SELLING AGREEMENT
FOR
AMERICAN ENTERPRISE LIFE INSURANCE COMPANY VARIABLE ANNUITIES
This SELLING AGREEMENT ("Agreement") is entered into as of dated Effective_Date
("Effective Date") by and between American Enterprise Life Insurance Company
("Company"), American Express Financial Advisors Inc. ("Distributor", together
with Company, "American Express"), SA or its affiliated insurance agencies who
have also executed this Agreement or an Affiliate Participation Agreement
attached as Exhibit C ("Affiliates") and are identified on Exhibit A ("Selling
Agency") and Broker_Dealer ("Broker-Dealer").
Recitals
The purpose of this Agreement is to establish the terms and conditions under
which Selling Agency and Broker-Dealer (referred to and defined further in
Section 1.2 herein as "Authorized Selling Firm") will market and sell Company's
variable annuities. American Express and Authorized Selling Firm intend that
Authorized Selling Firm will be responsible for managing and supervising the
marketing and sales of Company's variable annuities by its Producers pursuant to
this Agreement.
In consideration of the mutual covenants contained herein, the parties agree as
follows:
1. DEFINITIONS. As used in this Agreement, the following terms shall have the
following meanings:
1.1 "Affiliate" is an insurance agency affiliated with Selling Agency,
which has executed an Affiliate Participation Agreement of the form
attached hereto as Exhibit B, and which is identified on Exhibit A
("Products, Territory and Commission").
1.2 "Authorized Selling Firm" means the Broker-Dealer and Selling Agency,
taken together, with respect to the sale of Products under this
Agreement in accordance with the terms and conditions of the SEC
no-action letter First of America Brokerage Service, Inc. (dated Sept.
28, 1995).
1.3 "Broker-Dealer" is an entity duly registered as a broker-dealer with
the Securities and Exchange Commission ("SEC"), the National
Association of Securities Dealers ("NASD"), and states where required.
Selling Agency may also act as its own Broker-Dealer if properly
registered as a broker-dealer.
1.4 "Company Rules" mean any written instructions, bulletins, manuals, the
Agent Guide as defined in Section 4.4.14, and any underwriting or
suitability guidelines provided by the Company.
1.5 "Producer" is a duly licensed individual who sells Products as an
employee or independent contractor of Selling Agency and who is
appropriately registered with the NASD.
1.6 "Products" are those variable annuity products issued by Company which
will be marketed or sold by Selling Agency, Broker-Dealer and their
Producers under this Agreement, and which are set forth in Exhibit A
and its Addenda attached hereto.
1.7 "Replacement" is the sale of a Product which is funded by the annuity
purchaser with money obtained from the liquidation of another life
insurance policy or annuity contract, either of which was previously
issued either by Company or by any other life insurance company.
1.8 "Selling Agency" is an insurance agency or an Affiliate duly licensed
or otherwise qualified as an insurance agency, which, either itself or
through Producers who are its employees or independent contractors,
solicits and sells Products to the general public.
1.9 "Territory" is any of the 48 of the 50 United States (all states other
than New York and New Hampshire), and the District of Columbia, and
includes any other jurisdiction in which Selling Agency is permitted
to market and sell the Products through Producers, but only so long as
such jurisdictions are listed on Exhibit A, as it may be amended from
time to time.
2. TERM OF AGREEMENT. This Agreement shall remain in effect beginning upon the
Effective Date, until such time it is terminated pursuant to Section 9,
"Termination."
3. APPOINTMENT AND AUTHORIZATION OF SELLING AGENCY AND BROKER-DEALER.
3.1 Appointment and Authorization of Selling Agency and Broker-Dealer.
Company and Distributor hereby appoint and authorize Selling Agency
and Broker-Dealer to solicit sales of and sell Products in accordance
with the terms and conditions of this Agreement as an Authorized
Selling Firm, and Selling Agency and Broker-Dealer hereby accept the
appointment and authorization. These two appointments, taken together,
constitute the appointment of Authorized Selling Firm. Authorized
Selling Firm's authority will be nonexclusive, and will be limited to
the performance of the services and responsibilities set forth in this
Agreement.
3.2 Selection and Appointments of Affiliates. No Affiliate shall be
authorized to act as such until the Affiliate has executed this
Agreement or an Affiliate a Participation Agreement and Company has
authorized Affiliate to act as such.
4. DUTIES, OBLIGATIONS AND LIMITATIONS OF AUTHORIZED SELLING FIRM. Commencing
on the Effective Date, Authorized Selling Firm will faithfully perform all
of Authorized Selling Firm's duties within the scope of the agency
relationship created under this Agreement to the best of Authorized Selling
Firm's knowledge, skill and judgment. As Authorized Selling Firm, Selling
Agency and Broker-Dealer shall be jointly and severally responsible and
liable to American Express for the faithful performance of all obligations
and duties except those which this Agreement specifically identifies as
duties of Broker-Dealer. Authorized Selling Firm's duties shall include,
but not be limited to the following:
4.1 Recruitment of Producers. Authorized Selling Firm may recruit
Producers to sell under the supervision of Authorized Selling Firm. A
Producer so recruited may not solicit or sell Products prior to
acquiring any required state insurance license(s) in the state(s)
where such Producer will solicit and sell Products, being registered
with the NASD as a representative of the Broker-Dealer, being
appointed by Company as an agent, and completing the training
described in Section 4.4.14.
