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EXHIBIT 9(y)
[AMERICAN EXPRESS FINANCIAL ADVISORS LETTERHEAD]
September 27, 1997
Xx. Xxxxxx X. Xxxxxx
President
A I M Advisors, Inc.
00 Xxxxxxxx Xxxxx Xxxxx 0000
Xxxxxxx, XX 00000
Mr. X. Xxxx Xxxxxxxxxx
Senior Vice President
A I M Distributors, Inc.
00 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Dear Messrs. Xxxxxx and Xxxxxxxxxx:
This letter sets forth the agreement among IDS Insurance Company "IDS Life") and
IDS Life Insurance Company of New York ("IDS Life of New York") (IDS Life and
IDS Life of New York are collectively referred to as the "Insurance Companies"),
A I M Advisors, Inc. (the "Advisor") and A I M Distributors, Inc. (the
"Distributor") (the Advisor and the Distributor are collectively referred to as
"A I M") concerning certain administrative services.
1. Services and Expenses. The Advisor and the Distributor serve as the
investment advisor and principal underwriter, respectively, of the AIM
Variable Insurance Funds, Inc. ("AVIF"). IDS Life has entered into a
Participation Agreement with AVIF and the Distributor dated March 4, 1996
and amended on October 7, 1996 and IDS Life of New York has entered into a
Participation Agreement with AVIF and the Distributor dated October 7, 1996
(collectively, the "Participation Agreements"), as these agreements may be
amended from time to time, pursuant to which AVIF will make shares of the
AIM V. I. Growth and Income Fund (the "Fund") available to the Insurance
Companies to fund variable annuity contracts and variable life insurance
contracts (collectively, the "Contracts") through IDS Life Variable Account
10, IDS Life Variable Life Separate Account, IDS Life of New York Flexible
Portfolio Annuity Account and IDS Life of New York Account 8 (collectively,
the "Accounts").
The Participation Agreements provide that the Insurance Companies will, at
their expense, print and deliver to existing owners of the
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Contracts (the "Contractowners") the Fund prospectus and will deliver, at
their expense, the Fund's statement of additional information, shareholder
reports, proxy materials and other Contractowner communications. Further,
the Insurance Companies will incur various administrative expenses in
connection with the servicing of Contractowners who have allocated Contract
value to the Fund. The types of services that the Insurance Companies will
perform in connection with making the Fund available as an investment
option under the Contracts and with servicing the Contractowners are set
forth in Schedule A to this letter agreement.
2. Fees and Payments. The parties wish to allocate expenses in a manner that
is fair and equitable and consistent with the best interest of the
Contractowners. Further, the parties wish to establish a means for
allocating expenses that does not entail the expense and inconvenience of
separately identifying and accounting for each item of expense. In
consideration of the mutual benefits and promises contained in this letter
agreement, A I M agrees to pay the Insurance Companies a fee based on the
average daily net asset value of the shares of the Fund held in the
Accounts. The fee will be calculated based on the following schedule:
Fund Assets (millions) Annualized Fee Rate
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$0 but less than $50 0%
$50 but less than $150 0.15% of 1%
$150 but less than $250 0.20% of 1%
$250 and over 0.25% of 1%
For each calendar year the Annualized Fee Rate to be used in calculating
the fee will be the Annualized Fee Rate applicable to the highest average
assets invested in the Fund by the Accounts during such calendar year. The
fee will be calculated and paid quarterly. If during a calendar year the
Annualized Fee Rate increases, any fee previously paid for such calendar
year at a lower Annualized Fee Rate will be recalculated and the difference
will be paid. Annualized Fee Rates will be adjusted if the investment
management fee rate paid by the Fund to the Advisor changes. Annualized Fee
Rates will be increased or decreased by a percentage, the numerator of
which is the basis point change in the existing investment management fee
and the denominator of which is the existing investment management fee paid
prior to such change. A I M and the Insurance Companies agree to review
this fee arrangement if, at some future date, an AVIF fund is not promoted
in any of the Contracts or in a successor product. If; at some future date,
an AVIF fund is not included as an investment
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option, A I M may, at its option, terminate this letter agreement with
respect to such fund no longer included as an option.
As soon as practicable after the end of each calendar quarter, IDS Life
will send A I M at the address and in the manner set forth in the
Participation Agreements, a statement of the average daily value for the
preceding quarter of shares of such Fund as to which the fee is calculated,
together with a statement of the amount of such fee allocated to IDS Life
and IDS Life of New York. If the fee calculation made by the Insurance
Companies does not agree with the fee calculation made by A I M, the
parties will work together to promptly resolve any such difference.
A I M will pay IDS Life and IDS Life of New York each Company's prorata
share of such fee within thirty (30) days after the end of the calendar
quarter. Such payment will be by wire transfers unless the amount thereof
is less than $500. Wire transfers will be sent to the accounts and in the
manner specified by IDS Life and IDS Life of New York. Such wire transfers
will be separate from wire transfers of redemption proceeds and
distributions. Amounts less than $500 may be paid by check or by another
method acceptable to the parties.
