VARIABLE ANNUITY PRINCIPAL
UNDERWRITING AGREEMENT
This Variable Annuity Principal Underwriting Agreement ("Agreement"),
made and entered into this 1st day of February, 1999, by and between American
Enterprise Life Insurance Company ("Company"), an Indiana corporation, and
American Express Service Corporation ("Distributor"), a Delaware corporation.
In consideration of the mutual covenants and promises contained herein,
the parties agree as follows:
1. All capitalized words or terms used in this Agreement, not otherwise
defined herein, shall have the same meaning and definition specified in the
Master Agreement dated as of February 1, 1999 between and among Xxxxxxx,
Xxxxx & Co. ("GS & Co."), Company, American Centurion Life Assurance
Company, IDS Life Insurance Company, IDS Life Insurance Company of New
York, American Express Financial Advisors Inc. and Distributor ("Master
Agreement").
2. Company hereby appoints and authorizes Distributor, and Distributor hereby
agrees to act as principal underwriter and distributor for the GS Annuity
Contracts that will be issued and administered by Company in accordance
with the terms and conditions of the Master Agreement and the prospectus
for the GS Annuity Contracts.
3 Company and Distributor represent and warrant to each other and undertake
to do as follows:
a. Company represents and warrants that it is duly incorporated in the
state of Indiana and licensed and qualified to do business in the
District of Columbia and all states other than New York and New
Hampshire.
b. Distributor represents and warrants that it is and shall remain during
the term of this Agreement duly registered as a broker/dealer with the
SEC, NASD, the District of Columbia and all states, and is qualified
to do business in all states where Company is qualified and licensed
to do business.
c. Company represents and warrants that the GS Annuity Contracts have
been filed with and approved by appropriate State Insurance
Departments.
d. Company represents and warrants that the prospectus(es) and
registration statement(s) relating to the GS Annuity Contracts contain
no untrue statements of material fact or omission to state a material
fact, the omissions of which makes any statement contained in the
prospectus(es) and registration statement(s) misleading.
e. Company represents and warrants that the advertising and sales
literature for the GS Annuity Contracts shall be created as specified
in the Master Agreement. Company represents and warrants that Company
will meet any requirements of the State Departments of Insurance in
the jurisdictions in which the GS Annuity Contracts are available for
sale regarding both the filing and approval of advertising and sales
literature for the GS Annuity Contracts.
f. Company and Distributor will ensure that GS & Co. meets NASD
requirements regarding the filing and approval of advertising and
sales literature for the GS Annuity Contracts, in accordance with the
terms of the Master Agreement.
g. Distributor represents and warrants that it is and shall remain during
the term of this Agreement in compliance with Section 9(a) of the 0000
Xxx.
4. Distributor shall not directly solicit, offer or sell GS Annuity Contracts
to applicants or prospective applicants unless Distributor has been
authorized by Company to act as an Authorized Selling Firm pursuant to a
Selling Agreement and in accordance with the terms of the Wholesaling
Agreement (defined below).
5. Distributor shall have no authority with respect to Company, nor shall it
represent itself as having such authority, other than as is specifically
set forth in this Agreement. Specifically, and without limiting the
foregoing, Distributor shall not, without the express written consent of
Company, as applicable:
a. make, waive, alter or change any term, rate or condition stated in any
Company contract or Company- approved form, or discharge any contract
in the name of Company;
b. waive a forfeiture;
c. extend the time for the payment of premiums or other monies due
Company;
d. institute, prosecute or maintain any legal proceedings on behalf of
Company in connection with any matter pertaining to Company's
business, nor accept service of process on behalf of Company;
e. transact business in contravention of the rules and regulations of any
State Insurance Department and/or other governmental authorities
having jurisdiction over any subject matter embraced by this
Agreement;
f. make, accept or endorse notes, or endorse checks payable to Company,
or otherwise incur any expense or liability on behalf of Company;
g. offer to pay or pay, directly or indirectly, any rebate of premium or
any other inducement not specified in the GS Annuity Contract to any
owner or annuitant;
h. misrepresent the GS Annuity Contract for the purpose of inducing an
annuity contract-holder in any other company to lapse, forfeit or
surrender his/her insurance therewith;
i. give or offer to give any advice or opinion regarding the taxation of
any customer's income or estate in connection with the purchase of any
GS Annuity Contract;
j. use Company's names, logos, trademarks, service marks or any other
proprietary designation;
k. engage in any program designed to replace GS Annuity Contracts sold
hereunder with any annuity products of other companies, at any time
while this Agreement is in force; or provide data to any other person
or organization which would allow or facilitate such replacement of
Company's GS Annuity Contracts.
