EXHIBIT 99.3B
FORM OF BROKER DEALER SELLING AGREEMENT
"C"
BROKER DEALER AGENCY
SELLING AGREEMENT
FOR VARIABLE CONTRACTS
This Agreement is made among the following three parties:
1. ReliaStar Life Insurance Company of New York
0000 Xxxxxxxx Xxxx
Xxxxx 000
X.X. Xxx 0000
Xxxxxxxx, Xxx Xxxx 00000
a New York domiciled stock life insurance company (hereinafter
"Insurer"); and,
2. Washington Square Securities, Inc.
00 Xxxxxxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
an affiliate of Insurer, registered as a broker-dealer with the
Securities and Exchange Commission ("SEC") and a member of the
National Association of Securities Dealers, Inc. ("NASD")
(hereinafter "General Distributor"); and,
3.
------------------------------
------------------------------
Street
------------------------------
City State ZIP
registered as a broker-dealer with the SEC and a member of the NASD
and licensed as an insurance agency (hereinafter "Broker-Dealer").
Recitals:
Whereas, Broker-Dealer is licensed as an insurance agency in order to
satisfy state insurance law requirements with respect to the sale of variable
insurance products which are registered securities with the SEC.
Whereas, the parties wish to enter into an agreement for the distribution
of Variable Contracts by Broker-Dealer; and
Whereas, Insurer has appointed General Distributor as principal
underwriter and distributor (as those terms are defined by the Investment
Company Act of 1940) of the Variable Contracts and has authorized General
Distributor to enter into selling agreements with registered broker-dealers for
the solicitation and sale of Variable Contracts; and,
Whereas, Insurer and General Distributor propose to have Broker-Dealer's
registered representatives who are licensed as life insurance/variable contract
agents in appropriate jurisdictions ("Representatives") solicit and sell
Variable Contracts and,
Whereas, Insurer and General Distributor propose to have Broker-Dealer
provide certain supervisory and administrative services as hereinafter described
with respect to the solicitation and sales of Variable Contracts.
NOW THEREFORE, in consideration of the premises and the mutual covenants
hereinafter set forth, the parties now agree as follows:
1. Variable Contracts
In this Agreement, the words "Variable Contract" shall mean those
variable life insurance policies and variable annuity contracts identified
in Section 1 of the Compensation Schedule attached hereto, and as may
hereafter be amended.
Insurer may in its sole discretion and without notice to Broker
Dealer, suspend sales of any Variable Contracts or amend any policies or
contracts evidencing such Variable Contracts if, in Insurer's opinion,
such suspension or amendment is: (1) necessary for compliance with
federal, state, or local laws, regulations, or administrative order(s);
or, (2) necessary to prevent administrative or financial hardship to
Insurer. In all other situations, Insurer shall provide 30 days notice to
Broker Dealer prior to suspending sales of any Variable Contracts or
amending any policies or contracts evidencing such Variable Contracts.
Insurer may issue and propose additional or successor products, in
which event Broker Dealer will be informed of the product and its related
Commission Schedule. If Broker Dealer does not agree to distribute such
product (s), it must notify Insurer in writing within 30 days of receipt
of the Commission Schedule for such product(s). If Broker Dealer does not
indicate disapproval of the new product(s) or the terms contained in the
related Commission Schedule, Broker Dealer will be deemed to have thereby
agreed to distribute such product(s) and agreed to the related Commission
Schedule which shall be attached to and made a part of this Agreement.
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2. Agency Appointment
On the effective date, Insurer and General Distributor appoint Broker
Dealer and Broker Dealer accepts the appointment to solicit sales of and
to sell Variable Contracts, pursuant to the terms of this Agreement.
3. Duties of Broker Dealer
(a) Supervision of Representatives. Broker Dealer shall have full
responsibility for the training and supervision of all Representatives who
are engaged directly or indirectly in the offer or sale of the Variable
Contracts, and all such persons shall be subject to the control of Broker
Dealer with respect to such persons' securities regulated activities in
connection with the Variable Contracts. Broker Dealer will cause the
Representatives to be trained in the sale of the Variable Contracts, will
cause such Representatives to qualify under applicable federal and state
laws to engage in the sale of the Variable Contracts; will cause such
Representatives to be registered representatives of Broker Dealer before
such Representatives engage in the solicitation of applications for the
Variable Contracts; and will cause such Representatives to limit
solicitation of applications for the Variable Contracts to jurisdictions
where Insurer has authorized such solicitation. Broker Dealer shall cause
such Representatives' qualifications to be certified to the satisfaction
of General Distributor and shall notify General Distributor if any
Representative ceases to be a registered representative of Broker Dealer
or ceases to maintain the proper licensing required for the sale of the
Variable Contracts. All parties shall be liable for their own negligence
and misconduct under this paragraph.
