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EXHIBIT 3(a)
DISTRIBUTION AGREEMENT
AGREEMENT dated as of _________________ by and between IL ANNUITY AND
INSURANCE COMPANY ("Insurer"), a Massachusetts insurance company, on its behalf
and on behalf of each separate account identified in Schedule 1 hereto, and IL
SECURITIES, INC. ("Distributor"), an Indiana corporation.
WITNESSETH:
WHEREAS, Distributor is a broker-dealer that engages in the
distribution of variable insurance products and other investment products; and
WHEREAS, Insurer desires to issue certain variable insurance products
described more fully below to the public through Distributor acting as
principal underwriter;
NOW, THEREFORE, in consideration of their mutual promises, Insurer and
Distributor hereby agree as follows:
1. Additional Definitions
a. Contracts -- The class or classes of variable insurance
products set forth on Schedule 1 to this Agreement as in
effect at the time this Agreement is executed, and such other
classes of variable insurance products that may be added to
Schedule 1 from time to time in accordance with Section 11.b
of this Agreement, and including any riders to such contracts
and any other contracts offered in connection therewith. For
this purpose and under this Agreement generally, a "class of
Contracts" shall mean those Contracts issued by Insurer on the
same policy form or forms and covered by the same Registration
Statement.
b. Registration Statement -- At any time that this Agreement is
in effect, each currently effective registration statement
filed with the SEC under the 1933 Act on a prescribed form, or
currently effective post-effective amendment thereto, as the
case may be, relating to a class of Contracts, including
financial statements included in, and all exhibits to, such
registration statement or post-effective amendment. For
purposes of Section 9 of this Agreement, the term
"Registration Statement" means any document which is or at any
time was a Registration Statement within the meaning of this
Section 1.b.
c. Prospectus -- The prospectus included within a Registration
Statement, except that, if the most recently filed version of
the prospectus (including any supplements thereto) filed
pursuant to Rule 497 under the 1933 Act subsequent to the date
on which a Registration Statement became effective differs
from the prospectus included within such Registration
Statement at the time it became effective, the term
"Prospectus" shall refer to the most recently filed prospectus
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filed under Rule 497 under the 1933 Act, from and after the
date on which it shall have been filed. For purposes of
Section 9 of this Agreement, the term "any Prospectus" means
any document which is or at any time was a Prospectus within
the meaning of this Section 1.c.
d. Fund -- An investment company in which the Separate Account
invests.
e. Variable Account -- A separate account supporting a class or
classes of Contracts and specified on Schedule 1 as in effect
at the time this Agreement is executed, or as it may be
amended from time to time in accordance with Section 11.b of
this Agreement.
f. 1933 Act -- The Securities Act of 1933, as amended.
g. 1934 Act -- The Securities Exchange Act of 1934, as amended.
h. 1940 Act -- The Investment Company Act of 1940, as amended.
i. SEC -- The Securities and Exchange Commission.
j. NASD -- The National Association of Securities Dealers, Inc.
k. Regulations -- The rules and regulations promulgated by the
SEC under the 1933 Act, the 1934 Act and the 1940 Act as in
effect at the time this Agreement is executed or thereafter
promulgated.
l. Selling Broker-Dealer -- A person registered as a
broker-dealer and licensed as a life insurance agent or
affiliated with a person so licensed, and authorized to
distribute the Contracts pursuant to a sales agreement as
provided for in Section 4 of this Agreement.
m. Agents Manual -- The agents manual and other written rules,
regulations and procedures provided by Insurer to insurance
agents appointed to sell its insurance contracts, as revised
from time to time.
n. Representative -- When used with reference to Distributor or a
Selling Broker-Dealer, an individual who is an associated
person, as that term is defined in the 1934 Act.
o. Application -- An application for a Contract.
p. Premium -- A payment made under a Contract by an applicant or
purchaser to purchase benefits under the Contract.
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q. Annuity Service Center -- The service office identified in the
Prospectus as the location at which Premiums and Applications
are accepted.
