FORM OF
SELLING AGREEMENT
FOR VARIABLE CONTRACTS
ISSUED BY
TRAVELERS AFFILIATED INSURANCE COMPANIES
Xxx Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Tower Square Securities, Inc. (hereafter referred to as TSSI) as the
Principal Underwriter, XXXXX XXXXXX INC. (hereafter referred to as the
Broker/Dealer), and SBHU LIFE AGENCY, INC. and each company identified on
Exhibit A to this Agreement (hereafter collectively referred to as SBHU), enter
into this agreement effective on __________, 1995 for the purpose of authorizing
the Broker/Dealer and SBHU, through its licensed individual agents described in
paragraph 4, to solicit applications for such variable life insurance, variable
annuity, and modified guaranteed annuity contracts (the "Contract(s)") as may be
issued by The Travelers Insurance Company, The Travelers Life and Annuity
Company, and any affiliated insurance companies (hereafter referred to as
"Insurance Companies" or in their individual capacity, "Insurance Company") and
identified by policy forms in the Compensation Schedules attached to this
agreement as they may be amended by the Insurance Companies from time to time.
The parties represent and agree as follows:
1. The Insurance Companies are engaged in the issuance of the Contracts
in accordance with federal securities laws and the applicable
insurance laws of those states in which the Contracts have been
qualified for sale. The Contracts may be considered securities under
the Securities Act of 1933; therefore, the offering and distribution
of the Contracts is made through TSSI as a registered Broker/Dealer
under the Securities Exchange Act of 1934 and as a member of the
National Association of Securities Dealers, Inc. ("NASD"). The terms
of the offering of the Contracts are more particularly described in
the prospectus(es) for the Contracts.
2. The Broker/Dealer certifies that it is a registered Broker/Dealer
under the Securities Exchange Act of 1934 and a member of NASD. The
Broker/Dealer agrees to abide by all rules and regulations of the
NASD, and to comply with all applicable state and Federal laws and the
rules and regulations of authorized regulatory agencies affecting the
sale of the Contracts.
3. SBHU certifies that it is licensed as an insurance agency in
accordance with the applicable insurance laws of those states in which
the Contracts have been qualified for sale. Any provisions of this
Agreement that must be performed by an entity that is licensed as an
insurance agency will be carried out by SBHU. Broker/Dealer will
carry out such functions that must be performed by a registered
Broker/Dealer.
4. The Broker/Dealer will select persons to be employed and supervised by
it who will be trained and qualified to solicit applications for the
Contracts in conformance with applicable state and Federal laws and
regulations. Persons so trained and qualified will be registered
representatives of the Broker/Dealer in accordance with the rules of
NASD and they will be properly licensed in accordance with the
insurance laws of those jurisdictions in which the Contracts may be
lawfully distributed and in which they solicit applications for such
Contracts. The Insurance Company shall have ultimate authority to
determine whether it shall appoint or terminate a particular
registered representative as an agent of the Insurance Company with
the various state insurance departments.
5. The Broker/Dealer will review all Contract proposals and applications
for suitability and for completeness and correctness as to form. The
Broker/Dealer will promptly return to the applicant all applications,
together with any payments received therewith, deemed by the
Broker/Dealer to be unsuitable or not complete and correct as to form.
The Insurance Companies reserve the right to reject any Contract
application and return any payment made in connection with an
application which is rejected. The Insurance Companies agree to
promptly notify the Broker/Dealer of any such rejection.
a. If the Broker/Dealer is soliciting the sale of variable annuities
or modified guaranteed annuities, the Broker/Dealer will promptly
forward to the Insurance Companies, at addresses provided by the
Insurance Companies from time to time, all of the necessary
information from applications taken by Broker/Dealer and found
suitable and in good form, together with all payments received
from such applications. Broker/Dealer is responsible for
accurately communicating to the Insurance Companies investment
instructions for all business submitted by Broker/Dealer to the
Insurance Companies. Contracts issued by the Insurance Companies
will be forwarded to the Broker/Dealer for prompt delivery to the
Contract owner. The Broker/Dealer shall obtain and retain a
receipt for each Contract which Broker/Dealer delivers.
b. If the Broker/Dealer is soliciting the sale of variable life
insurance, the Broker/Dealer will promptly forward to one of the
general
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agents appearing on the Insurance Companies' most current
list of approved general agents for variable life insurance (the
"Approved General Agent") all of the necessary information from
applications taken by Broker/Dealer and found suitable and in
good form, including accurate investment instructions, together
with all payments received with such applications.