(b) Representatives Insurance Compliance. Broker Dealer, prior to allowing
its Representatives to solicit for sales or sell the Variable Contracts,
shall require such Representatives to be validly insurance licensed,
registered and appointed by Insurer as a variable contract/life insurance
agent in accordance with the jurisdictional requirements of the place
where the solicitations and sales take place as well as the solicited
person's or entity's place of residence.
Broker Dealer shall assist Insurer in the appointment of
Representatives under the applicable insurance laws to sell Variable
Contracts. Broker Dealer shall fulfill all Insurer requirements in
conjunction with the submission of licensing/appointment papers for all
applicants as insurance agents of Insurer. All such licensing/appointment
papers shall be submitted to Insurer or its designee by Broker Dealer.
Notwithstanding such submission, Insurer shall have sole discretion to
appoint, refuse to appoint, discontinue, or terminate the appointment of
any Representative as an insurance agent of Insurer.
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(c) Compliance with NASD Conduct Rules and Federal and State Securities
Laws. Broker Dealer shall fully comply with the requirements of the
National Association of Securities Dealers, Inc., the Securities Exchange
Act of 1934 and all other applicable federal and state laws. In addition,
Broker Dealer will establish and maintain such rules and procedures as may
be necessary to cause diligent supervision of the securities activities of
the Representatives as required by applicable law or regulation. Upon
request by General Distributor, Broker Dealer shall furnish such records
as may be necessary to establish such diligent supervision.
(d) Notice of Representative's Noncompliance. In the event a
Representative fails or refuses to submit to supervision of Broker Dealer
or otherwise fails to meet the rules and standards imposed by Broker
Dealer on its Representatives, Broker Dealer shall advise General
Distributor of this fact and shall immediately notify such Representative
that he or she is no longer authorized to sell the Variable Contracts and
Broker Dealer shall take whatever additional action may be necessary to
terminate the sales activities of such Representative relating to such
contracts and policies.
(e) Prospectuses, Sales Promotion Material and Advertising. Broker-Dealer
shall be provided, without any expense to Broker Dealer, with prospectuses
relating to the Variable Contracts and such other supplementary sales
material as General Distributor determines is necessary or desirable for
use in connection with sales of the Variable Contracts.
No sales promotion materials or any advertising relating to the
Variable Contracts, including without limitation generic advertising
material which does not refer to Insurer by name, shall be used by Broker
Dealer unless the specific item has been approved in writing by General
Distributor prior to such use.
In addition, Broker Dealer shall not print, publish or distribute
any advertisement, circular or any document relating to Insurer unless
such advertisement, circular or document shall have been approved in
writing by Insurer prior to such use.
Upon termination of this Agreement, all prospectuses, sales
promotion material, advertising, circulars, documents and software
relating to the sales of Insurer's contracts shall be promptly turned over
to Insurer free from any claim or retention of rights by the Broker
Dealer.
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Insurer represents that the prospectus and registration statement
relating to the Variable Contracts contain no untrue statements of
material fact or omission to state material fact, the omission of which
makes any statement contained in the prospectus and registration statement
misleading. Insurer agrees to indemnify Broker Dealer from and against any
claims, liabilities and expenses which may be incurred under the
Securities Act of 1933, the Investment Company Act of 1940, common law or
otherwise arising out of a breach of the agreement in this paragraph.
Broker Dealer agrees to hold harmless and indemnify Insurer and
General Distributor against any and all claims, liabilities and expenses
which Insurer or General Distributor may incur from liabilities arising
out of or based upon any alleged or untrue statement other than statements
contained in the registration statement, prospectus or approved sales
material of any Variable Contract.
In accordance with the requirements of the laws of the several
states, Broker Dealer shall maintain complete records indicating the
manner and extent of distribution of any such solicitation material, shall
make such records and files available to staff of Insurer or its
designated agent in field inspections and shall make such material
available to personnel of state insurance departments, the NASD or other
regulatory agencies, including the SEC, which have regulatory authority
over Insurer or General Distributor. Broker Dealer holds Insurer, General
Distributor and their affiliates harmless from any liability arising from
the use of any material which either (a) has not been specifically
approved by Insurer in writing, or (b) although previously approved, has
been disapproved, in writing, for further use.
(f) Securing Applications. All applications for Variable Contracts shall
be made on application forms supplied by Insurer and all payments
collected by Broker Dealer or any Representative thereof shall be remitted
promptly in full, together with such application forms and any other
required documentation, directly to Insurer at the address indicated on
such application or to such other address as Insurer may, from
time-to-time, designate in writing. Broker Dealer shall review all such
applications for accuracy and completeness. Checks or money orders in
payment on any such Variable Contract shall be drawn to the order of
"ReliaStar Life Insurance Company." All applications are subject to
acceptance or rejection by Insurer at its sole discretion. All records or
information obtained hereunder by Broker Dealer shall not be disclosed or
used except as expressly authorized herein, and Broker Dealer will keep
such records and information confidential, to be disclosed only as
authorized or if expressly required by federal or state regulatory
authorities.
