Exhibit 1.3(b)
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BROKER-DEALER AND GENERAL AGENT
SELLING AGREEMENT
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AGREEMENT, dated as of ___________ ___, 2002, by and among Liberty Life
Assurance Company of Boston ("Liberty Life"), Liberty Life Distributors LLC
("Distributor"), ___________________________________ ("Broker-Dealer") and
____________________________________ ("General Agent").
WHEREAS, Liberty Life, through certain of its separate accounts, issues certain
insurance products and group and individual insurance contracts/policies and
certificates participating therein, some of which may be deemed securities under
the Securities Act of 1933 ("1933 Act"); and
WHEREAS, Distributor and Broker-Dealer are both broker-dealers registered with
the Securities and Exchange Commission ("SEC") under the Securities Exchange Act
of 1934, as amended ("1934 Act"), and members of the National Association of
Securities Dealers, Inc.
(NASD);
WHEREAS, Liberty Life, on behalf of certain of its separate accounts, has
appointed Distributor as the principal underwriter and distributor of the
variable life insurance and annuity contracts (the "Contracts") specified in
Exhibit C;
WHEREAS Broker-Dealer is a broker/dealer engaged in the sale of securities and
other investment products; and
WHEREAS General Agent is an insurance agency licensed to sell variable life
insurance, and variable annuity contracts; and
WHEREAS, if General Agent and Broker-Dealer are the same person, the duties,
responsibilities, and privileges of General Agent under this Agreement shall be
undertaken by Broker-Dealer; and
NOW, THEREFORE, in consideration of the premises and of the mutual covenants and
promises herein contained, the parties hereto agree as follows:
1. PURPOSE
Broker-Dealer and General Agent desire to enter into an agreement with Liberty
Life and Distributor so as to have General Agent's sub-agents who are also
registered representatives of Broker-Dealer (the "Agents") appointed as agents
of Liberty Life for the purpose of selling the Contracts.
2. APPOINTMENT AND AUTHORIZATION
Distributor hereby authorizes Broker-Dealer to solicit sales of the Contracts.
Liberty Life hereby appoints and authorizes General Agent to solicit sales of
the Contracts. Broker-Dealer and General Agent accept such appointment and
authorization, and each agrees to use its best efforts to find purchasers of the
Contracts acceptable to Liberty Life. This appointment and authorization is
non-exclusive. Neither Broker-Dealer nor General Agent shall possess or exercise
any authority on behalf of the Distributor or Liberty Life other than the
authority expressly conferred by this Agreement.
3. LICENSING AND APPOINTMENT OF AGENTS
a. Broker-Dealer and General Agent are specifically authorized to designate
Agents proposed to be appointed as agents of Liberty Life to solicit
applications for the Contracts, to deliver the Contracts, and to collect
the first premium thereon in conformance with applicable state laws and
Liberty Life' rules and procedures. Broker-Dealer and General Agent shall
not propose an Agent for appointment unless such Agent is an "associated
person" of Broker-Dealer (as defined in Section 3(a)(8) of the 1934 Act),
duly registered as a representative of Broker-Dealer and duly licensed as
an insurance agent in the state(s) in which it is
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proposed that such Agent engage in solicitation of sales of the Contracts.
Broker-Dealer and General Agent together shall be responsible for such
Agents' continuing compliance with applicable securities registration
requirements and state insurance agent licensing laws.
b. Broker-Dealer and General Agent shall assist Liberty Life and Distributor
in the appointment of Agents under applicable insurance laws to sell the
Contracts. Broker-Dealer and General Agent shall comply with Liberty
Life's requirements, as Liberty Life in its sole discretion may establish
and change from time to time, in submitting licensing or appointment
documentation for Agents. All such documentation shall be submitted by
Broker-Dealer or General Agent to Liberty Life or its designated agent
licensing administrator. A copy of Liberty Life's current General Letter
of Recommendation, to be used in connection with the appointment of
Agents, is attached hereto as Exhibit A.
c. Liberty Life agrees to pay the initial appointment fee required under
relevant state insurance laws to appoint Agents as agents of Liberty Life
for the sale of Contracts. General Agent will be responsible for paying
all other state insurance licensing fees with respect to the Agents,
including transfer fees and termination fees. Broker-Dealer shall be
responsible for all fees, including registration and examination fees,
necessary to maintain the Agents' continuing compliance with applicable
securities registration requirements.
d. Liberty Life reserves the right to refuse to appoint any such designated
Agent or, once appointed, to terminate or refuse to renew such Agent's
appointment.
