SELLING AND SERVICES AGREEMENT
FOR
INSURANCE AND ANNUITY (FIXED AND VARIABLE) PRODUCTS
THIS SELLING AND SERVICES AGREEMENT (this "Agreement") is entered into
as of ___________ (the "Effective Date") by and between CUNA Mutual Insurance
Society, an Iowa insurance company ("CUNA Mutual"), CUNA Brokerage Services,
Inc., a Wisconsin corporation ("CUNA Brokerage") and ______________, a
____________, the undersigned general agent ("General Agent") and
________________, a ___________________, the undersigned broker-dealer
("Broker-Dealer").
WHEREAS, CUNA Mutual has the requisite authority to provide certain
fixed insurance policies and annuity contracts and variable life insurance
policies and annuity contracts, some of which are securities under the
Securities Act of 1933, as amended;
WHEREAS, CUNA Mutual has appointed CUNA Brokerage, a registered
broker-dealer with the Securities and Exchange Commission ("SEC") under the
Securities Exchange Act of 1934, as amended (the "1934 Act"), and a member of
the Financial Industry Regulatory Authority ("FINRA"), as the principal
underwriter and distributor of its variable life insurance policies and annuity
contracts;
WHEREAS, General Agent or Broker-Dealer, as the case may be, has the
requisite authority to solicit, sell and service fixed insurance policies and
annuity contracts and variable life insurance policies and annuity contracts
contemplated under this Agreement and Broker-Dealer is a registered
broker-dealer with the SEC under the 1934 Act and a member of FINRA; and
WHEREAS, CUNA Mutual and CUNA Brokerage desire to appoint and
authorize, on a non-exclusive basis, General Agent and Broker-Dealer to solicit,
sell and service certain fixed insurance policies and annuity contracts and
variable life insurance policies and annuity contracts (hereinafter collectively
referred to as the "Products"), which are more fully described in the Products
and Compensation Schedule (the "Schedule") attached hereto and incorporated
herein, and to have General Agent and Broker-Dealer provide certain
administrative services as described in this Agreement for purposes of
soliciting, selling and servicing the Products; and General Agent and
Broker-Dealer desire to accept such appointment and authorization pursuant to
this Agreement. In the event General Agent and Broker-Dealer are the same
entity, the term "General Agent" in this Agreement shall refer to Broker-Dealer,
which shall undertake all the obligations and privileges of General Agent
pursuant to this Agreement.
NOW, THEREFORE, in consideration of the mutual promises made herein,
the parties hereto agree as follows:
1. PURPOSE OF AGREEMENT. The principal purpose of this Agreement is to set
forth a selling and service arrangement whereby CUNA Mutual and CUNA Brokerage
will provide the Products and appoint and authorize, on a non-exclusive basis,
General Agent and Broker-Dealer, and through General Agent's and Broker-Dealer's
registered representatives ("Representatives") who are also licensed to sell
insurance in appropriate jurisdictions and who are appointed by CUNA Mutual to
sell the Products, accept such appointment and authorization and will solicit,
sell and service the Products hereunder. Further, General Agent and
Broker-Dealer will provide certain administrative services pursuant to this
Agreement for the purposes of soliciting, selling and servicing the Products.
2. ROLES AND RESPONSIBILITIES OF CUNA MUTUAL AND CUNA BROKERAGE.
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2.1 THE PRODUCTS. The Products issued by CUNA Mutual are described on
the Schedule. The attached Schedule may be amended from time-to-time by CUNA
Mutual. Prior versions of Products are included for servicing under this
Agreement for prior customers by Representatives who are now appointed as agents
of CUNA Mutual through General Agent under this Agreement. Any customer records
and files relating to prior versions of the Products shall be retained by the
appropriate Representatives or by General Agent or Broker-Dealer and shall be
subject to the confidentiality provisions of Section 5 and record maintenance
provisions of Subsection 3.15 of this Agreement. Upon issuance of the Products
pursuant to this Agreement, CUNA Mutual will transmit Products to General Agent
or Broker-Dealer for delivery to policyholders according to procedures set up by
CUNA Mutual, unless CUNA Mutual has provided otherwise. CUNA Mutual, in its sole
discretion and without notice to Broker-Dealer, may suspend sales of any of the
Products or may amend the Products if, in CUNA Mutual's opinion, such suspension
or amendment is: (a) necessary for compliance with federal, state, or local
laws, regulations, or administrative orders; or (b) necessary to prevent
administrative or financial hardship to CUNA Mutual. In all other situations,
CUNA Mutual shall provide reasonable notice, as practicable, to Broker-Dealer
prior to suspending sales of any of the Products or amending the Products.
2.2. APPOINTMENT OF GENERAL AGENT AND AUTHORIZATION OF BROKER-DEALER.
CUNA Mutual hereby appoints and CUNA Brokerage hereby authorizes General Agent
and Broker-Dealer to solicit, sell and service the Products through its
Representatives. General Agent and Broker-Dealer shall be responsible for any
appointment or renewal fees.
2.3 PROSPECTUSES. CUNA Mutual and CUNA Brokerage, at their own
expense, will provide Broker-Dealer with prospectuses and supplements thereto
relating to the Products, and such other materials as CUNA Mutual or CUNA
Brokerage, in its sole discretion, deems necessary or appropriate for use in
connection with the issuance and sale of the Products. Upon termination of this
Agreement or upon request by CUNA Mutual or CUNA Brokerage, Broker-Dealer shall
promptly return all such prospectuses, supplements and other materials to CUNA
Mutual or CUNA Brokerage free from any claim or retention rights by
Broker-Dealer.
2.4 SALES AND PROMOTION MATERIAL. CUNA Mutual and CUNA Brokerage, at
their expense and as deemed necessary at their discretion, may provide sales and
promotion materials relating to the Products for use by General Agent and
Broker-Dealer. Upon termination of this Agreement, General Agent and
Broker-Dealer shall promptly return or destroy all such sales and promotion
materials and advertising relating to the Products to CUNA Mutual or CUNA
Brokerage pursuant to Subsection 7.3 hereof.
2.5 COMPENSATION. CUNA Mutual shall pay "Compensation," as more fully
described in the Schedule, semi-monthly to General Agent and/or Broker-Dealer
based upon the Products sold by General Agent and/or Broker-Dealer during the
term of this Agreement. CUNA Mutual reserves the right, upon at least thirty
(30) days prior written notice to General Agent and Broker-Dealer, to change the
Compensation on the Schedule. Any such change shall constitute an amendment to
the Schedule and shall apply to Compensation due on applications of the Products
received by CUNA Mutual after the effective date of such amendment.
Notwithstanding the foregoing, in the event General Agent or Broker-Dealer or
any Representative of General Agent or Broker-Dealer shall at any time induce or
endeavor to induce any policyholders to relinquish the Products, except under
circumstances where there is reasonable grounds for believing that a particular
policy or contract is not suitable for a customer, any and all Compensation due
General Agent and Broker-Dealer hereunder shall cease and terminate. No
compensation other than that shown on the Schedule shall
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be paid or payable by CUNA Mutual or CUNA Brokerage to General Agent or
Broker-Dealer in connection with the offer and sale of the Products.
2.6 LEGAL COMPLIANCE. CUNA Mutual and CUNA Brokerage will comply in
all material respects with all applicable insurance and securities laws and
rules and regulations thereunder, including the rules and regulations of federal
and state authorities and self-regulatory organizations that have jurisdiction
over their activities described in this Agreement.
3. ROLES AND RESPONSIBILITIES OF GENERAL AGENT AND BROKER-DEALER.
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3.1 INSURANCE LICENSING. At all times while performing obligations
under this Agreement and at its own expense, General Agent, and General Agent's
Representatives, shall be validly licensed, including fees related to license
issue, transfer and termination, as an insurance agency in the states and other
local jurisdictions that require such licensing or registration in connection
with General Agent's fixed and variable insurance sales activities, or shall
maintain a validly licensed insurance agency subsidiary in those states in which
General Agent cannot obtain a corporate agent's license.
3.2 SECURITIES REGISTRATION. At all times while Broker-Dealer is
performing its obligations under this Agreement, Broker-Dealer, at its own
expense, shall be responsible for all fees, including registration and
examination fees, necessary in order to be registered as a securities broker
with the SEC and FINRA and shall generally maintain all licenses, registrations
and such other qualifications as may be necessary or required by applicable
federal and state laws, regulations or requirements of any self-regulating
organization with respect to its activities hereunder.
3.3 REPRESENTATIVES. General Agent shall have sole responsibility for
the training, supervision and compliance with applicable insurance laws and
regulations relating to Representatives who are engaged directly or indirectly
in soliciting, selling and servicing of the Products. All such persons shall be
subject to the control of Broker-Dealer with respect to such persons' securities
regulated activities in connection with the Products, including, but not limited
to, training and compliance with applicable federal and state laws and
regulations and compliance with any supervisory responsibilities pursuant to
applicable FINRA rules. General Agent and Broker-Dealer shall be responsible for
the selection of Representatives with the requisite insurance licenses and
securities registration under applicable federal, state, and local laws, rules
or regulations in order to engage in soliciting, selling and servicing the
Products. General Agent and Broker-Dealer will cause such Representatives to be
trained in the selling of the Products to ensure Representatives have thorough
knowledge of the Products and the ability to make appropriate product
presentations and suitability determinations in compliance with applicable law.