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(g) Collection of Purchase Payments. Broker Dealer agrees that all money
or other consideration tendered with or in respect of any application for
a Variable Contract and the Variable Contract when issued is the property
of Insurer and shall be promptly remitted in full to Insurer without
deduction or offset for any reason, including by way of example but not
limitation, any deduction or offset for compensation claimed by Broker
Dealer.
(h) Policy Delivery. Insurer will transmit Variable Contracts to Broker
Dealer for delivery to policyowners. Broker Dealer hereby agrees to
deliver all such Variable Contracts to Policyowners within ten (10) days
of their receipt by Broker Dealer from Insurer. Broker Dealer agrees to
indemnify and hold harmless Insurer for any and all losses caused by
Broker Dealer's failure to perform the undertakings described in this
paragraph. Broker Dealer hereby authorizes Insurer to set off any amount
it owes Insurer under this paragraph against any and all amounts otherwise
payable to Broker Dealer by Insurer.
(i) Fidelity Bond. Broker Dealer represents that all directors, officers,
employees and Representatives of Broker Dealer who are licensed pursuant
to this Agreement as Insurer's agents for state insurance law purposes or
who have access to funds of Insurer, including but not limited to funds
submitted with applications for the Variable Contracts, or funds being
returned to owners, are and shall be covered by a blanket fidelity bond,
including coverage for larceny and embezzlement, issued by a reputable
bonding company. This bond shall be maintained by Broker Dealer at Broker
Dealer's expense. Such bond shall be, at least, of the form, type and
amount required under the NASD Conduct Rules. Insurer may require
evidence, satisfactory to it, that such coverage is in force and Broker
Dealer shall give prompt written notice to Insurer of any notice of
cancellation or change of coverage.
Broker Dealer assigns any proceeds received from the fidelity
bonding company to Insurer to the extent of Insurer's loss due to
activities covered by the bond. If there is any deficiency amount, whether
due to a deductible or otherwise, Broker Dealer shall promptly pay Insurer
such amount on demand and Broker Dealer hereby indemnifies and holds
harmless Insurer from any such deficiency and from the costs of collection
thereof (including reasonable attorneys' fees).
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4. Compensation
(a) Variable Contracts. Insurer, on behalf of General Distributor, shall
pay a dealer concession to Broker Dealer on all sales of Variable
Contracts through its Representatives, in accordance with the form of the
Compensation Schedule attached hereto, which is in effect when purchase
payment on such Variable Contracts are received by Insurer. Dealer
concessions will be paid as a percentage of premiums received in cash or
other legal tender and accepted by Insurer on applications obtained by
Broker Dealer's Representatives unless otherwise indicated in Compensation
Schedule A. Upon termination of this Agreement, all compensation payable
hereunder shall cease; however, Broker Dealer shall continue to be liable
for any chargebacks or for any other amounts advanced by or otherwise due
Insurer hereunder.
Insurer will pay all such Compensation to the Broker Dealer. Broker
Dealer agrees to hold Insurer and General Distributor harmless from all
claims of its Representatives for compensation in respect of
Representative's sales of Variable Contracts.
(b) Commission Statements. Broker Dealer will be provided with copies of
its Representatives' commission statements together with Broker Dealer's
own commission statement for each commission payment period in which
commissions are payable. Broker Dealer agrees that, except as to clerical
errors and material undisclosed facts, if any, such statements constitute
a complete and accurate statement of the commission account unless written
notice is provided to Insurer within 120 days after the date of the
statement, which notice specifically sets forth the objections or
exceptions thereto.
(c) Compensation Schedules. The initial Compensation Schedule is attached.
Insurer and General Distributor reserve the right to change, amend,
or cancel any Compensation Schedule as to business produced after such
change by mailing notice of such change in the form of a new Compensation
Schedule to Broker Dealer. Such change shall be effective, unless
otherwise specified, ten (10) days after the notice is mailed.
(d) Rights of Rejection and Settlement. Insurer reserves the right to
reject any and all applications and collections submitted, to discontinue
writing any form of policy, to take possession of and cancel any policy
and return the premium or any part of it, and to make any compromise
settlement in respect of a policy. Broker Dealer will not be entitled to
receive or retain any compensation on premiums or parts of premiums
Insurer does not receive and retain because of such rejection,
discontinuance, cancellation, or compromise settlement. If
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compensation has been paid to which Broker Dealer is not entitled, any
amount credited will be charged back, and if the account balance is
insufficient to cover the credited amount, Broker Dealer as applicable
agrees to promptly repay the credited amount.
5. Termination
This Agreement may be terminated, without cause, by any party upon thirty
(30) days prior written notice; and may be terminated, for failure to
perform satisfactorily or other cause, by any party immediately; and shall
be terminated if Broker Dealer ceases to be registered as a broker dealer
under the Securities Exchange Act of 1934 and a member of the NASD or, if
Broker Dealer ceases to maintain its insurance agent license(s) in good
standing in the jurisdictions in which it conducts business.
