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EXHIBIT (b)(3)
BROKER-DEALER SELLING AGREEMENT
AGREEMENT by and between Connecticut General Life Insurance Company, a
Connecticut corporation ("CG Life"), CIGNA Financial Advisors, Inc. ("CFA"), a
registered broker-dealer with the Securities and Exchange Commission ("SEC")
under the Securities Exchange Act of 1934, and a member of the National
Association of Securities Dealers, Inc. ("NASD"); and ________________________
_____________ ("Broker-Dealer"), also a registered
broker-dealer with the Securities and Exchange Commission under the Securities
Exchange Act of 1934 and a member of the NASD.
WITNESSETH:
WHEREAS, CG Life proposes to have Broker-Dealer's registered
representatives ("Representatives") who are also licensed to sell insurance in
appropriate jurisdictions solicit and sell certain variable Insurance Contracts
(the "Policies") more particularly described in this Agreement and which are
deemed to be securities under the Securities Act of 1933; and
WHEREAS, CG Life has appointed CFA as the Principal Distributor of the
Policies and has agreed with CFA that CFA shall be responsible for the training
and supervision of such Representatives, with respect to the solicitation and
offer or sale of any of the Policies, and also for the training and supervision
of any other "persons associated" with Broker-Dealer who are engaged directly
or indirectly therewith; and CFA proposes to delegate, to the extent legally
permitted, said supervisory duties to Broker-Dealer; and
WHEREAS, CG Life and CFA propose to have Broker-Dealer provide certain
administrative services as described within this Agreement to facilitate
solicitations for and sales of the Policies.
NOW THEREFORE, in consideration of the premises and the mutual
covenants hereinafter contained, the parties hereto agree as follows:
1. Appointment of Broker-Dealer. CG Life and CFA hereby appoint
Broker-Dealer to sell the Policies through its Representatives and to provide
certain administrative services to facilitate solicitations for and sales of
the Policies.
2. The Policies. The Policies issued by CG Life to which this
Agreement applies are listed in Exhibit A. Exhibit A may be amended from
time-to-time by CG Life. CG Life in its sole discretion and
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without notice to Broker-Dealer, may suspend sales of any Policies or may amend
any policies or contracts evidencing such Policies if, in CG Life's opinion,
such suspension or amendment is; (1) necessary for compliance with federal,
state, or local laws, regulations, or administrative order(s); or, (2)
necessary to prevent administrative or financial hardship to CG Life. In all
other situations, CG Life shall provide 30 days notice to Broker-Dealer prior
to suspending sales of any Policies or amending any policies or contracts
evidencing such Policies.
3. Securities Licensing. Broker-Dealer shall, at all times when
performing its functions under this agreement, be registered as a securities
broker with the SEC and NASD and licensed or registered as a securities broker-
dealer in the states and other local jurisdictions that require such licensing
or registration in connection with variable insurance contract sales activities
or the supervision of Representatives who perform such activities in the
respective location.
4. Insurance Licensing. Broker-Dealer shall, at all times when
performing its functions under this agreement, be validly licensed as an
insurance agency in the states and other local jurisdictions that require such
licensing or registration in connection with Broker-Dealer's variable
insurance contract sales activities, or maintain a validly licensed insurance
agency subsidiary in those states in which Broker-Dealer cannot obtain a
corporate agent's license.
5. Appointments. Broker-Dealer shall assist CG Life in the
appointment of Representatives under the applicable insurance laws to sell the
Policies. Broker-Dealer shall fulfill all requirements set forth in the General
Letter of Recommendation, attached as Exhibit B, in conjunction with the
submission of licensing/appointment papers for all applicants as insurance
agents of CG Life. All such licensing/appointment papers should be submitted to
CG Life or its duly appointed agent by Broker-Dealer. Notwithstanding such
submission, CG Life shall have sole discretion to appoint, refuse to appoint,
discontinue, or terminate the appointment of any Representative as an insurance
agent of CG Life.
6. Securing Applications. All applications for Policies shall be
made on application forms supplied by CG Life and all payments collected by
Broker-Dealer or any Representative of Broker-Dealer shall be remitted
promptly in full, together with such application forms and any other required
documentation, directly to CG Life at the address indicated on such application
or to such other address as CG Life may, from time-to-time, designate in
writing. Broker-Dealer shall review all such applications for completeness.