4. SUPERVISION OF REPRESENTATIVES AND AGENTS
a. Broker-Dealer shall be responsible for training and supervision of all
Agents and other persons associated with Broker-Dealer who are involved
directly or indirectly in the offer or sale of the Contracts and all such
persons shall be subject to the control of Broker-Dealer with respect to
such person's activities in connection with the sale of Contracts. General
Agent shall be responsible for training and supervision of all Agents who
are involved directly or indirectly in the offer or sale of the Contracts
and for such Agents' compliance with applicable state insurance laws.
Distributor and Liberty Life shall not have responsibility for the
training and supervision of any Agent. Broker-Dealer and General Agent
each agree to comply with Liberty Life's statement in support of the
concepts in the Principles and Code of Ethical Market Conduct of the
Insurance Marketplace Standards Association (the "IMSA Principles and
Code"), as such statement may be amended from time to time, and to engage
in active and fair competition as contemplated by the IMSA Principles and
Code. A copy of Liberty Life's current statement in support of the IMSA
Principles and Code is attached as Exhibit B.
b. Broker-Dealer is specifically charged with the responsibility of
supervising and reviewing its Agents' use of sales literature and
advertising and all other communications with the public in connection
with the Contracts. No sales solicitation, including the delivery of
supplemental sales literature or other such materials, shall occur, be
delivered to or used with a prospective purchaser unless accompanied or
preceded by the appropriate then current prospectus, the then current
prospectus for the underlying funds funding the Contract, and where
required by state insurance law, the then current statement of additional
information.
c. Broker-Dealer is specifically charged with the responsibility of
supervising its Agents' compliance with all applicable suitability
requirements under federal or state law or the regulations of the NASD.
Broker-Dealer is specifically charged with providing or arranging for
adequate training to ensure that Agents have thorough knowledge of each
Contract and the ability to make appropriate product presentations and
suitability determinations in compliance with applicable law.
Broker-Dealer, General Agent and the Agents shall not recommend the
purchase of a Contract to a prospective purchaser unless they have
reasonable grounds to believe that such purchase is suitable for the
prospective purchaser and is in accordance with applicable regulations of
any regulatory authority, including the SEC and the NASD. While not
limited to the following, a determination of suitability shall be based on
information concerning
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the prospective purchaser's insurance and investment objectives, risk
tolerance, need for liquidity, and financial and insurance situation and
needs.
d. Broker-Dealer shall execute any electronic or telephone orders only in
accordance with the current prospectus applicable to the Contracts and
agrees, that in consideration for the telephone transfer privileges,
Liberty Life will not be liable for any loss incurred as a result of
acting upon electronic or telephone instructions containing unauthorized,
incorrect or incomplete information received from Broker-Dealer or its
representatives.
e. Upon request by Liberty Life, Broker-Dealer and General Agent shall
furnish appropriate records or other documentation to evidence
Broker-Dealer's and General Agent's diligent supervision.
f. If an Agent performs any unauthorized transaction with respect to a
Contract, Broker-Dealer and General Agent shall bear sole responsibility,
shall notify Liberty Life, and shall act to terminate the sales activities
of such Agent relating to the Contracts.
g. If an Agent fails to meet Broker-Dealer's or General Agent's rules and
standards, Broker-Dealer or General Agent, as the case may be, shall
notify Liberty Life, and shall act to terminate the sales activities of
such Agent relating to the Contracts.