6. Arbitration
Any dispute, claim or controversy arising out of or in connection with
this Agreement shall be submitted to arbitration pursuant to the NASD's
arbitration facilities. If the subject matter of the dispute, claim or
controversy is not within the scope of matters which may arbitrated
through the NASD arbitration facilities, then such dispute, claim or
controversy shall, upon the written request of any party, be submitted to
three arbitrators, one to be chosen by each party, and the third by the
two so chosen. If either party refuses or neglects to appoint an
arbitrator within thirty (30) days after the receipt of the written notice
from the other party requesting it to do so, the requesting party may
appoint two arbitrators. If the two arbitrators fail to agree in the
selection of a third arbitrator within thirty (30) days of their
appointment, each of them shall name two, of whom the other shall decline
one and the decision shall be made by drawing lots. All arbitrators shall
be active or retired executive officers of insurance companies not under
the control of any party to this Agreement. Each party shall submit its
case to the arbitrators within thirty (30) days of the appointment of the
third arbitrator. The arbitration shall be held in Minneapolis, Minnesota
at the times agreed upon by the arbitrators. The decision in writing of
any two arbitrators, when filed with the parties hereto shall be final and
binding on both parties. Judgment may be entered upon the final decision
of the arbitrators in any court having jurisdiction. Each party shall bear
the expense of its own arbitrator and shall jointly and equally bear with
the other party the expense of the third arbitrator and of the
arbitration.
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7. General Provisions
(a) Additions, Amendments, Modifications & Waivers. This Agreement shall
not be effective until approved by Insurer and General Distributor.
Insurer and General Distributor reserve the right to amend this Agreement
at any time, and the submission of an application for the purchase of a
Variable Contract by Broker Dealer after notice of any such amendment has
been sent shall constitute Broker Dealer's agreement to any such
amendment. No additions, amendments or modifications of this Agreement or
any waiver of any provision will be valid unless approved, in writing, by
one of Insurer's duly authorized officers. In addition, no approved waiver
of any default, or failure of performance by Broker Dealer will affect
Insurer's or General Distributor's rights with respect to any later
default or failure of performance.
(b) Independent Contractor Relationship. This Agreement does not create
the relationship of employer and employee between the parties to this
Agreement. Insurer and General Distributor are independent contractors
with respect to Broker Dealer and its Representatives.
(c) Assignments. Broker Dealer will not assign or transfer, either wholly
or partially, this Agreement or any of the benefits accrued or to accrue
under it, without the written prior consent of a duly authorized officer
of the Insurer and General Distributor.
(d) Service of Process. If Broker Dealer receives or is served with any
notice or other paper concerning any legal action against Insurer or
General Distributor, Broker Dealer agrees to notify Insurer immediately
(in any event not later than the first business day after receipt) by
telephone and further agrees to transmit any papers that are served or
received by facsimile to (000) 000-0000 and by overnight mail to Insurer's
Office of General Counsel.
(e) Severability. It is understood and agreed by the parties to this
Agreement that if any part, term or provision of this Agreement is held to
be invalid or in conflict with any law or regulation, the validity of the
remaining portions or provisions will not be affected, and the parties'
rights and obligations will be construed and enforced as if this Agreement
did not contain the particular part, term or provision held to be invalid.
(f) Governing Law. It is agreed by the parties to this Agreement that the
Agreement and all of its provisions will be governed by the laws of the
State of Minnesota.
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(g) Limitations. No party other than Insurer shall have the authority on
behalf of Insurer to make, alter, or discharge any policy, contract, or
certificate issued by Insurer, to waive any forfeiture or to grant,
permit, nor extend the time for making any payments nor to guarantee
earnings or rates, nor to alter the forms which Insurer may prescribe or
substitute other forms in place of those prescribed by Insurer, nor to
enter into any proceeding in a court of law or before a regulatory agency
in the name of or on behalf of Insurer, nor to open any bank account in
the full legal name of Insurer, any derivation thereof or any tradename
thereof.
8. Territory
Broker Dealer's territory is limited geographically to those
jurisdictions in which the Variable Contracts may lawfully be offered,
provided that Broker Dealer's right to solicit sales of and to sell the
Variable Contracts in such jurisdictions is not exclusive.
9. Effective Date
This Agreement shall be effective ________________, 199__.
IN WITNESS WHEREOF, we set our hands this ____ day of _________________. 199__.
INSURER:
BROKER DEALER:
RELIASTAR LIFE INSURANCE
COMPANY OF NEW YORK _______________________________
By: ______________________________ By:____________________________
Title: ____________________________ Title: __________________________
GENERAL DISTRIBUTOR:
WASHINGTON SQUARE
SECURITIES, INC.
