ADMINISTRATIVE and MARKETING SERVICES AGREEMENT
Exhibit 10.2
ADMINISTRATIVE and MARKETING SERVICES AGREEMENT
This Agreement is entered into effective the 1st day of January, 2012 (“Effective Date”) by and between Nationwide Life Insurance Company and Nationwide Life and Annuity Insurance Company (collectively referred to hereinafter “NWL”) and Xxxxxxx & Xxxx, Inc. (hereinafter “Xxxxxxx & Xxxx”), on its own behalf and on behalf of its affiliated corporate insurance agencies.
WHEREAS, NWL agrees to develop, issue and administer certain annuity contracts, life policies and qualified employer-sponsored retirement plan trust products (identified in Appendix A attached hereto and collectively, referred to hereinafter as (“the Products”); and
WHEREAS, Xxxxxxx & Xxxx agrees to support the marketing, sale and servicing of such Products as listed in Appendix A attached hereto.
NOW, THEREFORE, in consideration of the promises, covenants and undertakings contemplated herein, NWL and Xxxxxxx & Xxxx agree as follows:
APPOINTMENT OF PRODUCT DEVELOPER
NWL is hereby appointed Product Developer for the products referenced above and described in the attached Appendix A. The role of Product Developer means NWL shall develop and support the products for distribution exclusively by Xxxxxxx & Xxxx and perform those functions enumerated in the attached Exhibit A.
RELATIONSHIP AND WHOLESALER SUPPORT
NWL will dedicate one person to manage the relationship with Xxxxxxx & Xxxx during the term of the Exclusivity provision below. NWL will provide wholesaling and service support for the Products that is reasonably satisfactory to Xxxxxxx & Xxxx. Nationwide will sponsor and participate in periodic meetings of Xxxxxxx & Reed’s sales representatives, as requested from time to time by Xxxxxxx & Xxxx during the term of the Exclusivity period below.
EXCLUSIVITY
Except as otherwise provided herein, NWL will be the exclusive provider to Xxxxxxx & Xxxx of the product types listed in the Appendix A, attached hereto, for the term of this agreement as specified in the “Term of Agreement” section, infra. During this period, Xxxxxxx & Xxxx will not offer any other competitor’s products to its clients, except as otherwise provided herein. Notwithstanding the foregoing, this exclusivity provision will not apply to:
(a) clients transferring similar investment products from one investment advisor and/or broker-dealer to Xxxxxxx & Xxxx,
(b) additions made by Xxxxxxx & Xxxx clients to products owned prior to the commencement of distribution of like NWL products by Xxxxxxx & Xxxx pursuant to the general agent selling agreement currently in force between the Parties, as amended (“General Agent Agreement”),
(c) sales made by new Xxxxxxx & Xxxx financial advisors to prospects to which non-NWL products were offered prior to their engagement by Xxxxxxx & Xxxx,
(d) products offered by Securian/Minnesota Life Insurance Company and its affiliates,
(e) products offered by one (1) additional insurance company manufacturer to be identified by Xxxxxxx & Xxxx following the effective date of this Agreement, and
(f) exception sales of products offered by other insurance companies where the sale of a NWL product is rejected by Xxxxxxx & Xxxx clients due to product features or other reasons.
Xxxxxxx & Xxxx will make a good faith effort to monitor and report these exceptions to ensure that the principle of overall exclusivity is maintained.
NWL will provide sufficient resources to fulfill mutually agreed upon product feature, support and service level standards. It is understood and agreed that in addition to the provisions of the “Termination” provisions of this Agreement, infra. Xxxxxxx & Xxxx may terminate this Agreement if NWL fails in a material and substantial manner to meet the agreed upon support and service standards, after being provided with written notice specifying the alleged deficiencies and a reasonable period to cure same.
Xxxxxxx & Xxxx agrees that, at all times during the term of this Agreement, both the level of marketing and promotional services and the level of product and other administrative support services provided by Xxxxxxx & Xxxx to NWL will be at least equal to the level of such services provided in each case by Xxxxxxx & Xxxx to Minnesota Life and its affiliated companies (“Minnesota Life Companies”), and any other co-exclusive provider permitted under this Agreement (“Co-Exclusive Provider”). Xxxxxxx & Xxxx shall provide NWL with such relevant information as NWL may reasonably request about the nature, scope and frequency of all marketing, promotional and administrative services provided by Xxxxxxx & Xxxx to the Minnesota Life Companies and/or the Co-Exclusive Provider, and shall keep NWL reasonably informed about changes in the levels of such services.
CHANGES OF CONTROL
Changes of control involving any Party shall be governed by the provisions of the “Assignment” section, infra, of this Agreement. In addition, the following provisions shall apply to changes of control involving an unaffiliated organization:
(a) In the event that NWL experiences a change of control involving an unaffiliated organization, Xxxxxxx & Xxxx may elect to terminate this Agreement upon proper notice in accordance with the provisions of the “Termination” section of this agreement,
infra.
(b) In the event that Xxxxxxx & Xxxx experiences a change of control involving an unaffiliated organization and such organization desires for Xxxxxxx & Xxxx to sell its products or the products of one or more of its affiliates (“Acquirer Products”), the Acquirer Products may be considered to be added as a new exception (g) to this “Exclusivity” section, supra, specifically subject to renegotiated compensation, evidenced by a duly executed amendment, under the “Compensation” Section and provisions of this Agreement, infra. It is understood and agreed that if such a change of control should occur, and Xxxxxxx & Xxxx commences offering Acquirer Products, Xxxxxxx & Xxxx shall use its best efforts to ensure that NWL’s products receive and maintain an equitable competitive position in Xxxxxxx & Reed’s distribution system throughout the term of this Agreement period. For purposes of this provision, an “equitable competitive position” shall mean the opportunity for NWL to provide products with substantially similar costs, features, total compensation, fund diversification and positioning as the Acquirer Products.
