EXHIBIT 1
PRINCIPAL UNDERWRITING AGREEMENT
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AGREEMENT made as of the 1st day of December, 1997 by and between
Connecticut General Life Insurance Company, a Connecticut corporation ("CG"),
on its own behalf and on behalf of certain of its separate accounts
("Accounts") named in Attachment A to this Agreement, as said Attachment may
be amended from time to time, and CIGNA Financial Services, Inc., a
Connecticut corporation ("CFS").
WHEREAS, the Accounts are or will be established under the authority of
the Board of Directors of CG in order to set aside and invest assets
attributable to certain variable annuity contracts and variable life
insurance policies (together, "Policies") issued by CG;
WHEREAS, the Accounts are or will be registered under the Investment
Company Act of 1940, as amended ("the '40 Act") and the Policies are or will
be registered under the Securities Act of 1933, as amended ("the '33 Act"),
unless an exemption from registration under the '33 Act is available;
WHEREAS, CFS is registered as a broker-dealer with the Securities and
Exchange Commission ("SEC") under the Securities Exchange Act of 1934, as
amended ("the '34 Act") and is a member of the National Association of
Securities Dealers, Inc. ("NASD");
WHEREAS, CG and the Accounts desire to have the Policies sold and
distributed by and through CFS, and CFS is willing to sell and distribute
such Policies and arrange for their sale and distribution by other
broker-dealers under the terms stated herein; and
WHEREAS, CFS may desire to appoint CG, the issuer of the Policies, as
its agent to receive money and perform other services.
NOW, THEREFORE, in consideration of the covenants hereinafter contained, CG
and CFS agree as follows:
1. UNDERWRITER. CG hereby appoints CFS as Principal Distributor of the
Policies during the term of this Agreement. CG reserves the right, however,
to refuse at any time or times to sell any Policies hereunder for any reason,
and CG maintains ultimate responsibility for Policy underwriting.
2. UNDERTAKINGS REGARDING SALES BY CFS. CFS shall use reasonable
efforts to sell the Policies but does not agree hereby to sell any specific
number of Policies and shall be free to act as underwriter of other
securities. All premiums for Policies shall be held in a fiduciary capacity
and remitted promptly (and in any event within 30 days or such shorter period
as may be required by law) in full, together with such application, forms and
any other required documentation to CG, and CFS hereby appoints CG as agent
of CFS to receive premiums on CFS's behalf. Checks or money orders in payment
of premiums shall be drawn to the order of "Connecticut General Life
Insurance Company." CFS agrees to offer each Policy for sale in accordance
with any prospectus then in effect for such Policy. CFS is not authorized to
give any information
or to make any representations concerning any Policy other than those
contained in the current prospectus for such Policy as filed with the SEC or
in such sales literature as may be authorized by CG. CG shall review and
approve or disapprove all proposed advertising concerning the Policies prior
to its use.
3. COMPLIANCE. CFS shall conform to the Conduct Rules of the NASD, and
the securities laws of any jurisdiction in which it sells, directly or
indirectly, any Policies. CFS shall take reasonable steps to ensure that its
associated persons sell Policies to persons for whom a Policy is suitable.
CFS agrees to make timely filings with the SEC, the NASD, and such other
regulatory authorities as may be required of any sales literature relating to
the Policies and intended for distribution to prospective investors. CFS also
agrees to furnish to CG sufficient copies of any agreements or plans it
intends to use in connection with any sales of Policies. CFS further agrees
to provide information or reports with respect to its services hereunder
pursuant to request by any regulatory authority having jurisdiction with
respect thereto, in order that such regulatory authority may ascertain
whether CG's variable product operations are being conducted in a manner
consistent with applicable laws and regulations.
4. REGISTRATION AND QUALIFICATION OF POLICIES. CG agrees to execute
such papers and to do such acts and things as shall from time to time be
reasonably requested by CFS for the purpose of qualifying and maintaining
qualification of the Policies for sale under applicable state law and for
maintaining the registration of the Accounts and interests therein,
respectively, under the '40 Act and the '33 Act, to the end that there will
be available for sale from time to time such amount of the Policies as CFS
and other broker-dealers may reasonably be expected to sell. CG shall advise
CFS promptly of (a) any action of the SEC or any authority of any state or
territory of which it may be advised, affecting registration or qualification
of any Account, or the right to offer the Policies for sale, and (b) the
happening of any event which makes untrue any statement or which requires the
making of any change in the registration statement or prospectus in order to
make the statements therein not misleading.