4.2 Licensing, Registration and Appointment of Selling Agency and
Producers. Selling Agency shall be responsible for the preparation and
submission of proper appointment and licensing forms and the assurance
that all Producers recruited by Authorized Selling Firm are
appropriately licensed as insurance agents in the state(s) where such
Producers will solicit and sell Products. Broker-Dealer shall be
responsible for the preparation and submission to the NASD of proper
representative registration forms and the assurance that all Producers
are properly registered as representatives of Broker-Dealer with the
NASD. Authorized Selling Firm shall recommend Producers for
appointment with Company, but Company shall retain sole authority to
make appointments and may, by written notice to Authorized Selling
Firm, refuse to permit any Producer to solicit contracts for the sale
of the Products.
4.2.1 Background checks; Warranties. Authorized Selling Firm is
responsible for performing background checks on its Producers.
Authorized Selling Firm warrants that such background check
reports of Producers will comply with all applicable regulations
of the departments of insurance and securities in the states in
which said Producers will solicit and sell Products, and with the
requirements of the NASD. Authorized Selling Firm further
warrants and guarantees that copies of such background check
reports will be made available in a timely manner to any
regulator who may request them from Company, and that Company
will receive confirmation that such materials have been timely
delivered to any such regulator. Company will not require copies
of the reports themselves, but only the assurance that they have
been timely delivered as requested by such regulator, unless such
reports relate or may relate to a customer inquiry or complaint
about the Product or its sale, or unless such report relates to
Company's internal investigation of a Producer's sales practices
as regard the Products. Authorized Selling Firm further agrees
that it will provide to Company a copy of their respective
procedures and requirements for background checks to Company upon
request, but Company is entitled to rely on Authorized Selling
Firm for compliance with regulations as shown above even without
actually making such a demand.
4.3 Compliance with Company Policies and Applicable Laws. Authorized
Selling Firm will comply with all Company Rules and with all
applicable federal and state laws and regulations.
4.4 Supervision and Administration. Authorized Selling Firm shall have
full, joint and several responsibility for the training and
supervision of all of its Producers who are engaged directly or
indirectly in the offer or sale of the Products, and all such
Producers shall be subject to the control of Authorized Selling Firm
with respect to their securities and insurance regulated activities in
connection with the Products. Authorized Selling Firm shall be
responsible for all acts or omissions of Producers. Selling Agency's
supervisory and administrative responsibilities include, but are not
limited to:
4.4.1 ensuring that Producers comply with Company Rules and all federal
and state laws and regulations applicable to the Products;
4.4.2 training Producers prior to allowing a Producer to sell a Product
in accordance with Section 4.4.14;
4.4.3 providing advice and assistance to Producers with regard to
marketing and advertising of Products, and ensuring that no
advertising is used unless approved by Company in accordance with
Section 4.9, "Approved Advertising."
4.4.4 supplying sales literature and application forms approved by
Company to Producers;
4.4.5 ensuring that any sales literature or advertising used on or from
the premises of a financial institution be: (a) revised to
include the disclosure required by the financial institution
regulatory agencies and the NASD; (b) submitted to and approved
by Company and/or Distributor in accordance with Section 4.9,
"Approved Advertising," prior to first use; and (c) delivered by
the Producer to the prospective customer;
4.4.6 assisting Producers in responding to customer inquiries;
4.4.7 promptly delivering to Producers relevant Company communications
and Company Rules concerning Products, such as changes in rates,
regulatory notices or new Product announcements;
4.4.8 ensuring that Producers:
(a) submit premium payments directly and immediately to Company
in accordance with Section 4.5, "Collection and Submission
of Premiums";
(b) document transactions, including the fact of delivery, and
maintain any other documentation reasonably requested by
Company;
(c) have obtained and will continuously maintain the required
state insurance licenses in the state where such Producers
will solicit and sell Products; and
(d) have been appointed by Company in accordance with the
laws of the state in which the sale(s) occur and the
customer resides;
4.4.9 on all Replacement sales, ensuring that Producers provide
sufficient information to prospective annuity contract-holders as
to the suitability of the Replacement sale. Such information
includes but may not be limited to:
(a) the amount of the surrender charge to be incurred on
the investment to be liquidated;
(b) all fees and possible charges, such as surrender charges, on
the new investment;
(c) any change in the investment risk to the prospective annuity
contract-holder;
(d) any change in the nature or the provider of any guarantees
associated with the Product and/or the surrendered
product;
(e) any changes in the expenses associated with the Product
and/or the surrendered product;
All such information will be retained by Selling Agency for seven
years counting from the date of the initial solicitation, whether
or not the Product was ever sold, and will be made available to
Company as is shown in Section 4.8, "Accurate Record; Audit,"
herein.
4.4.10 timely obtaining and maintaining all required state insurance
licenses, and notifying Company if any Selling Agency or Producer
fails to maintain the required state insurance license or becomes
inactive;
4.4.11 promptly informing Company of any violation of law or Company
Rules by Authorized Selling Firm or Producer, or of any
allegation by an annuity contract-holder or regulatory agency of
wrongdoing as regards the activities of Authorized Selling Firm,
or a Producer with respect to the Products; and
4.4.12 any other duties necessary or appropriate to perform Authorized
Selling Firm's obligations under this Agreement.
4.4.13 Broker-Dealer will fully comply with and will ensure Selling
Agency's and Producers' compliance with the requirements of the
NASD, the SEC and all other applicable federal and state laws,
and, with Selling Agency, will establish and maintain such rules
and procedures as may be necessary to cause diligent supervision
of the securities activities of Selling Agency and Producers.
