EXHIBIT 3(c)
SELLING GROUP AGREEMENT
XXX XXXXXX AMERICAN CAPITAL DISTRIBUTORS, INC. AND
AMERICAN GENERAL LIFE INSURANCE COMPANY OF NEW YORK
This Selling Group Agreement ("Agreement") is made among Xxx Xxxxxx American
Capital Distributors, Inc., a registered broker-dealer and the distributor for
the variable life insurance policies (or certificates) and/or annuity
contracts (or certificates) set forth in Schedule A ("Distributor"),
-----------------------------------------------------------------------
("Selling Group Member")
-----------------------------------------------------------------------
("Associated Agency")
and, as the fourth party, American General Life Insurance Company of New York
("AGNY"). Selling Group Member is registered with the Securities and Exchange
Commission ("SEC") as a broker-dealer under the Securities Exchange Act of
1934 ("1934 Act") and under any appropriate regulatory requirements of state
law, and is a member in good standing of the National Association of
Securities Dealers, Inc. ("NASD"), unless Selling Group Member is exempt from
the broker-dealer registration requirements of the 1934 Act. Unless exempt,
Selling Group Member maintains a level of qualification with the NASD
appropriate to enable it to offer and sell the products set forth in Schedule
A. Selling Group Member is affiliated with Associated Agency, which is
properly licensed under the insurance laws of the state(s) in which Selling
Group Member will act under this Agreement.
This Agreement is for the purpose of providing for the distribution of (a)
certain variable life insurance policies and certificates, and (b) certain
variable annuity contracts and certificates set forth in Schedule A and any
successor or additional SEC registered insurance products (as discussed in
Part (1) "NEW PRODUCTS" of this Agreement) to be issued by AGNY and
distributed through Distributor through representatives who are state
insurance licensed and appointed agents of AGNY and associated with Associated
Agency and are also NASD registered representatives of Selling Group Member
("Sales Persons"). The policies, contracts and/or certificates set forth in
Schedule A, along with any successor or additional SEC registered insurance
products, are referred to collectively herein as the "Contracts".
In consideration of the mutual promises and covenants contained in this
Agreement, AGNY and Distributor appoint Selling Group Member and those persons
associated with Associated Agency who are NASD registered representatives of
Selling Group Member and state insurance licensed agents of AGNY to solicit
and procure applications for the Contracts. This appointment is not deemed to
be exclusive in any manner and only extends to those jurisdictions where the
Contracts have been approved for sale. Selling Group Member is authorized to
collect the first purchase payment or premium (collectively "Premiums") on the
Contracts and, unless Selling Group Member and AGNY have
otherwise agreed, must remit such premiums in full dollar amount to AGNY.
Unless Selling Group Member and AGNY have otherwise agreed, applications shall
be taken only on preprinted application forms supplied by AGNY. All completed
applications and supporting documents are the sole property of AGNY and must
be promptly delivered to AGNY. All applications are subject to acceptance by
AGNY at its sole discretion.
(1) NEW PRODUCTS
AGNY and Distributor may propose, and AGNY may issue additional or successor
products, in which event Selling Group Member will be informed of the product
and its related concession schedule. If Selling Group Member does not agree to
distribute such product(s), it must notify Distributor in writing within 30
days of receipt of the Concession Schedule for such product(s). If Selling
Group Member does not indicate disapproval of the new product(s) or the terms
contained in the related Concession Schedule, Selling Group Member will be
deemed to have thereby agreed to distribute such product(s) and agreed to the
related Concession Schedule which shall be attached to and made a part of this
Agreement.
(2) SALES PERSONS
Associated Agency is authorized to recommend Sales Persons for appointment by
AGNY to solicit sales of the Contracts. Associated Agency warrants that all
such Sales Persons shall not commence solicitation nor aid, directly or
indirectly, in the solicitation of any application for any Contract until that
Sales Person is appropriately licensed for such product under applicable
insurance laws and is a currently NASD registered representative of Selling
Group Member. Associated Agency shall be responsible for all fees required to
obtain and/or maintain any licenses or registrations required by state or
federal law, for Associated Agency and its Sales Persons. From time to time,
AGNY will provide Associated Agency and Selling Group Member with information
regarding the jurisdictions in which AGNY is authorized to solicit
applications for the Contracts and any limitations on the availability of such
Contracts in any jurisdiction.
