Exhibit 1.A.(3)(b)
SELECTED BROKER AGREEMENT
AGREEMENT dated ____________________, by and between Pruco Securities
Corporation (Distributor), a New Jersey corporation and ______________ (Broker),
a _______________ corporation.
WITNESSETH:
In consideration of the mutual promises contained herein, the parties
hereto agree as follows:
A. Definitions
(1) Contracts - Variable life insurance contracts and/or variable
annuity contracts described in Schedule A attached hereto which may
be issued and issued by any one of Pruco Life Insurance Company,
Pruco Life Insurance Company of New Jersey or The Prudential
Insurance Company of America (hereinafter collectively called the
"Company") and for which Distributor has been appointed the
principal underwriter pursuant to Distribution Agreements, copies of
which have been furnished to Broker.
(2) Accounts - Separate accounts established and maintained by Company
pursuant to the laws of Arizona or New Jersey, as applicable, to
fund the benefits under the Contracts.
(3) The Prudential Series Fund, Inc., or the Fund - An open-end
management investment company registered under the 1940 Act, shares
of which are sold to the Accounts in connection with the sale of the
Contracts.
(4) Registration Statement - The registration statements and amendments
thereto relating to the Contracts, the Accounts, and the Fund,
including financial statements and all exhibits.
(5) Prospectus - The prospectuses included within the registration
Statements referred to herein.
(6) 1933 Act - The Securities Act of 1933, as amended.
(7) 1934 Act - The Securities Exchange Act of 1934, as amended.
(8) SEC - The Securities and Exchange Commission.
B. Agreements of Distributor
(1) Pursuant to the authority delegated to it by Company, Distributor
hereby authorizes Broker during the term of this Agreement to
solicit applications for Contracts from eligible persons provided
that there is an effective Registration Statement relating to such
Contracts and provided further that Broker has been notified by
Distributor that the Contracts are qualified for sale under all
applicable securities and insurance laws of the state or
jurisdiction in which the application will be solicited. In
connection with the solicitation of applications for Contracts,
Broker is hereby authorized to offer riders that are available with
the Contracts in accordance with instructions furnished by
Distributor or Company.
(2) Distributor, during the term of this Agreement, will notify Broker
of the issuance by the SEC of any stop order with respect to the
Registration Statement 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 and of
any other action or circumstance that may prevent the lawful sale of
the contract in any state or jurisdiction.
(3) During the term of this Agreement, Distributor shall advise Broker
of any amendment to the Registration Statement or any amendment or
supplement to any Prospectus.
C. Agreements of Broker
(1) It is understood and agreed that Broker is a registered
broker/dealer under the 1934 Act and a member of the National
Association of Securities Dealers, Inc. and that the agents or
representatives of Broker who will be soliciting applications for
the Contracts also will be duly registered representatives of
Broker.
(2) Commencing at such time as Distributor and Broker shall agree upon,
Broker agrees to use its best efforts to find purchasers for the
contract acceptable to Company. In meeting its obligation to use its
best efforts to solicit applications for Contracts, Broker shall,
during the term of this Agreement, engage in the following
activities:
(a) Continuously utilize training, sales and promotional materials
which have been approved by Company;
(b) Establish and implement reasonable procedures for periodic
inspection and supervision of sales practices of its agents or
representatives and submit periodic reports to Distributor as
may be requested on the results of such inspections and the
compliance with such procedures.
(c) Broker shall take reasonable steps to ensure that the various
representatives appointed by it shall not make recommendations
to an applicant to purchase a Contract in the absence of
reasonable grounds to believe that the purchase of the
Contract is suitable for such applicant. While not limited to
the following, a determination of suitability shall be based
on information furnished to a representative after reasonable
inquiry of such applicant concerning the applicant's insurance
and investment objectives, financial situation and needs, and
the likelihood that the applicant will continue to make the
premium payments contemplated by the Contract.
(3) All payments for Contracts collected by agents or representatives of
Broker shall be held at all times in a fiduciary capacity and shall
be remitted promptly in full together with such applications, forms
and other required documentation to an office of the company
designated by Distributor. Checks or money orders in payment of
initial premiums shall be drawn to the order of the applicable one
of "Pruco Life Insurance Company", (for contracts issued by Pruco
Life Insurance Company and/or Pruco Life Insurance Company of New
Jersey) or "The Prudential Insurance Company of America". Broker
acknowledges that the Company retains the ultimate right to control
the sale of the Contracts and that the Distributor or Company shall
have the unconditional right to reject, in whole or part, any
application for the contract. In the event Company or Distributor
rejects an application, Company immediately will return all payments
directly to the purchaser and Broker will be notified of such
action. In the event that any purchaser of a Contract elects to
return such Contract pursuant to Rule 6e-2(b)(13)(viii) of the 1940
Act, the purchaser will receive a refund of any premium payments,
plus or minus any change due to investment performance in the value
of the invested portion of such premiums; however, if applicable
state law so requires, the purchaser who exercises his short-term
cancellation right will receive a refund of all payments made,
unadjusted for investment experience prior to the cancellation. The
Broker will be notified of any such action.