2. Authorization and Appointment
a. Scope of Authority. Insurer hereby authorizes Distributor on
an exclusive basis, and Distributor accepts such authority,
subject to the registration requirements of the 1933 Act and
the 1940 Act and the provisions of the 1934 Act and conditions
herein, to be the distributor and principal underwriter for
the sale of the Contracts to the public in each state and
other jurisdiction in which the Contracts may lawfully be sold
during the term of this Agreement. Insurer hereby appoints
Distributor as its independent general agent for sale of the
Contracts. Insurer hereby authorizes Distributor to grant
authority to Selling Broker-Dealers to solicit Applications
and Premiums to the extent Distributor deems appropriate and
consistent with the marketing program for the Contracts or a
class of Contracts, subject to the conditions set forth in
Section 4 of this Agreement. The Contracts shall be offered
for sale and distribution at premium rates set from time to
time by Insurer. Distributor shall use its best efforts to
market the Contracts actively, directly and/or through Selling
Broker-Dealers in accordance with Section 4 of this Agreement,
subject to compliance with applicable law, including rules of
the NASD.
b. Limits on Authority. Distributor shall act as an independent
contractor and nothing herein contained shall constitute
Distributor or its agents, officers or employees as agents,
officers or employees of Insurer solely by virtue of their
activities in connection with the sale of the Contracts
hereunder. Distributor and its Representatives shall not have
authority, on behalf of Insurer: to make, alter or discharge
any Contract or other insurance policy or annuity entered into
pursuant to a Contract; to waive any Contract forfeiture
provision; to extend the time of paying any Premium; or to
receive any monies or Premiums (except for the sole purpose of
forwarding monies or Premiums to Insurer). Distributor shall
not expend, nor contract for the expenditure of, the funds of
Insurer. Distributor shall not possess or exercise any
authority on behalf of Insurer other than that expressly
conferred on Distributor by this Agreement.
3. Solicitation Activities
a. Distributor Representatives. No Distributor Representative
shall solicit the sale of a Contract unless at the time of
such solicitation such individual is duly registered with the
NASD and duly licensed with all applicable state insurance and
securities regulatory authorities, and is duly appointed as an
insurance agent of Insurer.
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b. Solicitation Activities. All solicitation and sales
activities engaged in by Distributor and the Distributor
Representatives with respect to the Contracts shall be in
compliance with all applicable federal and state securities
laws and regulations, as well as all applicable insurance laws
and regulations and the Agents Manual. In particular, without
limiting the generality of the foregoing:
(1) Distributor shall train, supervise and be solely
responsible for the conduct of Distributor
Representatives in their solicitation of Applications
and Premiums and distribution of the Contracts, and
shall supervise their compliance with applicable
rules and regulations of any insurance or securities
regulatory agencies that have jurisdiction over
variable insurance product activities.
(2) Neither Distributor nor any Distributor
Representative shall offer, attempt to offer, or
solicit Applications for, the Contracts or deliver
the Contracts, in any state or other jurisdiction
unless Insurer has notified Distributor that such
Contracts may lawfully be sold or offered for sale in
such state, and has not subsequently revised such
notice.
(3) Neither Distributor nor any Distributor
Representative shall give any information or make any
representation in regard to a class of Contracts in
connection with the offer or sale of such class of
Contracts that is not in accordance with the
Prospectus for such class of Contracts, or in the
then-currently effective prospectus or statement of
additional information for a Fund, or in current
advertising materials for such class of Contracts
authorized by Insurer.
(4) All Premiums paid by check or money order that are
collected by Distributor or any of its
Representatives shall be remitted promptly, and in
any event not later than two business days, in full,
together with any Applications, forms and any other
required documentation, to IL ANNUITY AND INSURANCE
COMPANY as directed in the Agent's Manual. Checks or
money orders in payment of Premiums shall be drawn to
the order of "IL ANNUITY AND INSURANCE COMPANY
ANNUITY." Premiums may be transmitted by wire order
from Distributor to the Annuity Service Office in
accordance with the procedures set forth in the
Agents Manual. If any Premium is held at any time by
Distributor, Distributor shall hold such Premium in a
fiduciary capacity and such Premium shall be remitted
promptly, and in any event not later than two
business days, to Insurer. Distributor acknowledges
that all such Premiums, whether by check, money order
or wire, shall be the property of Insurer.