Checks or money orders in payment on any such Policy shall be drawn to the
order of "Connecticut General Life Insurance Company." All applications are
subject to acceptance or
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rejection by CG Life at its sole discretion. All records or information
obtained hereunder by Broker-Dealer shall not be disclosed or used except as
expressly authorized herein, and Broker-Dealer will keep such records and
information confidential, to be disclosed only as authorized or if expressly
required by federal or state regulatory authorities.
7. Money Received by Broker-Dealer. All money payable in
connection with any of the Policies, 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 Policies, is the property of CG Life and shall be
transmitted immediately in accordance with the administrative procedures of CG
Life without any deduction or offset for any reason, including by example, but
not limitation, any deduction or offset for compensation claimed by
Broker-Dealer.
8. Supervision of Representatives. Broker-Dealer shall have full
responsibility for the training and supervision of all Representatives
associated with Broker-Dealer who are engaged directly or indirectly in the
offer or sale of the Policies, and all such persons shall be subject to the
control of Broker-Dealer with respect to such persons' securities regulated
activities in connection with the Policies. Broker-Dealer will cause the
Representatives to be trained in the sale of the Policies; will cause such
Representatives to qualify under applicable federal and state laws to engage in
the sale of the Policies; will cause such Representatives to be registered
representatives of Broker- Dealer before such Representatives engage in the
solicitation of applications for the Policies; and will cause such
Representatives to limit solicitation of applications for the Policies to
jurisdictions where CG Life has authorized such solicitation. Broker-Dealer
shall cause such Representatives, qualifications to be certified to the
satisfaction of CFA and shall notify CFA if any Representative ceases to be a
registered representative of Broker-Dealer or ceases to maintain the proper
licensing required for the sale of the Policies. Each party shall be liable for
its own negligence and misconduct hereunder.
9. Representatives Insurance Compliance. Broker-Dealer, prior to
allowing its Representatives to solicit for sales or sell the Policies, shall
require such representatives to be validly insurance licensed, registered and
appointed by CG Life as a variable annuity agent in accordance with the
jurisdictional requirements of the place where the solicitations and sales take
place as well as the solicited person's or entity's place of residence.
10. Compliance with NASD. Rules of Fair Practice and Federal and
State Securities Laws. Broker-Dealer shall fully comply with the requirements
of the National Association of Securities Dealers, Inc. and
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of the Securities Exchange Act of 1934 and all other applicable federal or
state laws and will establish such rules and procedures as may be necessary to
cause diligent supervision of the securities activities of the Representatives.
Upon request by CFA, Broker-Dealer shall furnish such appropriate records as
may be necessary to establish such diligent supervision.
11. Notice of Representative's Non-compliance. In the event a
Representative fails or refuses to submit to supervision of Broker-Dealer or
otherwise fails to meet the rules and standards imposed by Broker-Dealer on its
Representatives, Broker-Dealer shall advise CFA of this fact and shall
immediately notify such Representative that he or she is no longer authorized
to sell the Policies and Broker-Dealer shall take whatever additional action
may be necessary to terminate the sales activities of such Representative
relating to the Policies.
12. Prospectuses, Sales Promotion Material and Advertising.
Broker-Dealer shall be provided, without any expense to Broker-Dealer, with
prospectuses relating to the Policies and such other material as CFA determines
to be necessary or desirable for use in connection with sales of the Policies.
No sales promotion materials or any advertising relating to the Policies shall
be used by Broker-Dealer unless the specific item has been approved in writing
by CFA.
In addition, Broker-Dealer shall not print, publish or distribute any
advertisement, circular or any document relating to CG Life unless such
advertisement, circular or document shall have been approved in writing by CG
Life; provided, however, that nothing herein shall prohibit Broker-Dealer from
advertising variable insurance in general or on a generic basis.
Upon termination of this Agreement, all prospectuses, sales promotion
material, advertising, circulars, and documents relating to the sales of the
Policies shall be promptly turned over to CG Life free from any claim or
retention of rights by the Broker-Dealer.
