company, the Adviser will pay all costs associated with or
arising out of any failure, or any anticipated or reasonably foreseeable
failure, of the Fund or any Portfolio to comply with Sections 5.1 or 5.2 hereof,
including all costs associated with correcting or responding to any such
failure; such costs may include, but are not limited to, the costs involved in
creating and organizing a new investment company as a funding medium for the
Variable Insurance Products and/or the costs of obtaining whatever regulatory
authorizations are required to substitute shares of another investment company
for those of the failed Portfolio; such costs to include, but are not limited
to, fees and expenses of legal counsel and other advisers to the Company and any
federal income taxes or tax penalties incurred by the Company or its contract
owners in connection with any such failure or anticipated or reasonably
foreseeable failure.
5.5 Within 45 days of the close of each calendar quarter, the Fund shall
provide the Company or its designee with a certification of compliance with the
aforesaid Section 817(h) diversification and Code qualification requirements, in
substantially the form attached hereto as Schedule D, provided, however, that
providing such certification does not relieve the Fund or the Adviser of its
responsibility for such compliance or of liability for any non-compliance.
- 13 -
ARTICLE VI.
Indemnification
---------------
6.1 Indemnification by the Company
------------------------------
(a) The Company agrees to indemnify and hold harmless the Fund and
each of its Directors, officers, employees and each person, if any, who controls
the Fund within the meaning of Section 15 of the 1933 Act (collectively, the
"Indemnified Parties" and individually the "Indemnified Party" for purposes of
this Article VI) against any an all losses, claims, damages, liabilities
(including amounts paid in settlement with the written consent of the Company,
which consent shall not be unreasonably withheld) or expenses (including the
reasonable costs of investigating or defending any alleged loss, claim, damage,
liability or expense and reasonable legal counsel fees incurred in connection
therewith) (collectively, "Losses"), to which the Indemnified Parties may become
subject under any statute or regulation, or at common law or otherwise, insofar
as such Losses are related to the sale or acquisition of Fund Shares or the
Variable Insurance Products and:
(i) arise out of or are based upon any untrue statements or
alleged untrue statements of any material fact contained in a
registration statement or prospectus for the Variable Insurance
Products or in the Variable Insurance Products themselves or in sales
literature generated by the Company on behalf of the Variable
Insurance Products or Accounts (or any amendment or supplement to any
of the foregoing) (collectively, "Company Documents" for the purposes
of this Article VI), or arise out of or are based upon the omission or
the alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading, provided that this indemnity shall not apply as to any
Indemnified Party if such statement or omission or such alleged
statement or omission was made in reliance upon and was accurately
derived from written information furnished to the Company by or on
behalf of the Fund for use in Company Documents or otherwise for use
in connection with the sale of the Variable Insurance Products or Fund
shares; or
(ii) arise out of or result from written statements or
representations (other than statements or representations contained in
and accurately derived from Fund Documents as defined in Section 6.2
(a)(i)) or wrongful conduct of the Company or persons under its
control, with respect to the sale or acquisition of the Variable
Insurance Products or Fund shares; or
(iii) arise out of or result from any untrue statement or alleged
untrue statement of a material fact contained in Fund Documents as
defined in Section 6.2(a)(i) or the omission or alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading if such
statement or omission was made
- 14 -
in reliance upon and accurately derived from written information
furnished to the Fund by or on behalf of the Company; or
(iv) arise out of or result from any failure by the Company to
provide the services or furnish the materials required under the terms
of this Agreement; or
(v) arise out of or result from any material breach of any
representation and/or warranty made by the Company in this Agreement
or arise out of or result from any other material breach of this
Agreement by the Company.