Broker- Dealer's duties with respect to Selling Agency's and
Producers' securities activities, include, but are not limited
to:
(a) delivering to each person submitting an application a
prospectus to be furnished by American Express in the form
required by the applicable federal laws or by the acts or
statutes of any applicable state, province or country;
(b) ensuring that all sales literature or advertising used by
Authorized Selling Firm or Producers hereunder concerning
the Products or Company or Distributor has been approved by
American Express;
(c) reviewing all Product applications for accuracy and
completeness, and to determine the suitability of the sale;
(d) complying with all applicable requirements of the
Securities Exchange Act of 1934 ("1934 Act") and the NASD,
including the requirements to maintain and preserve
books and records pursuant to Section 17(a) of the 1934 Act
and the rules thereunder and making such records and files
available to staff of American Express and personnel of
state insurance departments, the NASD, SEC or other
regulatory agencies which have authority over American
Express.
4.4.14. Authorized Selling Firm shall be responsible for ensuring that
their Producers who market and sell the Products are trained on
(i) the product specifications and features, (ii) requirements
that American Express has adopted to satisfy insurance laws and
regulations regarding replacements, and (iii) standards that
American Express has established for Authorized Selling Firms and
their Producers to use in meeting their respective duties to
ensure suitable sales of the Products (delivered together as the
"Agent Guide") before they begin to solicit or sell Products. If
Authorized Selling Firm chooses not to use the Agent Guide in
training their Representatives on (i), (ii) and (iii) above, then
Authorized Selling Firm shall provide to American Express its own
form of training to be used prior to the execution of this
Agreement.
After the execution of this Agreement, to the extent that
Authorized Selling Firm uses training material related to the
sale of the Products that is materially different from that
contained in the Agent Guide or training material other than
provided to American Express in accordance with the preceding
paragraph, Authorized Selling Firm must provide that training
material to American Express for approval prior to use.
Authorized Selling Firm shall also be responsible for assuring
that its Producers comply with Agent Guide, and the applicable
suitability requirements of the National Association of
Securities Dealers, Inc. ("NASD"), and any state or federal law,
as amended from time to time, in selling the Products.
4.5 Collection and Submission of Premiums. American Express and Authorized
Selling Firm will agree which of the following provisions will govern
Authorized Selling Firm's duties related to collection and submission
of premiums, by specifying on Exhibit A the applicable provision.
4.5.1 Check with Application. Authorized Selling Firm will assure its
Producers' collection and timely remittance to Company of the
premiums due on all Products as specified herein. Company will
receive premium payments no later than the second business day
after the application has been signed by the customer.
4.5.2 Gross Sweep. Authorized Selling Firm will assure its Producers'
collection of the premiums due on all Products and will timely
account for such premiums, directly depositing them into an
account established by Authorized Selling Firm for the benefit of
Company, at a bank approved by Company, and notifying Company
immediately of the gross receipts for the business day and of the
sales to which they relate. Upon receipt of notification from
Authorized Selling Firm, Company will sweep the settlement
account. Additional specific procedures governing movement of
money pursuant to this paragraph will be established by
Authorized Selling Firm and Company and will become part of the
Company Rules.
4.5.3 Gross ACH Through Clearing Broker. Authorized Selling Firm will
assure its Producer's collection of the premiums due for all
Products and the timely accounting for and submission of all
premiums directly and immediately to Clearing Broker. Premiums
must be in the form of check, bank draft authorization,
customer-approved account transfer, or wire transfer, with funds
payable to the order of Selling Agency. Clearing Broker will
immediately deposit premium payments received from Selling Agency
into an account for the benefit of Selling Agency, or into the
Clearing Broker's segregated omnibus account established for the
benefit of Selling Agency (sometimes referred to as an "Omnibus
Account."). Selling Agency will notify, or will ensure that the
Clearing Broker notifies, Company immediately of the gross
receipts for each business day. Clearing Broker will, through ACH
transfer, remit the gross premiums received to a Company-owned
bank account designated by Company so that the Company receives
the premiums no later than the close of business on the second
day after the application was signed by the Customer. Additional
specific procedures governing the movement of money pursuant to
this paragraph will be established by Selling Agency,
Broker-Dealer, Company and Distributor, and will become part of
the Company Rules.
4.5.4 Net Wire Through Clearing Broker. Selling Agency will assure its
Representatives' collection of the premiums for all Variable
Contracts and the timely accounting for and submission of all
premiums directly and immediately to Clearing Broker. Premiums
must be in the form of check, bank draft authorization,
customer-approved account transfer, or wire transfer, with funds
to the order of Selling Agency.
Clearing Broker will immediately deposit premium payments
received from Selling Agency into an account for the benefit of
Selling Agency, or into the Clearing Broker's segregated account
(sometimes referred to as an "Omnibus Account") established for
the benefit of Selling Agency and any Affiliates or
Broker-Dealer. Selling Agency will notify, or will ensure that
the Clearing Broker notifies, Company immediately of the gross
receipts for each business day. Clearing Broker will, through
wire transfer, remit the premiums received, net of Selling
Agency's share of commissions, subject to the conditions set
forth below, to a Company-owned bank account designated by
Company so that the Company receives the premiums no later than
the close of business on the second day after the day the
application was signed by the Customer.
Clearing Broker may remit premium payments to Company net of
Selling Agency's share of commission only if shown on Exhibit A,
and only if Company and Selling Agency agree on specific
procedures to be used. Such procedures will become part of the
Company Rules. "Selling Agency's share of commission"
specifically excludes supplemental trail commissions or other
payments contemplated between the parties.
If Option 4.5.3 or 4.5.4 are agreed upon by American Express and
Authorized Selling Firm as the method of collection and
submission of premiums then the provisions of Exhibit B will
apply.
4.6 Solicitation. Authorized Selling Firm, through Producers, will solicit
applicants who appear to meet Company's and Distributor's underwriting
and suitability standards, provided that nothing in this Agreement
shall be deemed to require Authorized Selling Firm to solicit any
particular customer's application for an annuity.