Furthermore, General Agent and Broker-Dealer will ensure Representatives are
licensed and registered representatives of General Agent or Broker-Dealer, as
the case may be, and meet any other requirements or conditions of this Agreement
before such Representatives engage in the solicitation of applications for the
Products, and General Agent and Broker-Dealer will ensure that such
Representatives maintain such licenses and registrations in accordance with
applicable laws and regulations. General Agent and Broker Dealer will be
responsible for all insurance and licensing fees for Representatives. Further,
General Agent and Broker-Dealer will cause such Representatives to limit
solicitation of applications for the Products to jurisdictions where CUNA Mutual
or CUNA Brokerage has approved or authorized such solicitation. General Agent
and Broker-Dealer will cause such Representatives to comply with all applicable
administrative procedures of CUNA Mutual, including, without limitation, those
that specifically address selling practices. Representatives' qualifications
shall be certified to the satisfaction of CUNA Mutual and CUNA Brokerage, and
General Agent or Broker-Dealer, as the case may be, shall notify CUNA Mutual and
CUNA Brokerage if any Representative ceases to be a registered representative of
Broker-Dealer or ceases to maintain the proper licensing required for
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selling the Products and will act to terminate the sales activities of such
Representative relating to the Products.
3.4 APPOINTMENT OF REPRESENTATIVES. General Agent shall assist CUNA
Mutual in the appointment of Representatives under the applicable insurance laws
to sell the Products. General Agent agrees to fulfill all requirements set forth
in the General Letter of Recommendation, attached hereto as Exhibit A and fully
incorporated herein, in conjunction with the submission of licensing/appointment
papers for all applicants as insurance agents of CUNA Mutual. All such
licensing/appointment papers should be submitted to CUNA Mutual or its duly
appointed agent by General Agent. Notwithstanding such submission, CUNA Mutual
shall have sole discretion to appoint, refuse to appoint, discontinue, or
terminate the appointment of any Representative as an insurance agent of CUNA
Mutual.
3.5 REPRESENTATIVES' INSURANCE COMPLIANCE. Prior to allowing
Representatives to solicit, sell or service the Products, General Agent shall
require Representatives to be validly insurance licensed, registered and
appointed by CUNA Mutual as an agent in accordance with the jurisdictional
requirements of the place where the solicitations, sales or service take place
as well as the solicited person's or entity's place of residence.
3.6 COMPLIANCE WITH FINRA RULES OF CONDUCT AND FEDERAL AND STATE
SECURITIES AND INSURANCE LAWS.
(a) Broker-Dealer shall fully comply and shall cause
Representatives to fully comply with the requirements of
FINRA and of the 1934 Act and all other applicable
securities and insurance federal, state or local laws,
rules and regulations. Further, General Agent and
Broker-Dealer will establish rules and procedures as may
be necessary consistent with applicable laws and
regulations to provide diligent supervision of the
securities and insurance sales activities of
Representatives. Upon request by CUNA Mutual or CUNA
Brokerage, General Agent and Broker-Dealer shall promptly
furnish any records deemed necessary to establish such
diligent supervision.
(b) Broker-Dealer represents and warrants that during the tern
of this Agreement, it will maintain and implement: i)
policies and procedures designed to comply with all
applicable rules of FINRA, including but not limited to
rules relating to suitability of variable annuity and
variable universal life recommendations; ii) a training
program for Representatives designed to ensure that
Representatives gather information concerning a customer's
financial status, tax status, investment objective and
other relevant information prior to recommending the
purchase or exchange of a variable annuity or variable
universal life contract; and iii) a reasonable system of
sales supervision designed to achieve compliance with
FINRA rules. Upon request by CUNA Mutual, Broker-Dealer
agrees to provide a report to CUNA Mutual certifying that
Broker-Dealer is in compliance with the said activities
listed above. Such reports shall be certified by a senior
manager of Broker-Dealer who has responsibility for such
activities. Broker-Dealer acknowledges and agrees that
CUNA Mutual and/or CUNA Brokerage may conduct an
inspection and/or audit of Broker-Dealer on a periodic
basis to ensure compliance with the stated activities
above, and Broker-Dealer agrees to make reasonable
accommodation to CUNA Mutual to enable CUNA Mutual to
inspect documents and records Broker-Dealer is responsible
to maintain that are directly related to the sale and
suitability of any CUNA Mutual variable annuity and
variable universal life products.
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3.7 COMPLIANCE WITH ADMINISTRATIVE PROCEDURES. General Agent and
Broker-Dealer shall fully comply and shall cause Representatives to fully comply
with the administrative procedures of CUNA Mutual relating to the Products and
the policies and procedures adopted by CUNA Mutual relating to privacy, agent
conduct and similar matters to the extent such policies and procedures are
applicable to the soliciting, sale and servicing of the Products, as those
administrative procedures and other policies and procedures are now in effect or
may be amended or established in the future by CUNA Mutual in its sole
discretion and communicated to General Agent and Broker-Dealer, as appropriate.
3.8 COMPLIANCE WITH PROSPECTUSES. General Agent and Broker-Dealer
shall comply with the terms of any prospectus (and supplements thereto) for a
Product. Without limiting the generality of the foregoing, General Agent and
Broker-Dealer shall offer the Products only at the public offering price
disclosed in the prospectus. In this regard, General Agent and Broker-Dealer
agree that Broker-Dealer shall be responsible for determining if, and
calculating the amount of, any waiver or reduction in sales charges is
applicable to any prospective purchaser of a Product and indicating such
information on the application for the Product. In addition, without limiting
the generality of the foregoing, General Agent and Broker-Dealer understand and
acknowledge that the Products are not suitable for offer or sale in connection
with any so-called "market-timing" program, plan, arrangement or service of
General Agent or Broker-Dealer or any Representative. General Agent and
Broker-Dealer shall not knowingly solicit, offer, or sell Products for use in
connection with any so-called "market-timing" program, plan, arrangement or
service and shall provide reasonable assistance to CUNA Mutual and CUNA
Brokerage in preventing the Products from being used for "market-timing"
activity.
3.9 DELIVERY OF PROSPECTUSES AND USE OF SALES MATERIALS. Broker-
Dealer agrees to deliver prospectuses, prospectus supplements, and other sales
and promotion materials for the Products to purchasers and prospective
purchasers of the Products in a timely manner and in accordance with all
applicable laws and regulations. General Agent and Broker-Dealer shall not use
any sales and promotion materials or any advertisements that they may create
relating to the Products, CUNA Mutual or CUNA Brokerage, unless CUNA Mutual or
CUNA Brokerage approve such materials and advertisements in writing prior to
use. However, this limitation shall not prevent General Agent and Broker-Dealer
from advertising insurance products in general, provided such advertising does
not reference the Products, CUNA Mutual, CUNA Brokerage, or any affiliated
person of CUNA Mutual or CUNA Brokerage.
3.10 NOTICE OF REPRESENTATIVE'S NONCOMPLIANCE. In the event a
Representative fails or refuses to submit to supervision of General Agent and
Broker-Dealer, ceases to be a registered representative of Broker-Dealer or
otherwise fails to meet the rules and standards imposed by General Agent and
Broker-Dealer on Representatives, General Agent and Broker-Dealer, as the case
may be, shall immediately advise CUNA Mutual and CUNA Brokerage of this fact and
shall immediately notify such Representative that s/he is no longer authorized
to sell the Products. General Agent or Broker-Dealer shall take whatever
additional action may be necessary to terminate the selling and service
activities of such Representative relating to the Products, which shall include,
but not be limited to, acquiring all the customer records and files of the
Representative relating to the Products. General Agent and Broker-Dealer agree
to retain such customer records as required by applicable federal or state laws
and regulations and to provide access to such records as CUNA Mutual or CUNA
Brokerage may reasonably request.
3.11 COMPENSATION TO REPRESENTATIVES. CUNA Mutual shall pay
Compensation to General Agent and Broker-Dealer pursuant to the Schedule.
General Agent and Broker-Dealer will be solely responsible for any compensation
payable to Representatives or any other persons associated with General Agent
and Broker-Dealer relating to the Products hereunder in accordance
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with applicable laws and regulations. Under no circumstances, unless as
necessary to meet legal requirements, will CUNA Mutual or CUNA Brokerage be
responsible for any compensation payable to Representatives or agents of General
Agent and Broker-Dealer.