13. Right of Rejection. Broker-Dealer and/or CG Life each in their
sole discretion, may reject any applications or payments remitted by
Representative through the Broker-Dealer and may refund an applicant's payments
to the applicant. In the event such refunds are made and if Broker-Dealer has
received compensation based on an applicant's payment that is refunded,
Broker-Dealer shall promptly repay such compensation to CG Life. If repayment
is not promptly made, CG Life may at its sole option deduct any amounts due it
from Broker-Dealer from future commissions otherwise payable to Broker-Dealer.
This provision shall survive termination of this Agreement.
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14. Compensation.
(a) Sales concessions payable to Broker-Dealer in
connection with the Policies shall be paid by CG Life to the Broker-Dealer. CFA
will provide Broker-Dealer with a copy of CG Life's current Schedule of Sales
Concessions. These fees and commissions will be paid as a percentage of
premiums received in cash or other legal tender and accepted by CG Life on
applications obtained by the various Representatives of the Broker-Dealer.
Upon termination of this Agreement, all compensation to the Broker-Dealer
hereunder shall cease; however, Broker-Dealer shall continue to be liable for
any chargebacks or for any other amounts advanced by or otherwise due CG Life
hereunder.
(b) CG Life shall pay any sales concessions due
Broker-Dealer within fifteen (15) days after the end of the calendar month in
which premiums upon which such sales concessions are based are accepted by CG
Life.
(c) CG Life may, upon at least ten (10) days prior
written notice to Broker-Dealer, change the Schedule of Sales Concessions. Any
such change shall be by written amendment of the particular schedule or
schedules and shall apply to compensation due on applications received by CG
Life after the effective date of such notice.
(d) If Broker-Dealer or any Representative of
Broker-Dealer shall rebate or offer to rebate all or any part of a premium on a
Policy issued by CG Life in violation of applicable state insurance laws or
regulations, or if Broker-Dealer or any Representative of Broker-Dealer shall
withhold any premium on any Policy issued by CG Life, the same may be grounds
for termination of this Agreement by CG Life. If Broker-Dealer or any
Representative of Broker- Dealer shall at any time induce or endeavor to induce
any owner of a Policy to relinquish the Policy except under circumstances where
there is reasonable grounds for believing the policy, contract or certificate
is not suitable for such person, any and all compensation due Broker-Dealer
hereunder shall cease and terminate.
(e) Nothing in this Agreement shall be construed as
giving Broker-Dealer the right to incur daily indebtedness on behalf of CG
Life. Broker-Dealer hereby authorizes CG Life to set off liabilities of
Broker-Dealer to CG Life against any and all amounts otherwise payable to
Broker-Dealer by CG Life.
15. Policy Delivery. CG Life may, upon written request of
Broker-Dealer, transmit Policies to Broker-Dealer for delivery to Policyowners.
Broker-Dealer hereby agrees to deliver all such Policies to Policy owners within
Ten (10) days of their receipt by Broker-Dealer
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from CG Life. Broker-Dealer agrees to indemnify and hold-harmless CG Life for
any and all losses caused by Broker-Dealer's failure to perform the
undertakings described in this paragraph. Broker-Dealer hereby authorizes CG
Life to set off any amount it owes CG Life under this paragraph against any and
all amounts otherwise payable to Broker-Dealer by CG Life.
16. Waiver. Failure of any party to insist upon strict compliance
with any of the conditions of this Agreement shall not be construed as a
waiver of any of the conditions, but the same shall remain in full force and
effect. No waiver of any of the provisions of this Agreement shall be deemed,
or shall constitute a waiver of any other provisions, whether or not similar,
nor shall any waiver constitute a continuing waiver.
17. Independent Contractors. CG Life and CFA are independent
contractors with respect to Broker-Dealer and to Representatives.
18. Limitations. No party other than CG Life shall have the
authority on behalf of CG Life to make, alter, or discharge any policy,
contract, or certificate issued by CG Life, to waive any forfeiture or to
grant, permit, nor extend the time for making any payments nor to guarantee
earnings or rates, nor to alter the forms which CG Life may prescribe or
substitute other forms in place of those prescribed by CG Life, nor to enter
into any proceeding in a court of law or before a regulatory agency in the name
of or on behalf of CG Life.