(4) Broker shall act as an independent contractor, and nothing herein
contained shall constitute Broker, its agents or representatives, or
any employees thereof as employees of Company or Distributor in
connection with the solicitation of applications for Contracts.
Broker, its agents or representatives, and its employees shall not
hold themselves out to be employees of Company or Distributor in
this connection or in any dealings with the public.
(5) Broker agrees that any material it develops, approves or uses for
sales, training, explanatory or other purposes in connection with
the solicitation of applications for Contracts hereunder (other than
generic advertising materials which do not make specific reference
to the Contracts) will not be used without the prior written consent
of Distributor and, where appropriate, the endorsement of Company to
be obtained by Distributor.
(6) Solicitation and other activities by Broker shall be undertaken only
in accordance with applicable laws and regulations. No agent or
representative of Broker shall solicit applications for the
Contracts until duly licensed and appointed by Company as a life
insurance and variable contract broker or agent of Company in the
appropriate states or other jurisdictions. Broker shall ensure that
such agents or representatives fulfill any training requirements
necessary to be licensed. Broker understands and acknowledges that
neither it nor its agents or representatives is authorized by
Distributor or Company to give any information or make any
representation in connection with this Agreement or the offering of
the Contracts other than those contained in the Prospectus or other
solicitation material authorized in writing by Distributor or
Company.
(7) Broker shall not have authority on behalf of Distributor or Company
to: make, alter or discharge any Contract or other form; waive any
forfeiture, extend the time of paying any premium; receive any
monies or premiums due, or to become due, to Company, except as set
forth in Section C(3) of this Agreement. Broker shall not expend,
nor contract for the expenditure of the funds of Distributor, nor
shall Broker possess or exercise any authority on behalf of Broker
by this Agreement.
(8) Broker shall have the responsibility for maintaining the records of
its representatives licensed, registered and otherwise qualified to
sell the Contracts. Broker shall maintain such other records as are
required of it by applicable laws and regulations. The books,
accounts and records of Company, the Account, Distributor and Broker
relating to the sale of the Contracts shall be maintained so as to
clearly and accurately disclose the nature and details of the
transactions. All records maintained by the Broker in connection
with this Agreement shall be the property of the Company and shall
be returned to the Company upon termination of rights by the Broker.
Nothing in this Section C(8) shall be interpreted to prevent the
Broker from retaining copies of any such records which the Broker,
in its discretion, deems necessary or desirable to keep. The Broker
shall keep confidential any information obtained pursuant to this
Agreement and shall disclose such information, only if the Company
has authorized such disclosure, or if such disclosure is expressly
required by applicable federal or state regulatory authorities.
D. Compensation
(1) Pursuant to the Distribution Agreement between Distributor and
Company, Distributor shall cause Company to arrange for the payment
of commissions to Broker as compensation for the sale of each
contract sold by an agent or representative of Broker. The amount of
such compensation shall be based on a schedule to be determined by
agreement of Company, Distributor and Broker. Company shall identify
to Broker with each such payment the name of the agent or
representative of Broker who solicited each Contract covered by the
payment.
(2) Neither Broker nor any of its agents or representatives shall have
any right to withhold or deduct any part of any premium it shall
receive for purposes of payment of commission or otherwise. Neither
Broker nor any of its agents or representatives shall have an
interest in any compensation paid by Company to Distributor, now or
hereafter, in connection with the sale of any Contracts hereunder.
E. Use of Insurance Agency Affiliate of Broker
It is understood and agreed that the registered representatives of
Broker engaged in the offer and sale of the Contracts may be employed by
(__________), an affiliate of Broker which is licensed as an insurance
agency (hereinafter referred to as "Insurance Agency Affiliate"), and
whose shareholders, officers, and employees are "associated persons" of
Broker within the meaning of Section 3(a)(18) of the 1934 Act. It is
further understood and agreed that records relating to sales of Contracts
by such employees may be maintained by Insurance Company Affiliate. It is
further understood and agreed that commissions payable under this
agreement shall, if broker so directs, be paid to Insurance Agency
Affiliate. Broker agrees that, if the Contracts are sold through Insurance
Agency affiliate:
(1) Broker will retain full responsibility for compliance with the
requirements of the 1933 Act and the 1934 Act, and will continue to
perform all obligations set forth in Section C above.
(2) Any books and records maintained by Insurance Agency Affiliate will
be deemed, for purposes of the 1934 Act, to be books and records of
Broker and will conform to the requirements of Section 17(a) of the
1934 Act and the rules thereunder. The manner in which the books and
records of Broker and Insurance Agency Affiliate are made and
maintained will permit supervisory personnel of Broker as well as
authorized examiners of the SEC or of another appropriate
governmental agency or self-regulatory organization to review data
concerning transactions in the Contracts effected through Insurance
Agency Affiliate to the same extent as if such transactions had been
effected through Broker itself. This may be accomplished either
through maintaining one set of books and records for Broker and
Insurance Agency Affiliate or by maintaining separate sets of books
and records with adequate integration, through cross-referencing or
otherwise, between records maintained by Broker and those maintained
by Insurance Agency Affiliate.