5. INDEPENDENT CONTRACTOR STATUS. CFS shall be an independent
contractor. CFS is responsible for its own conduct and for the employment,
control and conduct of its agents and employees and for injury to such agents
or employees or to others through its agents or employees. CFS assumes full
responsibility for its agents and employees under applicable statutes and
agrees to pay all employer taxes thereunder. All persons selling Policies
shall be duly licensed as insurance agents, with variable contract authority
if necessary, pursuant to applicable state laws, and CG shall have
responsibility for arranging for such licensing.
6. SALES BY ADDITIONAL BROKER-DEALERS. CFS, with CG's written consent
for each such distributor, may enter into consulting and/or wholesaling
agreements with broker-dealer distributors to obtain assistance in locating
broker-dealers who are willing to enter into sales agreements for the sale of
the Policies. In addition, CFS or CG may enter into sales agreements with
other independent broker-dealers for the sale of Policies, provided, however,
that with respect to any such other independent broker-dealer, CFS shall
obtain CG's written consent. Notwithstanding the above, CG expressly reserves
to itself the ultimate responsibility and authority for direction and control
of the underwriting services provided hereunder and ultimate control over,
and responsibility for, marketing the Policies; including the ultimate right
to appoint agents
and broker-dealers selling Policies, and to terminate an agent and/or
broker-dealer, once appointed.
7. EXPENSES PAID BY CG. While CFS continues to act as agent of CG to
obtain applications for and to sell Policies, and provided CFS (as
distinguished from its associated persons) receives no commission for the
sale of the Policies, CG shall pay the following:
(a) all expenses of printing and distributing any prospectus for use
in offering the Policies for sale and all other copies of any such
prospectus used by CFS, and
(b) all other expenses of advertising and of preparing, printing
and distributing all other literature or material for use in connection with
offering the Policies for sale.
8. INTERESTS IN AND OF CFS. It is understood that any of the
policyholders, directors, officers, employees and agents of CG may be a
shareholder, director, officer, employee or agent of, or be otherwise
interested in, CFS, any affiliated person of CFS, any organization in which
CFS may have an interest or any organization which may have an interest in
CFS; that CFS, any such affiliated person or any such organization may have
an interest in CG; and that the existence of any such dual interest shall not
affect the validity hereof or of any transaction hereunder except as
otherwise provided in the Charter, Articles of Incorporation or By-Laws of CG
and CFS, or by specific provision of applicable law.
9. COMPENSATION FOR SALES OF POLICIES AND APPOINTMENTS OF CG AS AGENT
OF CFS.
(a) For sales of the Policies by associated persons of CFS and the
continuing obligations of CFS set forth herein, CG shall pay to the
associated persons of CFS on behalf of CFS the commissions set forth in a
schedule which shall be attached hereto as Schedule A, which may be amended
from time to time by CG without prior notice. For Policies sold under
agreements that CFS enters into with other broker-dealers on behalf of CFS CG
shall pay commissions set forth in a schedule which must be attached to any
such agreement, as such schedule may be amended from time to time by CG.
(b) CG agrees to maintain all required books of account and related
financial records on behalf of CFS. All such books and records shall be
maintained and preserved pursuant to Rules 17a-3 and 17a-4 under the '34 Act
(or the corresponding provisions of any future federal securities laws or
regulations). In addition, CG agrees to maintain records of all sales
commissions paid to the associated persons of CFS and any other
broker-dealers pursuant to paragraph (a) above for the sale of Policies. All
such books and records shall be owned by and under the control of CG. CG also
agrees to send to CFS's customers all required confirmations of customer
transactions, and on behalf of CFS to pay all sales commissions due and
payable to the associated persons of CFS and/or to other broker-dealers duly
authorized by CFS to sell the Policies.
(10) INDEMNIFICATION.