Contracts issued by the Insurance Companies will be forwarded to
the Approved General Agent, who will forward them to the
Broker/Dealer. The Broker/Dealer shall obtain and retain a
receipt for each Contract which Broker/Dealer delivers.
The Broker/Dealer shall promptly return to the Insurance Companies, or
as reasonably directed by the Insurance Companies, all undelivered
Contracts and all receipts for cancellation of Contracts that
Broker/Dealer receives.
6. The Broker/Dealer will perform the selling functions required by this
agreement in accordance with the terms and conditions of the then
current prospectus(es) applicable to the Contract and will make no
representations not included in the prospectus or in any authorized
supplemental material. No sales solicitation, including the delivery
of supplemental sales literature or other such materials, shall occur,
be delivered to, or used with a prospective purchaser unless
accompanied or preceded by appropriate then current prospectus(es).
Any material prepared or used by the Broker/Dealer or its registered
representatives, which describes in whole or in part or refers by name
or form number to the Insurance Companies' Contracts (including
underlying investment funds available under the Contracts), or uses
the name of the Insurance Companies or the logos or Service Marks of
the Insurance Companies, must be approved by the Insurance Companies
in writing prior to any such use.
7. The Insurance Companies represent and warrant that all advertising,
brochures and other materials developed by them and delivered to
Broker/Dealer a) have been read and approved by the Insurance
Companies; b) are in conformity with the terms and conditions of the
applicable Contracts; c) meet the requirements of all federal, state
and local statutes and regulations applicable to the Insurance
Companies; and d) have been approved by any regulatory authority whose
approval of such material is required, whether such approval is
required before or after such material is used.
8. The Insurance Companies will not identify Broker/Dealer in any
advertising, publicity release or other material intended for
distribution to the public without securing the prior written approval
of Broker/Dealer.
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9. The Insurance Companies shall give the Broker/Dealer prior written
notice of any change to the list of states where the Insurance
Companies' products are approved for sale or to the regulatory status
of the Insurance Companies' products, within a reasonable amount of
time to permit the Broker/Dealer to act on such information.
10. The Insurance Companies shall not suspend sales of any Contracts or
amend any Contracts without giving prior written notice to the
Broker/Dealer. The Insurance Companies shall provide such notice at
least thirty days prior to suspending sales or amending Contracts,
except where such suspension or amendment is:
(a) necessary for compliance with federal, state, or local laws,
regulations, or administrative orders; or
(b) necessary to prevent administrative or financial hardship to the
Insurance Companies.
11. Commissions, allowances and any other fees payable to the
Broker/Dealer on sales of the Contracts solicited by the Broker/Dealer
will be paid to the Broker/Dealer, or as necessary to meet any state
insurance law requirements, to SBHU, in accordance with the
Compensation Schedule(s) attached to this agreement as they may be
amended from time to time and in effect at the time the Contract
payments are received by the Insurance Companies (in the case of
annuities) or at the time applications are received by the Insurance
Companies (in the case of life insurance), and in accordance with any
administrative procedures agreed to by the Insurance Companies and the
Broker/Dealer and in effect at the time such payments are received by
the Insurance Companies. The Insurance Companies reserve the right to
revise the Compensation Schedules at any time upon written notice to
Broker/Dealer. Commission to the Broker/Dealer's registered
representative for Contracts solicited by the registered
representative and issued by the Insurance Companies will be governed
by agreement between the Broker/Dealer and its registered
representative and its payment will be the responsibility of the
Broker/Dealer.
12. If the Insurance Companies return all or a portion of a premium paid
with respect to a Contract, Broker/Dealer shall be obligated to refund
to the Insurance Companies applicable commissions on the amount of
such premium only where:
(a) the Contract solicited is returned not taken under the policy
"free look" provisions;
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(b) premiums are refunded due to overpayments, errors in billing or
in the timing of automatic premium collection deductions, or
errors resulting in policy reissue;
(c) the check delivered in payment of any Contract premium does not
clear and the premium is not otherwise collected;
(d) the Contract is terminated or there is a refund of premium and an
act, error or omission of the Broker/Dealer or its registered
representative materially contributed to the termination of the
Contract or the need to return premium;
(e) the application is rejected by the Insurance Companies;
(f) the Insurance Companies are directed by a judicial or regulatory
authority to return premium without assessment of a surrender
charge;
(g) the applicant's initial premium on a 1035 exchange is returned
because the expected rollover amount from another Contract is not
transferred due to the exchange not meeting the legal
requirements to qualify for a tax-free exchange;
(h) the Insurance Companies return unearned premium on a life
insurance Contract as required by the provisions of the Contract;
(i) the Insurance Companies determine that it has a legal liability
to return premiums on a life insurance Contract within the first
year after the Contract is issued; or
(j) the Insurance Companies and Broker/Dealer mutually agree to
return all or a portion of a premium paid with respect to a
Contract.