(3) SALES MATERIAL
Associated Agency and Selling Group Member shall not utilize in their efforts
to market the Contracts, any written brochure, prospectus, descriptive
literature, printed and published material, audio-visual material or standard
letters unless such material has been provided preprinted by AGNY or
Distributor or unless AGNY and Distributor have provided written approval for
the use of such literature. In accordance with the requirements of the laws of
the several states, Associated Agency and Selling Group Member shall maintain
complete records indicating the manner and extent of distribution of any such
solicitation material, shall make such records and files available to staff of
AGNY and/or Distributor in field inspections and shall make such material
available to personnel of state insurance departments, the NASD or other
regulatory agencies, including the SEC, which have regulatory authority over
AGNY or Distributor. Associated Agency and Selling Group Member jointly and
severally hold AGNY, Distributor and their affiliates harmless from any
liability arising from the use of any material which either
2
(a) has not been specifically approved in writing by AGNY, or (b) although
previously approved, has been disapproved by AGNY or Distributor in writing
for further use.
(4) PROSPECTUSES
Selling Group Member and Associated Agency warrant that solicitation for the
sale of SEC registered insurance products will be made by use of a currently
effective prospectus, that a prospectus will be delivered concurrently with
each sales presentation and that no statements shall be made to a client
superseding or controverting any statement made in the prospectus. AGNY and
Distributor shall furnish Selling Group Member and Associated Agency, at no
cost to Selling Group Member or Associated Agency, reasonable quantities of
prospectuses to aid in the solicitation of Contracts.
(5) SELLING GROUP MEMBER COMPLIANCE
Selling Group Member shall be solely responsible for the approval of
suitability determinations for the purchase of any Contract or the selection
of any investment option thereunder, in compliance with federal and state
securities laws and shall supervise Associated Agency and Sales Persons in
determining client suitability. Selling Group Member shall hold AGNY and
Distributor harmless from any financial claim resulting from improper
suitability decisions.
Selling Group Member will fully comply with the requirements of the NASD and
of the 1934 Act and such other applicable federal and state laws and will
establish rules, procedures, and supervisory and inspection techniques
necessary to diligently supervise the activities of its NASD registered
representatives who are state insurance licensed agents or solicitors of AGNY,
in connection with offers and sales of the Contracts. Such supervision shall
include providing, or arranging for, initial and periodic training in
knowledge of the Contracts. Upon request by Distributor or AGNY, Selling Group
Member will furnish appropriate records as are necessary to establish diligent
supervision and client suitability.
Selling Group Member shall fully cooperate in any insurance or securities
regulatory examination, investigation, or proceeding or any judicial
proceeding with respect to AGNY, Distributor, Selling Group Member, and
Associated Agency and their respective affiliates, agents and representatives
to the extent that such examination, investigation, or proceeding arises in
connection with the Contracts. Selling Group Member shall immediately notify
Distributor if its broker-dealer registration or the registration of any of
its Sales Persons is revoked, suspended, or terminated.
(6) ASSOCIATED AGENCY AND SALES PERSON COMPLIANCE
Associated Agency will fully comply with the requirements of state insurance
laws and applicable federal laws and will establish rules and procedures
necessary to diligently supervise the activities of the Sales Persons. Upon
request by Distributor or AGNY, Selling Group Member will furnish appropriate
records as are necessary to establish such supervision. Associated Agency and
Sales Persons shall be responsible for making suitability determinations for
the purchase of any Contract or the selection of any investment option
thereunder, in compliance with federal and state securities laws.
3
Associated Agency shall fully cooperate in any insurance or securities
regulatory examination, investigation, or proceeding or any judicial
proceeding with respect to AGNY, Distributor, Selling Group Member, and
Associated Agency and their respective affiliates, agents and representatives
to the extent that such examination, investigation, or proceeding arises in
connection with the Contracts. Associated Agency shall immediately notify
Distributor if its insurance license or the license of any of its Sales
Persons is revoked, suspended, or terminated.
(7) AGNY COMPLIANCE
AGNY represents that the prospectus(es) and registration statement(s) relating
to the Contracts contain no untrue statements of material fact or omission to
state a material fact, the omission of which makes any statement contained in
the prospectus and registration statement misleading. AGNY agrees to indemnify
Associated Agency and Selling Group Member from and against any claims,
liabilities and expenses which may be incurred by any of those parties under
the Securities Act of 1933, the 1934 Act, the Investment Company Act of 1940,
common law, or otherwise, and that arises out of a breach of this paragraph.
(8) COMPENSATION
AGNY will remit to Associated Agency compensation as set forth in Schedule B
hereto.
(9) CUSTOMER SERVICE, COMPLAINTS, AND INDEMNIFICATION
The parties agree that AGNY may contact by mail or otherwise, any client,
agent, account executive, or employee of Associated Agency or other individual
acting in a similar capacity if deemed appropriate by AGNY, in the course of
normal customer service for existing Contracts, in the investigation of
complaints, or as required by law. The parties agree to cooperate fully in the
investigation of any complaint.