5. SALES PROMOTION MATERIAL AND ADVERTISING
a. During the term of this Agreement, Distributor will be responsible for
providing and approving promotional, sales and advertising material to be
used by Broker-Dealer and General Agent in connection with the offer and
sale of Contracts. Distributor will file such materials or will cause such
materials to be filed with the SEC and the NASD, and with any state
securities regulatory authorities, as required. Liberty Life and
Distributor reserve the right to require the recall of any material
approved by it at any time for any reason, and Broker-Dealer and General
Agent shall promptly comply with any such request and shall not use such
material thereafter.
b. Broker-Dealer, General Agent and Agents authorized to sell the Contracts
shall use only the effective current prospectuses, statements of
additional information ("SAIs") and other materials authorized by Liberty
Life for use in soliciting the sale of the Contracts. Distributor will
provide the Broker-Dealer and the General Agent, without charge, with as
many copies of the prospectuses for the Contract and the underlying
investment funds as may be reasonably requested. Upon receipt of updated
documentation, the Broker-Dealer and the General Agent will promptly
discard or destroy all copies of such material previously provided to
them, except as needed to maintain proper records. Liberty Life and
Distributor reserve the right to require the recall of any such material
at any time for any reason, and Broker-Dealer and General Agent shall
promptly comply with any such request and shall not use such material
thereafter.
c. Broker-Dealer and General Agent are not authorized, and may not authorize
anyone else, to give any information or to make any representation
concerning Liberty Life, the Contracts, the Variable Account or the
funding media for the Contracts other than those contained in the current
materials authorized for use by Liberty Life. Broker-Dealer, General
Agent, and their Agents may not modify or represent that they are
authorized to modify any such prospectus, SAI or other materials
authorized by Liberty Life for use in soliciting the sale of the
Contracts.
6. OBLIGATIONS OF BROKER-DEALER AND GENERAL AGENT
a. All solicitations for the Contracts will be made only by Agents who are
registered representatives of Broker-Dealer and duly licensed insurance
agents and appointed by Liberty Life. Continued solicitation for the
Contracts shall be contingent upon the continuing qualification of such
Agents by possession of the required licenses, appointments, and
registrations. Broker-Dealer and General Agent shall notify Distributor
immediately in writing if any Agent appointed by Liberty Life ceases to be
a
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registered representative of Broker-Dealer or ceases to be properly
licensed in any state. Solicitation may occur only in those states in
which Liberty Life is admitted to do business and in which the Contracts
have been approved for sale by the appropriate regulatory authority.
b. All applications for Contracts will be made on application forms supplied
by Liberty Life. Broker-Dealer and General Agent shall review all
applications for completeness and correctness, as well as compliance with
applicable suitability standards, including those specified above.
Broker-Dealer will promptly, but in no case later than the end of the next
business day following receipt by Broker-Dealer or an Agent, forward
completed applications to Liberty Life in accordance with Liberty Life's
administrative procedures. An appropriate principal of Broker-Dealer shall
approve each such application as to suitability before forwarding such
application to Liberty Life. Such applications shall be accompanied by any
premium payment received with such applications, without deduction for any
compensation, unless there has been mutual arrangement for net wire
transmissions between Distributor, Liberty Life, and Broker-Dealer.
Applications shall be sent to Liberty Life at the address shown on the
application or such other address as Liberty Life may specify from time to
time. Checks or money orders for the payment of premiums shall be drawn to
the order of "Liberty Life Assurance Company of Boston". Neither
Broker-Dealer nor General Agent has authority to deposit or endorse checks
payable to Liberty Life without the prior written approval of Liberty
Life. Liberty Life has the right to reject any application for a Contract
and return any premium payment made in connection with the sale of the
Contracts.
d. Contracts issued on accepted applications shall be delivered to the
Contract Owner according to procedures established by Liberty Life. If
Liberty Life forwards a Contract to Broker-Dealer for delivery,
Broker-Dealer shall cause each such Contract to be delivered to the
Contract Owner within four days of receipt. Broker-Dealer shall be liable
to Liberty Life for any loss incurred by Liberty Life (including
consequential damages and regulatory penalties) as a result of any delay
by Broker-Dealer or a Representative in delivering a Contract.
e. Broker-Dealer shall promptly pay any and all commissions and other
compensation due to its registered representatives in connection with the
sale of the Contracts.
f. Broker-Dealer and General Agent agree to comply with the established rules
and regulations of Liberty Life now in effect or which may be established
hereafter. Broker-Dealer and General Agent shall be responsible to
Distributor and Liberty Life for their and the Agents' acts and omissions.
g. Broker-Dealer and General Agent each agree to carry out their respective
sales and administrative activities and obligations under this Agreement
in continuous compliance with federal and state laws and regulations,
including those governing securities and insurance-related activities or
transactions, as applicable. Broker-Dealer and General Agent shall notify
Distributor and Liberty Life immediately in writing if Broker-Dealer
and/or General Agent fail to comply with any of the laws and regulations
applicable to either of them.