SALES MATERIAL AND OTHER DOCUMENTS
Xxxxxxx & Xxxx shall not print, publish or distribute any advertisement, circular or any document relating to the products distributed pursuant to this Agreement or relating to NWL unless such advertisement, circular or document shall have been approved in writing by NWL, which approval shall not be unreasonably withheld and shall be given as promptly as possible. Neither NWL nor any of its affiliates shall print, publish or distribute any advertisement, circular or any document relating to the products distributed pursuant to this Agreement or relating to Xxxxxxx & Xxxx unless such advertisement, circular or document shall have been approved in writing by Xxxxxxx & Xxxx, which approval shall not be unreasonably withheld and shall be given as promptly as possible. However, nothing herein shall prohibit any person from advertising the products in general or on a generic basis.
SALES MATERIAL
1. NWL shall develop and prepare promotional material to be used in the distribution of the products, in consultation with Xxxxxxx & Xxxx.
2. NWL is responsible for the printing of such promotional material.
3. NWL is responsible for the expense of providing such promotional material.
4. NWL is responsible for approval of promotional material by state insurance regulators, where required.
5. Xxxxxxx & Xxxx is responsible for the filing of all appropriate promotional material with federal securities regulators.
6. All promotional material relating to the products shall be subject to prior approval by Xxxxxxx & Xxxx.
7. Xxxxxxx & Xxxx and NWL agree to abide by the Advertising and Sales Promotion Material Guidelines, attached hereto as EXHIBIT B, and incorporated herein by reference.
PRODUCT INFORMATION AND PROSPECTUSES
Xxxxxxx & Xxxx shall promptly inform NWL via written notice of any and all changes to mutual funds managed by Xxxxxxx & Xxxx and/or its affiliates related to changes in investment management strategies, fund objectives, portfolio management and/or any similar changes which may affect the investment characteristics, orientation, style or quality of any fund. NWL and Xxxxxxx & Xxxx hereby acknowledge that NWL shall make adjustments to products as it deems appropriate or necessary in light of any fund changes or otherwise as appropriate.
NWL shall support the retention of Xxxxxxx & Xxxx Investment Management Company as the advisor to mutual funds included as investment options offered under certain Nationwide separate accounts, as reasonable within the bounds of its duties under applicable laws and regulations, unless Xxxxxxx & Xxxx experiences a change in control involving an unaffiliated organization or materially violates the Exclusivity provision described herein or otherwise breaches this Agreement.
NWL represents that the Contracts and Policies for the products, (collectively referred to hereinafter as “the Contracts”), are or shall be properly registered under the 1933 Act and/or the 1940 Act and agrees that the registration statements under the 1933 Act and/or the 1940 Act for the Contracts will remain in full force and effect for the duration of this Agreement. If any state should amend its current securities laws to require registration of insurance contracts, then NWL will comply with the amended state law.
Combined Product and Underlying Sub Account Prospectus- NWL shall be responsible for producing the product prospectuses and the underlying sub account prospectuses, which may be produced as a combined document as may be agreed upon by the Parties, for its use in sales kits and in the contract package for newly issued contracts. NWL shall supply Xxxxxxx & Xxxx with sufficient quantities of printed combined prospectuses for its use in marketing the products. Xxxxxxx & Xxxx shall be responsible for providing a camera-ready copy of the underlying sub account prospectuses, as amended from time to time, to NWL for its use in producing the product prospectuses. The total printing expense for the combined document shall be borne by NWL. Any annual product prospectus mailing required to be distributed to policyholders by applicable law will not be produced as a combined document.
Product Prospectus- NWL shall be responsible for producing the product prospectuses for the annual product prospectus delivery required to be distributed to policyholders by applicable law. The total production expense and delivery expense (postage) for
the product prospectuses will be borne by NWL.
Underlying Sub Account Prospectus- Xxxxxxx & Xxxx will produce the underlying sub account prospectuses, and shall bear the total production expenses relating to any annual underlying sub account prospectus delivery required to be distributed to policyholders (Shareholders) by applicable law. NWL, within ten (10) business days of a request by Xxxxxxx & Xxxx, shall send to Xxxxxxx & Xxxx an electronic file in a format reasonably acceptable to Xxxxxxx & Xxxx containing the names and mailing addresses of then-current policyholders to enable it to deliver the underlying sub account prospectuses. NWL will reimburse Xxxxxxx & Xxxx for the postage expense of the annual underlying sub account prospectus delivery required to be distributed to policyholders (Shareholders) by applicable law. Xxxxxxx & Xxxx and NWL shall share equally that portion of total production expenses relating to the underlying sub account prospectuses produced for soliciting prospective policyholders (Marketing).
Supplements to Underlying Sub Account Prospectus- Xxxxxxx & Xxxx is responsible for the production and delivery of any supplements to underlying sub account prospectuses required to be distributed to policyholders (Shareholders) by applicable law. NWL, within ten (10) business days of a request by Xxxxxxx & Xxxx, shall send to Xxxxxxx & Xxxx an electronic file in a format reasonably acceptable to Xxxxxxx & Xxxx containing the names and mailing addresses of then-current policyholders to enable it to deliver the underlying sub account prospectus supplement. Xxxxxxx & Xxxx shall be responsible for providing NWL a camera-ready copy of the supplement to the underlying sub account prospectuses to update the product and underlying sub account prospectus. NWL shall reimburse Xxxxxxx & Xxxx for associated delivery expense of any supplements to underlying sub account prospectuses.
Underlying Sub Account Semiannual and Annual Reports- Xxxxxxx & Xxxx will produce and bear the production expense for the underlying sub account semiannual and annual reports distributed to policyholders (Shareholders) and NWL will reimburse Xxxxxxx & Xxxx for the delivery expense of the underlying sub account semiannual and annual reports distributed to policyholders (Shareholders).
Upon reasonable request, NWL will provide Xxxxxxx & Xxxx copies of all registration statements, prospectuses, statements of additional information, reports, sales literature and other promotional materials, applications of exemption, requests for no action letters, and all amendments to any of the above, that relate to the Contracts or a Variable Account.
Upon request, NWL will provide Xxxxxxx & Xxxx with a report, in a format reasonably acceptable to Xxxxxxx & Xxxx, listing the total number of Contract policyholders who have selected each of the sub accounts.