3.12 HANDLING OF APPLICATIONS. CUNA Mutual shall supply Product
application forms for General Agent's and Broker-Dealer's use. All payments
collected by General Agent or Broker-Dealer or Representatives of General Agent
and Broker-Dealer will be promptly remitted in full, along with such application
forms and any other required documentation, directly to CUNA Mutual at the
address indicated on such application or to such other address as CUNA Mutual
designates in writing. General Agent and Broker-Dealer are responsible for
reviewing all such applications for completeness and correctness, as well as
compliance with suitability standards of all applicable federal state laws,
rules and regulations and SEC and FINRA requirements. Payments for the Products
shall be made by check, bank wire transfer or other forms of payment deemed
acceptable by CUNA Mutual and allowable under applicable laws or regulations and
shall be drawn to the order of "CUNA Mutual Insurance Society." General Agent
and Broker-Dealer do not have any authority to deposit or endorse checks payable
to CUNA Mutual without the prior written approval of CUNA Mutual. All
applications are subject to acceptance or rejection by CUNA Mutual in its sole
discretion. CUNA Mutual may require that any medical examination made in
conjunction with an application for a Product be made by a medical examiner
approved by CUNA Mutual and CUNA Mutual shall pay only those fees in connection
with medical examinations that have been expressly authorized by it. All records
or information obtained hereunder by General Agent or Broker-Dealer shall not be
disclosed or used except as expressly authorized herein and pursuant to Section
5 hereof, and General Agent and Broker-Dealer will keep confidential such
records and information, which will only be disclosed as authorized or if
expressly required by federal or state regulatory authorities. General Agent and
Broker-Dealer, in submitting applications for the Products, will be deemed to
have warranted to CUNA Mutual and CUNA Brokerage that General Agent or
Broker-Dealer, as the case may be, has made a determination of suitability based
on information concerning the prospective purchaser's insurance and investment
objectives, risk tolerance, need for liquidity, and financial and insurance
situation and needs, or on such other factors that General Agent or
Broker-Dealer deems to be appropriate under the circumstances and in compliance
with applicable laws and regulations. General Agent and Broker-Dealer will not,
directly or indirectly, expend or contract for the expenditure of any funds of
CUNA Mutual or CUNA Brokerage and CUNA Mutual and CUNA Brokerage will not be
obligated to pay any expense incurred by General Agent or Broker-Dealer in the
performance of this Agreement, unless otherwise provided for in this Agreement
or agreed to in advance in writing by CUNA Mutual or CUNA Brokerage.
3.13 TRANSMISSION AND OWNERSHIP OF MONEY FOR PRODUCTS. All money
received by General Agent and Broker-Dealer or Representatives or agents of
General Agent and Broker-Dealer in connection with the Products, 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 Products, is the
property of CUNA Mutual, shall be held in a separate account and shall be
transmitted promptly in accordance with the administrative procedures of CUNA
Mutual without any deduction or offset for any reason, including but not limited
to, any deduction or offset for Compensation claimed by General Agent or
Broker-Dealer.
3.14 DELIVERY OF PRODUCTS. Upon issuance of the Products by CUNA
Mutual pursuant to this Agreement, CUNA Mutual will transmit Products to General
Agent or Broker-Dealer for delivery to purchasers according to procedures set up
by CUNA Mutual, unless CUNA Mutual has provided otherwise. General Agent and
Broker-Dealer hereby agree to deliver all Products to purchasers within five (5)
business days after receipt by General Agent or Broker-Dealer, as the case may
be. General Agent and Broker-Dealer agree to indemnify and hold harmless CUNA
Mutual and CUNA Brokerage for any and all losses (including consequential
damages and regulatory penalties or
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fines) caused by General Agent's or Broker-Dealer's failure or any
Representative's failure to perform the undertakings pursuant to this Agreement.
General Agent and Broker-Dealer hereby authorize CUNA Mutual to set off any
amount it owes CUNA Mutual or CUNA Brokerage under this Subsection against any
and all amounts otherwise payable to General Agent and Broker-Dealer by CUNA
Mutual.
3.15 BOOKS, ACCOUNTS AND RECORDS. General Agent and Broker-Dealer will
maintain all books, accounts, and records as required by applicable laws and
regulations. The books, accounts and records of General Agent and Broker-Dealer
shall be kept in good order and clearly and accurately disclose the nature and
details of transactions relating to the Products and General Agent's and
Broker-Dealer's activities related thereto. General Agent and Broker-Dealer
shall keep confidential all information obtained pursuant to this Agreement,
including, but not limited to, names of policyholders, and shall disclose such
information only if CUNA Mutual or CUNA Brokerage has authorized such disclosure
in writing, or if such disclosure is expressly required by applicable federal or
state authorities. CUNA Mutual and CUNA Brokerage shall have prompt and full
access to all books, accounts and records of General Agent and Broker-Dealer
pertaining to the Products. General Agent and Broker-Dealer agrees to permit
CUNA Mutual and CUNA Brokerage representatives to enter into all areas of the
General Agent's and Broker-Dealer's business related hereto for the purpose of
conducting inspections and General Agent and Broker-Dealer shall fully cooperate
with such representatives during such inspections by rendering assistance as
CUNA Mutual and CUNA Brokerage may reasonably request. Upon notice from CUNA
Mutual or CUNA Brokerage, and without limiting other rights of CUNA Mutual and
CUNA Brokerage under this Agreement, General Agent and Broker-Dealer shall take
certain steps as may be necessary to correct any deficiencies detected during
such inspections. Each party hereto agrees to promptly furnish any reports and
information which a party hereto may request in order to meet its reporting and
record keeping obligations under the state insurance laws and the federal and
state securities laws or rules of FINRA and to provide such books and records to
the regulatory and administrative agencies which have jurisdiction over CUNA
Mutual or CUNA Brokerage.
3.16 CUSTOMER FILE AND RECORD RETENTION. For a period of six (6) years
from the termination date of this Agreement, General Agent and Broker-Dealer
agree (a) to permit CUNA Brokerage or CUNA Mutual access to inspect and copy,
during normal business hours, books and records, including but not limited to
customer files relating to the Products under this Agreement that are
specifically required to be maintained by the rules and regulations promulgated
by the SEC, FINRA, or any other federal or state regulatory agency with
jurisdiction over CUNA Brokerage, CUNA Mutual, Broker-Dealer or General Agent in
connection with an audit or investigation, including any such files as may have
been requested by such regulatory agencies ("Required Files) and (b) to maintain
such Required Files in the form originally received. In addition, this
information will be made available to CUNA Brokerage or CUNA Mutual in the event
an individual customer complaint or class action is submitted relating to
activity between customer and CUNA Brokerage or CUNA Mutual so that CUNA
Brokerage or CUNA Mutual, as the case may be, may respond to such complaint.
This information will be provided immediately to CUNA Brokerage or CUNA Mutual
for such inspections and proof of the regulatory request and/or customer
complaint. Within ninety (90) days following termination, General Agent and
Broker-Dealer shall deliver to CUNA Brokerage or CUNA Mutual the following
materials maintained by General Agent and Broker-Dealer or Representatives:
sales and promotion material, correspondence, customer communications, including
all communications relating to customer complaints, and records relating to
inspections conducted by any regulatory agency or by personnel of CUNA Brokerage
or CUNA Mutual. This Subsection 3.16 shall survive termination of this
Agreement.
3.17 NOTIFICATION OF DISCIPLINARY PROCEEDINGS AND CUSTOMER COMPLAINTS.
General Agent and Broker-Dealer shall promptly notify CUNA Mutual and CUNA
Brokerage of any
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disciplinary proceedings or customer complaints against General Agent or
Broker-Dealer, or any Representatives or agents of General Agent and
Broker-Dealer relating to the Products or any threatened or filed arbitration
action or civil litigation arising out of the solicitation, sale or service of
the Products. General Agent and Broker-Dealer shall fully and promptly cooperate
with CUNA Mutual and CUNA Brokerage in investigating and responding to any
customer complaint, attorney demand, or inquiry received from state insurance
departments or other regulatory agencies or legislative bodies, and in any
settlement or trial of any actions arising out of the conduct of business under
this Agreement. No response by General Agent or Broker-Dealer to an individual
customer complaint involving a Product will be sent until it has been approved
by CUNA Mutual or CUNA Brokerage. Any response by General Agent or Broker-Dealer
to an individual customer complaint will be sent to CUNA Mutual and CUNA
Brokerage for approval not less than five (5) business days prior to it being
sent to the customer, except if a more prompt response is required, the proposed
response may be communicated by telephone, electronically, via facsimile or in
person.
3.18 FIDELITY BOND. General Agent and Broker-Dealer represent that all
directors, officers, employees and Representatives of General Agent and
Broker-Dealer, who are licensed and registered pursuant to this Agreement as
CUNA Mutual agents for state insurance law purposes or who have access to funds
of CUNA Mutual, including but not limited to funds submitted with applications
for the Products 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 General Agent
and Broker-Dealer at their expense. CUNA Mutual and CUNA Brokerage may require
evidence, satisfactory to them, that such coverage is in force and General Agent
and Broker Dealer shall give prompt written notice to CUNA Mutual and CUNA
Brokerage of any notice of cancellation or change of coverage. General Agent and
Broker-Dealer hereby assign any proceeds received from the fidelity bonding
company to CUNA Mutual or CUNA Brokerage to the extent of CUNA Mutual's or CUNA
Brokerage's loss due to activities covered by the bond. If there is any
deficiency amount, whether due to a deductible or otherwise, General Agent and
Broker-Dealer shall promptly pay CUNA Mutual or CUNA Brokerage such amount on
demand and General Agent and Broker-Dealer hereby indemnify and hold harmless
CUNA Mutual and CUNA Brokerage from any such deficiency and from the costs of
collection thereof, including reasonable attorneys' fees.