By: ______________________________
Title:_____________________________
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"D"
BROKER DEALER AGENCY
SELLING AGREEMENT
FOR VARIABLE CONTRACTS
This Agreement is made among the following four parties:
1. ReliaStar Life Insurance Company of New York
0000 Xxxxxxxx Xxxx
Xxxxx 000
X.X. Xxx 0000
Xxxxxxxx, Xxx Xxxx 00000
a New York domiciled stock life insurance company (hereinafter
"Insurer"); and,
2. Washington Square Securities, Inc.
00 Xxxxxxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
an affiliate of Insurer, registered as a broker-dealer with the
Securities and Exchange Commission ("SEC") and a member of the
National Association of Securities Dealers, Inc. ("NASD")
(hereinafter "General Distributor"); and,
3.
------------------------------
------------------------------
Street
------------------------------
City State ZIP
registered as a broker-dealer with the SEC and a member of the NASD
(hereinafter "Broker-Dealer"); and,
4.
------------------------------
------------------------------
Street
------------------------------
City State ZIP
an affiliate of Broker-Dealer and a licensed insurance agency
(hereinafter "Agency").
11
Recitals:
Whereas, Broker-Dealer has become affiliated with Agency in order to
satisfy state insurance law requirements with respect to the sale of variable
insurance products which are registered securities with the SEC.
Whereas, the parties wish to enter into an agreement for the distribution
of Variable Contracts by Broker-Dealer and Agency; and
Whereas, Insurer has appointed General Distributor as principal
underwriter and distributor (as those terms are defined by the Investment
Company Act of 1940) of the Variable Contracts and has authorized General
Distributor to enter into selling agreements with registered broker-dealers for
the solicitation and sale of Variable Contracts; and,
Whereas, Insurer and General Distributor propose to have Broker-Dealer's
registered representatives who are affiliated with Agency and who are licensed
as life insurance/variable contract agents in appropriate jurisdictions
("Representatives") solicit and sell Variable Contracts; and,
Whereas, Insurer and General Distributor propose to have Broker-Dealer
provide certain supervisory and administrative services as hereinafter described
with respect to the solicitation and sales of Variable Contracts; and,
NOW THEREFORE, in consideration of the premises and the mutual covenants
hereinafter set forth, the parties now agree as follows:
1. Variable Contracts
In this Agreement, The words "Variable Contract" shall mean those
variable life insurance policies and variable annuity contracts identified
in Section 1 of the Compensation Schedule attached hereto, and as may
hereafter be amended.
Insurer may in its sole discretion and without notice to Broker
Dealer, suspend sales of any Variable Contracts or amend any policies or
contracts evidencing such Variable Contracts if, in Insurer's opinion,
such suspension or amendment is: (1) necessary for compliance with
federal, state, or local laws, regulations, or administrative order(s);
or, (2) necessary to prevent administrative or financial hardship to
Insurer. In all other situations, Insurer shall provide 30 days notice to
Broker Dealer prior to suspending sales of any Variable Contracts or
amending any policies or contracts evidencing such Variable Contracts.
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Insurer may issue and propose additional or successor products, in
which event Broker Dealer will be informed of the product and its related
Commission Schedule. If Broker Dealer does not agree to distribute such
product (s), it must notify Insurer in writing within 30 days of receipt
of the Commission Schedule for such product(s). If Broker Dealer does not
indicate disapproval of the new product(s) or the terms contained in the
related Commission Schedule, Broker Dealer will be deemed to have thereby
agreed to distribute such product(s) and agreed to the related Commission
Schedule which shall be attached to and made a part of this Agreement.
2. Agency Appointments
On the effective date, Insurer and General Distributor appoint Broker
Dealer and its affiliated Agency and Broker Dealer and Agency accept the
appointment to solicit sales of and to sell Variable Contracts only,
pursuant to the terms of this Agreement.
3. Duties of Broker Dealer
(a) Supervision of Representatives. Broker Dealer shall have full
responsibility for the training and supervision of all Representatives who
are engaged directly or indirectly in the offer or sale of the Variable
Contracts, and all such persons shall be subject to the control of Broker
Dealer with respect to such persons' securities regulated activities in
connection with the Variable Contracts. Broker Dealer will cause the
Representatives to be trained in the sale of the Variable Contracts, will
cause such Representatives to qualify under applicable federal and state
laws to engage in the sale of the Variable Contracts; will cause such
Representatives to be registered representatives of Broker Dealer before
such Representatives engage in the solicitation of applications for the
Variable Contracts; and will cause such Representatives to limit
solicitation of applications for the Variable Contracts to jurisdictions
where Insurer has authorized such solicitation. Broker Dealer shall cause
such Representatives' qualifications to be certified to the satisfaction
of General Distributor and shall notify General Distributor if any
Representative ceases to be a registered representative of Broker Dealer
or ceases to maintain the proper licensing required for the sale of the
Variable Contracts. All parties shall be liable for their own negligence
and misconduct under this paragraph.
(b) Representatives Insurance Compliance. Broker Dealer, prior to allowing
its Representatives to solicit for sales or sell the Variable Contracts,
shall require such representatives to be validly insurance licensed,
registered and appointed by Insurer as a variable contract agent in
accordance with the jurisdictional
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requirements of the place where the solicitations and sales take place as
well as the solicited person's or entity's place of residence.