NWL, during the term of this Agreement, will immediately notify Xxxxxxx & Xxxx of the following: (i) When the Registration Statement for any Contract has become effective or when any amendment with respect to the Registration Statement thereafter becomes effective; (ii) Any request by the SEC for any amendments or supplements to
the Registration Statement for any Contract or any request for additional information that must be provided by Xxxxxxx & Xxxx; and (iii) The issuance by the SEC of any stop order with respect to the Registration Statement for any Contact or any amendments thereto or the initiation of any proceedings for that purpose or for any other purpose relating to the registration and/or offering of the Contracts.
CONTRACTS, APPLICATIONS, SUITABILITY AND RELATED DOCUMENTATION
NWL is responsible for the design of product applications, contracts and related service forms in consultation with Xxxxxxx & Xxxx;
NWL is responsible for the production of adequate supplies of product applications, contracts and related service forms;
NWL will, during the term of this Agreement, immediately notify Xxxxxxx & Xxxx of the following: (i) The states or jurisdictions where approval of the product contract forms is required under applicable insurance laws and regulations, and whether and when such approvals have been obtained; and (ii) The states or jurisdictions where any product contract form may not lawfully be sold.
NWL is responsible for the design and production of service forms which the parties jointly determine to be necessary.
NWL is responsible for supplying adequate quantities of service forms and will arrange for delivery of such forms in bulk to any location designated by Xxxxxxx & Xxxx.
Upon reasonable request by NWL, Xxxxxxx & Xxxx agrees to provide full access and copies of complete documentation related to individual product sales/exchanges and suitability determinations and approvals in the possession, control or otherwise accomplished by Xxxxxxx & Xxxx. In addition, Xxxxxxx & Xxxx agrees that it has and will continue to have:
1. established and maintained a system to supervise recommendations to consumers by or through Xxxxxxx & Xxxx regarding the purchase or exchange of annuities issued by NWL, which system is reasonably designed to achieve compliance with, as applicable, the following:
a. all state insurance laws or regulations based on the NAIC Suitability in Annuity Transactions Model Regulation, as amended, or otherwise pertaining to annuity sales practices, and
b. all FINRA Conduct Rules regarding suitability, including but not limited to Rule 2310 (or new Rule 2111) and Rule 2330, as amended, if and to the extent that such rules are applicable to Xxxxxxx & Xxxx; and
2. maintained written procedures and conducted periodic reviews of its records to confirm that by or through Xxxxxxx & Xxxx was in compliance with applicable laws, rules and regulations referenced above.
Xxxxxxx & Xxxx acknowledges and agrees that NWL may review the compliance of Xxxxxxx & Xxxx with this provision and the laws, regulations and rules referenced herein.
PRODUCTION REPORTS
NWL will provide periodic production reports to Xxxxxxx & Xxxx during the term of this Agreement. The frequency, content and format of such production reports shall be reasonably satisfactory to Xxxxxxx & Xxxx.
COMPLAINT HANDLING
NWL and Xxxxxxx & Xxxx shall promptly inform the other Part in writing of (i) any complaints made to such party relating to the Services or Products provided under this Agreement, (ii) any actions, proceedings, claims, demands or complaints brought by a third party relating to the services or products provided under this Agreement, or to (iii) any complaints brought by a regulatory body relating to the Services or Products provided under this Agreement; and cooperate with the other party with respect to the resolution of such complaints and when possible adhering to regulatory deadlines.
COMPENSATION
NWL agrees to provide Xxxxxxx & Xxxx, promptly upon written request, records to verify the accuracy of the compensation calculations.
A. Deferred Variable Annuities
In addition to the compensation payable to Xxxxxxx & Xxxx by NWL under other agreements between the Parties, NWL will pay to Xxxxxxx & Xxxx the following:
Assets Received On or After Effective Date: NWL shall calculate and pay monthly to Xxxxxxx & Xxxx compensation in an amount equal to an annual rate of 22 basis points of the average monthly account value of all variable annuity assets received on or after the Effective Date of this Agreement for the products listed below distributed by Xxxxxxx & Xxxx. The compensation shall be calculated and paid by NWL to Xxxxxxx & Xxxx on a monthly basis. However, the compensation described in this Section relating to assets received on or after the Effective Date of this Agreement shall not survive termination of this Agreement and shall terminate upon termination of this Agreement, whether for or without cause.
Assets Prior to Effective Date: For variable annuity assets received prior the Effective Date, NWL shall calculate and pay to Xxxxxxx & Xxxx compensation in an amount equal to an annual rate of 24.4 basis points of the average monthly account value of all variable annuity assets received prior to the Effective Date of this Agreement for the products listed below distributed by Xxxxxxx & Xxxx. The compensation shall be reduced by 0.6 basis points a year over each of the five (5) years subsequent to the Effective Date, from a starting rate of 24.4 basis points annually of the average monthly account value for the first year, to 22 basis points beginning in the fifth year. The compensation shall be calculated and paid by NWL to Xxxxxxx & Xxxx on a monthly basis and shall survive termination of this Agreement, whether for or without cause.
|
Year |
|
Timeframe |
|
Basis points |
|
|
1 |
|
1/1/2012 through 12/31/2012 |
|
24.4 |
|
|
2 |
|
1/1/2013 through 12/31/2013 |
|
23.8 |
|
|
3 |
|
1/1/2014 to 1/31/2014 |
|
23.2 |
|
|
4 |
|
1/1/2015 to 1/31/2015 |
|
22.6 |
|
|
5 |
|
From 1/1/2016 and thereafter |
|
22 |
|
Variable Annuity Products
Xxxxxxx & Xxxx Advisors Select Annuity
Xxxxxxx & Xxxx Advisors Select Plus Annuity
Xxxxxxx & Xxxx Advisors Select Plus Annuity NY
Xxxxxxx & Xxxx Advisors Select Preferred Annuity
B. Fixed Annuities
In addition to the compensation payable to Xxxxxxx & Xxxx by NWL under the General Agent Agreement, NWL shall calculate and pay to Xxxxxxx & Xxxx compensation in an amount equal to an annual rate of 25 basis points of gross sales of the fixed annuities listed below distributed by Xxxxxxx & Xxxx.
