EXHIBIT 99.3(a)
Form of Distribution Agreement between Pacific Mutual Life and Pacific Mutual
Distributors, Inc. ("PMD")
DISTRIBUTION AGREEMENT
AGREEMENT made as of the ______ day of __________________, 1997, by and
between Pacific Life Insurance Company, a California company, ("Pacific Life")
on its own behalf and on behalf of its Pacific Corinthian Variable Separate
Account (the "Separate Account"), and Pacific Mutual Distributors, Inc., a
California corporation ("PMD").
WHEREAS, Pacific Life has established and maintains the Separate Account, a
separate investment account, for the purpose of selling variable annuity
contracts ("Contracts") to commence after the effectiveness of the Registration
Statement relating thereto filed with the Securities and Exchange Commission on
Form N-4 pursuant to the Securities Act of 1933, as amended (the "1933 Act"),
through PMD, acting as general agent of Pacific Life;
WHEREAS, the Separate Account is or will be registered as a unit investment
trust under the Investment Company Act of 1940 (the "1940 Act");
WHEREAS, PMD is registered as a broker-dealer under the Securities Exchange
Act of 1934 (the "1934 Act") and is a member of the National Association of
Securities Dealers, Inc. ("NASD"); and
WHEREAS, Pacific Life desires to retain PMD as the distributor and
principal underwriter to provide for the sale and distribution to the public of
any Contracts issued by Pacific Life and funded by interests in the General
Account of Pacific Life and in the Separate Account and PMD is willing to render
such services;
NOW THEREFORE, in consideration of the mutual promises and covenants
hereinafter set forth, the parties agree as follows:
1. Principal Underwriter. Pacific Life hereby appoints PMD, during the
term of this Agreement, subject to the registration requirements of the 1933 Act
and the 1940 Act and the provisions of the 1934 Act, to be the distributor and
principal underwriter for the sale of any Contracts to the public in each state
and other jurisdiction in which the Contracts may be lawfully sold. Pacific Life
also appoints PMD as its independent general agent for sale of its Contracts
(including any riders which Pacific Life may make available in connection
therewith or any contracts for which the Contracts may be exchanged or
converted) and for sale of such other annuity contracts or insurance contracts
as Pacific Life may, from time to time, authorize in writing by amendment
hereto. PMD shall offer the Contracts for sale and distribution at premium rates
set by Pacific Life.
Notwithstanding any other provision of this Agreement, it is understood and
agreed that Pacific Life shall at all times retain the ultimate responsibility
for and control of all functions performed pursuant to this Agreement, and for
marketing any and all Contracts, and reserves the right to direct, approve or
disapprove any action hereunder taken on its behalf by PMD.
2. Selling Agreements. PMD is hereby authorized to enter into separate
written agreements, on such terms and conditions as PMD determines are not
inconsistent with this Agreement, with such organizations which agree to
participate as a general agent and/or broker-dealer in the distribution of the
Contracts and to use their best efforts to solicit applications for Contracts.
Any such broker-dealer (hereinafter "Broker") shall be both registered as a
broker-dealer under the 1934 Act and a member of the NASD. Except as provided
in Section 3 hereof, PMD shall be responsible for ensuring that Broker and its
agents or representatives and general agent and its sub-agents soliciting
applications for Contracts shall be duly and appropriately licensed, registered
and otherwise qualified for the sale of any such Contracts (and the riders and
other contracts offered in connection therewith) under the annuity laws and any
applicable blue sky laws of each state or other jurisdiction in which such
Contracts may be lawfully sold and in which Pacific Life is licensed to sell
such Contracts. Pacific Life shall undertake to appoint Broker's qualified
agents or representatives and general agent's sub-agents as life insurance
agents of Pacific Life, provided that Pacific Life reserves the right to refuse
to appoint any proposed representative, agent, or sub-agent, or once appointed,
to terminate such appointment. PMD shall be responsible for ensuring that Broker
and general agent supervise its agents, representatives, or sub-agents.
3. Life Insurance Agents. Pacific Life shall be responsible for ensuring
that Broker and its agents or representatives and general agent and its sub-
agents meet all qualifications and hold any licenses or authorizations that may
be required for the solicitation or sale of any Contracts under the insurance
laws of the applicable jurisdictions.