Distributor acknowledges that Insurer shall have the
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unconditional right to reject, in whole or in part,
any Application or Premium.
c. Representations and Warranties of Distributor. Distributor
represents and warrants to Insurer that Distributor is and
shall remain registered during the term of this Agreement as a
broker-dealer under the 1934 Act, is a member with the NASD,
and is duly registered under applicable state securities laws,
and that Distributor is and shall remain during the term of
this Agreement in compliance with Section 9(a) of the 1940
Act.
4. Selling Broker-Dealers. Distributor shall ensure that sales of the
Contracts by Selling Broker-Dealers comply with the following
conditions, and any additional conditions Insurer may specify from
time to time.
a. Every Selling Broker-Dealer shall be both registered as a
broker-dealer with the SEC and a member of the NASD and
licensed as an insurance agent with authority to sell variable
products or associated with an insurance agent so licensed.
Any individuals to be authorized to act on behalf of Selling
Broker-Dealer shall be duly registered with the NASD as
representatives of Selling Broker-Dealer shall be duly
registered with the NASD as representatives of Selling
Broker-Dealer with authority to sell variable products, and
shall be licensed as insurance agents with authority to sell
variable products. Distributor shall verify that Selling
Broker-Dealer and its Representatives are duly licensed under
applicable state insurance law to sell the Contracts (or, if
Broker-Dealer is not so licensed, that it is associated with
an entity so licensed).
b. Every Selling Broker-Dealer (or, if applicable, its associated
general insurance agency) and each of its Representatives
shall have been appointed by Insurer, provided that Insurer
reserves the right to refuse to appoint any proposed person,
or once appointed, to terminate such appointment.
c. Every Selling Broker-Dealer must enter into a written sales
agreement with Distributor which sales agreement, among other
things, will require such Selling Broker-Dealer to use its
best efforts to solicit applications for Contracts and to
comply with applicable laws and regulations, including the
Insurer's rules and regulations as reflected in the Agents
Manual or otherwise communicated to agents appointed by
Insurer, and will contain such other provisions as the
Distributor deems to be consistent herewith.
d. In view of Insurer's desire to ensure that Contracts will be
sold to purchasers for whom the Contracts will be suitable,
the written Sales Agreement shall require that Selling
Broker-Dealers and their Representatives not make
recommendations to an applicant to purchase a Contract in the
absence of reasonable grounds to
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believe that the purchase of the Contract is suitable for the
applicant. While not limited to the following, a
determination of suitability shall be based on information
supplied by an applicant after a reasonable inquiry concerning
the applicant's other security holdings, insurance and
investment objectives, financial situation and needs, and the
likelihood that the applicant will continue to make any
premium payments contemplated by the Contract applied for and
will keep the Contract in force for a sufficient period of
time so that Insurer's acquisition costs are amortized over a
reasonable period of time.
5. Marketing Materials
a. Preparation and Filing. Insurer shall be primarily
responsible for the design and preparation of all promotional,
sales and advertising material relating to the Contracts.
Insurer shall be responsible for filing such material, as
required, with the NASD and any state securities regulatory
authorities, on behalf of the Distributor. Insurer shall be
responsible for filing all promotional, sales or advertising
material, as required, with any state insurance regulatory
authorities. Insurer shall be responsible for preparing the
Contract forms and filing them with applicable state insurance
regulatory authorities, and for preparing the Prospectuses and
Registration Statements and filing them with the SEC and state
regulatory authorities, to the extent required.
b. Use in Solicitation Activities. Insurer shall be responsible
for furnishing Distributor with such Applications,
Prospectuses and other materials for use by Distributor and
any Selling Broker-Dealers in their solicitation activities
with respect to the Contracts. Insurer shall notify
Distributor of those states or jurisdictions which require
delivery of a statement of additional information with a
prospectus to a prospective purchaser.