Fixed Annuity Products
Nationwide Platinum V Plus Fixed Annuity
Nationwide Quatro Select
Nationwide Quatro Select NY
C. Compensation related to Commission Options
Contemplated within this Agreement is a certain contemporaneous compensation arrangement which is related to the commission options available to Xxxxxxx & Xxxx pursuant to the General Agent Agreement between the Parties and its commission schedules, as amended (“GA Agreement”). This compensation arrangement includes
payments made by Xxxxxxx & Xxxx to NWL of the amounts specified below, a portion of which come from the 12b-1 fees received by Xxxxxxx & Xxxx to support distribution of Xxxxxxx & Xxxx products. For the variable annuity products contemplated by this Agreement, Xxxxxxx & Xxxx shall make the following payments to NWL in the manner provided in the Agreement (and amendments thereto) between Nationwide Financial Services, Inc. and Xxxxxxx & Xxxx Inc., setting forth service fees to be paid to Nationwide Financial Services, Inc.. Such fees shall be based on the commission options available under the GA Agreement for sales after the Effective Date:
a) If the high commission option is chosen, then Xxxxxxx & Xxxx shall pay 35 basis points to NWL, a portion of which to be paid out of the 12b-1 fees received by Xxxxxxx & Xxxx and/or its affiliates.
b) If the low commission option is chosen, then Xxxxxxx & Xxxx shall pay 10 basis points to NWL out of the 12b-1 fees received by Xxxxxxx & Xxxx and/or its affiliates.
Nothing contained herein shall be construed to modify or abridge agreed upon service fee arrangements in place prior to the effective date of this Agreement.
It is hereby acknowledged and agreed by the Parties that (a) the obligation to pay the amounts specified above in this section to NWL shall survive the termination of this agreement, whether for or without cause, and (b) any deviation from or failure to strictly adhere to the compensation arrangement as described above in this section shall constitute a material breach of this Agreement, and, in accordance with the Termination provision of this Agreement, shall constitute grounds for termination for cause of this Agreement if such breach is not cured in accordance with subsection (g) of the Termination provision.
WEBSITE HOSTING AND MAINTENANCE
NWL shall have sole control over the internet site at xxx.xxxxxxxxxxxxxxxxxxx.xxx/xxxxxxxxxxx (the “Web Site”). Both parties agree that NWL will conduct regular performance updates and Web Site enhancements. Modifications in the Web Site shall be deemed approved if Xxxxxxx and Xxxx fails, within 10 business days, to object in writing to NWL’s Web Site changes. In the event Xxxxxxx and Xxxx objects to certain updates or enhancements, the parties shall negotiate in good faith, without penalty, and agree in writing to a Web Site solution acceptable to both parties.
NWL shall be responsible for compliance with the security, privacy and user access policies of the Web Site and compliance with all applicable state and federal laws pertaining to the Web Site, with the exception of the form and content of materials created by and obtained from Xxxxxxx & Xxxx.
No compensation shall be paid and each party shall bear its own costs with respect to the creation, maintenance and operation of the Web Site.
Both parties expressly agree that the indemnifications and representations of the Agreement are extended to include the Web Site activities. In addition, the following acknowledgements and representations are made, specifically relating to the Web Site:
Ownership of the Web Site. As between Xxxxxxx & Xxxx and NWL, Xxxxxxx & Xxxx acknowledges that NWL is the exclusive owner of the Web Site, its services and content. NWL acknowledges that content given to NWL by Xxxxxxx & Xxxx for the Web Site shall remain the property of Xxxxxxx & Xxxx or its licensor. Neither NWL nor Xxxxxxx & Xxxx shall have any rights in the other party’s content other than the limited right to use such content as required to perform the terms of this Agreement.
Since NWL has customized this particular Web Site for Xxxxxxx & Xxxx, Xxxxxxx & Xxxx hereby grants to NWL the non-exclusive, non-transferable, non-assignable right during the term of this Agreement to use (i.e., to copy, transmit, distribute, display and perform both privately and publicly), the Xxxxxxx & Xxxx icon, the Xxxxxxx & Xxxx name and any other related textual and graphic materials, if any, that are provided by Xxxxxxx & Xxxx to NWL for the express purpose of inclusion on the Web Site.
To further the purpose, and subject to the terms of this Agreement, each party hereby grants to the other party a limited, non-exclusive, non-sublicenseable, royalty-free, worldwide license to use such party’s trademarks, service marks, trade names, logos, or other commercial or product designations (collectively, the “Marks”). The owner of the Marks may terminate the foregoing license if, in its sole discretion, the licensee’s use of the Marks does not conform to the owner’s standards. Title to and ownership of the owner’s Marks shall remain with the owner. The licensee shall not take any action inconsistent with the owner’s ownership of the Marks and any benefit accruing from the use of such Marks shall automatically vest in the owner.
NWL shall acquire no ownership to Xxxxxxx & Reed’s intellectual property rights by virtue of its inclusion of Xxxxxxx & Reed’s trademark on the Web Site, nor shall Xxxxxxx & Xxxx acquire any rights in NWL’s intellectual property or in NWL’s ownership of the Web Site by its trademark’s inclusion on the Web Site.
Neither party makes any express or implied warranties to the other party with respect to the Web site including, but not limited to, warranties of merchantability, fitness for a particular purpose, or that the operation of the Web site will be uninterrupted or error-free. Neither party shall be liable to the other for loss of use, data, or profits, business interruption, or any other damages caused by or resulting from interruptions or errors on the Web site caused by forces outside of reasonable control, including but not limited to malicious codes, interrupted communications, and/or hackers.
Xxxxxxx & Xxxx warrants that any passwords or access devices provided
to the Web site are for the sole use of the General Agent or Agents, and shall not be provided to any consumers.
Xxxxxxx & Xxxx and NWL agree that consumer’s nonpublic personal information obtained from and provided to each party will be maintained as confidential, will be used for only the intent and purpose shared, and will comply with all laws relating to privacy, confidentiality, security and the handling of customer information which may from time to time be established.
Either party may terminate the Web Site relationship without penalty by 30 days prior written notice. Upon termination of the Web Site relationship, all rights, licenses, and privileges shall automatically revert to the granting party.