7. INDEPENDENT CONTRACTOR
Broker-Dealer, General Agent, and the Agents are performing the acts covered by
this Agreement in the capacity of independent contractors and not as an employee
of Liberty Life or Distributor. Broker-Dealer and General Agent shall be free
and independent to exercise their own judgment as to the persons from whom
insurance will be solicited as well as the time, place and manner of such
solicitation.
8. REPRESENTATIONS
a. Liberty Life, Distributor, Broker-Dealer and General Agent each represents
to one another that it and the officers signing below have full power and
authority to enter into this Agreement, and that this Agreement has been
duly and validly executed by it and constitutes a legal, valid and binding
agreement.
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b. Distributor represents to Broker-Dealer that Distributor is registered as
a broker-dealer with the SEC under the 1934 Act and under the state
securities laws of each jurisdiction in which such registration is
required for underwriting the Contracts, and that it is a member of the
NASD.
c. Broker-Dealer represents to Distributor that Broker-Dealer is, and at all
times when performing its functions and fulfilling its obligations under
this Agreement will be, registered with the SEC as a broker-dealer under
the 1934 Act and under the state securities laws of each jurisdiction in
which such registration is required for the sale of the Contracts, and a
member of the NASD. Broker-Dealer will notify Distributor in writing if
any such registration is terminated or suspended.
d. General Agent represents to Distributor and Liberty Life that General
Agent is, and at all times when performing its functions and fulfilling
its obligations under this Agreement, will be, a properly licensed
insurance agency in each jurisdiction in which such licensing is required
for the sale of the Contracts.
e. Liberty Life represents to Broker-Dealer that the Contracts, including any
variable account(s) supporting such Contracts, shall comply in all
material respects with the registration and other applicable requirements
of the 1933 Act and the Investment Company Act of 1940, and the rules and
regulations thereunder, including the terms of any order of the SEC with
respect thereto.
f. Liberty Life represents to Broker-Dealer that the prospectuses included in
Liberty Life's Registration Statement for the Contracts, and in
post-effective amendments thereto, and any supplements thereto, as filed
or to be filed with the SEC, as of their respective effective dates,
contain or will contain in all material respects all statements and
information which are required to be contained therein by the 1933 Act and
conform or will conform in all material respects to the requirements
thereof.
9. COMPENSATION
a. Broker-Dealer shall be paid compensation for the sale of Contracts as set
forth in the Contracts and Compensation Schedule attached as Exhibit C
hereto. Distributor may change such compensation prospectively as of a
specified date, provided such date is at least ten days after the date the
change is mailed to Broker-Dealer's last known address. Any such change
will apply only to Contracts issued pursuant to applications taken on or
after the effective date of the change. Distributor shall not be obligated
to pay such compensation with respect to a Contract until Distributor has
received its compensation with respect to such Contract from Liberty Life.
b. Compensation to the Agents for Contracts that they solicit and that are
issued by Liberty Life shall be governed by agreements between
Broker-Dealer and the Agents and payment thereof will be the
Broker-Dealer's exclusive responsibility. General Agent shall have no
interest in any compensation paid by Liberty Life to Distributor, now or
hereafter, in connection with the sale of any Contracts under this
Agreement.
c. Neither Broker-Dealer nor General Agent shall, directly or indirectly,
expend or contract for the expenditure of any funds of the Distributor or
Liberty Life. Broker-Dealer and General Agent shall each pay all expenses
incurred by each of them in the performance of this Agreement, unless
otherwise specifically provided for in this Agreement or Distributor shall
have agreed in advance in writing to share the cost of certain expenses.
10. NOTIFICATION OF CUSTOMER COMPLAINTS OR DISCIPLINARY PROCEEDINGS
a. Broker-Dealer and General Agent will promptly notify Distributor and
Liberty Life of any customer complaint or notice of any regulatory
investigation or proceeding received by Broker-Dealer, General Agent, or
their respective affiliates relating to the Distributor, Liberty Life, any
associated person of Distributor or Liberty Life, or the Contracts, or any
or threatened or filed arbitration action or civil litigation arising out
of solicitation of the Contracts.