(3) Any receipt by Insurance Agency Affiliate of commissions for the
sale of the Contracts, and any payment by Insurance Agency Affiliate
of commissions for the sale of the Contracts to its sales personnel,
will be reflected in the FOCUS reports filed by Broker pursuant to
Section 17(a) of the 1934 Act and the rules thereunder and in its
fee assessment reports filed with the National Association of
Securities Dealers, Inc.
(4) All premiums derived from the sale of the Contract through Insurance
Agency Affiliate will be sent directly to the Company by Insurance
Agency Affiliate customers or will be sent by them to Broker for
forwarding to the Company. Insurance Agency Affiliate will not
receive or accumulate customer funds nor will it receive or maintain
custody of customer securities.
F. Complaints and Investigations
(1) Broker and Distributor jointly agree to cooperate fully in any
insurance regulatory investigation or proceeding or judicial
proceeding arising in connection with the Contracts marketed under
this Agreement. Broker and Distributor further agree to cooperate
fully in any securities regulatory investigation or proceeding or
judicial proceeding with respect to Broker, Distributor, their
affiliates and their agents or representatives to the extent that
such investigation or proceeding is in connection with Contract
marketed under this Agreement. Broker shall furnish applicable
federal and state regulatory authorities with any information or
reports in connection with its services under this Agreement which
such authorities may request in order to ascertain whether the
Company's operations are being conducted in a manner consistent with
any applicable law or regulation.
G. Term of Agreement
(1) This Agreement shall continue in force for one year from its
effective date and thereafter shall automatically be renewed every
year for a further one year period; provided that either party may
unilaterally terminate this Agreement upon thirty (30) days' written
notice to the other party of its intention to do so.
(2) Upon termination of this Agreement, all authorizations, rights and
obligations shall cease except (a) the agreements contained in
Section F hereof; (b) the indemnity set forth in
Section H hereof; and (c) the obligation to settle accounts
hereunder, including commission payments on premiums subsequently
received for Contracts in effect at the time of termination or
issued pursuant to applications received by Broker prior to
termination.
H. Indemnity
(1) Broker shall be held to the exercise of reasonable care in carrying
out the provision of this Agreement.
(2) Distributor agrees to indemnify and hold harmless Broker and each
officer or director of Broker against any losses, claims, damages or
liabilities, joint or several, to which Broker or such officer or
director become subject, under the 1933 Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of material fact, required to be stated
therein or necessary to make the statements therein not misleading,
contained in any Registration Statement or any post-effective
amendment thereof or in the Prospectus or any amendment or
supplement to the Prospectus, or any sales literature provided by
the Company or by the Distributor.
(3) Broker agrees to indemnify and hold harmless Company and Distributor
and each of their current and former directors and officers and each
person, if any, who controls or has controlled Company or
Distributor within the meaning of the 1933 Act or the 1934 Act,
against any losses, claims, damages or liabilities to which Company
or Distributor and any such director or officer or controlling
person may become subject, under the 1933 Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon:
(a) Any unauthorized use of sales materials or any verbal or
written misrepresentations or any unlawful sales practices
concerning the Contracts by Brokers; or
(b) Claims by agents or representatives or employees of Broker for
commissions, service fees, development allowances or other
compensation or renumeration of any type;
(c) The failure of Broker, its officers, employees, or agents to
comply with the provisions of this Agreement; and Broker will
reimburse Company and Distributor and any director or officer
or controlling person of either for any legal or other
expenses reasonably incurred by Company, Distributor, or such
director, officer of controlling person in connection with
investigating or defending any such loss, claims, damage,
liability or action. This indemnity agreement will be in
addition to any liability which Broker may otherwise have.
I. Assignability
This Agreement shall not be assigned by either party without the written
consent of the other.
J. Governing Law
This Agreement shall be governed by and Construed in accordance with the
laws of the State of New Jersey.
In Witness Whereof, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
PRUCO SECURITIES CORPORATION
(Distributor)
By:
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President
(Broker)
By:
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SELECTED BROKER AGREEMENT
SCHEDULE A
The following policies are the Contracts as defined in the Agreement made and
effective ________________, 19__, between Pruco Securities Corporation and
_____________________.
PRUCO LIFE INSURANCE COMPANY
Survivorship Variable Universal Life
(Flexible Premium Survivorship Variable Life Policy)
PruLife Custom Premier Variable Universal Life
(Flexible Premium Variable Life Policy)
PruSelect III Variable Universal Life
(Flexible Premium Variable Life Policy)
PruLife Advisor Select
(Flexible Premium Variable Life Policy)
