FORM OF BROKER/DEALER AGREEMENT
BROKER-DEALER SELLING AGREEMENT
AGREEMENT by and between CML Insurance Company, a Connecticut
corporation ("CML"), Connecticut Mutual Financial Services, LLC ("CMFS,
LLC") a registered broker-dealer with the Securities and Exchange Commission
("SEC") under the Securities Exchange Act of 1934 and a member of the National
Association of Securities Dealers, Inc. ("NASD"); and _______________________
("Broker-Dealer"), also a registered broker-dealer with the Securities and
Exchange Commission under the Securities Exchange Act of 1934 and a member of
the National Association of Securities Dealers, Inc.
WITNESSETH:
WHEREAS, CMFS, LLC proposes to have Broker-Dealer's registered
representatives ("Representatives") who are also insurance agents solicit and
sell certain Variable Insurance Contracts (the "Policies") more particularly
described in this Agreement and which are deemed to be securities under the
Securities Act of 1933; and
WHEREAS, CML has appointed CMFS, LLC as the Principal Underwriter
and Distributor of the Policies and has agreed with CMFS, LLC that CMFS, LLC
shall be responsible for the training and supervision of such Representatives,
with respect to the solicitation and offer or sale of any of the Policies, and
also for the training and supervision of any other "persons associated" with
Broker-Dealer who are engaged directly or indirectly therewith; and CMFS, LLC
proposes to delegate, to the extent legally permitted, said supervisory duties
to Broker-Dealer; and
WHEREAS, CMFS, LLC propose to have Broker-Dealer provide certain
administrative services to facilitate solicitations for and sales of the
Policies.
NOW THEREFORE, in consideration of the premises and the mutual covenants
hereinafter contained, the parties hereto agree as follows:
1. APPOINTMENT OF BROKER-DEALER. CMFS, LLC hereby appoints
Broker-Dealer to sell the Policies through its Representatives and to provide
certain administrative services to facilitate solicitations for and sales of
the Policies.
2. THE POLICIES. The Policies issued by CML to which this
Agreement applies are listed in Exhibit A. Exhibit A may be amended from
time-to-time by CML. CML in its sole discretion and without notice
to Broker-Dealer, may suspend sales of any Policies or may amend any policies
or contracts evidencing such Policies.
3. SECURITIES LICENSING. Broker-Dealer shall, at all times when
performing its functions under this agreement, be registered as a securities
broker with the SEC and NASD and licensed or registered as a securities
broker-dealer in the states and other local jurisdictions that require such
licensing or registration in connection with variable insurance contract sales
activities or the supervision of Representatives who perform such activities in
the respective location.
4. INSURANCE LICENSING. Broker-Dealer shall, at all times when
performing its functions under this agreement, be validly licensed as an
insurance agency in the states and other local jurisdictions that require such
licensing or registration in connection with Broker-Dealer's variable insurance
contract sales activities.
5. APPOINTMENTS. Broker-Dealer shall assist CML in the
appointment of Representatives under the applicable insurance laws to sell the
Policies. Broker-Dealer shall fulfill all requirements set forth in the Mutual
Letter of Recommendation, attached as Exhibit B, in conjunction with the
submission of licensing/appointment papers for all applicants as insurance
agents of CML. All such licensing/appointment papers should be submitted
to CML or its duly appointed agent by Broker-Dealer. Notwithstanding
such submission, CML shall have sole discretion to appoint, refuse to
appoint, discontinue, or terminate the appointment of any Representative as an
insurance agent of CML.
6. SECURING APPLICATIONS. All applications for Policies shall be made
on application forms supplied by CML and all payments collected by
Broker-Dealer or any Representative of Broker-Dealer shall be remitted promptly
in full, together with such application forms and any other required
documentation, directly to CML at the address indicated on such
application or to such other address as CML may, from time-to-time,
designate in writing. Broker-Dealer shall review all such applications for
completeness. Checks or money orders in payment on any such Policy shall be
drawn to the order of "Connecticut Mutual Life Insurance Company." All
applications are subject to acceptance or rejection by CML at its sole
discretion. All records or information obtained hereunder by Broker-Dealer
shall not be disclosed or used except as expressly authorized herein, and
Broker-Dealer will keep such records and information confidential, to be
disclosed only as authorized or if expressly required by federal or state
regulatory authorities.