Broker Dealer and Agency shall assist Insurer in the appointment of
Representatives under the applicable insurance laws to sell the Variable
Contracts. Broker Dealer shall fulfill all Insurer requirements in
conjunction with the submission of licensing/appointment papers for all
applicants as insurance agents of Insurer. All such licensing/appointment
papers shall be submitted to Insurer or its designee by Broker Dealer.
Notwithstanding such submission, Insurer shall have sole discretion to
appoint, refuse to appoint, discontinue, or terminate the appointment of
any Representative as an insurance agent of Insurer.
(c) Compliance with NASD Conduct Rules and Federal and State Securities
Laws. Broker Dealer shall fully comply with the requirements of the
National Association of Securities Dealers, Inc., the Securities Exchange
Act of 1934 and all other applicable federal and state laws. In addition,
Broker Dealer will establish and maintain such rules and procedures as may
be necessary to cause diligent supervision of the securities activities of
the Representatives as required by applicable law or regulation. Upon
request by General Distributor, Broker Dealer shall furnish such records
as may be necessary to establish such diligent supervision.
(d) Notice of Representative's Noncompliance. In the event a
Representative fails or refuses to submit to supervision of Broker Dealer
or otherwise fails to meet the rules and standards imposed by Broker
Dealer on its Representatives, Broker Dealer shall advise General
Distributor of this fact and shall immediately notify such Representative
that he or she is no longer authorized to sell the Variable Contracts and
Broker Dealer shall take whatever additional action may be necessary to
terminate the sales activities of such Representative relating to the
Variable Contracts.
(e) Prospectuses, Sales Promotion Material and Advertising. Broker-Dealer
shall be provided, without any expense to Broker Dealer, with prospectuses
relating to the Variable Contracts and such other supplementary sales
material as General Distributor determines is necessary or desirable for
use in connection with sales of the Variable Contracts.
No sales promotion materials or any advertising relating to the
Variable Contracts, including without limitation generic advertising
material which does not refer to Insurer by name, shall be used by Broker
Dealer or Agency unless the specific item has been approved in writing by
General Distributor prior to such use.
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In addition, neither Broker Dealer nor Agency shall print, publish
or distribute any advertisement, circular or any document relating to
Insurer unless such advertisement, circular or document shall have been
approved in writing by Insurer prior to such use.
Upon termination of this Agreement, all prospectuses, sales
promotion material, advertising, circulars, documents and software
relating to the sales of the Variable Contracts shall be promptly turned
over to Insurer free from any claim or retention of rights by the Broker
Dealer or Agency.
Insurer represents that the prospectus and registration statement
relating to the Variable Contracts contain no untrue statements of
material fact or omission to state material fact, the omission of which
makes any statement contained in the prospectus and registration statement
misleading. Insurer agrees to indemnify Broker Dealer from and against any
claims, liabilities and expenses which may be incurred under the
Securities Act of 1933, the Investment Company Act of 1940, common law or
otherwise arising out of a breach of the agreement in this paragraph.
Broker Dealer and Agency agree to hold harmless and indemnify
Insurer and General Distributor against any and all claims, liabilities
and expenses which Insurer or General Distributor may incur from
liabilities arising out of or based upon any alleged or untrue statement
other than statements contained in the registration statement, prospectus
or approved sales material of any Variable Contract.
In accordance with the requirements of the laws of the several
states, Broker Dealer and Agency shall maintain complete records
indicating the manner and extent of distribution of any such solicitation
material, shall make such records and files available to staff of Insurer
or its designated agent in field inspections and shall make such material
available to personnel of state insurance departments, the NASD or other
regulatory agencies, including the SEC, which have regulatory authority
over Insurer or General Distributor. Broker Dealer and Agency, jointly and
severally hold Insurer, General Distributor and their affiliates harmless
from any liability arising from the use of any material which either (a)
has not been specifically approved in writing, or (b) although previously
approved, has been disapproved, in writing, for further use.
(f) Securing Applications. All applications for Variable Contracts shall
be made on application forms supplied by Insurer and all payments
collected by Broker Dealer or any Representative thereof shall be remitted
promptly in full, together with such application forms and any other
required documentation, directly to Insurer at the address indicated on
such application or to such other address as Insurer may, from
time-to-time, designate in writing. Broker Dealer shall review all such
applications for accuracy and completeness. Checks or
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money orders in payment on any such Variable Contract shall be drawn to
the order of "ReliaStar Life Insurance Company." All applications are
subject to acceptance or rejection by Insurer at its sole discretion. All
records or information obtained hereunder by Broker Dealer shall not be
disclosed or used except as expressly authorized herein, and Broker Dealer
will keep such records and information confidential, to be disclosed only
as authorized or if expressly required by federal or state regulatory
authorities.