(a) CG agrees to indemnify and hold harmless CFS and each director or
officer thereof and each person, if any, who is associated with CFS within
the meaning of the '34 Act against any and all loss, liability, claims
damage, and expenses whatsoever (including any and all expenses reasonably
incurred in investigating or defending against any litigation commenced or
threatened or any claim whatsoever) arising out of any untrue or alleged
untrue registration statement, or sales material relating to the Policies
prepared by CG or supplied to CFS by CG, or in any application filed in any
state in order to qualify the same for sale, or the omission or alleged
omission therefrom of a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
(b) CFS agrees to indemnify and hold harmless CG and each director or
officer thereof, and each person, if any, who controls CG within the meaning
of the '33 Act, its agents, subsidiaries and employees, against any and all
loss liability, claims, damages, and expense whatsoever (including but not
limited to any and all expenses reasonably incurred in investigating or
defending against any litigation commenced or threatened or any claim
whatsoever) arising out of any untrue or alleged untrue statement or
representation made (except as such statements may be made in reliance on the
prospectus, registration statement and sales material supplied by CG), the
failure to deliver a currently effective prospectus (provided that CFS shall
be entitled to rely on representations by CG as to which prospectus is
currently effective at any point in time and CFS shall not be liable for
delivering a prospectus that is not currently effective at the time of
delivery thereof due to a misrepresentation of the currency thereof by CG or
other failure by CG to notify CFS that such prospectus was no longer
effective) or the use of any unauthorized sales literature by CFS (or its
employees) in connection with the sale of the Policies.
(c) Promptly after receipt by an indemnified party under this Section of
notice of the commencement of any such litigation or claim, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section, notify the indemnifying party of the
commencement thereof, but the omission so to notify the indemnifying party
will not relieve it from any liability which it may have to any indemnified
party otherwise than under this Section. In case any such litigation or claim
is brought against any indemnified party and it notifies the indemnifying
party of the commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent that it may wish, assume the defense
thereof, with counsel satisfactory to such indemnified party, and after
notice from the indemnifying party to such indemnified party of its election
to assume the defense thereof, the indemnifying party will not be liable to
such indemnified party under this Section for any legal or other expenses
subsequently incurred by such indemnified party in connection with the
defense thereof other than the reasonable cost of investigation.
11. LIABILITY. Each party shall be liable for its own misconduct and
negligence hereunder.
12. EFFECTIVE DATE AND TERMINATION. This Agreement shall act to amend
any previous agreement between the parties styled in whole or in part as a
principal underwriting agreement shall be effective as of the date first
above written, and:
(a) shall continue in force from year to year thereafter, subject to
prior termination as provided herein;
(b) may at any time be terminated by CG upon sixty days' written notice
to CFS;
(c) may at any time be terminated by CG if CG reasonably determines that
CFS has failed to perform in a satisfactory manner;
(d) shall terminate automatically in the event of its attempted
assignment by CFS and shall not be assignable by CG except with the written
consent of CFS;
(e) may at any time be terminated by CFS upon sixty days' written notice
to CG.
Termination of this agreement pursuant to this Section shall be without payment
of any penalty. In the event of termination for any reason, CG shall retain
all records relating hereto, free from any claim or retention of rights by CFS,
provided, however, that copies of all records will be made available to
regulatory authorities having jurisdiction over CFS.
13. CONFIDENTIALITY. CFS agrees not to disclose or use any records or
information obtained hereunder in any manner whatsoever except as expressly
authorized herein, will keep confidential any information obtained pursuant
hereto, and disclose such information only if CG has authorized such
disclosure, or if such disclosure is expressly required by state or federal
regulatory authorities having appropriate jurisdiction or otherwise by force
of law.
14. AMENDMENT. This Agreement may be amended only by an instrument in
writing signed by both parties.
15. APPLICABLE LAW AND LIABILITIES. This Agreement is executed and
delivered in the State of Connecticut and shall be governed by and construed
in accordance with the laws of Connecticut (other than its rules with respect
to conflicts of law). To the extent any provisions herein contained conflict
with any applicable provisions of law, the latter shall control and this
Agreement shall, to that extent, be deemed modified.
Connecticut General Life Insurance Company
By /s/ XXXXX XXXXXXX
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Name Xxxxx Xxxxxxx
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Title AVP
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CIGNA Financial Services, Inc.
By /s/ XXXXXXX X. XXXXXX
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Name Xxxxxxx X. Xxxxxx
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Title President
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Attachment A
SEPARATE ACCOUNTS
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1. CG Variable Life Insurance Separate Account A
Established May 22, 1995
2. CG Corporate Insurance Variable Life Insurance Account 02
Established February 22, 1996
File Number 333-01741
3. CG Variable Life Insurance Separate Account FE
Established March 21, 1997
Not Registered
4. CG Variable Annuity Account I - Group Variable Annuities for Qualified
Retirement Plans
Established March 12, 1968
File Number 2-33024
5. CG Variable Annuity Account II - Group Variable Annuities for Retirement
Plans
Established March 12, 1968
File Number 2-32094