13. This agreement will continue unless terminated by either party upon
thirty days prior written notice, except that the Insurance Companies
reserve the right to terminate this agreement immediately, without
notice, in the event Broker/Dealer ceases to be a registered
Broker/Dealer or a member of the NASD. Failure of any party to
terminate this agreement for any of the causes set forth in this
agreement will not constitute a waiver of the right to terminate this
agreement at a later time for any of these causes. After any
termination of the Agreement, both parties will continue to process
any applications for Contracts submitted by Broker/Dealer to the
Insurance Companies prior to such termination, and the Insurance
Companies shall issue Contracts based on such applications in
accordance with the provisions of the Agreement.
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14. For the purpose of compliance with any applicable federal or state
securities laws or regulations promulgated under them, the
Broker/Dealer acknowledges and agrees that in performing the
Broker/Dealer services covered by this agreement, it is acting in the
capacity of an independent broker and dealer as defined by the By-Laws
of the NASD and not as an agent or employee of either the Insurance
Companies or any registered investment company.
In furtherance of its responsibilities as a Broker/Dealer, the
Broker/Dealer warrants and represents that it has established a system
to supervise the activities of its registered representatives and
associated persons that is designed to achieve compliance with the
applicable securities laws and regulations with the rules of NASD, and
the Broker/Dealer acknowledges that it is responsible for such
supervision and compliance in connection with its solicitation and
sale of the Contracts.
The Broker/Dealer shall be responsible for compliance with all state
and federal laws and regulations applicable to the Broker/Dealer's
activities with respect to the Contracts. The Broker/Dealer shall
obtain proper customer authorization and shall accurately and in a
timely fashion communicate to the Insurance Companies investment
instructions relating to the Contracts. Each party to this agreement
will hold harmless and indemnify the Registered Investment Companies
which are used to fund the Contracts, the Insurance Companies or the
Broker/Dealer, as appropriate, for any loss or expense suffered as a
result of the violation or noncompliance by that party or the
Associated Persons of that party of any applicable law or regulation
or any provision of this agreement, including the Insurance Companies
as a result of Broker/Dealer's inaccurate communication to the
Insurance Companies of investment instructions relating to the
Contracts, provided, however, that no party or any of its employees or
agents will be liable to the other party for any indirect, special or
consequential damages arising out of or in connection with the
performance of any services pursuant to this Agreement.
15. During the term of this Agreement and after its termination, the
Insurance Companies agree that they will keep confidential and will
not use confidential information obtained through this Agreement,
which includes, without limitation, the names, addresses and telephone
numbers of the Broker/Dealer's clients where the Insurance Companies
did not have a pre-existing relationship with such client, for any
purposes not contemplated by this agreement, nor will the Insurance
Companies use such confidential information to solicit sales of goods
or services (including without limitation life, annuity, and long-term
care insurance), nor will the Insurance Companies disclose such
confidential information to any other
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party without the Broker/Dealer's consent except as necessary to carry
out the duties contemplated by this Agreement. The Insurance Companies
will not attempt in any organized fashion to actively induce
representatives of the Broker/Dealer to become independent agents of
TSSI or the Insurance Companies. The Insurance Companies further agree
that without prior approval of the Broker/Dealer it will not contact
registered representatives of the Broker/Dealer except for the
purposes of servicing their clients' Contracts or for providing
wholesaling support for variable life insurance Contracts to be issued
by the Insurance Companies.
16. The Insurance Companies and the Broker/Dealer agree to cooperate fully
with each other in the event of any material written customer
complaints or regulatory investigations or proceedings relating to
activities conducted pursuant to this Agreement. Each party shall
promptly notify the other of any such complaint or investigation and
shall consult with the other party prior to sending any written
response with respect to any such complaint or investigation.
17. All notices to the Insurance Companies relating to this agreement
should be sent to the attention of The Travelers Insurance Companies,
FS Legal Department, One Tower Square, Hartford, Connecticut 06183-
2020. All notices to the Broker/Dealer or SBHU will be duly given if
mailed or faxed to the address shown below to the attention of Xxxxxx
X. Xxxxxxx.
18. No modification, amendment, supplement to or waiver of any provisions
of the Agreement shall be binding upon the parties hereto unless made
in writing and duly signed by both parties (except for a change in the
Compensation Schedule or the addition of new products where permitted
in the Agreement). A failure or delay of any party to exercise any
option provided in the Agreement or to require at any time performance
of any of the provisions of the Agreement shall in no way be construed
as a waiver of such provision.