3.19 PROHIBITED ACTS. Nothing in this Agreement shall be construed as
giving General Agent and Broker-Dealer the right to incur any indebtedness or
make contracts on behalf of CUNA Mutual or CUNA Brokerage. General Agent and
Broker-Dealer are not authorized to: discharge, waive any forfeitures under or
extend the time for making payment for the Products; waive or modify any terms,
conditions, or limitations of any policy or contract; pay any premium or other
payment on behalf of an purchaser of the Products; or enter into any court or
regulatory proceeding in the name of or on behalf of CUNA Mutual or CUNA
Brokerage. General Agent and Broker-Dealer hereby authorize CUNA Mutual and CUNA
Brokerage to set off liabilities of General Agent or Broker-Dealer, as the case
may be, to CUNA Mutual and CUNA Brokerage against any and all amounts otherwise
payable to General Agent or Broker-Dealer by CUNA Mutual or CUNA Brokerage.
4. RIGHT OF REJECTION. General Agent, Broker-Dealer, CUNA Brokerage and/or
CUNA Mutual each in their sole discretion, may reject any applications or
payments remitted by Representatives through the General Agent or Broker-Dealer
and may refund an applicant's payments to the applicant. Likewise, CUNA Mutual
and CUNA Brokerage may, at any time for any reason, reject any order from
Product owner (whether transmitted by or through General Agent or Broker-Dealer
or otherwise) to transfer contract value from one investment option under a
Product to another. In the event such refunds are made and if General Agent or
Broker-Dealer has received Compensation based on an applicant's payment that is
refunded, General Agent or Broker-Dealer shall promptly repay such Compensation
to CUNA Mutual. If repayment is not promptly made, CUNA Mutual
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may, at its sole option, deduct any amounts due to General Agent or
Broker-Dealer from future Compensation otherwise payable to General Agent or
Broker-Dealer. This Section 4 shall survive termination of this Agreement.
5. SHARING OF CUSTOMER INFORMATION. The parties acknowledge and agree that
it may be necessary for the parties to share nonpublic personal information and
other customer information ("Customer Information") with each other in order for
each party to meet their obligations under this Agreement. With respect to the
sharing, use and protection of Customer Information, the parties agree to the
following:
5.1 CONFIDENTIALITY AND RESTRICTIONS ON REDISCLOSURE OF CUSTOMER
INFORMATION. Each party agrees to hold in strict confidence Customer Information
obtained from another party during the term of this Agreement and any existing
Customer Information received or obtained prior to this Agreement. Each party
agrees not to disclose Customer Information, in any form or medium, to any
affiliated or nonaffiliated person, firm or corporation except as necessary to
perform services under this Agreement or as may be required by law. The parties
hereto acknowledge and agree that disclosing Customer Information to effectuate,
service or administer a Customer transaction shall not be considered a breach of
the confidentiality obligations created hereunder. To the extent that a party
contracts with a third party that obtains Customer Information in order to
provide services under this Agreement, that party agrees to obtain contractual
confidentiality protections to require the third party to hold Customer
Information in strict confidence and not disclose it to any person unless
required by law. Upon termination of this Agreement, General Agent and
Broker-Dealer agree to maintain all Customer Information relating to the
Products pursuant to Subsection 3.14 hereof. Each party agrees to comply with
applicable privacy laws and regulations including, but not limited to, the
Xxxxx-Xxxxx-Xxxxxx Act, Public Law 106-102 (1999) as set forth in 15 U.S.C.A.
[SEC]6801, as amended and to comply with applicable changes in such laws and
regulations as these occur and become effective.
5.2 USE OF CUSTOMER INFORMATION. Each party agrees to use Customer
Information only to fulfill its obligations hereunder and not to use it for any
other purpose.
5.3 OBLIGATION TO MAINTAIN SECURITY OVER CUSTOMER INFORMATION. Each
party agrees to implement and maintain reasonable and customary security
measures to safeguard Customer Information. Such measures shall include, but not
be limited to, requiring employees who will have access to such information to
agree to the confidentiality requirements of this Subsection.
5.4 CONFIDENTIALITY OBLIGATIONS SURVIVE TERMINATION OF THE AGREEMENT.
The obligations of the parties set forth in this Section 5 shall survive the
termination of this Agreement.
6. LIMITATIONS. Only CUNA Mutual or CUNA Brokerage, and no other party,
shall have the authority on behalf of CUNA Mutual or CUNA Brokerage: (a) to
make, alter, or discharge any of the Policies issued by CUNA Mutual; (b) to
waive any forfeiture; (c) to grant, permit or extend the time for making any
payments; (d) to guarantee earnings or rates; (e) to alter the forms which CUNA
Mutual or CUNA Brokerage may prescribe or substitute other forms in place of
those prescribed by CUNA Mutual or CUNA Brokerage; or (f) to enter into any
proceeding in a court of law or before a regulatory agency in the name of or on
behalf of CUNA Mutual or CUNA Brokerage.
7. TERM AND TERMINATION.
---------------------
7.1 TERM. This Agreement will commence on the Effective Date, and
unless terminated as provided herein, will continue in force indefinitely.
9
7.2 TERMINATION. Each party will have the right to terminate this
Agreement: (a) without cause, effective upon delivery of thirty (30) days'
written notice thereof to the other party; (b) effective immediately upon
delivery of written notice thereof to the other party, in the event that the
other party is in breach of any material obligation herein; (c) effective
immediately in the event that either CUNA Brokerage or Broker-Dealer shall cease
to be registered broker-dealers under the 1934 Act and members of the FINRA; (d)
effective immediately, if General Agent or Broker-Dealer or any Representative
of General Agent or Broker-Dealer shall rebate or offer to rebate all or any
part of a premium on any Products issued by CUNA Mutual in violation of
applicable federal, state or local securities and insurance laws, rules or
regulations; and (e) effective immediately if General Agent or Broker-Dealer or
any Representative of General Agent or Broker-Dealer shall withhold any premium
on any policy issued by CUNA Mutual.
7.3 EFFECT OF TERMINATION. Upon termination of this Agreement, all
Compensation to the General Agent and Broker-Dealer hereunder shall cease;
however, General Agent and Broker-Dealer shall continue to be liable for any
chargebacks or for any other amounts advanced by or otherwise due CUNA Mutual or
CUNA Brokerage hereunder. General Agent and Broker-Dealer will immediately
return or destroy, as instructed by CUNA Mutual and CUNA Brokerage, all of CUNA
Mutual's and CUNA Brokerage's proprietary materials, and any copies thereof,
including but not limited to, information and data relating to the Products,
procedures and practices, sales and promotion materials, advertising,
information and materials relating to "Systems," as described hereinafter, and
any sales and promotion materials created by General Agent or Broker-Dealer
related to the Products, and any copies thereof; and General Agent and
Broker-Dealer shall not use the same thereafter. General Agent and Broker-Dealer
agree to retain all customer files and records pursuant to Subsection 3.15
hereof.
8. USE OF TECHNOLOGY.
------------------
8.1 GENERALLY. CUNA Mutual agrees to provide General Agent and
Broker-Dealer access to and the right to use those technology-based systems and
materials (collectively, the "Systems") that CUNA Mutual determines to be
reasonably required for General Agent's or Broker-Dealer's performance of its
obligations under this Agreement. Said access may be provided through software
provided by CUNA Mutual directly to General Agent or Broker-Dealer and/or via
the Internet. Upon delivery of any such software, CUNA Mutual shall be deemed to
grant to General Agent and Broker-Dealer a non-transferable, non-exclusive,
license to use the software within the scope of their responsibilities under
this Agreement and for no other purpose. The access and use rights to the
Systems granted hereunder shall apply only to the version of the Systems CUNA
Mutual makes available to General Agent or Broker-Dealer from time to time.
General Agent and Broker-Dealer shall not reproduce, display, modify or
distribute the Systems or any part thereof, or use said Systems for any purpose
outside the scope of General Agent's and Broker-Dealer's responsibilities under
this Agreement. General Agent and Broker-Dealer shall not provide access to the
Systems, nor to any software provided to General Agent and Broker-Dealer by CUNA
Mutual, in whole or in part, to any third party including any consultant or
contractor, without the express written permission of CUNA Mutual, obtained in
each instance in advance. General Agent and Broker-Dealer shall hold in strict
confidence, use only within the scope of their responsibilities under this
Agreement, not provide access to any third parties, any passwords or other
authentication or security procedures or devices provided to General Agent or
Broker-Dealer to access and/or use the Systems. Upon termination of this
Agreement, General Agent and Broker-Dealer shall return all copies of the
software or other indicia of the Systems in its possession and retain nothing.
Furthermore, General Agent and Broker-Dealer will ensure that Representatives
under this Agreement will abide by the provisions of this Section 8.