7. MONEY RECEIVED BY BROKER-DEALER. All money payable in connection
with any of the Policies, whether as premium or otherwise, and whether paid by
or on behalf of any policyholder, contract owner or anyone else having an
interest in the Policies, is the property of CML and shall be transmitted
immediately in accordance with the administrative procedures of CML
without any deduction or offset for any reason, including by example, but not
limitation, any deduction or offset for compensation claimed by Broker-Dealer.
8. SUPERVISION OF REPRESENTATIVES. Broker-Dealer shall have full
responsibility for the training and supervision of all Representatives
associated with Broker-Dealer who are engaged directly or indirectly in the
offer or sale of the Policies, and all such persons shall be subject to the
control of Broker-Dealer with respect to such persons' securities regulated
activities in connection with the Policies. Broker-Dealer will cause the
Representatives to be trained in the sale of the Policies; will cause such
Representatives to qualify under applicable federal and state laws to engage in
the sale of the Policies; will cause such Representatives to be registered
representatives of Broker-Dealer before such Representatives engage in the
solicitation of applications for the Policies; will cause such Representatives
to execute a Registered Representative's Agent Agreement with CML before
such Representatives engage in the solicitation of applications for the
Policies; and will cause such Representatives to limit solicitation of
applications for the Policies to jurisdictions where CML has authorized
such solicitation. Broker-Dealer shall cause such Representatives'
qualifications to be certified to the satisfaction of CMFS, LLC and shall
notify CMFS, LLC if any Representative ceases to be a registered representative
of Broker-Dealer or ceases to maintain the proper licensing required for the
sale of the Policies. Each party shall be liable for its own negligence and
misconduct hereunder.
9. REPRESENTATIVES AGREEMENT. Broker-Dealer shall cause its
Representatives to execute a registered Representative's Agent Agreement with
CML and forward same to CML before such Representatives shall
permitted to solicit applications for the sale of the Policies. CMFS, LLC
shall furnish Broker-Dealer with copies of the Registered Representative's
Agent Agreements for execution by Representatives.
10. COMPLIANCE WITH NASD RULES OF FAIR PRACTICE AND FEDERAL AND STATE
SECURITIES LAWS. Broker-Dealer shall fully comply with the requirements of the
National Association of Securities Dealers, Inc. and of the Securities Exchange
Act of 1934 and all other applicable federal or state laws and will establish
such rules and procedures as may be necessary to cause diligent supervision of
the securities activities of the Representatives. Upon request by CMFS, LLC,
Broker-Dealer shall furnish such appropriate records as may be necessary to
establish such diligent supervision.
11. NOTICE OF REPRESENTATIVE'S NONCOMPLIANCE. In the event a
Representative fails or refuses to submit to supervision of Broker-Dealer or
otherwise fails to meet the rules and standards imposed by Broker-Dealer on its
representatives, Broker-Dealer shall certify such fact to CMFS, LLC and shall
immediately notify such Representative that he or she is no longer authorized
to sell the Policies, and Broker-Dealer shall take whatever additional action
may be necessary to terminate the sales activities of such Representative
relating to the Policies.
12. PROSPECTUSES, SALES PROMOTION MATERIAL AND ADVERTISING.
Broker-Dealer shall be provided, without any expense to Broker-Dealer, with
prospectuses relating to the Policies and such other material as CMFS, LLC
determines to be necessary or desirable for use in connection with sales of the
Policies. No sales promotion materials or any advertising relating to the
Policies shall be used by Broker-Dealer unless the specific item has been
approved in writing by CMFS, LLC.
In addition, Broker-Dealer shall not print, publish or distribute any
advertisement, circular or any document relating to CML or CMFS, LLC
unless such advertisement, circular or document shall have been approved in
writing by the party named in the material; provided, however, that nothing
herein shall prohibit Broker-Dealer from advertising variable insurance in
general or on a generic basis.
Upon termination of this Agreement, all prospectuses, sales promotion
material, advertising, circulars, and documents relating to the sales of the
Policies shall be promptly turned over to CML free from any claim or
retention of rights by the Broker-Dealer.
13. RIGHT OF REJECTION. Broker-Dealer and/or CML each in their
sole discretion, may reject any applications or payments remitted by
Representative through the Broker-Dealer and may refund an applicant's payments
to the applicant. In the event such refunds are made and if Broker-Dealer has
received compensation based on an applicant's payment that is refunded,
Broker-Dealer shall promptly repay such compensation to CML. If
repayment is not promptly made, CML may at its sole option deduct any
amounts due it from Broker-Dealer from future commissions otherwise payable to
Broker-Dealer. This provision shall survive termination of this Agreement.