(b) The Company shall not be liable under this indemnification
provision with respect to any Losses to which an Indemnified Party would
otherwise be subject by reason of such Indemnified Party's willful misfeasance,
bad faith, or gross negligence in the performance of such Indemnified Party's
duties or by reason of such Indemnified Party's reckless disregard of
obligations and duties under this Agreement. The Company shall also not be
liable under this indemnification provision with respect to any claim made
against an Indemnified Party unless such Indemnified Party shall have notified
the Company in writing within a reasonable time after the summons or other first
legal process giving information of the nature of the claim shall have been
served upon such Indemnified Party (or after such Indemnified Party shall have
received notice of such service on any designated agent), but failure to notify
the Company of any such claim shall not relieve the Company from any liability
which it may have to the Indemnified Party against whom such action is brought
otherwise than on account of this indemnification provision. The Company also
shall be entitled to assume the defense thereof, with counsel satisfactory to
the party named in the action. After notice from the Company to such party of
the Company's election to assume the defense thereof, the Indemnified Party
shall bear the fees and expenses of any additional counsel retained by it, and
the Company will not be liable to such party under this Agreement for any legal
or other expenses subsequently incurred by such party independently in
connection with the defense thereof other than reasonable costs of
investigation.
(c) The Indemnified Parties will promptly notify the Company of the
commencement of any litigation or proceedings against them or their officers and
directors in connection with the issuance or sale of the Fund shares or the
Variable Insurance Products or the operation of the Fund.
6.2 Indemnification by the Adviser
------------------------------
(a) The Adviser agrees to indemnify and hold harmless the Company and
each of its Directors, officers, employees and each person, if any, who controls
the Company within the meaning of Section 15 of the 1933 Act (collectively, the
"Indemnified Parties" and individually an "Indemnified Party" for purposes of
this Section 6.2) against any and all losses, claims, damages, liabilities
(including amounts paid in settlement with the written consent of the Adviser,
which consent shall not be unreasonably withheld) or expenses (including the
reasonable costs of investigating or defending any alleged loss, claim, damage,
liability or expense and reasonable legal
- 15 -
counsel fees incurred in connection therewith) (collectively, "Losses") to which
the Indemnified Parties may become subject under any statute, at common law or
otherwise, insofar as such Losses are related to the sale or acquisition of the
Fund's Shares or the Variable Insurance Products and:
(i) arise out of or are based upon any untrue statements or
alleged untrue statements of any material fact contained in the
Registration Statement, prospectus or sales literature of the Fund (or
any amendment or supplement to any of the foregoing) (collectively,
the "Fund Documents") or arise out of or are based upon the omission
or the alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not
misleading, provided that this agreement to indemnify shall not apply
as to any Indemnified Party if such statement or omission of such
alleged statement or omission was made in reliance upon and in
conformity with information furnished to the Adviser or Fund by or on
behalf of the Company for use in the Registration Statement or
prospectus for the Fund or in sales literature (or any amendment or
supplement) or otherwise for use in connection with the sale of the
Variable Insurance Products or Fund shares; or
(ii) arise out of or as a result of written statements or
representations (other than statements or representations contained
and accurately derived from the registration statement, prospectus or
sales literature for the Variable Insurance Products) or wrongful
conduct of the Fund, Adviser or persons under their control, with
respect to the sale or distribution of the Variable Insurance Variable
Insurance Products or Fund shares; or
(iii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a registration statement,
prospectus or sales literature covering the Variable Insurance
Products, or any amendment thereof or supplement thereto, or the
omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statement or statements
therein not misleading, if such statement or omission was made in
reliance upon information furnished to the Company by or on behalf of
the Fund; or
(iv) arise out of or result from any material breach of any
representation and/or warranty made by the Adviser in this Agreement
or arise out of or result from any other material breach of this
Agreement by the Adviser, as limited by and in accordance with the
provisions of Sections 6.2(b) and 6.2(c) hereof.
(b) The Adviser shall not be liable under this indemnification
provision with respect to any Losses to which an Indemnified Party would
otherwise be subject to reason of such Indemnified Party's willful misfeasance,
bad faith, or gross negligence in the performance of such Indemnified Party's
duties or by reason of such Indemnified Party's reckless disregard of
obligations and duties under this Agreement or to the Company or the Account,
whichever is applicable.
