EXHIBIT (3)(j)
PRINCIPAL UNDERWRITING AGREEMENT
PRINCIPAL UNDERWRITING AGREEMENT
THIS PRINCIPAL UNDERWRITING AGREEMENT made and effective as of the 1st day
of March, 2001, by and between AFSG SECURITIES CORPORATION ("AFSG"), a
Pennsylvania corporation, and TRANSAMERICA LIFE INSURANCE COMPANY OF NEW YORK
("XXXX"), a New York corporation, on its own behalf and on behalf of the
separate investment accounts of XXXX set forth in Exhibit A attached hereto and
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made a part hereof (collectively, the "Account").
WITNESSETH:
WHEREAS, the Account was established or acquired by XXXX under the laws of
the State of New York, pursuant to a resolution of TONY's Board of Directors in
order to set aside the investment assets attributable to certain variable life
insurance and annuity contracts ("Contracts") issued by XXXX;
WHEREAS, XXXX has registered or will register the Account with the
Securities and Exchange Commission ("SEC") under the Investment Company Act of
1940, as amended (the "1940 Act");
WHEREAS, XXXX has registered or will register the Contracts under the
Securities Act of 1933, as amended (the "1933 Act");
WHEREAS, AFSG is and will continue to be registered as a broker-dealer with
the SEC under the Securities Exchange Act of 1934, as amended (the "1934 Act"),
and a member of the National Association of Securities Dealers, Inc. (the
"NASD") prior to the offer and sale of the Contracts;
WHEREAS, XXXX shall have the Plan of Operations for the separate accounts
approved by the New York Superintendent of Insurance;
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WHEREAS, AFSG may not assign or delegate its responsibilities without prior
written consent of the XXXX Board and approval by the New York Superintendent of
Insurance;
WHEREAS, XXXX proposes to have the Contracts sold and distributed through
AFSG, and AFSG is willing to sell and distribute such Contracts under the terms
stated herein; and
WHEREAS, this Agreement may only be amended by written consent of both XXXX
and AFSG, provided that such amendment is submitted to and approved by the New
York Superintendent of Insurance.
NOW, THEREFORE, the parties, intending to be legally bound, hereby agree as
follows:
1. Appointment as Distributor/Principal Underwriter. XXXX grants to AFSG
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the exclusive right to be, and AFSG agrees to serve as, distributor and
principal underwriter of the Contracts during the term of this Agreement. AFSG
agrees to use its best efforts to solicit applications for the Contracts and
otherwise perform all duties and functions which are necessary and proper for
the distribution of the Contracts.
2. Prospectus. AFSG agrees to offer the Contracts for sale in accordance
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with the registration statements and prospectus therefor then in effect. AFSG
is not authorized to give any information or to make any representations
concerning the Contracts other than those contained in the current prospectus
therefor filed with the SEC or in such sales literature as may be authorized by
XXXX.
3. Considerations. All premiums, purchase payments or other moneys
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payable under the Contracts shall be remitted promptly in full together with
such application, forms and any other required documentation to XXXX or its
designated servicing agent and shall become the exclusive property of XXXX.
Checks or money orders in payment under the Contracts shall be drawn to the
order of "Transamerica Occidental Life Insurance Company" and funds may be
remitted by wire if prior written approval is obtained from XXXX. XXXX shall
collect premiums or establish a lock-box bank arrangement in its name for the
deposit of amounts
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collected from policyholders (including payments of principal or interest on
contract loans) from any collection facility, including intermediaries and other
persons or institutions that receive remittances with respect to TONY's
business. If a lock-box arrangement is used, TONY's employees will direct the
disbursement of funds.
4. Copies of Information. On behalf of the Account, XXXX shall furnish
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AFSG with copies of all prospectuses, financial statements and other documents
which AFSG reasonably requests for use in connection with the distribution of
the Contracts.
5. Representations. AFSG represents that it is (a) duly registered as a
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broker-dealer under the 1934 Act, (b) a member in good standing of the NASD and
(c) to the extent necessary to offer the Contracts, duly registered or otherwise
qualified under the securities laws of any state or other jurisdiction. AFSG
shall be responsible for carrying out its sales and underwriting obligations
hereunder in continued compliance with the NASD Rules and federal and state
securities and insurance laws and regulations. Further, AFSG represents and
warrants that it will adopt, abide by and enforce the principles set forth in
the Principles and Code of Ethical Market Conduct of the Insurance Marketplace
Standards Association as adopted by XXXX.