14. COMPENSATION.
(a) Sales concessions payable to Broker-Dealer in connection with
the policies shall be paid by CML to the Broker-Dealer. CMFS, LLC will
provide Broker-Dealer with a copy of CML's current Schedule of Sales
Concessions. These fees and commissions will be paid as a percentage of
premiums received in cash or other legal tender and accepted by CML on
applications obtained by the various Representatives of the Broker-Dealer.
Upon termination of this Agreement, all compensation to the Broker-Dealer
hereunder shall cease; however, Broker-Dealer shall continue to be liable for
any chargebacks or for any other amounts advanced by or otherwise due CML
hereunder.
(b) CML shall pay any sales concessions due Broker-Dealer
within fifteen (15) days after the end of the calendar month in which premiums
upon which such sales concessions are based are accepted by CML.
(c) CML may, upon at least ten (10) days prior written notice
to Broker-Dealer, change the Schedule of Sales Concessions. Any such change
shall be by written amendment of the particular schedule or schedules and shall
apply to compensation due on applications received by CML after the
effective date of such notice.
(d) If Broker-Dealer or any Representative of Broker-Dealer shall
rebate or offer to rebate all or any part of a premium on a Policy issued by
CML in violation of applicable state insurance laws or regulations, or if
Broker-Dealer or any Representative of Broker-Dealer shall withhold any premium
on any Policy issued by CML, the same may be grounds for termination of
this Agreement by CML. If Broker-Dealer or any representative of
Broker-Dealer shall at any time induce or endeavor to induce any owner of a
Policy to relinquish the Policy except under circumstances where there is
reasonable grounds for believing the policy, contract or certificate is not
suitable for such person, any and all compensation due Broker-Dealer hereunder
shall cease and terminate.
(e) Nothing in this Agreement shall be construed as giving
Broker-Dealer the right to incur any indebtedness on behalf of CML.
Broker-Dealer hereby authorizes CML to set off liabilities of
Broker-Dealer to CML against any and all amounts otherwise payable to
Broker-Dealer by CML.
15. POLICY DELIVERY. CML may, upon written request of Broker-
Dealer, transmit Policies to Broker-Dealer for delivery to Policy Owners.
Broker-Dealer hereby agrees to deliver all such Policies to Policy Owners within
Ten (10) days of the Policy's Issue Date. Broker-Dealer agrees to indemnify
and hold-harmless CML for any and all losses caused by Broker-Dealer's
failure to perform the undertakings described in this paragraph. Broker-Dealer
hereby authorizes CML to set off any amount it owes CML under is
paragraph against any and all amounts otherwise payable to Broker-Dealer by
CML.
16. WAIVER. Failure of any party to insist upon strict compliance with
any of the conditions of this Agreement shall not be construed as a waiver of
any of the conditions, but the same shall remain in full force and effect. No
waiver of any of the provisions of this Agreement shall be deemed, or shall
constitute a waiver of any other provisions, whether or not similar, nor shall
any waiver constitute a continuing waiver.
17. INDEPENDENT CONTRACTORS. CML and CMFS, LLC are independent
contractors with respect to Broker-Dealer and to Representatives.
18. LIMITATIONS. No party other than CML shall have the authority
on behalf of CML to make, alter, or discharge any policy, contract, or
certificate issued by CML, to waive any forfeiture or to grant, permit,
nor extend the time for making any payments nor to guarantee earnings or rates,
nor to alter the forms which CML may prescribe or substitute other forms
in place of those prescribed by CML, nor to enter into any proceeding in
a court of law or before a regulatory agency in the name of or on behalf of
CML.
19. FIDELITY BOND. Broker-Dealer represents that all directors,
officers, employees and Representatives of Broker-Dealer who are licensed
pursuant to this Agreement as CML agents for state insurance law purposes
or who have access to funds of CML, including but not limited to funds
submitted with applications for the Policies or funds being returned to owners,
are and shall be covered by a blanket fidelity bond, including coverage for
larceny and embezzlement, issued by a reputable bonding company. This bond
shall be maintained by Broker-Dealer at Broker-Dealer's expense. Such bond
shall be, at least, of the form, type and amount required under the NASD Rules
of Fair Practice. CML may require evidence, satisfactory to it, that
such coverage is in force and Broker-Dealer shall give prompt written notice to
CML of any notice of cancellation or change of coverage.