6. Company will be responsible for preparing, filing and maintaining all
necessary GS Annuity forms and related applications, registration
statements and other documents, establishing the appropriate Separate
Accounts and Subaccounts to support the GS Annuity Contracts, securing all
necessary approvals from the Indiana Insurance Department, and the State
Insurance Departments of all states other than New Hampshire and New York,
to issue the GS Annuity Contract and performing all other tasks and
obligations related to the GS Annuity Contract that Company is obligated to
perform under the Master Agreement.
7. Company and Distributor agree to enter into selling agreements with retail
broker/dealers and their insurance agency affiliates ("Authorized Selling
Firms"), to provide for solicitation and procurement by the Authorized
Selling Firms of applications for GS Annuity Contracts to be issued by
Company, in accordance with the terms and conditions of the Master
Agreement, including the standard form of Selling Agreement specified
therein, and the Wholesaling Agreement between Company, AESC, Xxxxxxx Sachs
Insurance Agency, Inc. and GS & Co. (the "Wholesaling Agreement"). No
retail broker/dealer or insurance agency shall offer or sell the GS Annuity
Contracts unless they are properly licensed and appointed, have entered
into a Selling Agreement with Company and Distributor and have complied
with the conditions that the Selling Agreement specifies must be met before
any sale of the GS Annuity Contract. Company will supply, or will ensure
that Wholesaler supplies, all materials for use by Authorized Selling Firms
in accordance with the terms of the Master Agreement and the Wholesaling
Agreement.
8. No individual shall offer or sell the GS Annuity Contracts unless duly (a)
registered as a "registered representative" of a Selling Broker-Dealer in
accordance with NASD Rules and Regulations, and not subject to a bar or
suspension order thereunder, (b) licensed as an insurance agent in
accordance with the requirements of the jurisdiction(s) where the
solicitations and sales take place as well as in accordance with the
requirements of the solicited person's or entity's place of residence, (c)
appointed as an insurance agent for Company in those states where such
individual is licensed, and (d) licensed or registered, or applicable, with
State Securities Departments in accordance with the requirements of the
jurisdiction where the solicitations and sales take place as well as in
accordance with the requirements of the solicited person's or entity's
place of residence. Authorized Selling Firm shall be responsible for
"registered representative" registrations and insurance agent licensing of
their individual sales agents, and Company shall be responsible for
appointment of individual sales agents and Authorized Selling Firm's or its
affiliated insurance agencies as agents of Company, in accordance with the
Master Agreement.
9. Compensation shall be paid to Authorized Selling Firms by Company in
accordance with the terms and conditions contained in the Master Agreement,
and the Selling Agreement between Company, Distributor and the Authorized
Selling Firm.
10. Company will compensate Distributor for its services as principal
underwriter and distributor by reimbursing Distributor for its costs
associated with performing such services. It is agreed, with respect to any
services which are to be provided to Company upon an allocated cost basis
by Distributor, that any such method of allocation or classification of
expenses incurred or services rendered shall be in conformance with the
laws and regulations of the Indiana Insurance Department. If at any time
either Company or Distributor can reasonably demonstrate that any method of
allocation is more equitable and in conformance with such laws and
regulations, the current method of allocation shall then be subject to
renegotiation. In any event, review of all expenses for the year will be
made annually, to make all necessary adjustments in the amounts billed
hereunder in order to conform them with the amount of such expenses
actually incurred.