10
8.2 DISCLAIMER. CUNA MUTUAL PROVIDES THE SYSTEMS, SOFTWARE AND ANY
INFORMATION STORED OR PROCESSED ON SAID SYSTEMS AND SOFTWARE "AS IS," AND
EXPRESSLY DISCLAIMS ALL WARRANTIES EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. General Agent
and Broker-Dealer understand and agree that the Systems and software contain
trade secrets and proprietary data of CUNA Mutual and that the Systems and
software are and shall at all times remain the sole and exclusive property of
CUNA Mutual. This provision shall survive termination of this Agreement.
8.3 LIMITED LIABILITY. In no event to the maximum extent permitted by
law shall CUNA Mutual be liable for any special, indirect, incidental, or
consequential damage (including, without limitation, damages for loss of
business, profits or income) arising out access, lack of access, use or lack of
use of the Systems or software, even if CUNA Mutual has been advised of the
possibility of such damages. Further, in no event to the maximum extent
permitted by law shall CUNA Mutual be liable to General Agent or Broker-Dealer
for damages of any kind or nature arising from the access, lack of access, use,
or lack of use of the Systems or software to the extent said damages exceed the
Compensation that CUNA Mutual has paid to General Agent and Broker-Dealer under
this Agreement during the three (3) month period immediately preceding the
occurrence of the claim.
9. CONFIDENTIALITY AND TRADE SECRETS. All information or materials
relating to or prepared by a party to this Agreement which are obtained or
reviewed in any inspection or through the course of business during the term of
this Agreement, including but not limited to, CUNA Mutual's insurance policy
information, coverage plan and rates and CUNA Mutual's or CUNA Brokerage's
policies and procedures, practices, billing information, claims information,
business relationship information, statistical data, and any other know-how and
information, shall be held in strict confidence by the parties hereto. No party
shall permit any third party to copy, review or use the other party's
confidential or proprietary materials at any time. CUNA Mutual and CUNA
Brokerage shall have sole and exclusive ownership of all right, title and
interest in "Trade Secrets" and Broker-Dealer shall obtain no such rights
hereunder. "Trade Secrets" shall be defined as a whole or any portion thereof of
any business, sales or legal information, process, procedure, know-how that
provides a party with a significant competitive advantage in the development,
construction, conduct, operation, control, marketing, sale, management,
administration, maintenance or servicing of insurance, or financial products.
This provision shall survive the termination of this Agreement.
10. REPRESENTATIONS AND WARRANTIES
------------------------------
10.1 GENERAL REPRESENTATIONS AND WARRANTIES. Each party represents
and warrants to the others that:
(a) It is duly organized, validly existing and in good
standing under the laws of the state of its organization and has all the
requisite power, corporate or otherwise, to carry on its business as now being
conducted and to perform its obligations as contemplated by this Agreement;
(b) It has all licenses, approvals, permits and authorizations
of, and registrations with, all authorities and agencies, including
non-government self-regulatory bodies, required under federal, state and local
laws and regulations to enabled it to perform its obligations under this
Agreement; and
(c) The execution, delivery and performance of this Agreement
have been duly and validly authorized by all necessary "corporate" action, and
this Agreement constitutes the legal, valid and binding agreement of such party,
enforceable against it according to its terms, except as the same may be limited
by bankruptcy, insolvency, reorganization, moratorium, or other similar laws
relating to creditors' rights generally and general principles of equity.
11
10.2 BROKER-DEALER REPRESENTATIONS AND WARRANTIES. CUNA Brokerage and
Broker-Dealer each represent and warrant to the other that it is registered as a
broker-dealer with SEC under the 1934 Act and is a member in good standing of
FINRA.
11. MUTUAL INDEMNIFICATION.
-----------------------
11.1 GENERAL AGENT AND BROKER-DEALER INDEMNIFICATION. General Agent
and Broker-Dealer, jointly and severally, will indemnify, defend and hold
harmless CUNA Mutual and CUNA Brokerage and their respective affiliates,
officers, directors, employees and agents from and against any claim, loss,
damage, expense or liability, judgment, settlements or regulatory actions,
including defense costs, reasonable attorneys' fees, penalties and fines,
arising from, or in any manner relating to: (a) any breach of any covenant or
obligation pursuant to this Agreement, including, but not limited to, any
applicable law or regulation, or any applicable rule of any self-regulatory
organization by General Agent and Broker-Dealer or their Representatives and
agents; (b) any criminal, fraudulent or intentionally wrongful act or omission
committed by General Agent or Broker-Dealer or their Representatives and agents
in connection with the performance of General Agent's or Broker-Dealer's
obligations hereunder; or (c) the infringement, violation or misappropriation by
General Agent or Broker-Dealer or their Representatives and agents of any
party's rights with respect to any Trade Secrets, copyright, trademark, service
xxxx, tradename or similar proprietary rights conferred by common law, state law
or by any law of the United States arising out of or resulting from the
performance of General Agent's or Broker-Dealer's obligations under this
Agreement.
11.2 CUNA MUTUAL AND CUNA BROKERAGE INDEMNIFICATION. CUNA Mutual and
CUNA Brokerage, jointly and severally, will indemnify, defend and hold harmless
General Agent and Broker-Dealer and their respective affiliates, officers,
directors, employees and agents from and against any claim, loss, damage,
expense or liability, judgment, settlements or regulatory actions, including
defense costs, reasonable attorneys' fees, penalties and fines, arising from, or
in any manner relating to: (a) any breach of any covenant or obligation pursuant
to this Agreement, including, but not limited to, any applicable law or
regulation, or any applicable rule of any self-regulatory organization by CUNA
Mutual or CUNA Brokerage; or (b) any criminal, fraudulent or intentionally
wrongful act or omission committed by CUNA Mutual or CUNA Brokerage in
connection with the performance of CUNA Mutual's or CUNA Brokerage's obligations
hereunder.
11.3 SURVIVAL. This Section 11 shall survive termination of this
Agreement.
12. GENERAL COMPLIANCE. The parties hereto agree to comply with the
existing laws and rules or regulations of applicable local, state or federal
regulatory authorities, including, but not limited to, FINRA, SEC, Financial
Crimes Enforcement Network and the New York Stock Exchange, and with those which
may be enacted or adopted during the term of this Agreement regulating the
business conducted under this Agreement and in any jurisdiction in which the
business described herein is to be transacted, and to provide information or
reports relating to the respective duties and obligations hereunder pursuant to
requests by any regulatory authority having jurisdiction with respect thereto.
13. ANTI-MONEY LAUNDERING COMPLIANCE PROGRAM. The parties hereto
acknowledge and agree that insurance agencies and securities broker-dealers are
subject to certain regulations set forth under the Bank Secrecy Act (the "BSA")
and [SEC]352 of the USA PATRIOT Act (the "PATRIOT Act") related to adopting and
implementing an anti-money laundering compliance program ("AML Program"). Each
party hereto represents and warrants that it has effectively implemented a
written AML Program, which includes at a minimum: a) incorporating policies,
procedures and internal controls reasonably designed to assure compliance with
BSA and the PATRIOT Act; b) designating a compliance officer responsible for
day-to-day compliance with the BSA and the AML Program; c)
12
providing education and/or training of Representatives and other appropriate
personnel concerning their responsibilities under the AML Program, including
training in the detection of suspicious transactions; and d) providing for
independent review to monitor and maintain an adequate AML Program. The parties
agree that CUNA Mutual and CUNA Brokerage have the right, upon reasonable
request, to examine the description of the training provided to Representatives
to ensure that the AML Program of General Agent and/or Broker-Dealer provides
adequate training for Representatives. In the event General Agent and/or
Broker-Dealer or Representatives become aware of circumstances related to a
customer that may be suspicious, General Agent, Broker-Dealer or Representative,
as the case may be, agrees to promptly notify the Anti-Money Laundering Officer
at CUNA Mutual regarding such suspicious activity. Furthermore, the parties
represent and warrant that each has adopted and will continue to execute a
customer identification program (the "CIP") meeting the requirements under the
PATRIOT Act. The parties agree that CUNA Mutual and CUNA Brokerage have the
right, upon reasonable request, to examine the description of the CIP that
General Agent and/or Broker-Dealer has adopted and implemented.
14. NOTICES. All notices, requests, demands and other communications
required or permitted under this Agreement shall be given in writing and shall
be deemed to be given upon receipt of any of the following delivery methods: (a)
personally delivered; or (b) sent by telecopier, facsimile transmission or other
electronic transmission; or (c) sent by United States certified or registered
mail, postage prepaid, return receipt requested; or (d) sent by private
overnight courier service. The respective addresses to be used for all notices,
requests, demands or communications are as follows:
CUNA Mutual Insurance Society
Attn: Licensing & Contracting Department
0000 Xxxxxxxx Xxx
Xxxxxxx, XX 00000
CUNA Brokerage Services, Inc.
Attn: Licensing & Contracting Department
0000 Xxxxxxxx Xxx
Xxxxxxx, XX 00000
Broker-Dealer:
General Agent:
15. INDEPENDENT CONTRACTORS. The relationship between the parties hereto is
an independent relationship and each party has sole responsibility and authority
for the conduct of its own business. General Agent and Broker-Dealer and their
Representatives and their agents are independent contractors with respect to
CUNA Mutual and CUNA Brokerage. No party hereto has the right to bind the other
party in any way.
16. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Wisconsin.
13
17. WAIVER. A waiver by any party of any terms and conditions of this
Agreement in any one instance shall not be deemed or construed to be a waiver of
any such term or condition for the future, or of any subsequent breach thereof,
nor shall it be deemed a waiver of performance of any obligation hereunder.
18. SEVERABILITY. If any portion or provision of this Agreement is held to
be invalid or unenforceable, the remainder of this Agreement shall continue in
full force and effect.
19. ASSIGNMENT. This Agreement shall be binding on and shall inure to the
benefit of the parties hereto and their respective successors and assigns; and
no party may assign rights or obligations under this Agreement without the prior
written consent of the other party.
20. HEADINGS. The headings in this Agreement are solely for convenience of
reference and shall not be given any effect in the construction or
interpretation of this Agreement.
21. AMENDMENT. CUNA Mutual and CUNA Brokerage reserve the right to amend
this Agreement at any time, and the submission of an application by General
Agent or Broker-Dealer after notice of any such amendment has been sent to
General Agent and Broker-Dealer shall constitute that General Agent and
Broker-Dealer are in agreement to any such amendment.
22. ENTIRE AGREEMENT. This Agreement and any attachments hereto constitute
the entire understanding of the parties hereto relating to the subject matter
hereof and supersedes in its entirety all prior agreements between CUNA Mutual
and CUNA Brokerage and General Agent or Broker-Dealer, if any, all prior and
collateral agreements, understandings, statements and negotiations of the
parties relating to such subject matter.
23. COUNTERPARTS. This Agreement may be executed in counterparts and all
documents so executed shall constitute one agreement binding on the parties
hereto.
[The remainder of this page is intentionally left blank.
Signatures appear on the following page.]
14
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first set forth above.
CUNA MUTUAL INSURANCE SOCIETY
By: ___________________________________________
Xxxxx X. Xxxxxx
Senior Vice President - CUNA Mutual Insurance Society
CUNA BROKERAGE SERVICES, INC.
By: ___________________________________________
Xxxxx X. Xxxxxx
President
BROKER-DEALER
Name:
Title:
By: __________________________________
GENERAL AGENT
Name:
Title:
By: __________________________________
NOTE: Please return two signed copies of this Agreement to:
CUNA Mutual Insurance Society
Attn: Licensing & Contracting Department
0000 Xxxxxxxx Xxx
Xxxxxxx, XX 00000
Upon acceptance, one countersigned copy will be returned to General
Agent/Broker-Dealer for its files.
15
EXHIBIT A
---------
SELLING AND SERVICES AGREEMENT
FOR
INSURANCE AND ANNUITY (FIXED AND VARIABLE) PRODUCTS
GENERAL LETTER OF RECOMMENDATION
--------------------------------
General Agent and Broker-Dealer hereby certify to CUNA Mutual that all the
following requirements will be fulfilled in conjunction with the submission by
General Agent or Broker-Dealer of licensing/appointment papers for all
applicants as agents of CUNA Mutual. General Agent or Broker-Dealer will, upon
request, forward proof of compliance with same to CUNA Mutual in a timely
manner.
1. We have made a thorough and diligent inquiry and investigation relative to
each applicant's identity, residence, business reputation, and experience
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
license and appointment as an agent of CUNA Mutual. This inquiry and
background investigation has included a credit and criminal check on each
applicant. Based upon our investigation, we vouch and certify that each
individual is trustworthy, competent and qualified to act as an agent for
CUNA Mutual to hold himself/herself out in good faith to the general
public.
2. We have on file appropriate state insurance department licensing forms or a
Form U-4 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 FINRA member firm, and each
applicant is presently registered as a FINRA registered representative. The
above information in our files indicates no fact or condition which would
disqualify the applicant from receiving a license or appointment 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 licensed 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 therefor and appointed by CUNA Mutual. 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 or
license applied for is received.
16
SELLING AND SERVICES AGREEMENT
FOR
INSURANCE AND ANNUITY (FIXED AND VARIABLE) PRODUCTS
PRODUCTS AND COMPENSATION SCHEDULE
----------------------------------
This Products and Compensation Schedule (this "Schedule") is incorporated into
the Selling and Services Agreement (the "Agreement") as of the Effective Date of
the Agreement. CUNA Mutual agrees to compensate General Agent and Broker-Dealer,
as appropriate, under the Agreement as set forth below. Notwithstanding any
provisions in the Agreement to the contrary, CUNA Mutual reserves the right to
discontinue the availability of any of the Products or modify the Compensation
at any time, subject to thirty (30) days written notice. Subject to the
provisions of the Agreement, General Agent and Broker-Dealer shall be entitled
to receive the Compensation for the Products listed in this Schedule.
Capitalized terms in this Schedule and not otherwise defined herein will have
the meanings set forth in the Agreement.
================================================================================
For each product sale or transaction the following rules apply:
o For PROPRIETARY INSURANCE PRODUCTS, First Year and Renewal Commission are
expressed as a percentage of premiums by year. Note that for proprietary
life insurance products, First Year Commission is calculated based on net
annualized first year premium, and Renewal Commission is calculated as a
percentage of renewal premium paid by the purchaser. For annuity products,
First Year Commission is calculated as a percentage of earned premiums, and
Renewal Commission is calculated as a percentage of trailers. A trailer is
defined as the annuity contract account value at the end of the annuity
contract anniversary.
o For the SINGLE PREMIUM IMMEDIATE ANNUITY, commission charge backs will be
made when death of the client occurs prior to the income payment start
date. The charge back will be 100% of the commission if death of the client
occurred in the first six months after issue, or 50% of the commission if
death of the client occurred in months seven through twelve after issue.
o For PROPRIETARY SINGLE LIFE AND JOINT LIFE INCOME OPTIONS, First Year
Commission is expressed as a percentage of the amount applied to the income
option on the contract. First Year Commission is calculated for the service
representative at the time proceeds are applied to:
a) All variable single life and joint life income options
b) All fixed non-dividend based single life and joint life income
options
o INCOME OPTION TRAILERS are expressed as a percent of the reserve held by
CUNA Mutual on the contract and are paid once per year in January to the
representative assigned for service as of the prior year-end calculation
date on contracts in force for all fixed period income options.
o In addition, several special Compensation rules apply to the Products sold
as part of this Agreement:
1. CUNA Mutual has the right to define and determine compensation on
transfers, exchanges, or replacements.
2. CUNA Mutual reserves the right to refund premium paid or principal
invested on a policy if such refund is justified by reason of
rescission or cancellation for justifiable reason. In this
situation, compensation will be adjusted for any refunded premium
or investment.
3. For proprietary insurance products, First Year Commission is
credited when the policy is issued and the premium is fully
processed by CUNA Mutual, and Renewal Commission is credited when
the premium is received and fully processed by CUNA Mutual.
4. Increases to premium level and specified amount may result in
compensation being credited to another representative. In
addition, changes in service assignments or in a sales and service
agreement may result in compensation being credited to another
representative.
5. The minimum disbursed commissions check amount will be $50. Any
payable amounts below the minimum in a given period will be held
over and disbursed in a subsequent period.
6. With respect to annuity products, CUNA Mutual reserves the right
to reverse compensation upon the death of the owner or annuitant
within the first year after issuance of the policy.