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b. Broker-Dealer and General Agent shall cooperate with Distributor and
Liberty Life in investigating and responding to any such complaint,
regulatory investigation or proceeding, arbitration, or civil litigation,
and in any settlement or trial of any actions arising out of the conduct
of business under this Agreement.
c. Any response by Broker-Dealer or General Agent to an individual customer
complaint will be sent to Liberty Life and Distributor for approval not
less than five (5) business days prior to it being sent to the customer,
except that if a more prompt response is required, the proposed response
may be communicated by telephone, facsimile or in person.
11. INDEMNIFICATION
a. Broker-Dealer and General Agent, jointly and severally, shall indemnify
and hold harmless Liberty Life, Distributor, and their respective
affiliates, officers, directors, employees and agents against any and all
loss, claim, damage, liability or expense (including reasonable attorneys'
fees), joint or several, insofar as such loss, claim, damage, liability or
expense arises out of or is based upon any breach of this Agreement, any
applicable law or regulation, or any applicable rule of any
self-regulatory organization, by Broker-Dealer, General Agent, and/or any
of the Agents. This indemnification will be in addition to any liability
which the Broker-Dealer and General Agent may otherwise have.
b. Liberty Life and Distributor, jointly and severally, shall indemnify and
hold harmless Broker-Dealer, General Agent, and their respective
affiliates, officers, directors, employees and agents against any and all
loss, claim, damage, liability or expense (including reasonable attorneys'
fees), joint or several, insofar as such loss, claim, damage, liability or
expense arises out of or is based upon any breach of this Agreement, by
Liberty Life or the Distributor. This indemnification will be in addition
to any liability which Liberty Life and the Distributor may otherwise
have.
12. ASSOCIATED INSURANCE AGENCY
Broker-Dealer and General Agent represent that they are in compliance with the
terms and conditions of no-action letters issued by the staff of the SEC with
respect to non-registration as a broker-dealer of an insurance agency associated
with a registered broker-dealer. Broker-Dealer and General Agent shall notify
Distributor immediately in writing if Broker-Dealer and/or such Agency fail to
comply with any such terms and conditions and shall take such measures as may be
necessary to comply with any such terms and conditions. If General Agent is the
same person as Broker-Dealer, this Paragraph 12 does not apply, and
Broker-Dealer shall undertake all the duties, responsibilities and privileges
under this Agreement.
13. FIDELITY BOND COVERAGE
Broker-Dealer represents that it and its directors, officers, employees, and
registered representatives are and shall be covered by a blanket fidelity bond,
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 Conduct Rules. Distributor may
require evidence, satisfactory to it, that such coverage is in force, and
Broker-Dealer shall give prompt written notice to Distributor of any
cancellation or change of coverage. Broker-Dealer assigns any proceeds received
from the fidelity bonding company to Liberty Life to the extent of its loss due
to activities covered by the bond, and to Distributor to the extent of its loss
due to activities covered by the bond. Failure to secure and maintain same shall
be grounds for immediate termination of this Agreement for cause.
14. CONFIDENTIALITY
Each party to this Agreement shall maintain the confidentiality of any client
list or any other proprietary information that they may acquire in the
performance of this Agreement and shall not use such information for any purpose
unrelated to this Agreement without the prior written consent of the other
party.
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Each party to this Agreement further agrees to hold in confidence any and all
non-public personally identifiable information about consumers or customers for
the Policies (individually and collectively, "Consumer/Customer Information")
obtained from each other during the term of this Agreement. "Non-public
personally identifiable information" is financial or medical information of or
concerning a private person which either has been obtained from sources which
are not available to the general public or obtained from the person who is the
subject and which information is included in data files exchanged by the parties
hereto. For the purposes hereof the terms shall include data elements such as
names and addresses of individuals. All such information shall be maintained in
confidence and not further transferred nor used for any purposes other than as
permitted hereunder. The parties further agree not to disclose Consumer/Customer
Information to nonaffiliated third parties except as may be:
1. necessary to carry out the joint marketing or in the ordinary
course of business to carry out that joint marketing;
2. necessary to effect, administer, service or enforce products and
services obtained under this Agreement; or,
3. required or permitted by law.
