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EXHIBIT 1 A (3) (a)
DISTRIBUTION AGREEMENT BETWEEN
CONNECTICUT GENERAL LIFE INSURANCE COMPANY
AND
CIGNA FINANCIAL SERVICES, INC.
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PRINCIPAL UNDERWRITING AGREEMENT
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
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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
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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.
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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
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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 ___________________________
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Name _________________________
Title ________________________
CIGNA Financial Services, Inc.
By ___________________________
Name _________________________
Title ________________________
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Attachment A
Separate Accounts
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