4. Suitability. Pacific Life desires to ensure that Contracts will be
sold to purchasers for whom the Contract will be suitable. PMD shall take
reasonable steps to ensure that the various representatives of Broker and sub-
agents of general agents shall not make recommendations to an applicant to
purchase a Contract in the absence of reasonable grounds to believe the purchase
of the Contract is suitable for such applicant. While not limited to the
following, a determination of suitability shall be based on information
furnished to a representative or sub-agent after reasonable inquiry of such
applicant concerning the applicant's other security holdings, retirement and
investment objectives, financial situation and needs, and the likelihood that
the applicant will continue to make any premium payments contemplated by the
Contracts and will keep the Contract in force for a sufficient period of time so
that Pacific Life's acquisition costs are amortized over a reasonable period
of time.
5. Conformity with Registration Statement and Approved Sales Materials.
In performing its duties as distributor, PMD will act in conformity with the
registration statement and with the instructions and directions of Pacific Life,
the requirements of the 1933 Act, the 1940 Act, the 1934 Act, and all other
applicable federal and state laws and regulations. PMD shall not give any
information nor make any representations, concerning any aspect of the Contract
or of Pacific Life's operations to any persons or entity unless such information
or representations are contained in the registration statement and the pertinent
prospectus filed with the Securities and Exchange Commission, or are contained
in sales or promotional literature approved by Pacific Life. PMD will not use
and will take reasonable steps to ensure Broker will not use any sales promotion
material and advertising which has not been previously approved by Pacific Life.
6. Applications. Completed applications for Contracts solicited by such
Broker through its agents or representatives or by general agent through its
sub-agents shall be transmitted directly to Pacific Life. All payments under the
Contracts shall be made by check to Pacific Life or by other method acceptable
to Pacific Life, and if received by PMD, shall be held at all times in a
fiduciary capacity and remitted promptly to Pacific Life. All such payments will
be the property of Pacific Life. Pacific Life has the sole authority to approve
or reject such applications or payments and maintains ultimate responsibility
for underwriting. Anything in this Agreement to the contrary notwithstanding,
Pacific Life retains the ultimate right to control the sale of the Contracts and
to appoint and discharge life insurance agents of Pacific Life.
7. Standard of Care. PMD shall be responsible for exercising reasonable
care in carrying out the provisions of this Agreement.
8. Reports and Records. PMD shall be responsible for maintaining and
preserving accurate records relating to matters pertaining to this Agreement and
the Broker and general agent and their agents, representatives or sub-agents who
are licensed, registered and otherwise qualified to sell the Contracts, as
required by applicable laws and regulations, or as Pacific Life may reasonably
request for its own record-keeping or accounting purposes; calculating and
furnishing the fees payable to Brokers or general agents; and for furnishing
periodic reports to Pacific Life as to the sale of Contracts made pursuant to
this Agreement. The books, accounts and records of Pacific Life, the Separate
Account and PMD shall be maintained so as to clearly and accurately disclose the
nature and details of the transactions.
9. Investigation and Procedures. PMD and Pacific Life agree to
cooperate fully in any regulatory investigation or proceeding or judicial
proceeding arising in connection with any Contracts distributed under this
Agreement. PMD further agrees to furnish regulatory authorities with any
information or reports in connection with such services which may be requested
in order to ascertain whether the operations of Pacific Life and the Separate
Account are being conducted in a manner consistent with applicable laws and
regulations. PMD and Pacific Life further agree to cooperate fully in any
securities regulatory investigation or proceeding with respect to Pacific Life,
PMD, their affiliates and their agents or representatives to the extent that
such investigation or proceeding is in connection with any Contracts distributed
under this Agreement. Without limiting the foregoing:
(a) PMD will be notified promptly of any customer complaint or notice of
any regulatory investigation or proceeding or judicial proceeding received by
Pacific Life with respect to PMD or any agent, representative, or sub-agent of a
Broker or general agent or which may affect Pacific Life's issuance of any
contract sold under this Agreement; and
(b) PMD will promptly notify Pacific Life of any customer complaint or
notice of any regulatory investigation or proceeding received by PMD or its
affiliates with respect to PMD or any agent, representative, or sub-agent of a
Broker or general agent in connection with any Contract distributed under this
Agreement or any activity in connection with any such contract.