(g) Collection of Purchase Payments. Broker Dealer agrees that all money
or other consideration tendered with or in respect of any application for
a Variable Contract and the Variable Contract when issued is the property
of Insurer and shall be promptly remitted in full to Insurer without
deduction or offset for any reason, including by way of example but not
limitation, any deduction or offset for compensation claimed by Broker
Dealer.
(h) Policy Delivery. Insurer will transmit Variable Contracts to Broker
Dealer for delivery to Policyowners. Broker Dealer hereby agrees to
deliver all such Variable Contracts to Policyowners within ten (10) days
of their receipt by Broker Dealer from Insurer. Broker Dealer agrees to
indemnify and hold harmless Insurer for any and all losses caused by
Broker Dealer's failure to perform the undertakings described in this
paragraph. Broker Dealer hereby authorizes Insurer to set off any amount
it owes Insurer under this paragraph against any and all amounts otherwise
payable to Broker Dealer by Insurer.
(i) Fidelity Bond. Broker Dealer represents that all directors, officers,
employees and Representatives of Broker Dealer who are licensed pursuant
to this Agreement as Insurer's agents for state insurance law purposes or
who have access to funds of Insurer, including but not limited to funds
submitted with applications for the Variable Contracts or funds being
returned to owners, are and shall be covered by a blanket fidelity bond,
including coverage for larceny and embezzlement, issued by a reputable
bonding company. This bond shall be maintained by Broker Dealer at Broker
Dealer's expense. Such bond shall be, at least, of the form, type and
amount required under the NASD Conduct Rules. Insurer may require
evidence, satisfactory to it, that such coverage is in force and Broker
Dealer shall give prompt written notice to Insurer of any notice of
cancellation or change of coverage.
Broker Dealer assigns any proceeds received from the fidelity
bonding company to Insurer to the extent of Insurer's loss due to
activities covered by the bond. If there is any deficiency amount, whether
due to a deductible or otherwise, Broker Dealer shall promptly pay Insurer
such amount on demand and Broker Dealer hereby indemnifies and holds
harmless Insurer from any such deficiency and from the costs of collection
thereof (including reasonable attorneys' fees).
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4. Compensation
(a) Variable Contracts. Insurer, on behalf of General Distributor, shall
pay a dealer concession to Broker Dealer on all sales of Variable
Contracts through such Representatives, in accordance with the form of the
Compensation Schedule attached hereto, which is in effect when purchase
payment on such Variable Contracts are received by Insurer. Dealer
concessions will be paid as a percentage of premiums received in cash or
other legal tender and accepted by Insurer on applications obtained by
Broker Dealer's Representatives unless otherwise indicated in Compensation
Schedule A. Upon termination of this Agreement, all compensation payable
hereunder shall cease; however, Broker Dealer shall continue to be liable
for any chargebacks or for any other amounts advanced by or otherwise due
Insurer hereunder.
Insurer will pay all such Compensation to and in the name of Broker
Dealer or its affiliated Agency. Broker Dealer agrees to hold Insurer and
General Distributor harmless from all claims of its Representatives for
compensation in respect of such Representative's sales of Variable
Contracts.
(b) Commission Statements. Broker Dealer will be provided with copies of
its Representatives' commission statements together with Broker Dealer's
own commission statements for each commission payment period in which
commissions are payable. Broker Dealer agrees that, except as to clerical
errors and material undisclosed facts, if any, such statements constitutes
a complete and accurate statement of the commission account unless written
notice is provided to Insurer within 120 days after the date of the
statement, which notice specifically sets forth the objections or
exceptions thereto.
(c) Compensation Schedules. The initial Compensation Schedule is attached.
Insurer and General Distributor reserve the right to change, amend,
or cancel any Compensation Schedule as to business produced after such
change by mailing notice of such change in the form of a new Compensation
Schedule to Broker Dealer. Such change shall be effective, unless
otherwise specified, ten (10) days after the notice is mailed.
(d) Rights of Rejection and Settlement. Insurer reserves the right to
reject any and all applications and collections submitted, to discontinue
writing any form of policy, to take possession of and cancel any policy
and return the premium or any part of it, and to make any compromise
settlement in respect of a policy. Broker Dealer will not be entitled to
receive or retain any compensation on premiums or parts of premiums
Insurer does not receive and retain because of such rejection,
discontinuance, cancellation, or compromise settlement. If compensation
has been paid to which Broker Dealer is not entitled, any amount
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credited will be charged back, and if the account balance is insufficient
to cover the credited amount, Broker Dealer as applicable agrees to
promptly repay the credited amount.
5. Termination
This Agreement may be terminated, without cause, by any party upon thirty
(30) days prior written notice; and may be terminated, for failure to
perform satisfactorily or other cause, by any party immediately; and shall
be terminated if Broker Dealer ceases to be registered as a broker dealer
under the Securities Exchange Act of 1934 and a member of the NASD or, if
Agency ceases to maintain its insurance agent license(s) in good standing
in the jurisdictions in which it conducts business.