17
SELLING AND SERVICES AGREEMENT
PRODUCTS AND COMPENSATION SCHEDULE
-------------------------------------------------------------------------------------------------------------------
COMMISSION RATE
-------------------------------------------------------------------------------------------------------------------
PRODUCT YEAR FIRST YEAR RENEWAL
-------------------------------------------------------------------------------------------------------------------
VARIABLE ANNUITY
-------------------------------------------------------------------------------------------------------------------
MEMBERS(R) VARIABLE ANNUITY III:
-------------------------------------------------------------------------------------------------------------------
Option 1 - Up Front and Trailer (default option)
-------------------------------------------------------------------------------------------------------------------
% of premium; issue ages 0-75 all years 6.50%
-------------------------------------------------------------------------------------------------------------------
% of premium; issue ages 76-80 all years 5.40%
-------------------------------------------------------------------------------------------------------------------
% of premium; issue ages 81-85 all years 3.75%
-------------------------------------------------------------------------------------------------------------------
Trailer; paid on policy anniversary 0.25%
-------------------------------------------------------------------------------------------------------------------
Option 2 - Semi-Levelized
-------------------------------------------------------------------------------------------------------------------
% of premium; issue ages 0-75 all years 4.70%
-------------------------------------------------------------------------------------------------------------------
% of premium; issue ages 76-80 all years 3.85%
-------------------------------------------------------------------------------------------------------------------
% of premium; issue ages 81-85 all years 2.60%
-------------------------------------------------------------------------------------------------------------------
Trailer; paid on policy anniversary 0.50%
-------------------------------------------------------------------------------------------------------------------
Option 3 - Semi-Levelized 2
-------------------------------------------------------------------------------------------------------------------
% of premium; issue ages 0-75 all years 3.50%
-------------------------------------------------------------------------------------------------------------------
% of premium; issue ages 76-80 all years 2.90%
-------------------------------------------------------------------------------------------------------------------
% of premium; issue ages 81-85 all years 2.00%
-------------------------------------------------------------------------------------------------------------------
Trailer; paid on policy anniversary 0.75%
-------------------------------------------------------------------------------------------------------------------
Option 4 - All Up Front
-------------------------------------------------------------------------------------------------------------------
% of premium; issue ages 0-75 all years 7.25%
-------------------------------------------------------------------------------------------------------------------
% of premium; issue ages 76-80 all years 6.00%
-------------------------------------------------------------------------------------------------------------------
% of premium; issue ages 81-85 all years 4.20%
-------------------------------------------------------------------------------------------------------------------
Trailer; paid on policy anniversary 0.00%
-------------------------------------------------------------------------------------------------------------------
MEMBERS(R) VARIABLE ANNUITY III - EXTRACREDIT:
-------------------------------------------------------------------------------------------------------------------
Option 1 - Up Front and Trailer (default option)
-------------------------------------------------------------------------------------------------------------------
% of premium; issue ages 0-75 all years 5.00%
-------------------------------------------------------------------------------------------------------------------
% of premium; issue ages 76-80 all years 4.15%
-------------------------------------------------------------------------------------------------------------------
% of premium; issue ages 81-85 all years 2.90%
-------------------------------------------------------------------------------------------------------------------
Trailer; paid qtrly, starts at the end of the 5th qtr 0.063%
-------------------------------------------------------------------------------------------------------------------
Option 2 - Semi-Levelized
-------------------------------------------------------------------------------------------------------------------
% of premium; issue ages 0-75 all years 3.20%
-------------------------------------------------------------------------------------------------------------------
% of premium; issue ages 76-80 all years 2.65%
-------------------------------------------------------------------------------------------------------------------
% of premium; issue ages 81-85 all years 1.85%
-------------------------------------------------------------------------------------------------------------------
Trailer; paid qtrly, starts at the end of the 5th qtr 0.125%
-------------------------------------------------------------------------------------------------------------------
Option 3 - Semi-Levelized 2
-------------------------------------------------------------------------------------------------------------------
% of premium; issue ages 0-75 all years 2.00%
-------------------------------------------------------------------------------------------------------------------
% of premium; issue ages 76-80 all years 1.65%
-------------------------------------------------------------------------------------------------------------------
% of premium; issue ages 81-85 all years 1.15%
-------------------------------------------------------------------------------------------------------------------
Trailer; paid qtrly, starts at the end of the 5th qtr 0.188%
-------------------------------------------------------------------------------------------------------------------
Option 4 - All Up Front
-------------------------------------------------------------------------------------------------------------------
% of premium; issue ages 0-75 all years N/A
-------------------------------------------------------------------------------------------------------------------
% of premium; issue ages 76-80 all years N/A
-------------------------------------------------------------------------------------------------------------------
% of premium; issue ages 81-85 all years N/A
-------------------------------------------------------------------------------------------------------------------
Trailer; paid qtrly, starts at the end of the 5th qtr N/A
-------------------------------------------------------------------------------------------------------------------
MEMBERS(R) CHOICE VARIABLE ANNUITY
-------------------------------------------------------------------------------------------------------------------
% of premium all years 1.125%
-------------------------------------------------------------------------------------------------------------------
Trailer; paid on policy anniversary 1.00%
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
18
SELLING AND SERVICES AGREEMENT
PRODUCTS AND COMPENSATION SCHEDULE
-------------------------------------------------------------------------------------------------------------------
COMMISSION RATE
-------------------------------------------------------------------------------------------------------------------
PRODUCT YEAR FIRST YEAR RENEWAL
-------------------------------------------------------------------------------------------------------------------
MEMBERS(R) VARIABLE ANNUITY III - L-SHARE:
-------------------------------------------------------------------------------------------------------------------
Option 1 - Up Front and Trailer (default option)
-------------------------------------------------------------------------------------------------------------------
% of premium; issue ages 0-75 1 4.00%
-------------------------------------------------------------------------------------------------------------------
2 3.25%
-------------------------------------------------------------------------------------------------------------------
3 2.50%
-------------------------------------------------------------------------------------------------------------------
4 1.75%
-------------------------------------------------------------------------------------------------------------------
5+ 1.00%
-------------------------------------------------------------------------------------------------------------------
% of premium; issue ages 76-80 1 3.30%
-------------------------------------------------------------------------------------------------------------------
2 3.25%
-------------------------------------------------------------------------------------------------------------------
3 2.50%
-------------------------------------------------------------------------------------------------------------------
4 1.75%
-------------------------------------------------------------------------------------------------------------------
5+ 1.00%
-------------------------------------------------------------------------------------------------------------------
% of premium; issue ages 81-85 1 2.30%
-------------------------------------------------------------------------------------------------------------------
2 2.30%
-------------------------------------------------------------------------------------------------------------------
3 2.30%
-------------------------------------------------------------------------------------------------------------------
4 1.75%
-------------------------------------------------------------------------------------------------------------------
5+ 1.00%
-------------------------------------------------------------------------------------------------------------------
Trailer; paid qtrly, starts at the end of the 5th qtr 0.25%
-------------------------------------------------------------------------------------------------------------------
Option 2 - Semi-Levelized
-------------------------------------------------------------------------------------------------------------------
% of premium; issue ages 0-75 1 4.50%
-------------------------------------------------------------------------------------------------------------------
2 3.25%
-------------------------------------------------------------------------------------------------------------------
3 2.50%
-------------------------------------------------------------------------------------------------------------------
4 1.75%
-------------------------------------------------------------------------------------------------------------------
5+ 1.00%
-------------------------------------------------------------------------------------------------------------------
% of premium; issue ages 76-80 1 3.75%
-------------------------------------------------------------------------------------------------------------------
2 3.25%
-------------------------------------------------------------------------------------------------------------------
3 2.50%
-------------------------------------------------------------------------------------------------------------------
4 1.75%
-------------------------------------------------------------------------------------------------------------------
5+ 1.00%
-------------------------------------------------------------------------------------------------------------------
% of premium; issue ages 81-85 1 2.60%
-------------------------------------------------------------------------------------------------------------------
2 2.60%
-------------------------------------------------------------------------------------------------------------------
3 2.50%
-------------------------------------------------------------------------------------------------------------------
4 1.75%
-------------------------------------------------------------------------------------------------------------------
5+ 1.00%
-------------------------------------------------------------------------------------------------------------------
Trailer; paid qtrly, starts at the end of the 5th qtr 0.188%
-------------------------------------------------------------------------------------------------------------------
Option 3 - Semi-Levelized 2
-------------------------------------------------------------------------------------------------------------------
% of premium; issue ages 0-75 1 5.00%
-------------------------------------------------------------------------------------------------------------------
2 3.25%
-------------------------------------------------------------------------------------------------------------------
3 2.50%
-------------------------------------------------------------------------------------------------------------------
4 1.75%
-------------------------------------------------------------------------------------------------------------------
5+ 1.00%
-------------------------------------------------------------------------------------------------------------------
% of premium; issue ages 76-80 1 4.15%
-------------------------------------------------------------------------------------------------------------------
2 3.25%
-------------------------------------------------------------------------------------------------------------------
3 2.50%
-------------------------------------------------------------------------------------------------------------------
4 1.75%
-------------------------------------------------------------------------------------------------------------------
5+ 1.00%
-------------------------------------------------------------------------------------------------------------------
% of premium; issue ages 81-85 1 2.90%
-------------------------------------------------------------------------------------------------------------------
2 2.90%
-------------------------------------------------------------------------------------------------------------------
3 2.50%
-------------------------------------------------------------------------------------------------------------------
4 1.75%
-------------------------------------------------------------------------------------------------------------------
5+ 1.00%
-------------------------------------------------------------------------------------------------------------------
Trailer; paid qtrly, starts at the end of the 5th qtr 0.125%
-------------------------------------------------------------------------------------------------------------------
19
SELLING AND SERVICES AGREEMENT
PRODUCTS AND COMPENSATION SCHEDULE
-------------------------------------------------------------------------------------------------------------------