- 16 -
(c) The Adviser shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Adviser in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Adviser of any
such claim shall not relieve the Adviser from any liability which it may have to
the Indemnified Party against whom such action is brought otherwise than on
account of this indemnification provision. In case any such action is brought
against the Indemnified Parties, the Adviser will be entitled to participate at
its own expense, in the defense thereof. The Adviser also shall be entitled to
assume the defense thereof, with counsel satisfactory to the party named in the
action. After notice from the Adviser to such party of the Adviser's election to
assume the defense thereof, the Indemnified Party shall bear the expenses of any
additional counsel retained by it, and the Adviser will not be liable to such
party under this Agreement for any legal or other expenses subsequently incurred
by such party independently in connection with the defense thereof other than
reasonable costs of investigation.
(d) The Company agrees promptly to notify the Adviser of the
commencement of any litigation or proceedings against it or any of its officers
or directors in connection with the issuance or sale of the Variable Insurance
Products or the operation of each Account.
6.3 Indemnification by the Fund
---------------------------
(a) The Fund agrees to indemnify and hold harmless the Company, and
each of its directors and officers and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act (collectively, the
"Indemnified Parties" for purposes of this Section 6.3) against any and all
losses, claims, damages, liabilities (including amounts paid in settlement with
the written consent of the Fund, which consent shall not be unreasonably
withheld) or litigation (including legal and other expenses) to which the
Indemnified Parties may become subject under any statute, at common law or
otherwise, insofar as such losses, claims, damages, liabilities or expenses (or
actions in respect thereof) or settlements result from the gross negligence, bad
faith or willful misconduct of the Board or any member thereof, are related to
the operations of the Fund, and arise out of or result from any material breach
of any representation and/or warranty made by the Fund in this Agreement or
arise out of or result from any other material breach of this Agreement by the
Fund; as limited by and in accordance with the provisions of Section 6.3(b) and
6.3(c) hereof. It is understood and expressly stipulated that neither the
holders of shares of the Fund nor any Trustee, officer, agent or employee of the
Fund shall be personally liable hereunder, nor shall any resort to be had to
other private property for the satisfaction of any claim or obligation
hereunder, but the Fund only shall be liable.
(b) The Fund shall not be liable under this indemnification provision
with respect to any losses, claims, damages, liabilities or litigation incurred
or assessed against any Indemnified Party as such may arise from such
Indemnified Party's willful
- 17 -
misfeasance, bad faith, or gross negligence in the performance of such
Indemnified Party's duties or by reason of such Indemnified Party's reckless
disregard of obligations and duties under this Agreement to the Company or the
Account, whichever is applicable.
(c) The Fund shall not be liable under this indemnification provision
with respect to any claim made against an Indemnified Party unless such
Indemnified Party shall have notified the Fund in writing within a reasonable
time after the summons or other first legal process giving information of the
nature of the claims shall have been served upon such Indemnified Party (or
after such Indemnified Party shall have received notice of such service on any
designated agent), but failure to notify the Fund of any such claim shall not
relieve the Fund from any liability which it may have to the Indemnified Party
against whom such action is brought otherwise than on account of this
indemnification provision. In case any such action is brought against the
Indemnified Parties, the Fund will be entitled to participate, at its own
expense, in the defense thereof. The Fund also shall be entitled to assume the
defense thereof, with counsel satisfactory to the party named in the action.
After notice from the Fund to such party of the Fund's election to assume the
defense thereof, the Indemnified Party shall bear the fees and expenses of any
additional counsel retained by it, and the Fund will not be liable to such party
under this Agreement for any legal or other expenses subsequently incurred by
such party independently in connection with the defense thereof other than
reasonable costs of investigation.
(d) The Company and the Adviser agree promptly to notify the Fund of
the commencement of any litigation or proceedings against it or any of its
respective officers or directors in connection with this Agreement, the issuance
or sale of the Variable Insurance Products, with respect to the operation of
either the Account, or the sale or acquisition of share of the Fund.
ARTICLE VII.
Termination
-----------
7.1 This Agreement may be terminated by any party in its entirety or with
respect to one, some or all Portfolios for any reason by ninety (90) days
advance written notice delivered to the other parties, and shall terminate
immediately in the event of its assignment, as that term is used in the 1940
Act.