6. Other Broker-Dealer Agreements. AFSG is hereby authorized to enter
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into written sales agreements with other independent broker-dealers for the sale
of the Contracts. All such sales agreements entered into by AFSG shall provide
that each independent broker-dealer will assume full responsibility for
continued compliance by itself and by its associated persons with the NASD Rules
and applicable federal and state securities and insurance laws, shall provide
that each independent broker-dealer will adopt, abide by and enforce the
principles set forth in the Principles and Code of Ethical Market Conduct of the
Insurance Marketplace Standards Association as adopted by XXXX, and shall be in
such form and contain such other provisions as XXXX xxx from time to time
require. All associated persons of such independent broker-dealers soliciting
applications for the Contracts shall be duly and appropriately registered
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by the NASD and licensed and appointed by XXXX for the sale of Contracts under
the insurance laws of the applicable states or jurisdictions in which such
Contracts may be lawfully sold. All applications for Contracts solicited by such
broker-dealers through their representatives, together with any other required
documentation and premiums, purchase payments and other moneys, shall be handled
as set forth in paragraph 3 above.
7. Insurance Licensing and Appointments. XXXX shall apply for the proper
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insurance licenses and appointments in appropriate states or jurisdictions for
the designated persons associated with AFSG or with other independent broker-
dealers that have entered into sales agreements with AFSG for the sale of
Contracts, provided that XXXX reserves the right to refuse to appoint any
proposed registered representative as an agent or broker, and to terminate an
agent or broker once appointed.
8. Recordkeeping. XXXX and AFSG shall cause to be maintained and
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preserved for the periods prescribed such accounts, books, and other documents
as are required of them by the 1940 Act, and 1934 Act, and any other applicable
laws and regulations. The books, accounts and records of XXXX, of the Account,
and of AFSG as to all transactions hereunder shall be maintained so as to
disclose clearly and accurately the nature and details of the transactions.
XXXX (or such other entity engaged by XXXX for this purpose), on behalf of and
as agent for AFSG, shall maintain AFSG's books and records pertaining to the
sale of Contracts to the extent as mutually agreed upon from time to time by
XXXX and AFSG; provided that such books and records shall be the property of
AFSG, and shall at all times be subject to such reasonable periodic, special or
other audit or examination by the SEC, NASD, any state insurance commissioner
and/or all other regulatory bodies having jurisdiction. XXXX shall be
responsible for sending on behalf of and as agent for AFSG all required
confirmations on customer transactions in compliance with applicable
regulations, as modified by an exemption or other relief obtained by XXXX. AFSG
shall cause XXXX to be furnished with such reports as XXXX
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may reasonably request for the purpose of meeting its reporting and
recordkeeping requirements under the insurance laws of the State of New York and
any other applicable states or jurisdictions. XXXX agrees that its records
relating to the sale of Contracts shall be subject to such reasonable periodic,
special or other audit or examination by the SEC, NASD, and any state insurance
commissioner and/or all other regulatory bodies having jurisdiction.
All books, records and files established and maintained by any party by
reason of its performance under this agreement which, in absence of this
agreement, would have been held by XXXX, shall be deemed the property of XXXX.
These records shall be maintained in accordance with applicable laws and
regulations, including, but not limited to, New York Insurance Department
Regulation NO. 152.
9. Commissions. XXXX shall have the responsibility for paying on behalf
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of AFSG (a) any compensation to other independent broker-dealers and their
associated persons due under the terms of any sales agreements entered into
pursuant to paragraph 6 above, between AFSG and such broker-dealers as agreed to
by XXXX and (b) all commissions or other fees to associated persons of AFSG
which are due for the sale of the Contracts in the amounts and on such terms and
conditions as XXXX and AFSG determine. Notwithstanding the preceding sentence,
no broker-dealer, associated person or other individual or entity shall have an
interest in any deductions or other fees payable to AFSG as set forth herein.
10. Expense Reimbursement. XXXX shall reimburse AFSG for all costs and
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expenses incurred by AFSG in furnishing the services, materials, and supplies
required by the terms of this Agreement. The expense to be paid by XXXX for the
services under this agreement must be actual cost incurred by AFSG to provide
such services so that neither party shall receive a profit nor suffer a loss.
Expenses will be classified and allocated in accordance with New York State
Insurance Department Regulation No. 33. AFSG shall submit within 30 days prior
to the end of each quarter a statement of the estimated amount of the
apportioned expenses for such
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quarter and XXXX shall remit payment within 15 days following receipt of such
statement. Within 60 days after the end of each fiscal year, AFSG shall submit a
statement of actual apportioned expenses for such fiscal year. The difference
between the amount of estimated and actual expenses shall be paid to either
party, as the case may be, within 15 days of the receipt of the statement of
actual apportioned expenses. Records of such expenses shall be subject to audit
at all times by XXXX and its Regulators.