6. Arbitration
Any dispute, claim or controversy arising out of or in connection with
this Agreement shall be submitted to arbitration pursuant to the NASD's
arbitration facilities. If the subject matter of the dispute, claim or
controversy is not within the scope of matters which may arbitrated
through the NASD arbitration facilities, then such dispute, claim or
controversy shall, upon the written request of any party, be submitted to
three arbitrators, one to be chosen by each party, and the third by the
two so chosen. If either party refuses or neglects to appoint an
arbitrator within thirty (30) days after the receipt of the written notice
from the other party requesting it to do so, the requesting party may
appoint two arbitrators. If the two arbitrators fail to agree in the
selection of a third arbitrator within thirty (30) days of their
appointment, each of them shall name two, of whom the other shall decline
one and the decision shall be made by drawing lots. All arbitrators shall
be active or retired executive officers of insurance companies not under
the control of any party to this Agreement. Each party shall submit its
case to the arbitrators within thirty (30) days of the appointment of the
third arbitrator. The arbitration shall be held in Minneapolis, Minnesota
at the times agreed upon by the arbitrators. The decision in writing of
any two arbitrators, when filed with the parties hereto shall be final and
binding on both parties. Judgment may be entered upon the final decision
of the arbitrators in any court having jurisdiction. Each party shall bear
the expense of its own arbitrator and shall jointly and equally bear with
the other party the expense of the third arbitrator and of the
arbitration.
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7. General Provisions
(a) Additions, Amendments, Modifications & Waivers. This Agreement shall
not be effective until approved by Insurer and General Distributor.
Insurer and General Distributor reserve the right to amend this Agreement
at any time, and the submission of an application for the purchase of a
Variable Contract by either Broker Dealer or Agency after notice of any
such amendment has been sent shall constitute Broker Dealer's or Agency's,
as applicable, agreement to any such amendment. No additions, amendments
or modifications of this Agreement or any waiver of any provision will be
valid unless approved, in writing, by one of Insurer's duly authorized
officers. In addition, no approved waiver of any default, or failure of
performance by Broker Dealer or Agency will affect Insurer's or General
Distributor's rights with respect to any later default or failure of
performance.
(b) Independent Contractor Relationship. This Agreement does not create
the relationship of employer and employee between the parties to this
Agreement. Insurer and General Distributor are independent contractors
with respect to Broker Dealer, its Representatives, Agency and its Agents.
(c) Assignments. Neither Broker Dealer nor Agency will assign or transfer,
either wholly or partially, this Agreement or any of the benefits accrued
or to accrue under it, without the written prior consent of a duly
authorized officer of the Insurer and General Distributor.
(d) Service of Process. If Broker Dealer or Agency receives or is served
with any notice or other paper concerning any legal action against Insurer
or General Distributor, Broker Dealer or Agency agrees to notify Insurer
immediately (in any event not later than the first business day after
receipt) by telephone and transmit any papers that are served or received
by facsimile to (000) 000-0000 and by overnight mail to Insurer's Office
of General Counsel.
(e) Severability. It is understood and agreed by the parties to this
Agreement that if any part, term or provision of this Agreement is held to
be invalid or in conflict with any law or regulation, the validity of the
remaining portions or provisions will not be affected, and the parties'
rights and obligations will be construed and enforced as if this Agreement
did not contain the particular part, term or provision held to be invalid.
(f) Governing Law. It is agreed by the parties to this Agreement that the
Agreement and all of its provisions will be governed by the laws of the
State of Minnesota.
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(g) Limitations. No party other than Insurer shall have the authority on
behalf of Insurer to make, alter, or discharge any policy, contract, or
certificate issued by insurer, to waive any forfeiture or to grant,
permit, nor extend the time for making any payments nor to guarantee
earnings or rates, nor to alter the forms which Insurer may prescribe or
substitute other forms in place of those prescribed by Insurer, nor to
enter into any proceeding in a court of law or before a regulatory agency
in the name of or on behalf of Insurer, nor to open any bank account in
the full legal name of Insurer, any derivation thereof or any tradename
thereof.
8. Territory
Broker Dealer's territory is limited geographically to those
jurisdictions in which the Variable Contracts may lawfully be offered,
provided that Broker Dealer's right to solicit sales of and to sell the
Variable Contracts in such jurisdictions is not exclusive.
9. Effective Date
This Agreement shall be effective ________________, 199__.
IN WITNESS WHEREOF, we set our hands this ____ day of _________________. 199__.
INSURER:
BROKER DEALER:
RELIASTAR LIFE INSURANCE
COMPANY OF NEW YORK _______________________________
By: ______________________________ By:____________________________
Title: ____________________________ Title: __________________________
GENERAL DISTRIBUTOR:
AGENCY:
WASHINGTON SQUARE
SECURITIES, INC. __________________________________
By: ______________________________ By: ______________________________
Title:_____________________________ Title: _____________________________
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