In the case of a customer complaint, PMD and Pacific Life will cooperate in
investigating such complaint and any response will be sent to the other party to
this Agreement for approval not less than five business days prior to it being
sent to the customer or regulatory authority, except that if a more prompt
response is required, the proposed response shall be communicated by telephone,
telegraph or telecopier.
10. Indemnification. Pacific Life hereby agrees to indemnify and hold
harmless PMD and its officers and directors, and employees for any expenses
(including legal expenses), losses, claims, damages, or liabilities incurred by
reason of any untrue or alleged untrue statement or representation of a material
fact or any omission or alleged omission to state a material fact required to be
stated to make other statements not misleading, if made in reliance on any
prospectus, registration statement, post-effective amendment thereof, or sales
materials supplied or approved by Pacific Life or the Separate Account. Pacific
Life shall reimburse each such person for any legal or other expenses reasonably
incurred in connection with investigating or defending any such loss, liability,
damage, or claim. However, in no case shall Pacific Life be required to
indemnify for any expenses, losses, claims, damages or liabilities which have
resulted from the willful misfeasance, bad faith, negligence, misconduct, or
wrongful act of PMD.
PMD hereby agrees to indemnify and hold harmless Pacific Life, its
officers, directors, and employees, and the Separate Account for any expenses,
losses, claims, damages, or liabilities arising out of or based upon any of the
following in connection with the offer or sale of any Contract: 1) except for
such statements made in reliance on any prospectus, registration statement or
sales material supplied or approved by Pacific Life or the Separate Account, any
untrue or alleged untrue statement or representation made; 2) any failure to
deliver a currently effective prospectus; 3) the use of any unauthorized sales
literature by any officer, employee, agent, or sub-agent of PMD, Broker or
general agent; or 4) any willful misfeasance, bad faith, negligence, misconduct
or wrongful act. PMD shall reimburse each such person for any legal or other
expenses reasonably incurred in connection with investigating or defending any
such loss, liability, damage, or claim.
Promptly after receipt by a party entitled to indemnification ("Indemnified
Party") of notice of the commencement of any action, if a claim for
indemnification in respect thereof is to be made against Pacific Life or PMD
("Indemnifying Party") such Indemnified Party will notify Indemnifying Party in
writing of the commencement thereof, but failure to notify the Indemnifying
Party of any claim shall not relieve it from any liability which it may have to
the person against whom such action is brought otherwise than on account of this
Agreement contained in this Section 10. The Indemnifying Party will be entitled
to participate in the defense of the Indemnified Party, but such participation
will not relieve such Indemnifying Party of the obligation to reimburse the
Indemnified Party for reasonable legal and other expenses incurred by such
Indemnified Party in defending himself.
11. Agent of Pacific Life or Separate Account. Any person, even though
also an officer, director, employee, or agent of PMD, who may be or become an
officer, director, employee, or agent of Pacific Life or the Separate Account
shall be deemed, when rendering services to Pacific Life or the Separate Account
or acting in any business of Pacific Life or the Separate Account, to be
rendering such services to or acting solely for Pacific Life or the Separate
Account and not as an officer, director, employee, or agent or one under the
control or
direction of PMD even though paid by PMD. Likewise, any person, even though also
an officer, director, employee, or agent of Pacific Life or the Separate
Account, who may be or become an officer, director, employee, or agent of PMD
shall be deemed when rendering services to PMD or acting in any business of PMD
to be rendering such services to or acting solely for PMD and not as an officer,
director, employee, or agent or one under the control or direction of Pacific
Life or the Separate Account even though paid by Pacific Life or the Separate
Account.
12. Books and Records. It is expressly understood and agreed that all
documents, reports, records, books, files, and other materials relating to this
Agreement and the services to be performed hereunder shall be the sole property
of Pacific Life and the Separate Account and that any such property held by PMD
shall be held by PMD only as agent, during the effective term of this Agreement.