For purposes of this Paragraph 2, the average daily value of the shares of
the Fund will be based on the net asset values reported by such Fund to the
Insurance Companies. No adjustments will be made to such net asset values
to correct errors in the net asset values so reported for any day unless
such error is corrected and the corrected net asset value per share is
reported to the Insurance Companies before 5:00 p.m. Central time on the
first Business Day after the day to which the error relates.
3. Nature of Payments. The parties to this letter agreement recognize and
agree that A I M's payments to the Insurance Companies relate to
administrative services only and do not constitute payment in any manner
for investment advisory or distribution services. The amount of the fee
payments made by A I M to the Insurance Companies pursuant to Paragraph 2
of this letter agreement will not be deemed to be conclusive with respect
to actual administrative expenses or savings of A I M.
4. Term. This letter agreement will remain in full force and effect for so
long as assets of the Fund are attributable to amounts invested by the
Insurance Companies under the Participation Agreements, unless terminated
in accordance with Paragraphs 2 or 5 of this letter agreement. In
accordance with Section 6.3 of the Participation
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Agreements, this Service Fee will continue to be due and payable with
respect to the shares attributable to Existing Contracts.
5. Termination. This letter agreement will be terminated upon mutual agreement
of the parties hereto in writing, or as required by law.
6. Amendment. This letter agreement may be amended only upon mutual agreement
of the parties hereto in writing.
7. Counterparts. This letter agreement may be executed in counterparts, each
of which will be deemed an original but all of which will together
constitute one and the same instrument.
8. Governing Law. This letter agreement will be construed and the provisions
hereof will be interpreted under and in accordance with the laws of the
State of Minnesota.
9. Entire Agreement. This letter agreement, together with the attached
Schedules or attachments, contains the entire agreement among the parties
and supersedes any prior or inconsistent agreements, understandings or
arrangements among the parties with respect to the subject matter of this
letter agreement, all of which are merged herein.
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If this letter agreement is consistent with your understanding of the matters we
discussed concerning administrative expense payments, kindly sign below and
return a signed copy to us.
Very truly yours,
IDS LIFE INSURANCE COMPANY ATTEST:
Signature: /s/ XXXXXXX X. XXXXX Signature: /s/ XXXXXXX X. XXXXXXXXXX
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By: Xxxxxxx X. Xxxxx By: Xxxxxxx X. Xxxxxxxxxx
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Title: President Title: Secretary
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IDS LIFE INSURANCE COMPANY ATTEST:
OF NEW YORK
Signature /s/ Xxxxxxx X. Xxxxx Signature: /s/ XXXXXXX X. XXXXXXXXXX
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By: Xxxxxxx X. Xxxxx By: Xxxxxxx X. Xxxxxxxxxx
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Title: Chairman of the Board and Title: Counsel
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President
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Acknowledged and Agreed:
A I M ADVISORS, INC. (For Both):
Signature: /s/ XXXXXX X. XXXXXX ATTEST:
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By: Xxxxxx X. Xxxxxx Signature: /s/ XXXXX X. XXXXXX
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Title: President By: Xxxxx X. Xxxxxx
Title: Assistant Secretary
A I M DISTRIBUTORS, INC.
Signature: /s/ X. X. XXXXXXXXXX
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By: X. Xxxx Xxxxxxxxxx
Title: Senior Vice President
Attachment: Schedule A
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Schedule A
Pursuant to the letter agreement to which this Schedule is attached, the
Insurance Companies will perform the following administrative services:
1. Maintain master accounts with the Fund and such accounts will be in
the name of IDS Life and IDS Life of New York (or their nominees) as the record
owners of shares on behalf of the Accounts.
2. Determine the net amount to be transmitted to the Accounts as a
result of redemptions of Fund shares based on Contractowners' redemption
requests. Disburse or credit to the Accounts all proceeds of redemptions of
shares of the Fund. Notify the Fund of the cash required to meet payments.
3. Determine the net amount to be transmitted to the Fund as a result
of purchases of Fund shares based on Contractowners' purchase payments and
transfers allocated to the Accounts investing in the Fund. Transmit net purchase
payment receipts to the Fund's custodian.
4. Distribute to Contractowners copies of the Fund's prospectus, proxy
materials, periodic fund reports to Contractowners and other materials that the
Fund is required by law or otherwise to provide to its shareholders.
5. Maintain and preserve all records as required by law to be
maintained and preserved in connection with providing administrative services
including, but not limited to, recording the issuance of Fund shares, recording
transfers and redemptions, and reconciling and balancing the Accounts.
6. Provide Contractowner services including, but not limited to,
financial advisors' advice with respect to inquiries related to the Fund (not
including information about performance or related to sales) and communicating
with Contractowners about Fund (and Accounts') performance.
7. Provide other administrative support for the Fund as mutually agreed
to by the Insurance Companies and the Fund and relieve the Fund of other usual
or incidental administrative services provided to individual Contractowners.
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