7.2 This Agreement may be terminated immediately by either the Fund or the
Adviser following consultation with the Directors upon written notice to the
Company:
(a) if either one or both of the Fund or the Adviser respectively,
shall determine, in their sole judgment exercised in good faith, that the
Company has suffered a material adverse change in its business, operations,
financial condition or prospects since the date of this Agreement; or
(b) if the Company gives the Fund and the Adviser the written notice
specified in Section 1.10 hereof and at the same time such notice was given
there was no notice of termination outstanding under any other provision of this
Agreement; provided,
- 18 -
however, that any termination under this Section 7.2(b) shall be effective
forty-five (45) days after the notice specified in Section 1.10 was given.
7.3 This Agreement may be terminated immediately by the Company upon
written notice to the Fund or the Adviser:
(a) with respect to any Portfolio based upon the Company's
determination that shares of such Portfolio are not reasonably available to meet
the requirements of the Contracts; or
(b) with respect to any Portfolio in the event any of the Portfolio's
shares are not registered, issued or sold in accordance with applicable state
and/or federal law or such law precludes the use of such shares as the
underlying investment media of the Contracts issued or to be issued by the
Company; or
(c) with respect to any Portfolio in the event that such Portfolio
ceases to qualify as a Regulated Investment Company under Subchapter M of the
Code or under any successor or similar provision, or if the Company reasonably
believes that the Trust may fail to so qualify; or
(d) with respect to any Portfolio in the event that such Portfolio
fails to meet the diversification requirements specified in Article V hereof.
7.4 This Agreement may be terminated immediately by the Company upon
written notice to the Fund and the Adviser, if the Company shall determine, in
its sole judgment exercised in good faith, that either the Fund or the Adviser
has suffered a material adverse change in its business, operations, financial
conditions or prospects since the date of this Agreement or is the subject of
material adverse publicity.
7.5 If this Agreement is terminated for any reason, except under Article IV
(Potential Conflicts) above, the Fund shall, at the option of the Company,
continue to make available additional shares of any Portfolio and redeem shares
of any Portfolio pursuant to all of the terms and conditions of this Agreement
for all Variable Insurance Products in effect on the effective date of
termination of this Agreement (hereinafter "Existing Contracts"). Specifically
without limitation the owners of the Existing Contracts shall be permitted to
reallocate investments in the Fund, redeem investments in the Fund, and/or
invest in the Fund upon the making of additional purchase payments under the
Existing Contracts. The parties agree that this Section 7.4 shall not apply to
any terminations pursuant to Article IV, and that the provisions of Article IV
shall govern.
7.6 The provisions of Articles III (Representations and Warranties) and VI
(Indemnification) shall survive the termination of this Agreement. All other
applicable provisions of this Agreement shall survive the termination of this
Agreement, as long as shares of the Fund are held on behalf of contract owners
in accordance with Section 7.4, except that the Fund and the Adviser shall have
no further obligation to sell Fund shares with respect to Variable Insurance
Products issued after termination.
- 19 -
7.7 The Company shall not redeem Fund shares attributable to the Variable
Insurance Products except (i) as necessary to implement contract owner initiated
or approved transactions, (ii) as required by state and/or federal laws or
regulations or judicial or other legal precedent of general application
(hereinafter referred to as a "Legally Required Redemption"), or (iii) as
permitted by an order of the Commission pursuant to Section 26(b) of the 1940
Act. Upon request, the Company will promptly furnish to the Fund and the Adviser
the opinion of counsel for the Company (which counsel shall be reasonably
satisfactory to the Fund and the Adviser) to the effect that any redemption
pursuant to clause (ii) above is a Legally Required Redemption. Furthermore,
except in cases where permitted under the terms of the Variable Insurance
Products, the Company shall not prevent contract owners from allocating payments
to a Portfolio that was otherwise available under the Variable Insurance
Products without first giving the Fund or the Adviser ninety (90) days notice of
its intention to do so.
ARTICLE VIII.
Notices
-------
Any notice shall be sufficiently given when sent by registered or certified
mail to the other party at the address of such party set forth below or at such
other address as such party may from time to time specify in writing to the
other party.
If to the Fund or the Adviser:
Advantus Capital Management, Inc.