Selling Group Member, Associated Agency, and Sales Persons agree to hold
harmless and indemnify Distributor and AGNY against any and all claims,
liabilities and expenses incurred by either Distributor or AGNY, and arising
out of or based upon any alleged or untrue statement of Selling Group Member,
Associated Agency or Sales Person other than statements contained in the
approved sales material for any Contract, or in the registration statement or
prospectus for any Contract.
(10) FIDELITY BOND
Associated Agency represents that all directors, officers, employees and Sales
Persons of Associated Agency licensed pursuant to this Agreement or who have
access to funds of AGNY are and will continue to be covered by a blanket
fidelity bond including coverage for larceny, embezzlement and other
defalcation, issued by a reputable bonding company. This bond shall be
maintained at Associated Agency's expense. Such bond shall be at least
equivalent to the minimal coverage required under the NASD Rules of Fair
Practice, and endorsed to extend coverage to life insurance and annuity
4
transactions. Associated Agency acknowledges that AGNY may require evidence
that such coverage is in force and Associated Agency shall promptly give
notice to AGNY of any notice of cancellation or change of coverage.
Associated Agency assigns any proceeds received from the fidelity bond company
to AGNY to the extent of AGNY's loss due to activities covered by the bond. If
there is any deficiency, Associated Agency will promptly pay AGNY that amount
on demand. Associated Agency indemnifies and holds harmless AGNY from any
deficiency and from the cost of collection.
(11) LIMITATIONS OF AUTHORITY
The Contract forms are the sole property of AGNY. No person other than AGNY
has the authority to make, alter or discharge any policy, Contract,
certificate, supplemental contract or form issued by AGNY. No party has the
right to waive any provision with respect to any Contract or policy; give or
offer to give, on behalf of AGNY, any tax or legal advice related to the
purchase of a Contract or policy; or make any settlement of any claim or bind
AGNY or any of its affiliates in any way. No person has the authority to enter
into any proceeding in a court of law or before a regulatory agency in the
name of or on behalf of AGNY.
(12) ARBITRATION
The parties agree that any controversy between or among them arising out of
their business or pursuant to this Agreement that cannot be settled by
agreement shall be taken to arbitration as set forth herein. Such arbitration
will be conducted according to the securities arbitration rules then in
effect, of the American Arbitration Association, NASD, or any registered
national securities exchange. Arbitration may be initiated by serving or
mailing a written notice. The notice must specify which rules will apply to
the arbitration. This specification will be binding on all parties.
The arbitrators shall render a written opinion, specifying the factual and
legal bases for the award, with a view to effecting the intent of this
Agreement. The written opinion shall be signed by a majority of the
arbitrators. In rendering the written opinion, the arbitrators shall determine
the rights and obligations of the parties according to the substantive and
procedural laws of the State of Illinois. Accordingly, the written opinion of
the arbitrators will be determined by the rule of law and not by equity. The
decision of the majority of the arbitrators shall be final and binding on the
parties and shall be enforced by the courts in Illinois.
(13) GENERAL PROVISIONS
(A) Waiver
Failure of any of the parties to promptly insist upon strict
compliance with any of the obligations of any other party under
this Agreement will not be deemed to constitute a waiver of the
right to enforce strict compliance.
5
(B) Independent Contractors
Distributor, Selling Group Member and Associated Agency are
independent contractors and not employees or subsidiaries of AGNY;
Selling Group Member and Associated Agency are not employees or
subsidiaries of Distributor.
(C) Independent Assignment
No assignment of this Agreement or of commissions or other
payments under this Agreement shall be valid without prior written
consent of AGNY and Distributor.
(D) Notice
Any notice pursuant to this Agreement may be given electronically
(other than vocally by telephone) or by mail, postage paid,
transmitted to the last address communicated by the receiving
party to the other parties to this Agreement.
(E) Severability
To the extent this Agreement may be in conflict with any
applicable law or regulation, this Agreement shall be construed in
a manner consistent with such law or regulation. The invalidity or
illegality of any provisions of this Agreement shall not be deemed
to affect the validity or legality of any other provision of this
Agreement.
(F) Amendment
This Agreement may be amended only in writing and signed by all
parties. No amendment will impair the right to receive commissions
as accrued with respect to Contracts issued and applications
procured prior to the amendment.