Each party to this Agreement agrees to apply reasonable customary business
practices to protect and secure Consumer/Customer Information from unauthorized
release or distribution and to limit access and usage of such information to
those employees, officers, agents and representatives necessary to provide the
products and services under this Agreement. The parties agree that the
obligations contained in this provision shall survive the termination of this
Agreement.
General Agent and Broker-Dealer shall from time to time during regular business
hours and upon reasonable notice permit Liberty Life to perform security audits
of General Agent's and Broker-Dealer's facilities and equipment, and such other
audits as may be necessary to ensure General Agent's and Broker-Dealer's
compliance with the terms and conditions of this Agreement including but not
limited to all requirements related to the protection of Consumer/Customer
Information, which audits shall be performed at Liberty Life's sole expense. The
parties agree that the obligations contained in this provision shall survive the
termination of this Agreement.
15. TERMINATION
a. Any party may terminate this Agreement without cause upon thirty days
written notice to the other party at its last known business address.
b. This Agreement will terminate automatically if Broker-Dealer or General
Agent cease to have the requisite regulatory licenses.
c. This Agreement may be terminated by Liberty Life or Distributor for cause.
Termination for cause will become effective upon the mailing of a notice
of termination to Broker-Dealer's or General Agent's last known address,
if the reasons for the termination include conversion, fraud, embezzlement
or similar activity. Otherwise, a reasonable opportunity for cure will be
provided, and the termination will be effective at the end of the cure
period unless the grounds for termination have been corrected to Liberty
Life's and Distributor's satisfaction.
d. This Agreement may be terminated immediately for cause upon an event of
default. Such termination shall be deemed to occur as of the date
immediately preceding the event of default. An "event of default" shall
occur when (i) the first of Broker-Dealer or General Agent files for
bankruptcy, or financial or corporate reorganization under federal or
state insolvency law, resulting in an impairment of such person's ability
to perform the services contemplated herein; or (ii) applicable laws or
regulations prohibit Broker-Dealer or General Agent from continued
marketing of the Contracts.
e. Failure of Liberty Life and/or Distributor to terminate this Agreement
upon knowledge of a cause shall not constitute a waiver of the right to
terminate at a later time for such cause. If this Agreement is terminated
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for cause with no opportunity to cure as described above, all rights to
compensation which might otherwise be payable under this Agreement shall
cease and Broker-Dealer's right, title and interest in and to such
commissions and compensation shall be forever barred. If the parties
litigate this provision of the Agreement, the unsuccessful litigant shall
pay to the successful litigant all costs and expenses, including
attorneys' fees and court costs, incurred by the successful litigant at
trial and on appeal.
f. No provision of this Agreement shall continue in force after any
termination, other than Paragraphs 5, 10, 11, 14, 16, and 18.
16. ASSIGNMENT
This Agreement, or any compensation due hereunder, may not be assigned by any
party except by mutual consent of all other parties.
17. AMENDMENTS
Except as stated in Paragraph 9.a., no amendment to this Agreement will be
effective unless it is in writing and signed by all the parties hereto.
18. BOOKS AND RECORDS
a. General Agent shall maintain such books and records concerning the
activities of the Agents as may be required by the appropriate insurance
regulatory agencies that have jurisdiction and that may be reasonably
required by Distributor to reflect adequately the Contracts business
processed through General Agent. Broker-Dealer represents that it
maintains and shall maintain appropriate books and records concerning the
activities of the Agents as are required by the SEC, the NASD and other
agencies having jurisdiction and that may be reasonably required by
Distributor to reflect adequately the Contracts business processed through
Broker-Dealer. General Agent and Broker-Dealer shall make such books and
records available to Distributor and/or Liberty Life at any reasonable
time upon written request by Distributor or Liberty Life.
b. The parties shall promptly furnish each other any reports and information
that another party may reasonably request for the purpose of meeting its
reporting and recordkeeping requirements under the insurance laws of any
state, under any applicable federal or state securities laws, rules or
regulations, or under the rules of the NASD.