6. Compensation and Expenses
a. Insurer shall pay compensation for sales of the Contracts in
accordance with Schedule 2 hereto. Insurer shall pay
compensation payable to Distributor Representatives and to
Selling Broker-Dealers, on Distributor's behalf.
b. Insurer shall pay all expenses in connection with:
(1) the preparation and filing of each Registration
Statement (including each pre-effective and
post-effective amendment thereto) and the preparation
and filing of each Prospectus (including any
preliminary and each definitive Prospectus);
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(2) the preparation, underwriting, issuance and
administration of the Contracts;
(3) any registration, qualification or approval or other
filing of the Contracts or Contract forms required
under the securities or insurance laws of the states
in which the Contracts will be offered;
(4) all registration fees for the Contracts payable to
the SEC; and
(5) the printing of all promotional materials definitive
Prospectuses for the Contracts and any supplements
thereto for distribution to existing Contractowners.
c. Distributor shall pay any expenses incurred by Distributor or
its Representatives or employees for the purpose of carrying
out the obligations of Distributor hereunder.
7. Compliance
a. Maintaining Registration and Approvals. Insurer shall be
responsible for maintaining the registration of the Contracts
with the SEC and any state securities regulatory authority
with which such registration is required, and for gaining and
maintaining approval of the Contract forms where required
under the insurance laws and regulations of each state or
other jurisdiction in which the Contracts are to be offered.
b. Confirmations and 1934 Act Compliance. Insurer, as agent for
Distributor, shall confirm to each applicant for and purchaser
of a 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. Insurer 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. Insurer 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.
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c. Issuance and Administration of Contracts. Insurer shall be
responsible for issuing the Contracts and administering the
Contracts and the Variable Account, provided, however, that
Distributor shall have full responsibility for the securities
activities of all persons employed by the Insurer, engaged
directly or indirectly in the Contract operations, and for the
training, supervision and control of such persons to the
extent of such activities.
8. Investigations and Proceedings
a. Cooperation. Distributor and Insurer shall cooperate fully in
any securities or insurance regulatory investigation or
proceeding or judicial proceeding arising in connection with
the offering, sale or distribution of the Contracts
distributed under this Agreement. Without limiting the
foregoing, Insurer and Distributor shall notify each other
promptly of any customer complaint or notice of any regulatory
investigation or proceeding or judicial proceeding received by
either party with respect to the Contracts.
9. Indemnification
a. By Insurer. Insurer shall indemnify and hold harmless
Distributor and each person who controls or is associated with
Distributor within the meaning of such terms under the federal
securities laws, and any officer, director, employee or agent
of the foregoing, against any and all losses, claims, damages
or liabilities, joint or several (Including any investigative,
legal and other expenses reasonably incurred in connection
with, and any amounts paid in settlement of, any action, suit
or proceeding or any claim asserted), to which distributor
and/or any such person may become subject, under any statute
or regulation, any NASD rule or interpretation, at common law
or otherwise, insofar as such losses, claims, damages or
liabilities:
(1) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact
required to be stated therein or necessary to make
the statements therein not misleading, in light of
the circumstances in which they were made, contained
in any (i) Registration Statement or in any
Prospectus or (ii) blue-sky application or other
document executed by Insurer specifically for the
purpose of qualifying any or all of the Contracts for
sale under the securities laws of any jurisdiction;
provided that Insurer shall not be liable in any such
case to the extent that such loss, claim, damage or
liability arises out of, or is based upon, an untrue
statement or alleged untrue statement or omission or
alleged omission made in reliance upon information
furnished in writing to Insurer by
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Distributor specifically for use in the preparation
of any such Registration Statement or any such
blue-sky application or any amendment thereof or
supplement thereto;
(2) result from any breach by Insurer of any provision of
this Agreement.
This indemnification agreement shall be in addition to any
liability that Insurer may otherwise have; provided,however,
that no person shall be entitled to indemnification pursuant
to this provision if such loss, claim, damage or liability is
due to the willful misfeasance, bad faith, gross negligence or
reckless disregard of duty by the person seeking
indemnification.