4.7 Company Property. Authorized Selling Firm will safeguard, maintain and
account for all policies, forms, manuals, equipment, supplies,
advertising and sales literature furnished to Authorized Selling Firm
and Producers by American Express and will destroy or return the same
to American Express promptly upon request.
4.8 Accurate Record; Audit. As required by applicable laws and Company's
policies and procedures, Authorized Selling Firm will keep
identifiable and accurate records and accounts of all business and
transactions effected pursuant to this Agreement. Upon reasonable
notice and at reasonable times, continuing during a period of one year
following the termination of this Agreement, Authorized Selling Firm
will permit American Express to visit, inspect, examine, audit and
verify, at Authorized Selling Firms offices or elsewhere, any of the
properties, accounts, files, documents, books, reports, work papers
and other records belonging to or in the possession or control of
Authorized Selling Firm relating to the business covered by this
Agreement, and to make copies thereof and extracts therefrom, provided
that such audit shall not unreasonably interfere with Authorized
Selling Firm's normal course of business.
4.9 Approved Advertising. No sales promotions, promotional materials, or
any advertising relating to Products or Company or Distributor ("Sales
Material") shall be used by Authorized Selling Firm or Producers
unless the specific item has been approved in writing by Company
and/or Distributor before use. Any promotional material developed by
Authorized Selling Firm will become the sole property of American
Express once approved. Any modification of the promotional materials
to enable the use of such in a financial institution setting must also
be approved in accordance with this section.
4.10 Chargeback of Commissions. Selling Agency will be charged back for
Selling Agency's portion of commissions relating to certain surrenders
of annuity products as specified in Exhibit A and its addenda, as
amended from time to time.
4.11 Fidelity Bond. Authorized Selling Firm represents and warrants that
all directors, officers, employees and representatives of Selling
Agency who are appointed pursuant to this Agreement as Producers for
Company or who have access to funds of Company, including but not
limited to funds submitted with applications for Products 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 acceptable to Company. The bond shall
be maintained by Broker-Dealer at Broker-Dealer's and/or Selling
Agency's expense. Company may require evidence, satisfactory to it,
that such coverage is in force. Authorized Selling Firm shall give
prompt written notice to Company of cancellation or change of
coverage.
4.12 Limitations. Authorized Selling Firm shall have no authority with
respect to American Express, nor shall it represent itself as having
such authority, other than as is specifically set forth in this
Agreement. Without limiting the foregoing, neither Selling Agency nor
Broker-Dealer shall, without the express written consent of Company
and/or Distributor, as applicable: 4.12.1 make, waive, alter or change
any term, rate or condition stated in any Company contract or Company
or Distributor approved form, or discharge any contract in the name of
Company;
4.12.2 waive a forfeiture;
4.12.3 extend the time for the payment of premiums or other monies due
Company;
4.12.4 institute, prosecute or maintain any legal proceedings on
behalf of Company or Distributor in connection with any matter
pertaining to Company's business, nor accept service of process
on behalf of Company or Distributor;
4.12.5 transact business in contravention of the rules and regulations
of any insurance department and/or other governmental authorities
having jurisdiction over any subject matter embraced by this
Agreement;
4.12.6 make, accept or endorse notes, or endorse checks payable to
Company or Distributor, or otherwise incur any expense or
liability on behalf of Company or Distributor;
4.12.7 offer to pay or pay, directly or indirectly, any rebate of
premium or any other inducement not specified in the Products to
any owner or annuitant;
4.12.8 misrepresent the Products for the purpose of inducing an
annuity contract-holder in any other company to lapse, forfeit or
surrender his/her insurance therewith;
4.12.9 give or offer to give any advice or opinion regarding the
taxation of any customer's income or estate in connection with
the purchase of any Product;
4.12.10 enter into an agreement with any person or entity to market or
sell the Products without the written consent of Company and
Distributor;
4.12.11 use Company's or Distributor's names, logos, trademarks,
service marks or any other proprietary designation without the
prior written permission of Company; or
4.12.12 engage in any program designed to replace Products with any
annuity products of other companies, at any time while this
Agreement is in force; or provide data to any other person or
organization which would allow or facilitate such replacement of
Company's Products. Nothing herein shall preclude the replacement
of Company's fixed annuity products with Company's own variable
annuity products, so long as such sales are suitable and
documented according to Section 4.4.9, Replacement Sales. (See
also Section 9.3, Post Termination Limitations, and Section 11,
Confidentiality, generally.)
4.13 Wholesaling Services. Authorized Selling Firm shall receive certain
wholesaling services under this Agreement pursuant to a Wholesaling
Agreement entered into on WhseDate, by American Enterprise Life
Insurance Company (the "Company"), American Express Financial Advisors
Inc. (the "Distributor") and WhseName (the "Wholesaler").
5. COMPANY AND DISTRIBUTOR REPRESENTATIONS AND RESPONSIBILITIES.
5.1 Representations.
5.1.1 Company represents and warrants that (a) it is duly incorporated
in the state of Indiana and licensed in all states in the
Territory; and (b) that all Products, and all Sales Material (as
defined in Section 4.9, above) provided by Company or Distributor
have been filed with and approved by state insurance departments
in all states in the Territory, and comply with all applicable
laws and regulations and rules of the NASD.
5.1.2 Distributor represents and warrants that it is duly registered
as a broker-dealer with the SEC, the NASD, all fifty states and
the District of Columbia, and is qualified to do business in all
states in which Company is licensed and qualified to do business.