000 Xxxxxx Xxxxxx Xxxxx
Xx. Xxxx, XX 00000-0000
Attention: President
If to the Company:
PFL Life Insurance Company
Financial Markets Division
0000 Xxxxxxxx Xxxx X.X.
Xxxxx Xxxxxx, XX 00000-0000
Attention: Division General Counsel
ARTICLE IX.
Miscellaneous
-------------
9.1 The captions 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.
9.2 This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
- 20 -
9.3 If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the Agreement shall
not be affected thereby.
9.4 This Agreement shall be construed and the provisions hereof interpreted
under and in accordance with the laws of the State of Iowa. It shall also be
subject to the provisions of the federal securities laws and the rules and
regulations thereunder and to any orders of the Commission granting exemptive
relief therefrom and the conditions of such orders. Copies of any such orders
shall be promptly forwarded by the Fund to the Company.
9.5 The parties to this Agreement acknowledge and agree that all
liabilities of the Fund arising, directly or indirectly, under this Agreement,
of any and every nature whatsoever, shall be satisfied solely out of the assets
of the Fund and that no director, officer, agent or holder of shares of
beneficial interest of the Fund shall be personally liable for any such
liabilities.
9.6 Each party shall cooperate with each other party and all appropriate
governmental authorities (including without limitation the Commission, the
National Association of Securities Dealers, Inc. and state insurance regulators)
and shall permit such authorities reasonable access to its books and records in
connection with any investigation or inquiry relating to this Agreement or the
transactions contemplated hereby.
9.7 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.
9.8 The parties of this Agreement acknowledge and agree that this Agreement
shall not be exclusive in any respect, except as provided in Section 1.10.
9.9 No provisions of this Agreement may be amended or modified in any
manner except by a written agreement properly authorized and executed by all
parties.
IN WITNESS WHEREOF, the parties have caused their duly authorized officers
to execute this Participation Agreement as of the date and year first above
written.
PFL Life Insurance Company
By its authorized officer
By:
--------------------------------------------
Name:
-------------------------------------------
Title:
------------------------------------------
Advantus Series Fund, Inc.
By its authorized officer
- 21 -
By:
--------------------------------------------
Name:
-------------------------------------------
Title:
------------------------------------------
Advantus Capital Management, Inc.
By its authorized officer
By:
--------------------------------------------
Name:
-------------------------------------------
Title:
------------------------------------------
- 22 -
SCHEDULE A
Separate Accounts of PFL Life Insurance Company
-----------------------------------------------
Legacy Builder Variable Life Separate Account
A-1
SCHEDULE B
Fund Portfolios and Classes Available
-------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Investment Investment
Portfolio Class Adviser Sub-Adviser
------------------------------------------------------------------------------------------------------------------------------------
Mortgage Securities Advantus Capital Management, Inc.
------------------------------------------------------------------------------------------------------------------------------------
Capital Appreciation Advantus Capital Management, Inc. Credit Suisse Asset Management, Inc.
------------------------------------------------------------------------------------------------------------------------------------
Real Estate Securities Advantus Capital Management, Inc.
------------------------------------------------------------------------------------------------------------------------------------
B-1
SCHEDULE C
CERTIFICATE OF COMPLIANCE
-------------------------
Name of Fund:
Name of each Portfolio:
To: ___________ Insurance Company
000 Xxxxxx Xxxxxx Xxxxx
Xxxxx Xxxx, Xxxxxxxxx 00000-0000
Attn: Manager
Life Fund Accounting
Station Number: 9-6169
We have reviewed compliance of the Fund named above with respect to certain
investment diversification requirements for the Fund for the quarter ending,
__________, __________. The review was limited to verifying whether the Fund
complied with the quarterly diversification requirements described in Section
817(h) of the Internal Revenue Code of 1986, as amended, and the regulations
thereunder (the "Section 817(h) Diversification Requirements").
The review did not include testing compliance with any other investment
limitations in the Private Placement Memorandum of the Fund or the Private
Placement Memorandum of the Policies issued by the Company.
As of _____________, ___________________, the Fund was in compliance with
the Section 817(h) Diversification Requirements.
Dated:
----------------------------------------
By:
-------------------------------------------
Title:
----------------------------------------
D-1