b. By Distributor. Distributor shall indemnify and hold harmless
Insurer and each person who controls or is associated with
Insurer within the meaning of such terms under the federal
securities laws, and any officer, director, employee or agent
of the foregoing, against any and all losses, claims, damages
or liabilities, joint or several (including any investigative,
legal and other expenses reasonably incurred in connection
with, and any amounts paid in settlement of, any action, suit
or proceeding or any claim asserted), to which Insurer and/or
any such person may become subject under any statute or
regulation, any NASD rule or interpretation, at common law or
otherwise, insofar as such losses, claims, damages or
liabilities:
(1) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact
required to be stated therein or necessary in order
to make the statements therein not misleading, in
light of the circumstances in which they were made,
contained in any (i) Registration Statement or in any
Prospectus, or (ii) blue-sky application or other
document executed by Insurer specifically for the
purpose of qualifying any or all of the Contracts for
sale under the securities laws of any jurisdiction;
in each case to the extent, but only to the extent,
that such untrue statement or alleged untrue
statement or omission or alleged omission was made in
reliance upon information furnished in writing by
Distributor to Insurer specifically for use in the
preparation of any such Registration Statement or any
such blue-sky application or any amendment thereof or
supplement thereto
(2) result because of any use by Distributor or any
Distributor Representative of promotional, sales or
advertising material not authorized by Insurer or any
verbal or written misrepresentations by Distributor
or any Distributor Representative or any unlawful
sales practices concerning the Contracts by
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Distributor or any Distributor Representative under
federal securities laws or NASD regulations; or
(3) result from any breach by distributor of any
provision of this Agreement.
This indemnification shall be in addition to any liability
that Distributor may otherwise have; provided, however, that
no person shall be entitled to indemnification pursuant to
this provision if such loss, claim, damage or liability is due
to the willful misfeasance, bad faith, gross negligence or
reckless disregard of duty by the person seeking
indemnification.
c. General. Promptly after receipt by a party entitled to
indemnification ("indemnified person") under this Section 9 of
notice of the commencement of any action as to which a claim
will be made against any person obligated to provide
indemnification under this Section 9 ("indemnifying party"),
such indemnified person shall notify the indemnifying party in
writing of the commencement thereof as soon as practicable
thereafter, but failure to so notify the indemnifying party
shall not relieve the indemnifying party from any liability
which it may have to the indemnified person otherwise than on
account of this Section 9. The indemnifying party will be
entitled to participate in the defense of the indemnified
person but such participation will not relive such
indemnifying party of the obligation to reimburse the
indemnified person for reasonable legal and other expenses
incurred by such indemnified person in defending himself or
itself.
The indemnification provisions contained in this Section 9
shall remain operative in full force and effect, regardless of
any termination of this Agreement. A successor by law of
Distributor or Insurer, as the case may be, shall be entitled
to the benefits of the indemnification provisions contained in
this Section 9.
10. Termination. This Agreement shall terminate automatically if it is
assigned by a party without the prior written consent of the other
party. This Agreement may be terminated at any time for any reason by
either party upon 30 days' written notice to the other party, without
payment of any penalty. (The term "assigned" shall not include any
transaction exempted from Section 15(b)(2) of the 1940 Act.) This
Agreement may be terminated at the option of either party to this
Agreement upon the other party's material breach of any provision of
this Agreement or of any representation or warranty made in this
Agreement, unless such breach has been cured within 10 days after
receipt of notice of breach from the non-breaching party. 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 the time of termination or issued pursuant to
Applications received by Insurer prior to termination.
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11. Miscellaneous
a. Binding Effect. This Agreement shall be binding on and shall
inure to the benefit of the respective successors and assigns
of the parties hereto provided that neither party shall assign
this Agreement or any rights or obligations hereunder without
the prior written consent of the other party.
b. Schedules. The parties to this Agreement may amend Schedule 1
to this Agreement from time to time to reflect additions of
any class of Contracts and Variable Accounts. The provisions
of this Agreement shall be equally applicable to each such
class of Contracts and each Variable Account that may be added
to the Schedule, unless the context otherwise requires.
Insurer may amend Schedule 2 unilaterally, from time to time.
Any other change in the terms or provisions of this Agreement
shall be by written agreement between Insurer and Distributor.
c. Rights, Remedies, and Obligations are Cumulative. 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. Failure of
either 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.
d. Notices. All notices hereunder are to be made in writing and
shall be given:
if to Insurer, to: Xxxxxxx X. Xxxxxx
IL Annuity and Insurance Company
0000 X. Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
if to Distributor, to: Xxx X. Xxxx
IL Securities, Inc.
0000 X. Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
or such other address as such party may hereafter specify in
writing. Each such notice to a party shall be either hand
delivered or transmitted by registered or certified United
States mail with return receipt requested, or by overnight
mail by a nationally recognized courier, and shall be
effective upon delivery.