This material shall be delivered to Pacific Life upon the termination of this
Agreement free from any claim or retention of rights by PMD. During the term of
this Agreement and for a period of three years from the date of termination of
this Agreement, PMD will not disclose or use any records or information and will
regard and preserve as confidential all information related to the business of
Pacific Life or the Separate Account that may be obtained by PMD from any source
as a result of this Agreement and will disclose such information only if Pacific
Life or the Separate Account has authorized such disclosure, or if such
disclosure is expressly required by applicable federal or state regulatory
authorities. PMD further acknowledges and agrees that, in the event of a breach
or threatened breach by it of the provisions of this Section 12, Pacific Life
will have no adequate remedy in moneys or damages and, accordingly, Pacific Life
shall be entitled in its discretion to seek an injunction against such breach.
However, no specification in this Agreement of a specific legal or equitable
remedy shall be construed as a waiver or prohibition against any other legal or
equitable remedy in the event of a breach of a provision of this Agreement.
13. Employees. PMD will not employ, except with the prior written
approval of the Commissioner of Insurance of the State of California, in any
material connection with the handling of the Separate Account's assets any
person who, to the knowledge of PMD:
(a) in the last 10 years has been convicted of any felony or misdemeanor
arising out of conduct involving embezzlement, fraudulent conversion, or
misappropriation of funds or securities, or involving violations of Sections
1341, 1342, or 1343 of Xxxxx 00, Xxxxxx Xxxxxx Code; or
(b) within the last 10 years has been found by any state regulatory
authority to have violated or has acknowledged violation of any provision of any
state insurance law involving fraud, deceit, or knowing misrepresentation; or
(c) within the last 10 years has been found by any federal or state
regulatory authorities to have violated or have acknowledged violation of any
provision of federal or state securities laws involving fraud, deceit, or
knowing misrepresentation.
14. Termination. This Agreement shall terminate automatically upon its
assignment without the prior written consent of both parties. This Agreement
may be terminated at any time, for any reason, by either party on 60 days'
written notice to the other party, without the payment of any penalty. Upon
termination of this Agreement, all authorizations, rights and obligations shall
cease
except the obligation to settle accounts hereunder, including commissions on
premiums subsequently received for Contracts in effect at time of termination,
and the agreements contained in Sections 9 and 10 hereof.
15. Regulation. This Agreement shall be subject to the provisions of the
1940 Act and the 1934 Act and the rules, regulations and rulings thereunder, and
of the applicable rules and regulations of the NASD, and applicable state
insurance law and other applicable law, from time to time in effect, and the
terms hereof shall be interpreted and construed in accordance therewith.
16. Independent Contractor. PMD shall act as an independent contractor
and nothing herein contained shall constitute PMD or its agents, officers or
employees as agents, officers, or employees of Pacific Life in connection with
the sale of any Contract.
17. Notices. Notices of any kind to be given to PMD by Pacific Life or the
Separate Account shall be in writing and shall be duly given if mailed, first
class postage prepaid, or delivered to PMD at 000 Xxxxxxx Xxxxxx Xxxxx, Xxxxxxx
Xxxxx, Xxxxxxxxxx 00000, or at such other address or to such individual as shall
be specified by PMD. Notices of any kind to be given to Pacific Life or the
Separate Account shall be in writing and shall be duly given if mailed, first
class postage prepaid, or delivered to them at 700 Newport Center Drive, Post
Office Box 9000, Xxxxxxx Xxxxx, Xxxxxxxxxx 00000, or at such other address or to
such individual as shall be specified by Pacific Life.
If any provisions of this Agreement shall be held or made invalid by a
court decision, statute rule or otherwise, the remainder of this Agreement shall
not be affected thereby.
18. Entire Agreement; Amendments. This Agreement (a) sets forth the
entire understanding of the parties with respect to the subject matter hereof;
(b) incorporates and merges any and all previous agreements, understandings, and
communications, oral or written; and (c) may not be modified, amended, or waived
except by a written instrument duly executed by the party against whom such
modification, amendment, or waiver is sought to be enforced.
19. Counterparts. This Agreement may be executed in any number of
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
20. Governing Law. This Agreement shall be construed and enforced in
accordance with and governed by the laws of the State of California.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
PACIFIC LIFE INSURANCE COMPANY
By: __________________________________________
Chairman and Chief Executive Officer
ATTEST:
____________________________________
Secretary
PACIFIC MUTUAL DISTRIBUTORS, INC.
By: __________________________________________
President
WITNESS:
____________________________________