PRIVACY/CONFIDENTIALITY OF INFORMATION
Confidentiality Obligation. Each party (in such capacity, the “Receiving Party”) shall hold the Confidential Information (as defined below) of the other party (in such capacity, the “Disclosing Party”) in strict confidence. Each party shall take all reasonable steps to assure that any material or information considered by either party to be confidential which has or will come into the possession or knowledge of the other in connection with this Agreement shall not be disclosed to others, in whole or in part, without the prior written permission of the other party or as otherwise provided herein. In addition, each party agrees not to use, disclose or distribute any Confidential Information except as necessary to perform the terms of this Agreement. Each party warrants that it will protect and maintain the other party’s Confidential Information with reasonable care, which shall not be less than the degree of care it uses to protect and maintain is own Confidential Information. Each party represents and agrees that it shall not disclose Confidential Information on other than a “need to know basis” and then only to (a) Receiving Party’s employees, officers or agents engaged in a use permitted hereby, (b) affiliates of Receiving Party provided they shall be restricted in use and subsequent disclosure to the same extent as Receiving Party, and (c) third party service providers of Customer and customer’s affiliated and subsidiary companies solely for use in connection with the provision of services to Customer and affiliated and subsidiary companies; provided that Customer’s third party service providers shall in advance sign a confidentiality agreement that includes reasonable nondisclosure provisions and that is no less restrictive than the terms of this Agreement. The Receiving Party shall not duplicate any material containing Confidential Information except in the direct performance of its obligations under this Agreement.
CONFIDENTIAL INFORMATION
As used herein, “Confidential Information” shall mean information, including trade secrets, know-how, proprietary information, formulae, processes, techniques and information relating to the Disclosing Party’s past, present and future marketing, financial, research and development activities, and personal information about
employees, policyholders, customers, licensors, contractors and others, that may be disclosed, whether orally or in writing, to the Receiving Party, or that may be otherwise received or accessed by the Receiving Party in connection with this Agreement, whether transmitted prior to or after the Effective Date, and which is information either identified as being Confidential Information, or which is information that a reasonable business person would understand to be confidential Information. Examples of Confidential Information include, but are not limited to, the terms and conditions of this Agreement, the Disclosing Party’s (or its third party business partner’s, who shall be an express third party beneficiary under this Agreement) customer lists, pricing policies, market analyses, market projections, consulting and sales methods and techniques, expansion plans, programs, program decks, routines, subroutines, operating systems, internal controls, security procedures, inventions, methods of operation or proposed methods of operation, object and source codes, updates thereto, and related items, including, but not limited, specifications, layout, charts and other like materials and documents, together with all information, data, and know-how, technical or otherwise, included therein, manuals printouts, notes and annotations on disks, diskettes, tapes or cassettes, both master and duplicate.
Notwithstanding the foregoing, “Confidential Information” shall not include information: (i) previously known to the Receiving Party without an obligation of confidence; (ii) independently developed by or for the Receiving Party or Receiving Party’s employees, consultants or agents without reference to or use of the Confidential Information; (iii) was lawfully acquired by the Receiving Party form a third party which is not, to the Receiving Party’s knowledge, under an obligation of confidence with respect to such information; or (iv) which is or becomes publicly available through not fault of the Receiving Party or by no breach of this Agreement. If the Receiving Party receives a subpoena or other validly issued administrative or judicial process demanding confidential Information, it shall promptly notify the Disclosing Party of such receipt and tender to it the defense of such demand. After providing such notification, the Receiving Party shall be entitled to comply with such subpoena or other process to the extent permitted by Law. Notwithstanding the fact that a portion of Confidential Information is or may become non-confidential, each party’s obligations under this Agreement will continue to apply to all other Confidential Information.
Customer Information: As used herein, “Customer Information” means non-public personally identifiable information as defined in the Xxxxx-Xxxxx-Xxxxxx Act and the rules and regulations promulgated there under. Each party agrees to comply with all applicable provisions of the Xxxxx-Xxxxx-Xxxxxx Act.
Customer Information shall not include information that is not personally identifiable (de-identified information). De-identified information may be used by NWL and/or its service providers, either alone or in aggregate, for research, studies, and for other business purposes.
Unauthorized Disclosure. Receiving Party shall: (a) promptly notify Disclosing Party of any unauthorized possession, use or knowledge, or attempt thereof, of Disclosing
Party’s Confidential Information by any person or entity that may become known to Receiving Party, (b) promptly furnish to Disclosing Party full details of the unauthorized possession, use or knowledge, or attempt thereof, and assist Disclosing Party in investigating or preventing the recurrence of any unauthorized possession, use or knowledge, or attempt thereof, of Disclosing Party’s Confidential Information, (c) cooperate with Disclosing Party in any litigation and investigation against third parties deemed necessary by Disclosing Party to protect its proprietary rights, and (d) use reasonable steps to prevent a recurrence of any such unauthorized possession, use or knowledge, or attempt thereof, of Disclosing Party’s Confidential Information. Receiving Party shall bear the cost it incurs as a result of compliance with this Section.
Return or Destruction of Confidential Information. Upon the Disclosing Party’s written request or following the completion or termination of any Statement of Work, the Receiving Party shall promptly (i) return to NWL all documents and other media containing Confidential Information that is in Receiving Party’s possession or control, and (ii) purge, delete or destroy, to the extent reasonably practical, any Confidential Information that cannot feasibly be returned to Disclosing Party, and (iii) safeguard all other documents or media, containing personal information, that cannot be returned, purged, deleted or destroyed. With respect to identical copies of documents or other media whose originals have been returned to Disclosing Party, Receiving Party will purge, delete or destroy such copies.
Data Security. In addition to complying with Customer Policies relating to security of and access to Customer Information, in performing the Services here under, Supplier shall adhere to industry standard best practices for security customer data so as to reasonably ensure that Customer Information is not lost or stolen or otherwise used, modified or accessed by any other party without Customer’s prior written approval.
Indemnification and Limitation on Liability. The parties understand and agree that there shall be no cap on liability for direct damages arising out of breaches of confidentiality involving breaches of data that lead to the release and misuse of data pertaining to Customer or its employees (“Identified Breaches”). All damages arising out of or relating to Identified Breaches shall be deemed direct damages for purposes of this Agreement.
This Section shall survive and continue in full force and effect notwithstanding the expiration or termination of the Agreement.