11. Distributor assumes full responsibility for the supervision of its
associated persons in all their activities covered by this Agreement.
12. Company, as agent for Distributor, shall confirm to each applicant for and
purchaser of a GS Annuity Contract in accordance with Rule 10b-10 under the
1934 Act acceptance of premiums and such other transactions as are required
by Rule 10b-10 or administrative interpretations thereunder. Company shall
maintain and preserve such books and records with respect to such
confirmations in conformity with the requirements of Rules 17a-3 and 17a-4
under the 1934 Act to the extent such requirements apply. Company shall
maintain all such books and records and hold such books and records on
behalf of and as agent for Distributor whose property they are and shall
remain, and acknowledges that such books and records are at all times
subject to inspection by the SEC in accordance with Section 17(a) of the
1934 Act.
13. This Agreement, including the terms of the Master Agreement, supersedes all
prior agreements between the parties hereto regarding the distribution of
GS Annuity Contracts.
14. This Agreement may be terminated at any time by mutual agreement of the
parties, or by thirty (30) days notice given by either to the other. This
Agreement shall automatically terminate in the event of its assignment by
either party or by operation of law. Upon termination of this Agreement all
authorizations, rights and obligations shall cease except the obligation to
settle accounts hereunder, including commissions or premiums subsequently
received for GS Annuity Contracts in effect at the time of termination or
issued pursuant to applications received by Company prior to termination.
15. This Agreement shall be governed by Indiana Law.
16. a. Indemnification by Company. In addition to any indemnification
liability the Company may have otherwise (e.g., any indemnification
arising under statute or regulation applicable to the activities
conducted hereunder), and subject to Section 16-c hereof, the Company
shall indemnify and hold harmless Distributor, and any partner,
officer, director, employee, or agent against any and all losses,
claims, damages, expenses or liabilities, joint or several (including
any investigative, legal and other expenses reasonably incurred in
connection with, and any amounts paid in settlement of or defending,
any action, suit or proceeding or any claim asserted or any alleged
loss, liability, damage or expense and reasonable legal counsel fees
incurred in connection therewith), to which Distributor, and any
partner, officer, director, employee, or agent of any of the
foregoing, may become subject under any statute or regulation, at
common law or otherwise, insofar as such losses, claims, damages,
expenses or liabilities:
i. result because of a material breach by the Company, or any
officer, director, employee, agent, or subcontractor thereof, of
any provision of this Agreement;
ii. result because of the provisions of any GS Annuity Contract, or a
material breach of any provision of any GS Annuity Contract; or
iii. result from any acts or omissions of the Company, or any officer,
director, employee, agent, or subcontractor thereof, that are not
in substantial accordance with this Agreement, including, but not
limited to, any violation of any federal or state statute or
regulation.
Notwithstanding the above, no person shall be entitled to indemnification
pursuant to this Section if such loss, claim, damage, liability or expense
is due to the willful misfeasance, bad faith, gross negligence or reckless
disregard of duty by the person seeking indemnification.
b. Indemnification by Distributor. In addition to any indemnification
liability Distributor may have otherwise (e.g., any indemnification
arising under statute or regulation applicable to the activities
conducted hereunder), and subject to Section 16-c hereof, Distributor
shall indemnify and hold harmless the Company and any officer,
director, employee or agent thereof against any and all losses,
claims, damages, liabilities, or expenses, joint or several (including
any investigative, legal and other expenses reasonably incurred in
connection with, and any amounts paid in settlement of or defending,
any action, suit or proceeding or any claim asserted or any alleged
loss, liability, damage or expense and reasonable legal counsel fees
incurred in connection therewith), to which the Company and any
officer, director, employee or agent thereof may become subject under
any statute or regulation, at common law or otherwise, insofar as such
losses, claims, damages, liabilities or expenses:
i. result because of a material breach by Distributor or any
officer, director, employee, agent, or sub-contractor thereof, of
any provision of this Agreement; or
ii. result from any acts or omissions of Distributor, or any
officers, directors, employees, agents, or subcontractors
thereof, that are not in substantial accordance with this
Agreement, including, but not limited to, any violation of any
federal or state statute or regulation.