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e. Interpretation; Jurisdiction. This Agreement constitutes the
whole agreement between the parties hereto with respect to the
subject matter hereof, and supersedes all prior oral or
written understandings, agreements or negotiations between the
parties with respect to such subject matter. No prior
writings by or between the parties with respect to the subject
matter hereof shall be used by either party in connection with
the interpretation of any provision of this Agreement. This
Agreement shall be construed and its provisions interpreted
under and in accordance with the internal laws of the state of
Indiana without giving effect to principles of conflict of
laws.
f. Severability. This is a severable Agreement. In the event
that any provision of this Agreement would require a party to
take action prohibited by applicable federal or state law or
prohibit a party from taking action required by applicable
federal or state law, then it is the intention of the parties
hereto that such provision shall be enforced to the extent
permitted under the law, and, in any event, that all other
provisions of this Agreement shall remain valid and duly
enforceable as if the provision at issue had never been a part
hereof.
g. Section and Other Headings. The headings 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.
h. Counterparts. This Agreement may be executed in two or more
counterparts, each of which taken together shall constitute
one and the same instrument.
i. Regulation. This Agreement shall be subject to the provisions
of the 1933 Act, 1934 Act and 1940 Act and the Regulations and
the rules and regulations of the NASD, from time to time in
effect, including such exemptions from the 1940 Act as the SEC
may grant, and the terms hereof shall be interpreted and
construed in accordance therewith.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by such authorized officers on the date specified below.
IL ANNUITY AND INSURANCE COMPANY
By:
---------------------------------------------
Name: Xxxxxxx X. Xxxxxx
-------------------------------------------
Title: President and Chief Executive Officer
------------------------------------------
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IL SECURITIES, INC.
By:
----------------------------------------------
Name: Xxx X. Xxxx
--------------------------------------------
Title: Vice President, Director of Marketing
-------------------------------------------
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SCHEDULE 1
IL Annuity and Insurance Company Separate Account I
The Visionary: Flexible Premium Deferred Variable Annuity
15
SCHEDULE 2
COMPENSATION
IL Annuity and Insurance Company shall pay IL Securities, Inc. a concession on
all contracts sold by it or by Selling Broker-Dealers to whom it has authorized
to participate in the sale of the contracts.
IL Annuity and Insurance Company shall, on behalf of IL Securities, Inc., pay
to Broker-Dealer and concession on each Contract for which the Broker-Dealer is
the Broker-of-Record. The concession shall be determined in accordance with
the Compensation Schedule attached to and made a part of the Selling Broker's
Selling Agreement.
Concessions payable to IL Securities shall be determined in accordance with
this Schedule.
1. Sales by IL Securities:
a. Concession Schedule for the Visionary. IL Securities may
select one of the following Options for each Agent. Once an Option is
selected for an Agent it may not be changed and the Option is
applicable for each and every contract on which that Agent is the
writing Agent.
NEW PREMIUM ASSET TRAIL
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YEARS 1-9 YEARS 10+ ALL YEARS
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Option A 6.00% 1.00% -0-
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Option B 4.75% 1.00% 0.25%
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Option C 3.50% 1.00% 0.50%
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Option D 1.00% 1.00% 1.00%
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Asset trails concessions are paid on the value of a Contract as of its
contract anniversary day.
b. Concessions on Withdrawn Premium. IL Securities will repay
all concession paid on premiums which were withdrawn or removed from a
Contract within 12 months of the date of the premium payment.
c. Concessions on Replacements. Concession on a Contract which
replaces an existing contract issued by IL Annuity and Insurance
Company (or any of its affiliated companies) shall be paid as follows:
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1. The concession on premium paid in excess of the cash
surrender value of the existing contract will be payable at
the first year rate.
2. The concession on premiums equal to the excess of the
cash surrender value of the existing contract will be payable
at the rate for year 10.
Replacement is defined as the issue of a new contract where an
existing contract(s) is (are) surrendered within one year of the issue
of the new contract.
2. Sales by Selling Broker-Dealers.
NEW PREMIUM
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Years 1-10 Years 10+
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1.00% .15%
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