TERM OF AGREEMENT
This Agreement shall remain in full force and effect for five (5) years from the Effective Date (“Initial Term”) unless terminated for cause, and may be amended only by mutual agreement of the parties, in writing. Thereafter, unless otherwise terminated as provided for herein, this Agreement shall be renewed automatically for successive (5) five-year periods (“Rollover Periods”). In
addition to the provisions for termination set forth in the “Termination” Section, below, this Agreement may be terminated without penalty by provision of a notice of non-renewal provided at least sixty (60) days prior to the expiration of the Initial Term or any Rollover Period in order to avoid automatic renewal. Any decision by either party to cease issuance or distribution of any specific product contemplated under this Agreement shall not effect a termination of the Agreement unless the Parties mutually agree to terminate this Agreement with proper notice and in writing as provided for in this Agreement.
TERMINATION
In addition to the provisions for termination set forth in the “Exclusivity” and “Term of Agreement” Sections of this Agreement, either party may terminate this Agreement for cause at any time, upon written notice to the other, if the other knowingly and willfully (a) materially fails to comply with the laws or regulations of any state or governmental agency or body having jurisdiction over the sale of insurance or securities, (b) misappropriates any money or property belonging to the other, (c) subjects the other to any material actual or potential liability due to misfeasance, malfeasance, or nonfeasance, (d) commits any fraud upon the other, (e) has an assignment for the benefit of creditors, (f) incurs bankruptcy, or (g) commits a material breach of this Agreement; and does not cure such breach within 30 days following its receipt of written notice from the terminating party.
Either party may terminate this Agreement, without regard to cause, upon six months prior written notice.
In the event of termination of this Agreement, NWL and Xxxxxxx & Xxxx will use “best efforts,” as defined below, to preserve in force the business relating to the products issued pursuant to this Agreement.
“Best efforts” with respect to Xxxxxxx & Xxxx shall mean that Xxxxxxx & Xxxx shall endeavor to ensure that the various sales representatives appointed by it shall not recommend to an owner of a product that the product be exchanged for a non-NWL policy unless there are reasonable grounds that the exchange of the product is suitable for the product owner, with both Xxxxxxx & Xxxx and NWL acknowledging the limitations on Xxxxxxx & Reed’s ability to do so due to the independent contractor status of its sales representatives. “Best efforts” with respect to NWL shall include, but not be limited to, efforts by NWL to make available new product features, contractual benefits and administrative and service enhancements which can, if economically feasible, be introduced to owners of the products, thereby discouraging the surrender, cancellation, exchange or transfer of the products identified in Appendix A.
GENERAL PROVISIONS
PREVIOUS AGREEMENT
As of the Effective date of this Agreement, this Agreement shall supersede and effectively terminate any and all Administrative Services Agreements and amendments to all Administrative Service Agreements that may have been entered into between NWL and Xxxxxxx & Xxxx.
OTHER AGREEMENTS
NWL and Xxxxxxx & Xxxx acknowledge other agreements are established between the two parties however, the provisions of this Agreement control the conduct contemplated herein.
AMENDMENT
This Agreement and any provision contained or arrangement contemplated herein, may only be amended as agreed to by all Parties as evidenced by a writing duly executed by authorized officers of each Party.
WAIVER
Failure of NWL or Xxxxxxx & Xxxx 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.
LIMITATIONS
Neither party shall have authority on behalf of the other to (i) make, alter or discharge any contractual terms of the products, (ii) to waive any forfeiture, (iii) extend the time of making any contributions to the products, (iv) guarantee dividends, (v) alter the forms which either may prescribe (vi) or substitute other forms in place of those prescribed by the other.
BINDING EFFECT
Except as expressly limited otherwise in this Agreement, 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 neither party shall assign or sub-contract this Agreement or any rights or obligations hereunder without the prior written consent of the other, which consent shall not be unreasonably withheld.
ASSIGNMENT
Neither Party shall have the right to assign, transfer, or sublicense any obligation or benefits under this Agreement without the prior written consent of the other Party; however, such consent shall not be unreasonably withheld. Any attempt to do any of the foregoing without such consent shall be void. The obligations of the Parties under this Agreement shall not terminate upon any attempted, unauthorized assignment. However, either Party may assign its rights, licenses and obligations hereunder to any affiliate, subsidiary or organization controlled by or under common control with it, or in connection with a change of control, reorganization, demutualization, merger, consolidation, or corporate reorganization.
INDEMNIFICATIONS
NWL agrees to indemnify and hold Xxxxxxx & Xxxx harmless from any and all losses, claims, damages, liabilities or expenses to which Xxxxxxx & Xxxx may become subject under any statute, regulation, common law or otherwise, insofar as such losses, claims, damages, liabilities or expenses relate directly to the sale of the Contracts and arise as a direct consequence of: (i) any material misrepresentation or omission, or alleged misrepresentation or omission, contained in the registration statement, prospectuses or the Contracts; (ii) any failure by NWL or its employees, whether negligent or intentional, to perform the duties and discharge the obligations contemplated in this Agreement; (iii) any fraudulent, unauthorized or wrongful act or omission by NWL, its employees, contractors or agents; and (iv) NWL’s misuse, modification and/or unauthorized use of the Marks or any claims that the Marks or materials provided to Xxxxxxx & Xxxx by NWL pursuant to this Agreement constitute an infringement of title, copyright, trademark or other intellectual property rights of a third party, or piracy, plagiarism, or unfair competition or idea misappropriation under implied or express contract or any other cause of action in any way related to the Marks or materials provided to Xxxxxxx & Xxxx by NWL pursuant to this Agreement.