Notwithstanding the above, no person shall be entitled to indemnification
pursuant to this Section if such loss, claim, damage, liability or expense
is due to the willful misfeasance, bad faith, gross negligence or reckless
disregard of duty by the person seeking indemnification.
c. General Provisions Governing Indemnification. After receipt by a
party, its Affiliates, or any partner, officer, director, employee or
agent thereof, entitled to indemnification ("indemnified party") under
this Section 16 of notice of the commencement of any action, if a
claim in respect thereof is to be made against any person obligated to
provide indemnification under this Section 16 ("indemnifying party"),
such indemnified party will notify the indemnifying party in writing
of the commencement thereof as soon as practicable after the summons
or other first written notification giving information of the nature
of the claim has been served upon the indemnified party; provided that
the failure to so notify the indemnifying party will not relieve the
indemnifying party from any liability under this Section 16, except to
the extent that the omission results in a failure of actual notice to
the indemnifying party and such indemnifying party is damaged solely
as a result of the failure to give such notice. The indemnifying
party, upon the request of the indemnified party, shall retain counsel
satisfactory to the indemnified party to represent the indemnified
party in the proceeding, and shall pay the fees and disbursements of
such counsel related to such proceeding. In any such proceeding, any
indemnified party shall have the right to retain its own counsel, but
the fees and expenses of such counsel shall be at the expense of such
indemnified party unless (a) the indemnifying party and the
indemnified party shall have mutually agreed to the retention of such
counsel, or (b) the named parties to any such proceeding (including
any impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the same
counsel would be inappropriate due to actual or potential differing
interests between them. The indemnifying party shall not be liable for
any settlement of any proceeding effected without its written consent,
but, if settled, with such consent, or if there be a final judgment
for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party from and against any loss or liability by reason of
such settlement or judgment.
17. This Agreement is not a contract of employment. Nothing contained in this
Agreement shall be construed or deemed to create the relationship of joint
venture, partnership, or employer-employee between Company and Distributor.
Each party is an independent contractor and shall be free, subject to the
terms and conditions of this Agreement, to exercise judgment and discretion
with regard to the conduct of its business.
18. This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns, subject to the
following provision. The parties to this Agreement may not assign, either
wholly or partially, this Agreement or any of the benefits accrued or to
accrue under it, or subcontract their interests or obligations under this
Agreement, without the written approval of all parties.
19. The parties may amend this Agreement at any time, but no amendment shall be
effective until approved in writing by all parties.
20. Any notice hereunder shall be in writing and shall be deemed to have been
duly given if sent by certified or registered mail, postage prepaid, or via
a national courier service with the capacity to track its shipments, to the
following addresses:
If to Company If to Distributor
American Enterprise Life Insurance Company American Express Service Corporation
Administrative Offices 00 Xxxxx 0xx Xxxxxx
XX Xxx 000 Xxxxxxxxxxx, XX 00000
Xxxxxxxxxxx, XX 00000-0000
Dated the 31st day of March, 1999
ATTEST: American Enterprise Life Insurance Company
By: /s/ Xxxxxxx X. Xxxxxxxxxx By:/s/ Xxxxx X. Xxxxx
Name: Xxxxxxx X. Xxxxxxxxxx Name: Xxxxx X. Xxxxx
Title: Secretary Title: President and C.E.O.
Dated the 31st day of March, 1999.
ATTEST: American Express Service Corporation
By: /s/ Xxxxxxx X. Xxxxxx By:/s/ Xxxxxxx X. Xxxxx
Name: Xxxxxxx X. Xxxxxx Name: Xxxxxxx X. Xxxxx
Title: Secretary Title: Vice President