Broker-Dealer assigns any proceeds received from the fidelity bonding
company to CML to the extent of CML's loss due to activities
covered by the bond. If there is any deficiency amount, whether due to a
deductible or otherwise, Broker-Dealer shall promptly pay CML such amount
on demand and Broker-Dealer hereby indemnifies and holds harmless CML
from any such deficiency and from the costs of collection thereof (including
reasonable attorneys' fees).
20. 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 Broker-Dealer may not assign this Agreement or any
rights or obligations hereunder without the prior written consent of CML.
21. REGULATIONS. All parties agree to observe and comply with the
existing laws and rules or regulations of applicable local, state, or federal
regulatory authorities and with those which may be enacted or adopted during
the term of this Agreement regulating the business contemplated hereby in any
jurisdiction in which the business described herein is to be transacted, and to
provide information or reports with respect to their duties hereunder pursuant
to request by any regulatory authority having jurisdiction with respect
thereto.
22. NOTICES. All notices or communications shall be sent to the address
shown below or to such other address as the party may request by giving written
notice to the other parties:
Connecticut Mutual Life Insurance Company
Xxxxxxxx, XX 00000
Attn:
Connecticut Mutual Financial Services, LLC
Xxxxxxxx, XX 00000
Attn:
Broker-Dealer:
23. GOVERNING LAW. This Agreement shall be construed in accordance with
and governed by the laws of the state of Connecticut.
24. AMENDMENT OF AGREEMENT. Connecticut Mutual Life reserves the right
to amend this Agreement at any time, and the submission of an application by
Broker-Dealer after notice of any such amendment has been sent to the other
parties shall constitute the other parties' agreement to any such amendment.
25. TERMINATION. This Agreement may be terminated, without cause, by
any party upon thirty (30) days prior written notice; and may be terminated,
for failure to perform satisfactorily or other cause, by any party immediately;
and shall be terminated if CMFS, LLC or Broker-Dealer shall cease to be
registered Broker-Dealers under the Securities Exchange Act of l934 and members
of the NASD.
CONNECTICUT MUTUAL LIFE INSURANCE COMPANY
By:
CONNECTICUT MUTUAL FINANCIAL SERVICES, LLC
By:
BROKER-DEALER
Name of Firm
By:
Dated:
EXHIBIT A
SCHEDULE OF SALES CONCESSIONS
CONTRACTS FORM NUMBER CONTRACT % PER PURCHASE PAYMENT
EXHIBIT B
Mutual Letter of Recommendation
BROKER-DEALER hereby certifies to Connecticut Mutual Life Insurance
Company ("CML") that all the following requirements will be fulfilled in
conjunction with the submission of licensing/appointment papers for all
applicants as agents of CML submitted by BROKER-DEALER. BROKER-DEALER will,
upon request, forward proof of compliance with same to CML in a timely manner.
1. We have made a thorough and diligent inquiry and investigation relative to
each applicant's identity, residence and business reputation and declare
that each applicant is personally known to us, has been examined by us, is
known to be of good moral character, has a good business reputation, is
reliable, is financially responsible and is worthy of a life insurance and
securities license as well as appointment as an insurance agent of X.XX.
Each individual is trustworthy, competent and qualified to act as an agent
for CML to hold himself out in good faith to the general public. We vouch
for each applicant.
2. We have on file a X-000, X-000, or U-4 form which was completed by each
applicant. We have fulfilled all the necessary investigative requirements
for the registration of each applicant as a registered representative
through our NASD member firm, and each applicant is presently registered
as an NASD registered representative.
The information in our files indicates no fact or condition which would
disqualify the applicant from receiving a life insurance or securities
license or from being appointed as an insurance agent of CML and all
the findings of all investigative information is favorable.
3. We certify that all educational requirements have been met for the
specific state each applicant is requesting a license in, and that, all
such persons have fulfilled the appropriate examination, education and
training requirements.
4. We certify that each applicant will receive close and adequate
supervision, and that we will make inspection when needed of any or all
risks written by these applicants, to the end that the insurance interest
of the public will be properly protected.
5. We will not permit any applicant to transact insurance as an agent until
duly licensed and appointed by CML. No applicants have been given a
contract or furnished supplies, nor have any applicants been permitted to
write, solicit business, or act as an agent in any capacity, and they will
not be so permitted until the certificate of authority applied for is
received.