(G) Termination
This Agreement may be terminated by any party upon 30 days' prior
written notice. It may be terminated, for cause, by any party
immediately. Termination of this Agreement shall not impair the
right to receive commissions accrued with respect to applications
procured prior to the termination except as otherwise specifically
provided in Schedule B.
(H) ILLINOIS LAW
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF ILLINOIS.
(I) This Agreement replaces and supersedes any other agreement or
understanding related to the Contracts, between or among the
parties to this Agreement.
6
By signing below, the undersigned agree to have read and be bound by the terms
and conditions of this Agreement.
Date: ___________________
Selling Group Member: __________________________________________________
(BROKER-DEALER)
Address: __________________________________________________
__________________________________________________
Signature: __________________________________________________
Name & Title: __________________________________________________
Associated Agency: __________________________________________________
(PRIMARY INSURANCE AGENCY AFFILIATION)
Address: __________________________________________________
__________________________________________________
Signature: __________________________________________________
Name & Title: __________________________________________________
XXX XXXXXX AMERICAN CAPITAL DISTRIBUTORS, INC.
Signed By: __________________________________________________
Xxxx Xxxxxxxx, Senior Vice President
American General Life Insurance Company of New York
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxx, XX 00000
Signed By: __________________________________________________
Name and Title
7
Schedule A
AMERICAN GENERAL LIFE INSURANCE COMPANY OF NEW YORK
CONTRACTS COVERED BY THIS AGREEMENT
REGISTRATION FORMS SEPARATE
CONTRACT NAME AND NUMBERS ACCOUNT
Generations Variable Annuity Form N-4 E
Nos. 333-32387
811-3050
SCHEDULE B - GENERATIONS VARIABLE ANNUITY
CONTROL DATE - January 1, 1998
XXX XXXXXX AMERICAN CAPITAL DISTRIBUTORS, INC., AND
AMERICAN GENERAL LIFE INSURANCE COMPANY OF NEW YORK ("AGNY")
This Schedule B is attached to and made a part of the Selling Group Agreement
("Agreement") to which it is attached. It is subject to the terms and
conditions of the Agreement. In no event shall AGNY be liable for the payment
of any commission with respect to any solicitation made, in whole or in part,
by any person not appropriately licensed and appointed prior to the
commencement of such solicitation.
A commission will be paid to Associated Agency in the amount of 6% of the
aggregate Purchase Payments received and accepted by AGNY with a properly
completed application or as subsequent Purchase Payments under the Contracts
after the Contract is in force.
Commission Reductions:
(a) FREE LOOK. If a Contract is returned to AGNY pursuant to the "Free Look"
provision of the Contract, the full commission paid by AGNY will be
returned to AGNY or, in the absence of such return, charged back to
Associated Agency.
(b) REDUCTIONS FOR PURCHASE PAYMENTS AT AGE 81 AND LATER. A 50% commission
reduction shall apply with respect to Purchase Payments made on or after
the Annuitant's eighty-first birthday (regardless of whether the
Contract has a Contingent Annuitant).
(c) CHARGEBACKS FOR WITHDRAWALS. The following commission chargebacks shall
apply on full or partial withdrawals: (excluding withdrawals made
pursuant to the Systematic Withdrawal Program that are within the 10%
Free Withdrawal Privilege, as defined in the Contract):
o 100% for full or partial withdrawal of a Purchase Payment made
during the first six months following its receipt; and
o 50% for full or partial withdrawal of a Purchase Payment made
during the next six months following its receipt.
In no event shall any commission adjustment or chargeback be assessed
for termination of a Contract because of the death of the Annuitant or
Owner during the periods specified above.
(d) NO COMPENSATION PAYABLE. No compensation shall be payable:
o if AGNY, in its sole discretion, determines not to issue the
Contract applied for or rescinds the Contract;
o if AGNY refunds all or any portion of the Purchase Payments as a
result of a complaint or grievance; or
o if AGNY determines that a Purchase Payment made within 60 days
following a prior partial withdrawal, including systematic
withdrawals, is reasonably believed to be a reinvestment of part
or all of the prior partial withdrawal.
o if the Owner, at the time the Contract is purchased, is an
officer, director, or bona-fide employee of AGNY or any of its
company affiliates; provided, however, that the Owner shall have
completed, at the time the Contract is purchased, appropriate
documents supplied by AGNY which provide for a waiver of all
surrender charges.
Associated Agency agrees to promptly deliver Contracts and holds AGNY harmless
from and against any claim arising from market loss to the owner of the
Contract resulting from late delivery by Associated Agency.
Unless otherwise agreed, Associated Agency shall forward to AGNY the first
full payment collected by Associated Agency, without deduction for
compensation.