19. NOTICE
a. In the event of sale, transfer or assignment or a controlling interest in
Broker-Dealer or General Agent, notice shall be provided in writing to
Distributor no less than thirty days prior to the closing date.
b. All notices to Liberty Life and Distributor under this Agreement shall
be given in writing and addressed as follows:
Liberty Life Distributors LLC Liberty Life Assurance Company of Boston
000 Xxxxxxx Xxx 000 Xxxxxxxx Xxxxxx
Xxxxx, Xxx Xxxxxxxxx 00000 Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: President Attention: Xxxx Xxxxxxxx, Executive Vice President
Copy to:
Liberty Life Assurance Company of Boston
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxx X. X'Xxxxxxx, Vice President and Assistant General Counsel
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All notices to Broker-Dealer and General Agent shall be mailed to their
respective address shown on the signature page or to such other person as
they may designate in writing. All notices shall be either hand delivered or
transmitted by certified United States mail, return receipt requested, and
shall be effective upon delivery.
20. SEVERABILITY
If any provision of this Agreement shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement shall not
be affected thereby.
21. CONSTRUCTION
This Agreement shall be subject to the provisions of the 1934 Act and, to the
extent applicable, the 1940 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.
22. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the laws of
the Commonwealth of Massachusetts.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.
BROKER-DEALER GENERAL AGENT
________________________________ _________________________________
Name Name
________________________________ _________________________________
Xxxxxx Xxxxxxx Xxxxxx Xxxxxxx
________________________________ _________________________________
City/State/Zip City/State/Zip
By:_____________________________ By:______________________________
Signature Signature
Name & Title: __________________ Name & Title:____________________
(Please print) (Please print)
__________________ ____________________
LIBERTY LIFE ASSURANCE COMPANY LIBERTY LIFE DISTRIBUTORS LLC
OF BOSTON
By:_____________________________ By:______________________________
Signature Signature
Name & Title: __________________ Name & Title:____________________
(Please print) (Please print)
__________________ ____________________
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EXHIBIT A
GENERAL LETTER OF RECOMMENDATION
The General Agent hereby certifies to Liberty Life that all the following
requirements will be fulfilled in conjunction with the submission by General
Agent of appointment papers for all applicants to become agents of Liberty Life
("Applicants"). The General Agent will, upon request, forward proof of
compliance with same to Liberty Life in a timely manner.
1. We have on file the appropriate state insurance department licensing form
and 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 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, and all the findings of all investigative information
is favorable.
2. 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
contract agent of Liberty 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 Liberty Life and
hold himself out in good faith to the general public.
3. We certify that all educational requirements have been met for the
specific state in which each Applicant is requesting a license and that all such
persons have fulfilled the appropriate examination, education and training
requirements.
4. We hereby warrant that the Applicant is not applying for a license with
Liberty Life in order to place insurance chiefly or solely on his or her life or
property or on the lives, property or liability of relatives or associates.
5. 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.
6. We will not permit any Applicant to transact insurance as an agent until
duly licensed and appointed by Liberty Life. 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.
EXHIBIT B
STATEMENT IN SUPPORT OF IMSA PRINCIPLES AND CODE
INSURANCE MARKETPLACE STANDARDS ASSOCIATION
OUR COMMITMENT TO ETHICAL MARKETING PRACTICES
Liberty Life Assurance Company of Boston has earned charter membership in IMSA,
a new organization dedicated to maintaining the highest standards of ethics in
the sale and marketing of individual life insurance and annuity products. Only
companies that adopt the IMSA Principles and pass a rigorous assessment of their
market practices are granted membership.
LIBERTY LIFE SUBSCRIBES TO THE FOLLOWING SIX
IMSA PRINCIPLES OF ETHICAL MARKET CONDUCT:
1. To conduct business according to high standards of honesty and fairness
and to render that service to its customers which, in the same
circumstances, it would apply to or demand for itself.
2. To provide competent and customer-focused sales and service.
3. To engage in active and fair competition.
4. To provide advertising and sales materials that are clear as to purpose
and honest and fair as to content.
5. To provide a fair and expeditious handling of customer complaints and
disputes.
6. To maintain a system of supervision and review that is reasonably designed
to achieve compliance with these principles of ethical market conduct.