5.1.3 Distributor and Company represent and warrant that Company, as
issuer and on behalf of the underlying investment account(s), has
registered the underlying investment account(s) of the Products
with the SEC as a security under the Securities Act of 1933
("1933 Act") and as a unit investment trust under the Investment
Company Act of 1940.
5.1.4 Company represents and warrants that the prospectuses and
registration statements relating to the Products do not contain
any untrue statements of material fact or any omission to state a
material fact, the omission of which makes any statement
contained in the prospectuses and registration statements
misleading.
5.1.5 Company represents and warrants that Company will meet any
requirements of the NASD and state departments of insurance in
the jurisdictions in which the Products are available for sale
regarding both the filing and approval of Sales Material.
5.2 Prospectuses, Sales Literature and Advertising. American Express will
provide to Authorized Selling Firm, without any expense to Authorized
Selling Firm, prospectuses relating to the Products and such other
Sales Material (as defined is Section 4.9, above) as American Express
determines is necessary or desirable for use in connection with sales
of the Products.
5.3 Transmission of Contracts for Delivery to Contract Owners. Company
will transmit contracts for Products directly to annuity
contract-holders.
5.4 Confirmations. Upon Company's acceptance of any payment for a Product,
Company as agent for Distributor will deliver to each contract owner a
statement confirming the transaction in accordance with Rule 10b-10
under the 1934 Act.
5.5 Annuity Contract-holder Services. Company shall provide
administrative, accounting and other services to annuity
contract-holders as necessary and appropriate, in the same manner as
such services are provided to Company's other annuity
contract-holders.
5.6 Reservation of Rights. Notwithstanding any other provision of this
Agreement or any other agreement between Company and/or Distributor
and Selling Agency and/or Broker-Dealer, Company reserves the
unconditional right to modify any of the Products in any respect
whatsoever or to suspend the sale of any Products in whole or in part
at any time and without prior notice. Company reserves the
unconditional rights to refuse to accept applications procured by
Authorized Selling Firm or Producers which fail to meet underwriting
or other standards of Company.
5.7 Company Rules. American Express shall provide Authorized Selling Firm
with Company Rules as soon as is practicable. All revisions,
modifications and replacements of such Company Rules shall be provided
by Company and Distributor to Authorized Selling Firm promptly after
issuance by Company and/or Distributor.
6 COMPENSATION.
6.1 Compensation to Authorized Selling Firm. Company shall pay a total
commission on premiums collected pursuant to this Agreement based on
the rates of commission set forth on the attached Exhibit A and its
Addenda. In all cases, the amount of commission shown in the addenda
is the total compensation available for distribution from Company, or
any of its subsidiaries, affiliates, or other related entities owned
or controlled by American Express Company, whether under this
Agreement or under any other agreement between or among Company,
Broker-Dealer, any Selling Agency or Producer, or any other party. No
commission will be apid on sales outside the states shown in the
Territory on Exhibit A. No commission will be paid on the sale of an
annuity under this Agreement if that sale involves replacement of an
asset or investment issued by Company or by any other insurance
company owned or controlled by American Express Company. Company
reserves the right from time to time to adjust commission upwards for
any of the Products, for a specified period of time, upon notice to
Selling Agency and Broker-Dealer, without requiring signatures on a
corresponding addendum. No downward adjustment of commission will
occur without signatures of all parties to the Agreement, except for
the return to commission rates originally identified in the addenda.
No compensation shall be paid unless all of the following conditions
precedent have been met to Company's satisfaction:
6.1.1 Licensing of Producer. Prior to the time of any solicitation of a
sale or a sale of a Product, the Producer making such
solicitation or sale shall be licensed and appointed with Company
in accordance with the laws of the state(s) where the sale is
being made and the customer resides.
6.1.2 Licenses and Contracts. No person or entity, except Producers
satisfying the provisions of Section 6.1.1, "Licensing of
Producers," shall in any way share in any commissions payable
hereunder unless such person or entity is licensed in accordance
with the laws of the state(s) in which the sale was made and the
customer resides; and unless such person or entity shall have
entered into an agreement with Selling Agency which specifies
such person or entity's rights and obligations and which makes
provision for payment, including splitting, of commissions.
Notwithstanding the preceding sentence, in those states which
permit payment of a commission to an entity which is not licensed
as an insurance agency, Company will pay commissions to an
unlicensed entity which is a party to this Agreement, but only
after such entity has provided evidence satisfactory to Company
as to how Company may make such payments in accordance with
applicable state insurance laws.
6.1.3 Alternative Payment Agreement. Only if shown on Exhibit A
attached hereto, Company may make commission payments and debit
commission chargebacks to Broker-Dealer, so long as Broker-Dealer
also has insurance licenses appropriate for the sales of Products
in affected states. See also Section 4.10.
6.1.4 Supplemental Trail Commissions. Amounts and conditions of payment
of Supplemental Trail Commission, if any, are attached in the
addenda and shown on Exhibit A. In no event will Supplemental
Trail Commission be paid on a contract less than one year old.
6.2 Chargebacks. Company has the right to charge back Selling Agency for
commissions paid in the event of certain surrenders of annuity
contracts as specified in Exhibit A and its Addenda.
6.3 Expenses. Except as otherwise provided in this Agreement, or
subsequently agreed to in writing by American Express, Authorized
Selling Firm will be responsible for all costs and expenses of any
kind and nature incurred by Authorized Selling Firm in the performance
of its duties under this Agreement.
6.4 Post Termination Compensation Obligations. Upon termination of this
Agreement, Company's obligation to pay commissions to Selling Agency,
or Producers shall immediately cease except that:
6.4.1 Company will pay commissions, as the same become due and payable,
upon Products for which the application has been taken and the
required premium has been collected (or has become irrevocably
collectable from a third party) as of the date of termination,
and for which the Company subsequently issues a policy.