11. Indemnification. XXXX agrees to indemnify AFSG for any losses
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incurred as a result of any action taken or omitted by AFSG, or any of its
officers, agents or employees, in performing their responsibilities under this
Agreement in good faith and without willful misfeasance, gross negligence, or
reckless disregard of such obligations.
12. Regulatory Investigations. AFSG and XXXX agree to cooperate fully in
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any insurance or judicial regulatory investigation or proceeding arising in
connection with Contracts distributed under this Agreement. AFSG and XXXX
further agree to cooperate fully in any securities regulatory inspection,
inquiry, investigation or proceeding or any judicial proceeding with respect to
XXXX, AFSG, their affiliates and their representatives to the extent that such
inspection, inquiry, investigation or proceeding or judicial proceeding is in
connection with Contracts distributed under this Agreement. Without limiting
the foregoing:
(a) AFSG will be notified promptly of any customer complaint or notice of
any regulatory inspection, inquiry investigation or proceeding or judicial
proceeding received by XXXX with respect to AFSG or any representative or which
may affect TONY's issuance of any Contracts marketed under this Agreement; and
(b) AFSG will promptly notify XXXX of any customer complaint or notice of
any regulatory inspection, inquiry, investigation or judicial proceeding
received by AFSG or any representative with respect to XXXX or its affiliates in
connection with any Contracts distributed under this Agreement.
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In the case of a customer complaint, AFSG and XXXX will cooperate in
investigating such complaint and shall arrive at a mutually satisfactory
response.
13. Termination.
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(a) This Agreement may be terminated by either party hereto upon 60 days'
prior written notice to the other party.
(b) This Agreement may be terminated upon written notice of one party to
the other party hereto in the event of bankruptcy or insolvency of such party to
which notice is given.
(c) This Agreement may be terminated at any time upon the mutual written
consent of the parties hereto.
(d) AFSG shall not assign or delegate its responsibilities under this
Agreement without the written consent of XXXX.
(e) Upon termination of this Agreement, all authorizations, rights and
obligations shall cease except the obligations to settle accounts hereunder,
including payments or premiums or contributions subsequently received for
Contracts in effect at the time of termination or issued pursuant to
applications received by XXXX prior to termination.
(f) If any software that is used in the performance of the services under
this agreement is not readily available from a third party vendor, XXXX shall be
granted perpetual right to use such software.
14. Regulatory Impact. This Agreement shall be subject to, among other
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laws, the provisions of the 1940 Act and the 1934 Act and the rules,
regulations, and rulings thereunder and of the NASD, from time to time in
effect, including such exemptions from the 1940 Act as the SEC may grant, and
the terms hereof shall be interpreted and construed in accordance therewith.
AFSG shall submit to all regulatory and administrative bodies having
jurisdiction over the operations of the Account, present or future; and will
provide any information, reports or
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other material which any such body by reason of this Agreement may request or
require pursuant to applicable laws or regulations.
15. Severability. If any provision of this Agreement shall be held or
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made invalid by a court decision, statute, rule or otherwise, the remainder of
this Agreement shall not be affected thereby.
16. Choice of Law. This Agreement shall be construed, enforced and
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governed by the laws of the State of Iowa.
17. No Assignment. Neither party may assign its interest in this
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Agreement without the prior written consent of the other party, which consent
shall not be unreasonably withheld or delayed.
18. Disputes. Any dispute between AFSG and XXXX shall be submitted to a
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board of arbitration comprised of unaffiliated arbitrators. Arbitration is the
sole remedy for disputes arising under this agreement. Arbitration should be
held New York. Expenses of such arbitration shall be borne by AFSG and XXXX
equally.
19. All advertising, sales and marketing material utilized on behalf of
XXXX by AFSG shall be subject to the prior approval of XXXX. XXXX shall
maintain files of all such material in accordance with the New York State
Insurance Department Regulation No. 34A.
20. AFSG shall provide underwriting services to XXXX under this agreement
in accordance with the underwriting guidelines and procedures provided by AFSG
by XXXX, and XXXX shall retain all final underwriting authority.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by their respective duly authorized officials as of the day and year
first above written.
AFSG SECURITIES CORPORATION TRANSAMERICA LIFE INSURANCE
COMPANY OF NEW YORK
By: /s/ Xxxxx X. Xxxx By: /s/ Xxxxxx X. Xxxxxxx
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Xxxxx X. Xxxx Xxxxxx X. Xxxxxxx
Title: Secretary Title: Vice President
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EXHIBIT A
Separate Account VA GNY
Separate Account VA HNY
Separate Account VL BNY
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