19. Fidelity Bond. Broker-Dealer represents that all directors,
officers, employees and Representatives of Broker-Dealer who are licensed
pursuant to this Agreement as CG Life agents for state insurance law purposes
or who have access to funds of CG Life, including but not limited to funds
submitted with applications for the Policies 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 Broker-Dealer at Broker-Dealer's expense. Such bond
shall be, at least, of the form, type and amount required under the NASD Rules
of Fair Practice. CG Life may require evidence, satisfactory to it, that such
coverage is in force and Broker-Dealer shall give prompt written notice to CG
Life of any notice of cancellation or change of coverage.
Broker-Dealer assigns any proceeds received from the fidelity bonding
company to CG Life to the extent of CG Life's loss due to activities covered by
the bond. If there is any deficiency amount, whether due to a deductible or
otherwise, Broker-Dealer shall promptly pay CG Life such amount on demand and
Broker-Dealer hereby indemnifies and holds harmless CG Life from any such
deficiency and from the costs of collection thereof (including reasonable
attorneys' fees).
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20. Binding Effect. This Agreement shall be binding on and shall
inure to the benefit of the parties to it and their respective successors and
assigns; provided that Broker-Dealer may not assign this Agreement or any
rights or obligations hereunder without the prior written consent, of CG Life,
which consent shall not be unreasonably withheld.
21. Regulations. All parties agree to observe and comply with the
existing laws and rules or regulations of applicable local, state, or federal
regulatory authorities and with those which may be enacted or adopted during
the term of this Agreement regulating the business contemplated hereby in any
jurisdiction in which the business described herein is to be transacted, and to
provide information or reports with respect to their duties hereunder pursuant
to request by any regulatory authority having jurisdiction with respect
thereto.
22. Notices. All notices or communications shall be sent to the
addresses shown below or to such other address as the party may request by
giving written notice to the other parties:
Connecticut General Life Insurance Company
Xxxxxxxx, XX 00000
Attn: Annuity Marketing Department
S - 351
CIGNA Financial Advisors, Inc.
Xxxxxxxx, XX 00000
Broker-Dealer:
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23. Governing Law. This Agreement shall be construed in accordance
with and governed by the laws of the state of Connecticut.
24. Amendment of Agreement. CG Life reserves the right to amend
this Agreement at any time, and the submission of an application by
Broker-Dealer after notice of any such amendment has been sent to the other
parties shall constitute the other parties' agreement to any such amendment.
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25. Termination. This Agreement may be terminated, without cause,
by any party upon thirty (30) days prior written notice; and may be terminated,
for failure to perform satisfactorily or other cause, by any party immediately;
and shall be terminated if CFA or Broker-Dealer shall cease to be registered
Broker-Dealers under the Securities Exchange Act of 1934 and members of the
NASD.
CONNECTICUT GENERAL LIFE INSURANCE COMPANY
By:
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, Senior Vice President
CIGNA FINANCIAL ADVISORS, INC.
By:
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, Vice President
BROKER-DEALER
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Name of Firm
Name:
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(Please Type)
By:
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(Signature)
Dated:
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EXHIBIT A
"AIM/CIGNA HERITAGE VARIABLE ANNUITY" - FORM AN400
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EXHIBIT B
General Letter of Recommendation
BROKER-DEALER hereby certifies to Connecticut General Life Insurance
Company ("CG Life") that all the following requirements will be fulfilled in
conjunction with the submission of appointment papers for all applicants as
agents of CG Life submitted by BROKER-DEALER. BROKER-DEALER will, upon request,
forward proof of compliance with same to CG Life 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 appointment as a variable annuity agent
of CG Life. This inquiry and background investigation has included a
credit and criminal check on each applicant. Based upon our
investigation, we vouch for each applicant and certify that each
individual is trustworthy, competent and qualified to act as an agent
for CG Life to hold himself out in good faith to the general public.
2. We have on file a X-000, X-000, or U-4 form 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 NASD member firm, and each applicant is
presently registered as an NASD 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 and appointed by CG Life. No applicants have
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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 applied for is received.
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