19. Neither party may assign the Agreement and/or any of its rights and/or
obligations thereunder to any entity that is not affiliated to the
assigning party, without the other party's consent. The assigning
party shall provide written notice of any such assignment. TSSI
reserves the rights to designate, at its sole discretion, an
alternative Principal Underwriter for the distribution of the
Contracts covered by this Agreement. The designation will constitute
substitution of parties to this Agreement with assumption of the
rights and obligations created by this agreement as applicable.
20. All rules and procedures established by the Insurance Companies must
be reasonable, must not conflict with any statutes or governmental
rules or
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regulations, and must be communicated to the Broker/Dealer
before the Broker/Dealer will be subject to them.
21. Should any portion of the Agreement for any reason be held to be void
in law or in equity, the Agreement shall be construed insofar as is
possible, as if such portion had never been contained therein.
22. Unless otherwise directed by any regulatory authority or the Contract
Owner, the Insurance Companies will only take instructions from the
Broker/Dealer regarding changes in agent of record.
23. The Broker/Dealer shall be entitled to receive any earned compensation
generated regardless of any events occurring after the sale resulting
in such compensation, including the termination of this Agreement,
unless the Broker/Dealer ceases to be a registered Broker/Dealer or
member of the NASD, or if the payment of such compensation would be
prohibited by any applicable law or regulatory authority.
24. The terms "Associated person," "Broker/Dealer," and "member as used
herein shall be defined consistently with the definition of similar
such terms as contained in Article I of the NASD By-Laws. This
Agreement will be construed in accordance with the laws of the State
of Connecticut.
In reliance on the representations set forth and in consideration of the
undertakings described, the parties represented below do hereby Contract and
agree.
TOWER SQUARE SECURITIES, XXXXX XXXXXX INC.
INC. 000 XXXXXXXXX XXXXXX
XXX XXXX, XXX XXXX 00000
By By
-------------------------- --------------------------
Title Title
----------------------- -----------------------
Date of Execution Date of Execution
----------- -----------
Taxpayer I.D.
---------------
SBHU LIFE AGENCY OF SBHU LIFE AGENCY OF
MASSACHUSETTS, INC. OHIO, INC.
By By
-------------------------- --------------------------
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Title Title
----------------------- -----------------------
Date of Execution Date of Execution
----------- -----------
Taxpayer I.D. Taxpayer I.D.
--------------- ---------------
SHEARSON XXXXXX XXXXXX SBHU LIFE AGENCY OF
INSURANCE BROKERS OF NEW TEXAS, INC.
HAMPSHIRE, INC.
By By
-------------------------- --------------------------
Title Title
----------------------- -----------------------
Date of Execution Date of Execution
----------- -----------
Taxpayer I.D. Taxpayer I.D.
--------------- ---------------
SBS INSURANCE BROKERS SBHU LIFE AGENCY, INC. AND
OF NORTH DAKOTA, INC. OTHER COMPANIES IDENTIFIED ON
EXHIBIT A
By By
-------------------------- --------------------------
Title Title
----------------------- -----------------------
Date of Execution Date of Execution
----------- -----------
Taxpayer I.D. Taxpayer I.D.
--------------- ---------------
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EXHIBIT A
---------
XXXXX XXXXXX INC. INSURANCE SUBSIDIARIES
Xxxxxxxx Xxxxxxxx Insurance Services of Alabama, Inc.
SBHU Life Agency of Arizona, Inc.
SBS Insurance Brokerage Agency of Arkansas, Inc.
Shearson Xxxxxx Xxxxxx Insurance Agency of Hawaii, Inc.
SBS Insurance Agency of Idaho, Inc.
SBHU Life Agency of Indiana, Inc.
SBS Insurance Brokers of Kentucky, Inc.
Xxxxx Xxxxxx Xxxxxx Xxxxx Life Agency, Inc.
SBS Insurance Agency of Maine, Inc.
SBHU Life Agency of Massachusetts, Inc.
SBS Insurance Agency of Nevada, Inc.
Shearson Xxxxxx Xxxxxx Insurance Brokers of New Hampshire, Inc.
SBS Insurance Brokers of North Dakota, Inc.
SBHU Life Agency of Ohio, Inc.
SBHU Life Agency of Oklahoma, Inc.
SBS Insurance Agency of South Dakota, Inc.
SBHU Life Agency of Texas, Inc.
SBHU Life Agency of Utah, Inc.
SBS Insurance Agency of Wyoming, Inc.
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