EXHIBIT C
CONTRACTS AND COMPENSATION SCHEDULE
This schedule is attached to and made a part of the most current executed
Broker-Dealer and General Agent Selling Agreement (the "Agreement") between and
among Liberty Life Assurance Company of Boston ("Liberty Life"), Liberty Life
Distributors LLC ("Distributor"), ________________________________________
("Broker-Dealer") and ______________________________________ ("General Agent").
The compensation for the variable life insurance and annuity products (the
Contracts) referred to in the Agreement is as follows:
1. NEW BUSINESS COMMISSION AND EXPENSE REIMBURSEMENT ALLOCATION:
BROKER-DEALER shall receive commissions and expense reimbursement allowance,
as provided below, based on the new annualized premium received on Contract
applications written through Broker-Dealer after receipt by Liberty Life of
the premium payment and issuance of the Contract.
A. FOR SINGLE PAYMENT VARIABLE UNIVERSAL LIFE INSURANCE CONTRACTS:
BROKER-DEALER shall receive commissions of 7% of the Initial Payment for
each Contract for which Broker-Dealer is the broker-of-record.
B. FOR FLEXIBLE PAYMENT VARIABLE UNIVERSAL LIFE INSURANCE CONTRACTS:
BROKER-DEALER shall receive
o Commissions at the rate of 50% of the first year's annualized minimum
monthly premium as defined in the Contract after receipt by Liberty
Life of the first premium payment and issuance of the Contract and 4%
of premium payments exceeding the first year's annualized monthly
minimum premium received in a policy year.
o Override at the rate of 5% of the first year's annualized premium
after receipt by Liberty Life of the first premium payment and
issuance of a Contract.
o Expense Reimbursement Allowance at the rate of 31% of each premium
payment received by Liberty Life, as it is received, for the first
policy year.
o Renewal Commissions for year 2 and thereafter for the life of the
Contract of 3% of each premium payment, as it is received.
However, no compensation shall be paid on Payment received from a Contract Owner
when an existing life insurance or annuity contract issued by Liberty Life on
the same life has lapsed, been terminated or surrendered, been continued on a
nonforfeiture option, or been changed, modified or converted in any manner
within six months of the date of the application for the new Contract or twelve
months after the issue date of the new Contract, except to the extent that the
first years annualized premium for the new Contract exceeds the first years
annualized premium from the existing contract.
2. RETURN OF COMPENSATION IN SPECIFIED CIRCUMSTANCES
The following rules regarding chargebacks shall apply in connection with the
offer and sale of Contracts under this Agreement:
a) In the event that:
i. a payment is returned because Liberty Life rejects the
application for the Contract under which such Payment has been paid
or because the Payment, or the related application, is not timely
received by Liberty Life as required herein, or a refund is made
because a purchaser exercises his or her free look right under a
Contract; or
ii. within the first thirteen months after the date on which a
Contract was issued, the purchaser surrenders the Contract, or
otherwise rescinds the Contract, or the Contract lapses; then, in
any such event, Broker-Dealer shall not be entitled to any
compensation with respect to such Contract, and any and all
compensation previously received by Broker-Dealer based on all
Payments paid into the Contract shall be repaid to Distributor, and
Broker-Dealer shall pay any loss incurred as a result of a Payment
being returned which was not timely received or for which an
application was not timely received by Liberty Life.
b) If and to the extent that any loans or partial withdrawals are made
with respect to any Contract during the first year after issuance,
the compensation due to Broker-Dealer shall be recomputed as though
the amount of the loan or partial withdrawal had never been paid as
a Payment.
c) If and to the extent that a Contract is exchanged for another
contract during the first policy year of the Contract, the
compensation due to Broker-Dealer shall be recomputed as though the
Contract had never been issued.
Distributor shall have the right to collect from Broker-Dealer or to withhold
from future payments of compensation due to Broker-Dealer under this Agreement
an amount equal to any reduction in compensation effected by this Exhibit C, to
the extent permitted by applicable law; provided, however, that this option on
the part of Distributor shall not prevent both Distributor and Broker-Dealer or
either of them from pursuing any other means or remedies available to them to
recover such compensation. Distributor agrees to notify Broker-Dealer and
General Agent within thirty days after it receives notice from Liberty Life of
any premium refund or a commission charge back. For purposes of this Exhibit C,
the payment of a death benefit pursuant to the terms of a Contract shall not be
deemed a surrender or rescission by a purchaser.