Xxxxxxx & Xxxx agrees to indemnify and hold NWL, their officers, directors, employees and agents harmless from any and all losses, claims, damages, liabilities or expenses to which NWL may become subject under any statute, regulation, common law or otherwise, insofar as such losses, claims, damages, liabilities or expenses related directly to the sale of the Contracts and arise as a direct consequence of: (i) any material misrepresentation or omission, or alleged misrepresentation or omission involving the sales subject to this Agreement, provided that such misrepresentations or omissions are not caused by NWL; (ii) any failure by Xxxxxxx & Xxxx, its Agents or affiliated agencies, whether negligent or intentional, to perform the duties and discharge the obligations contemplated in this Agreement; (iii) any fraudulent, unauthorized or wrongful act or omission by Xxxxxxx & Xxxx, its Agents or affiliated agencies; (iv) Xxxxxxx & Reed’s misuse, modification and/or unauthorized use of the Marks or any claims that the Marks or materials provided to NWL by Xxxxxxx & Xxxx pursuant to this
Agreement constitute an infringement of title, copyright, trademark or other intellectual property rights of a third party, or piracy, plagiarism, or unfair competition or idea misappropriation under implied or express contract or any other cause of action in any way related to the Marks or materials provided to NWL by Xxxxxxx & Xxxx pursuant to this Agreement; (iv) any and all actions conducted on the part of Xxxxxxx & Xxxx, its Agents or affiliated agencies related to findings by any regulatory agency that a sale of a Contract was unsuitable; and (v) any loss, damage, liability, claim, demand, suit, judgment and expense (including reasonable attorneys’ fees) brought against NWL due to the misuse of Xxxxxxx & Reed’s access number(s), password(s) and account number(s) collectively referred to as “Security Codes.”
In the event that NWL is compelled or agrees to pay any amount in the settlement of any claim, judgment, arbitration or similar action pursuant to this Section, Xxxxxxx & Xxxx shall reimburse NWL. NWL, in the alternative, may deduct the amount of such reimbursement obligation from any sales compensation subsequently payable to Xxxxxxx & Xxxx.
No party shall be liable, as the indemnifying party pursuant to this Section, to the extent that the losses, claims, damages, liabilities or legal expenses incurred by the indemnified party arise out of the indemnified party’s willful misfeasance, bad faith, or gross negligence in the performance of its duties, or through the reckless disregard of the indemnified party’s duties, under this Agreement.
The parties will promptly notify each other of the commencement of any litigation or proceedings, or the assertion of any claim or any material inquiries related to the duties set forth in the Agreement. The indemnifying party shall have control of the defense of any such action, including appeals, and of all negotiations relating thereto, including the right to effect the settlement or compromise thereof.
Nothing in this Section shall preclude the parties from exercising any other rights and remedies that may be available to them at law or in equity.
NOTICES
All notices, requests, demands and other communication under this Agreement shall be in writing and shall be deemed to have been given on the date of service if served personally on the party to whom notice is to be given, or on the date of mailing if sent by First Class Mail, Registered or Certified, postage prepaid and properly addressed as follows:
To NWL:
Nationwide Life Insurance Company
Xxxx X. Xxxxxx
Senior Vice-President, Nationwide Life Insurance Company
Xxx Xxxxxxxxxx Xxxxx, XX 0-0-000
Xxxxxxxx, XX 00000
To Xxxxxxx & Xxxx:
Xxxxxxx & Xxxx, Inc.
Xxx Xxxxx
President and Chief Marketing Officer
0000 Xxxxx Xxxxxx
Xxxxxxxx Xxxx, XX 00000
With a copy to:
Xxxxxxx & Xxxx, Inc.
Attn: Legal Department
0000 Xxxxx Xxxxxx
Xxxxxxxx Xxxx, XX 00000
GOVERNING LAW
This Agreement shall be construed in accordance with and governed by the laws of the State of Ohio.
IN WITNESS WHEREOF, the parties hereto execute this Agreement effective as of the date written above.
Xxxxxxx & Xxxx, Inc.
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/s/ Xxxxxx X. Xxxxx |
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Xxxxxx X. Xxxxx |
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President and Chief Marketing Officer |
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NATIONWIDE LIFE INSURANCE COMPANY |
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NATIONWIDE LIFE AND ANNUITY INSURANCE COMPANY | |||
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/s/ Xxxx X. Xxxxxx |
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Xxxx X. Xxxxxx |
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Senior Vice President Non-Affiliated Sales, Nationwide Life Insurance Company and Nationwide Life and Annuity Insurance Company | ||
APPENDIX A
PRODUCT TYPES
Exclusivity refers to the following product types:
Variable Annuities
Variable Universal Life Insurance
Retirement Plans
This APPENDIX may be amended from time to time with the addition of certain other annuity or insurance product types.
Exhibit A
Administration Services Agreement
Analysis of Functions and Responsibilities
Administration and Customer Service
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NWL |
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XXXXXXX & XXXX |
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· Applies underwriting issue criteria to application. Notifies agent and/or customer of any error or missing data necessary to underwrite application and establish Contract Owner records.
· Receives and processes all Policyholder service requests, including but not limited to informational requests, beneficiary changes, payments, deposits, and transfers of contract value between eligible investment options. Receives and processes surrenders, loans, death claims in accordance with established guidelines.
· Prepares checks for surrenders, loans, death claims and forwards to payee. Prepares and mails confirmation statement of disbursement to Contract Owner/Beneficiary, with copy to agent.
· Maintains daily records of all changes made to Contract Owner accounts and values those accounts daily.
· Researches and responds to all customer/broker policy inquiries. Keeps all required policyholder records.
· Produces and provides all forms ancillary to contract policy issue.
· Maintain adequate number of toll-free lines to service customer-broker policy inquiries. |
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· Forwards completed application and associated forms to NWL.
· Gathers information, conducts individual suitability determinations, and maintains records for all product recommendations, sales and exchanges in accordance with applicable state, federal and FINRA laws, rules and regulations, and in accordance with the provisions of this Agreement.
· Xxxxxxx & Xxxx shall maintain its registration under the 1934 Act and shall continue registration in good standing with the FINRA. Xxxxxxx & Xxxx shall promptly notify NWL in the event that any appointed agent fails to maintain required licenses, or materially fails to adhere to supervisory standards in connection with the sale of the products provided jointly by NWL and Xxxxxxx & Xxxx.
· Responds to formal complaints on behalf of itself and its affiliates from state insurance departments, the SEC, and other outside agencies where such complaints are specifically addressed to and directed toward Xxxxxxx & Xxxx.
· Accommodates customer service function by providing any supporting information or documentation which may be in the control of Xxxxxxx & Xxxx.