6.4.2 Company will charge back against those commissions identified in
Exhibit A for surrenders of Products sold prior to the
termination of this Agreement by Authorized Selling Firm or
Producers. Company will invoice Selling Agency unless Company and
Selling Agency agree upon another method of payment of such
amounts.
6.4.3 Company shall pay commissions in accordance with Exhibit A and
its addenda, attached hereto, on all premiums collected on
Products issued prior to such termination.
7. INDEMNIFICATION.
7.1 Indemnification of Company and Distributor. Authorized Selling Firm
shall indemnify, defend and hold harmless American Express, any of its
officers, directors and employees, from and against any and all
losses, claims, damages, liabilities, actions, costs or expenses to
which American Express, or any of its officers, directors and
employees, may become subject (including any legal or other expenses
incurred by it in connection with investigating any claim against it
and defending any action and, provided Authorized Selling Firm will
have given prior written approval of such settlement or compromise,
which consent will not be unreasonably withheld or delayed, any
amounts paid in settlement or compromise) insofar as such losses,
claims, damages, liabilities, actions, costs or expenses arise out of
or are based upon:
7.1.1 The acts or omissions of Authorized Selling Firm or any of its
employees, agents or Producers while acting (whether under actual
or apparent authority, or otherwise) on behalf of Authorized
Selling Firm or American Express in connection with this
Agreement;
7.1.2 Any breach of any covenant or agreement made by Authorized
Selling Firm under this Agreement; or
7.1.3 The inaccuracy or breach of any representation or warranty made
by Authorized Selling Firm under this Agreement.
This indemnification obligation shall not apply to the extent
that such alleged act or omission is attributable to American
Express either because (1) American Express directed the act or
omission, or (2) the act or omission by Authorized Selling Firm
or any of its employees, agents or Producers was the result of
their compliance with the Company Rules.
7.2 Indemnification of Selling Agency and Broker-Dealer. American Express
shall indemnify, defend and hold harmless Authorized Selling Firm, any
of its officers, directors and employees, from and against any and all
losses, claims, damages, liabilities, actions, costs or expenses to
which Authorized Selling Firm, or any of its officers, directors and
employees, may become subject (including any legal or other expenses
incurred by it in connection with investigating any claim against it
and defending any action and, provided American Express will have
given prior written approval of such settlement or compromise, which
consent will not be unreasonably withheld or delayed, any amounts paid
in settlement or compromise) insofar as such losses, claims, damages,
liabilities, actions, costs or expenses arise out of or are based
upon:
7.2.1 The acts or omissions of American Express, or any employee or
agent of American Express, (excluding Authorized Selling Firm or
Producers) while acting (whether under actual or apparent
authority or otherwise) on behalf of Company in connection with
this Agreement;
7.2.2 Any breach of any covenant or agreement made by American Express
under this Agreement; or
7.2.3 The inaccuracy or breach of any representation or warranty made
by American Express under this Agreement.
7.3 Limitation of Liability. Except as expressly stated herein, as between
the parties, in no event will any party to this Agreement be
responsible to any other party for any incidental, indirect,
consequential, punitive, or exemplary damages of any kind arising from
this Agreement, including without limitation, lost revenues, loss of
profits or loss of business. The parties agree that the losses and
damages arising under and/or covered by Section 7.1 and 7.2 shall be
subject to this limitation.
8. ARBITRATION. The parties agree to attempt to settle any misunderstandings
or disputes arising out of this Agreement through consultation and
negotiation in good faith and a spirit of mutual cooperation. However, if
those attempts fail, the parties agree that any misunderstandings or
disputes arising from this Agreement will be decided by arbitration which
will be conducted, upon request of either party, before three arbitrators
(unless both parties agree on one arbitrator) designated by the American
Arbitration Association located in the city of Company's principal place of
business. The parties further agree that the arbitrator(s) will decide
which party must bear the expenses of the arbitration. This agreement to
arbitrate shall not preclude either party from obtaining provisional
remedies such as injunctive relief or the appointment of a receiver from a
court having jurisdiction, either before, during or after the pendency of
the arbitration. The institution and maintenance of such provisional
remedies shall not constitute a waiver of the right of a party to submit a
dispute to arbitration.
9. TERMINATION.
9.1 Termination for Cause. At any time during the Term of this Agreement,
American Express or Authorized Selling Firm may terminate this
Agreement immediately for cause upon written notice of such
termination to the other party. Such written notice shall state the
cause with specificity. As used in this Section, the term "cause"
shall include any one or more of the following:
9.1.1 the conviction of any party, its officers or supervisory
personnel of any felony, of fraud, or of any crime involving
dishonesty;
9.1.2 the intentional misappropriation by a party of funds or property
of any other party, or of funds received for it or for annuity
contract-holders;
9.1.3 the cancellation, or the refusal to renew by the issuing
insurance regulatory authority of, any license, certificate or
other regulatory approval required in order for any party to
perform its duties under this Agreement;
9.1.4 any action by a regulatory authority with jurisdiction over the
activities of a party that would place the party in receivership
or conservatorship or otherwise substantially interfere or
prevent such party from continuing to engage in the lines of
business relevant to the subject matter hereof; or
9.1.5 a party becoming a debtor in bankruptcy (whether voluntary or
involuntary) or the subject of an insolvency proceeding.
9.2 Termination without Cause. American Express or Authorized Selling Firm
may terminate this Agreement without cause upon 30 days prior written
notice to the other parties.