COMMISSION RATE
-------------------------------------------------------------------------------------------------------------------
PRODUCT YEAR FIRST YEAR RENEWAL
-------------------------------------------------------------------------------------------------------------------
MEMBERS(R) VARIABLE ANNUITY III - L-SHARE (CON'T):
-------------------------------------------------------------------------------------------------------------------
Option 4 - All Up Front
-------------------------------------------------------------------------------------------------------------------
% of premium; issue ages 0-75 1 5.50%
-------------------------------------------------------------------------------------------------------------------
2 3.25%
-------------------------------------------------------------------------------------------------------------------
3 2.50%
-------------------------------------------------------------------------------------------------------------------
4 1.75%
-------------------------------------------------------------------------------------------------------------------
5+ 1.00%
-------------------------------------------------------------------------------------------------------------------
% of premium; issue ages 76-80 1 4.55%
-------------------------------------------------------------------------------------------------------------------
2 3.25%
-------------------------------------------------------------------------------------------------------------------
3 2.50%
-------------------------------------------------------------------------------------------------------------------
4 1.75%
-------------------------------------------------------------------------------------------------------------------
5+ 1.00%
-------------------------------------------------------------------------------------------------------------------
% of premium; issue ages 81-85 1 3.15%
-------------------------------------------------------------------------------------------------------------------
2 3.15%
-------------------------------------------------------------------------------------------------------------------
3 2.50%
-------------------------------------------------------------------------------------------------------------------
4 1.75%
-------------------------------------------------------------------------------------------------------------------
5+ 1.00%
-------------------------------------------------------------------------------------------------------------------
Trailer; paid qtrly, starts at the end of the 5th qtr 0.00%
-------------------------------------------------------------------------------------------------------------------
Trailer; paid qtrly, starts at the end of the 17th qtr 0.25%
-------------------------------------------------------------------------------------------------------------------
FIXED ANNUITY
-------------------------------------------------------------------------------------------------------------------
MEMBERS(R) SELECT FIXED ANNUITY II:
-------------------------------------------------------------------------------------------------------------------
Under $250,000
-------------------------------------------------------------------------------------------------------------------
% of premium; issue ages 0-75 1 4.00%
-------------------------------------------------------------------------------------------------------------------
% of premium; issue ages 76-80 1 3.10%
-------------------------------------------------------------------------------------------------------------------
% of premium; issue ages 81-90 1 2.20%
-------------------------------------------------------------------------------------------------------------------
$250,000 and above
-------------------------------------------------------------------------------------------------------------------
% of premium; issue ages 0-75 1 3.35%
-------------------------------------------------------------------------------------------------------------------
% of premium; issue ages 76-80 1 2.65%
-------------------------------------------------------------------------------------------------------------------
% of premium; issue ages 81-90 1 1.85%
-------------------------------------------------------------------------------------------------------------------
SINGLE PREMIUM DEFERRED INDEXED ANNUITY
-------------------------------------------------------------------------------------------------------------------
MEMBERS(R) INDEX ANNUITY:
-------------------------------------------------------------------------------------------------------------------
Option 1 - Under $250,000
-------------------------------------------------------------------------------------------------------------------
% of premium; issue ages 0-75 1 5.00%
-------------------------------------------------------------------------------------------------------------------
% of premium; issue ages 76-85 1 3.25%
-------------------------------------------------------------------------------------------------------------------
Option 1 - $250,000 and above
-------------------------------------------------------------------------------------------------------------------
% of premium; issue ages 0-75 1 4.25%
-------------------------------------------------------------------------------------------------------------------
% of premium; issue ages 76-85 1 2.75%
-------------------------------------------------------------------------------------------------------------------
Option 2 - Under $250,000
-------------------------------------------------------------------------------------------------------------------
% of premium; issue ages 0-75 1 4.00%
-------------------------------------------------------------------------------------------------------------------
% of premium; issue ages 76-85 1 2.60%
-------------------------------------------------------------------------------------------------------------------
Trailer 0.25%
-------------------------------------------------------------------------------------------------------------------
Option 2 - $250,000 and above
-------------------------------------------------------------------------------------------------------------------
% of premium; issue ages 0-75 1 3.25%
-------------------------------------------------------------------------------------------------------------------
% of premium; issue ages 76-85 1 2.10%
-------------------------------------------------------------------------------------------------------------------
Trailer 0.25%
-------------------------------------------------------------------------------------------------------------------
"Re-up" compensation will be credited at 50% of the original issue First Year Commission Rate.
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
20
SELLING AND SERVICES AGREEMENT
PRODUCTS AND COMPENSATION SCHEDULE
-------------------------------------------------------------------------------------------------------------------
COMMISSION RATE
-------------------------------------------------------------------------------------------------------------------
PRODUCT YEAR FIRST YEAR RENEWAL
-------------------------------------------------------------------------------------------------------------------
SINGLE PREMIUM IMMEDIATE ANNUITY
-------------------------------------------------------------------------------------------------------------------
MEMBERS(R) SPIA:
-------------------------------------------------------------------------------------------------------------------
Life Income Option
-------------------------------------------------------------------------------------------------------------------
% of premium; issue ages 0-70 1 7.00%
-------------------------------------------------------------------------------------------------------------------
% of premium; issue ages 71-80 1 5.90%
-------------------------------------------------------------------------------------------------------------------
% of premium; issue ages 81 + 1 4.25%
-------------------------------------------------------------------------------------------------------------------
Installment Option
-------------------------------------------------------------------------------------------------------------------
% of premium; all ages 1 3.00%
-------------------------------------------------------------------------------------------------------------------
LIFE INSURANCE
-------------------------------------------------------------------------------------------------------------------
MEMBERS(R) WHOLE LIFE PRIMARY PROTECTION PLAN:
-------------------------------------------------------------------------------------------------------------------
% of premium 1 96.00%
-------------------------------------------------------------------------------------------------------------------
% of premium 2-3 10.00%
-------------------------------------------------------------------------------------------------------------------
% of premium 4-10 5.00%
-------------------------------------------------------------------------------------------------------------------
TERM INSURANCE
-------------------------------------------------------------------------------------------------------------------
MEMBERS(R) ELITE PROTECTION TERM SERIES:
-------------------------------------------------------------------------------------------------------------------
LEVEL 10, 15
-------------------------------------------------------------------------------------------------------------------
% of premium 1 80.00%
-------------------------------------------------------------------------------------------------------------------
% of premium 2-10 2.00%
-------------------------------------------------------------------------------------------------------------------
LEVEL 20
-------------------------------------------------------------------------------------------------------------------
% of premium 1 92.00%
-------------------------------------------------------------------------------------------------------------------
% of premium 2-10 2.00%
-------------------------------------------------------------------------------------------------------------------
LEVEL 30
-------------------------------------------------------------------------------------------------------------------
% of premium 1 98.00%
-------------------------------------------------------------------------------------------------------------------
% of premium 2-10 2.00%
-------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE INSURANCE
-------------------------------------------------------------------------------------------------------------------
2006 MEMBERS(R) LONG-TERM CARE:
(Only "Standard" state commission rates are provided in this Schedule.
Commission rates vary in Delaware, Indiana, Michigan, Pennsylvania and
Wisconsin due to state insurance law.)
-------------------------------------------------------------------------------------------------------------------
LIFETIME PAY
-------------------------------------------------------------------------------------------------------------------
% of premium; issue ages 18 - 59 1 40.00%
-------------------------------------------------------------------------------------------------------------------
% of premium; issue ages 60 - 74 1 37.00%
-------------------------------------------------------------------------------------------------------------------
% of premium; issue ages 75 - 85 1 24.00%
-------------------------------------------------------------------------------------------------------------------
% of premium 2-10 3.00%
-------------------------------------------------------------------------------------------------------------------
% of premium 11+ 0.00%
-------------------------------------------------------------------------------------------------------------------
LIMITED PAY
-------------------------------------------------------------------------------------------------------------------
% of premium; issue ages 18 - 59 1 21.00%
-------------------------------------------------------------------------------------------------------------------
% of premium; issue ages 60 - 74 1 18.00%
-------------------------------------------------------------------------------------------------------------------
% of premium; issue ages 75 - 85 1 10.00%
-------------------------------------------------------------------------------------------------------------------
% of premium 2-10 3.00%
-------------------------------------------------------------------------------------------------------------------
% of premium 11+ 0.00%
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
21
SELLING AND SERVICES AGREEMENT
PRODUCTS AND COMPENSATION SCHEDULE
-------------------------------------------------------------------------------------------------------------------
COMMISSION RATE
-------------------------------------------------------------------------------------------------------------------
PRODUCT YEAR FIRST YEAR RENEWAL
-------------------------------------------------------------------------------------------------------------------
INCOME OPTIONS
-------------------------------------------------------------------------------------------------------------------
LIFETIME PAYOUTS:
-------------------------------------------------------------------------------------------------------------------
MVA Comp Options 1, 2, 3, & 4 plus all other products:
-------------------------------------------------------------------------------------------------------------------
% of premium 1 0.00%
-------------------------------------------------------------------------------------------------------------------
% of premium 2 0.00%
-------------------------------------------------------------------------------------------------------------------
% of premium 3 1.50%
-------------------------------------------------------------------------------------------------------------------
% of premium 4 3.00%
-------------------------------------------------------------------------------------------------------------------
% of premium 5 4.00%
-------------------------------------------------------------------------------------------------------------------
% of premium 6 5.00%
-------------------------------------------------------------------------------------------------------------------
% of premium 7 6.00%
-------------------------------------------------------------------------------------------------------------------
% of premium 8+ 6.50%
-------------------------------------------------------------------------------------------------------------------
INSTALLMENT PAYMENTS
-------------------------------------------------------------------------------------------------------------------
FIXED PERIOD INCOME OPTIONS:
-------------------------------------------------------------------------------------------------------------------
Trailer; paid on a calendar year basis, based on the year-end value. 0.225%
-------------------------------------------------------------------------------------------------------------------
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22