· Researches and responds to customer/broker inquiries regarding fund performance and distribution practices. |
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NWL
· Maintains a 24 hour “voice response” system for unit values and contract values and other applications as developed.
· Responds to formal complaints on behalf of it and its affiliates from state insurance departments, the SEC, and other outside agencies where such complaints are specifically addressed to and directed toward NWL.
· Promptly communicates complaints (formal written complaints and all inquires or complaints from any federal or state regulatory body) received by NWL which may relate to sales by Xxxxxxx & Xxxx, and assists in resolution.
· Provides payout quotes information for customers.
· Provides service support for all new contract sales.
· Provides several daily outbound data feeds on existing contracts, including registration, transaction, unit values, and production history files in lieu of paper delivery of producer confirmation, quarterly statements, and commission statements.
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· Promptly communicates complaints (formal written complaints and all inquires or complaints from any federal or state regulatory body) received by Xxxxxxx & Xxxx which may relate to NWL products and assists in resolution.
· Communicates responsibilities to producers and supports the process as appropriate. |
Accounting, Daily Trades and Valuations
This Section is governed by the fund participation agreement which has been entered into by NWL and the W&R Target Funds-such agreement is hereby incorporated by reference into this Agreement.
Banking
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XXXXXXX & XXXX |
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· Balances, edits, endorses and prepares daily deposit. |
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· Places deposits in depository account. Prepares daily cash journal summary reports and maintains same for review by Xxxxxxx & Xxxx. |
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Proxy Processing
This section is governed by the fund participation agreement which has been entered into by NWL and the W&R Target Funds-such agreement is hereby incorporated by reference into this Agreement.
Premium Taxes
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XXXXXXX & XXXX |
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· Collects, pays and accounts for premium taxes as appropriate. |
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· Prepares and maintains all premium tax records by state. Maintains liabilities in General Account ledger for accrual of premium taxes collected. Integrates all company premium taxes due and performs related accounting. |
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Regulatory and Other Reporting
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· Prepares and files all contracts and registrations required by SEC and state insurance departments as related to the annuity product.
· Prepares and files Separate Account Semi-Annual and Annual Statements.
· Prepares and delivers the appropriate, required IRS reports at the Contract Owner level. Files same with required regulatory agencies.
· Prepares and files N-SAR for the Separate Account.
· Responsible for all audits related to the separate account and registration. Provides periodic reports in accordance with Schedule of Reports to be jointly prepared by NWL and Xxxxxxx & Xxxx. |
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· Prepares and files registrations as required by the SEC relative to the mutual funds managed by Xxxxxxx & Xxxx..
· Prepares and files form N-SAR for the mutual funds managed by Xxxxxxx & Xxxx.
· Responsible for all audits related to the mutual funds managed by Xxxxxxx & Xxxx.
· Provides periodic reports in accordance with Schedule of Reports to be jointly prepared by NWL and Xxxxxxx & Xxxx. |
Sales and Marketing
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XXXXXXX & XXXX |
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· Supports the wholesaling effort of the Products.
· Provides input into the Sales and Marketing plan. Responsible for planning service and administration support to appropriately support the sales efforts.
· Responsible for leading joint development of all sales and marketing materials and for all costs associated with producing, storing, postage and delivery. |
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· Responsible for wholesaling the Products to prospective producers including seminars, one-on-one presentations, training, and other normal wholesaling activities.
· Participates in joint development of all sales and marketing materials, and files with state insurance authorities as required,
· Responsible for filing sales and marketing material with FINRA.
· Responsible for development and |
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· Provides input and prior approval on advertising materials. Files with regulatory agencies as required. |
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associated costs of all advertising developed by Xxxxxxx & Xxxx. |
EXHIBIT B
ADVERTISING AND SALES PROMOTION MATERIAL GUIDELINES
In order to assure compliance with state and federal regulatory requirements and to maintain control over the distribution of promotional materials dealing with the Products, NWL and Xxxxxxx & Xxxx require that all variable contract promotional materials be reviewed and approved by both NWL and Xxxxxxx & Xxxx prior to their use. These guidelines are intended to provide appropriate regulatory and distribution controls.
Sufficient lead time must be allowed in the submission of all promotional material. NWL and Xxxxxxx & Xxxx shall approve in writing all promotional material. Such approval shall not be unreasonably withheld and shall be given as promptly as possible within a reasonable period of time as agreed.
All promotional material will be submitted in “draft” form to permit any changes or corrections to be made prior to the printing.
NWL and Xxxxxxx & Xxxx will provide each other with the information below regarding the intended use of promotional material submitted. Approval for one use will not constitute approval for any other use. Different standards of review may apply when the same advertising material is intended for different uses. The following information will be provided for each item of promotional material:
i) In what jurisdiction(s) the material will be used.
ii) Whether distribution will be for “public” or “broker dealer only” use.
iii) How the material will be used (e.g., brochure, mailings, 482 ads, etc.)
iv) The projected date of initial use and, if a special promotion, the projected date of last use.
NWL and Xxxxxxx & Xxxx will advise each other of the date on which any material is discontinued from use.
Any changes to previously approved promotional material must be resubmitted, following these procedures. When approved material is to be put to a different use, request for approval of the material for the new use must be submitted.
NWL and Xxxxxxx & Xxxx will assign a form number to each item of advertising on each piece of advertising and sales promotional material. It will be used to aid in necessary filings, and to maintain appropriate controls.
NWL and Xxxxxxx & Xxxx will provide written approval for all material to be used.
Xxxxxxx & Xxxx will provide NWL with a minimum of 50 copies of all material
in final print form to effect necessary state insurance regulatory filings.
Xxxxxxx & Xxxx will coordinate, perform and be responsible for FINRA and any state securities regulatory filings of sales and promotional material to be used by Xxxxxxx & Xxxx registered representatives.
All telephone communication and written correspondence should be directed to Compliance Director, Nationwide Life Insurance Company, Xxx Xxxxxxxxxx Xxxxx 0-00-000, Xxxxxxxx, XX 00000 and if to Xxxxxxx & Xxxx, to, Xxx Xxxxxxx, Xxxxxxx & Xxxx, Inc, 0000 Xxxxx Xxxxxx, Xxxxxxxx Xxxx, XX 00000 (phone 000-000-0000).