9.3 Post Termination Limitation. For a period of one year after
termination of this Agreement, Authorized Selling Firm and Producers
shall not knowingly induce or cause, or attempt to induce or cause,
any concerted or organized effort to recommend, promote, encourage or
endorse the termination, surrender, or cancellation of any Product
sold pursuant to this Agreement.
10. INDEPENDENT CONTRACTOR. This Agreement is not a contract of employment.
Nothing contained in this Agreement shall be construed or deemed to create
the relationship of joint venture, partnership, or employer and employee
between American Express and Authorized Selling Firm. Each party is an
independent contractor and shall be free, subject to the terms and
conditions of this Agreement, to exercise judgment and discretion with
regard to the conduct of business.
11. CONFIDENTIALITY.
11.1 Each party agrees that, during the term of this Agreement and at all
times thereafter, it will not disclose to any unaffiliated person,
firm, corporation or other entity, nor use for its own account, any of
the other parties' trade secrets or confidential information,
including, without limitation, the terms of this Agreement; non-public
program materials; member or customer lists; proprietary information;
information as to the other party's business methods, operations or
affairs, or the processes and systems used in its operations and
affairs, or the processes and systems used in any aspect of the
operation of its business; all whether now known or subsequently
learned by it. If this Agreement is terminated, each party, within 60
days after such termination, will return to the other parties,
respectively, any and all copies, in whatever form or medium, of any
material disclosing any of the other parties' trade secrets or
confidential information as described above.
Nothing in this Agreement shall require a party to keep confidential
any information that:
11.1.1 the party can prove was known to it prior to any disclosure by
any other party;
11.1.2 is or becomes publicly available through no fault of the party;
11.1.3 the party can prove was independently developed by it outside
the scope of this Agreement and with no access to any
confidential or proprietary information of any other party;
11.1.4 is required to be disclosed to governmental regulators or
pursuant to judicial or administrative process or subpoena;
11.1.5 is required in order to perform that party's obligation under
this Agreement;
11.1.6 is required to be disclosed by any applicable law; or
11.1.7 is mutually agreed upon by all parties to this Agreement.
11.2 In the event Authorized Selling Firm during the term of this Agreement
and for a period of one year after the effective date of its
termination, engages in a concerted effort to promote, recommend or
encourage the termination, surrender, or cancellation of any Product
sold under this Agreement, without reasonable grounds to believe that
such termination, cancellation or surrender is in each individual
customer's best interest, then American Express will have the right to
contact present and former purchasers of the Products sold under this
Agreement with a view to retaining the assets in their accounts with
Company, without being found in violation of this Section 11.
12. ASSIGNMENT. The parties to this Agreement may not assign, either wholly or
partially, this Agreement or any of the benefits accrued or to accrue under
it, or subcontract their interests or obligations under this Agreement,
without the written approval of all parties.
13. AMENDMENT OF AGREEMENT. American Express reserves the right to amend this
Agreement at any time, but no amendment shall be effective until approved
in writing by Authorized Selling Firm, subject to the provisions of Section
5.6, "Reservation of Rights," and Section 12, "Assignment," herein.
14. MISCELLANEOUS.
14.1 Applicable Law. This Agreement shall be governed by and interpreted
under the laws of the State of Minnesota.
14.2 Severability. Should any part of this Agreement be declared invalid,
the remainder of this Agreement shall remain in full force and effect,
as if the Agreement had originally been executed without the invalid
provisions.
14.3 Notice. Any notice hereunder shall be in writing and shall be deemed
to have been duly given if sent by certified or registered mail,
postage prepaid, or via a national courier service with the capacity
to track its shipments, to the following addresses:
If to Company: If to Distributor:
American Enterprise Life Insurance Company American Express Financial Advisors Inc.
00 Xxxxx 0xx Xxxxxx 00 Xxxxx 0xx Xxxxxx
Xxxxxxxxxxx, XX 00000 Xxxxxxxxxxx, XX 00000
Attn: Compliance Officer (Unit 1818) Attn: Compliance Officer (Unit 1818)
If to Selling Agency: If to Broker-Dealer:
SA Broker_Dealer
SAAddress1 BD_address1
SAAddress2 BD_address2
SACity, SAState SAZip BD_city, BD_State BD_zip
Attn: SAContact_name__tit Attn: BD_contact_name__Tit
14.4 Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and
assigns, subject to the provisions of this Agreement limiting
assignment.
14.5 Headings. The headings in this Agreement are for convenience only and
are not intended to have any legal effect.
14.6 Defined Terms. The terms defined in this Agreement are to be
interpreted in accordance with this Agreement. Such defined terms are
not intended to conform to specific statutory definitions of any
state.
14.7 Entire Agreement. This Agreement constitutes the entire agreement of
the parties with respect to the subject matter hereof and supersedes
all previous communications, representations, understandings and
agreements, either oral or written, between the parties or any
official representative thereof.
14.8 Survival. All terms and conditions of Section 7, "Indemnification";
Section 9.3, "Post Termination Limitations"; and Section 11,
"Confidentiality," will survive termination of this Agreement.
14.9 No Waiver. No failure to enforce, nor any breach of any term or
condition of this Agreement, shall operate as a waiver of such term or
condition, or of any other term or condition, nor constitute nor be
deemed a waiver or release of any other rights at law or in equity, or
of claims which any party may have against any other party, for
anything arising out of, connected with, or based upon this Agreement.
Any waiver, including a waiver of this Section, must be in writing and
signed by the parties hereto.
American Enterprise Life Insurance Company SA
Company Selling Agency
By:_______________________ By:_______________________
Title:____________________ Title:____________________
Date:_____________________ Date:_____________________
American Express Financial Advisors Inc. Broker_Dealer
Distributor Broker-Dealer
By:_______________________ By:______________________
Title:____________________ Title:___________________
Date:_____________________ Date:____________________
Affiliate: Affiliate:
SAAffiliate1 SAAffiliate2
By:_______________________ By:______________________
Title:____________________ Title:___________________
Date:_____________________ Date:____________________
EXHIBIT A
Selling Agency: Products, Territory and Commissions
SUMMARY:
This Exhibit is intended to summarize the contents of Exhibit A and its Addenda,
as they are added to the arrangements with SA, ("Selling Agency"), Broker_Dealer
("Broker-Dealer"), Company and Distributor under this Agreement.
Selling Agency & Broker-Dealer Products Product Commission Remittance of Premiums Territory
(See Section 4.5)
------------------------------------------------------------------------------------------------------------------------------
XX Xxxxx Fargo Advantage See Addenda A & B Money_Movement State_s
Broker_Dealer only
SAAffiliate1 Xxxxx Fargo Advantage Credit See Addenda C & D
SAAffiliate2
------------------------------------------------------------------------------------------------------------------------------
This Exhibit A will only be separately executed when: (i) a product is added or
deleted; or (ii) there is a reduction in compensation.
Last Revision Date:____________________ Effective Revision Date:______________
Purpose of Last Revision:______________________________________________________
Addendum A to Exhibit A: Products, Territory and Commissions
Addendum to Exhibit A of the Selling Agreement between American Enterprise Life
Insurance Company ("Company"), American Express Financial Advisors Inc.
("Distributor"), Xxxxx Fargo Securities, Inc.("Selling Agency") and Xxxxx Fargo
Securities, Inc. ("Selling Agent's Broker") dated November 15, 1999. This
Addendum is effective for the states, and from the date(s), specified on Exhibit
A, executed by the parties to this Agreement.
The Product to be offered through Selling Agent is a flexible premium variable
annuity known as the Xxxxx Fargo Advantage Variable Annuity, which is to be
offered only in the Territory shown in Exhibit A.
COMMISSION:
The commission payable for contracts described in this Addendum will be as
follows:
(a) ____% gross of all premiums for issue ages of both owner and annuitant
not exceeding 80 (qualified or non-qualified).
(b) ____% gross of all premiums for issue ages of both owner and annuitant
of 81-85 (qualified or non-qualified).
(c) No commission is payable for policies described in this Addendum where
the issue age of either the annuitant or owner exceeds age 85
(qualified or non-qualified). No commission is payable on the sale of
Products under this Agreement if that sale involves replacement of an
asset or investment issued by Company or by any other insurance
company owned or controlled by American Express Company.
CHARGEBACK:
In the event of the surrender of an annuity within forty days of the issue date,
there will be a chargeback of all commissions paid with respect to premium
received in accordance with the following schedule. After this "free look"
period, no chargebacks will be assessed.
Agreed to on ______________, 1999.
American Enterprise Life Insurance Company Xxxxx Fargo Securities, Inc.
Company Selling Agency and Selling Agency's
Broker
By:_______________________ By:_______________________________
Title:____________________ Title:____________________________
American Express Financial Advisors Inc.
Distributor
By:_______________________
Title:____________________
Addendum B to Exhibit A
Supplemental Trail Commission
by and between American Enterprise Life Insurance Company ("Company"), American
Express Service Corporation (Distributor), Xxxxx Fargo Securities, Inc. (Selling
Agency) and Well Fargo Securities, Inc. (Selling Agency's Broker) dated November
15, 1999. This Addendum is effective November 15, 1999, and applies only to the
sale of the Xxxxx Fargo Advantage Variable Annuity described in Addendum A,
above.
Supplemental Trail Commission:
1. In addition to the compensation shown in other Addenda to this Agreement,
Company agrees to pay to Selling Agency a Supplemental Trail Commission as
shown in #2, below, subject to all the conditions in #3 below.
2. Payment. At the end of each calendar quarter, Company shall calculate and
pay the Supplemental Trail Commission as follows:
Supplemental Trail Compensation = Eligible Value x Annual Rate
----------------------------
4
Where:
A. Annual Rate of the Supplemental Trail Commission is shown below.
Supplemental Trail Commission increases when the annuity contract's surrender
charge period lapses.
In ALL cases, Years 2-5: "x" basis points
In SOME cases: Years 6 & 7: "x" basis points (if contract's surrender
charge period is 7 years)
In SOME cases: Years 6 & 7: "y" basis points (if contract's surrender
charge period is 5 years)
In ALL cases: Years 8 +: "y" basis points
B. Eligible Contracts means contracts sold to customers under this Addendum
A to this Agreement which have reached their first contract anniversary as of
the calendar quarter end.
C. Eligible Value means accumulation value (including earnings accrued), as
of the quarter end for which the Supplemental Trail Commission is being
calculated, of all Eligible Contracts for which Option B or C, above, has been
selected. Each option's trail will be calculated separately. Trail checks will
be made payable to the Selling Agency, and will be sent directly to Selling
Agency for distribution.
3. Conditions of Payment:
A. Payment for each quarter's Supplemental Trail Commission shall be final,
and no credits or additions or adjustments shall be made to it. Each quarter is
evaluated independently. Chargebacks will be accounted for in the quarter in
which the contract is returned to the Company.
B. Company will supply supporting information for the calculation, along
with payment, to Selling Agency within 45 business days of the end of each
calendar quarter.
C. The Supplemental Trail Commission does not apply to sales outside the
Territory or to sales which are otherwise excluded from normal commission
payments under Exhibit A and/or any other Addenda to this Agreement (e.g.,
unlicensed sales, sales for which Selling Agency could not otherwise be
compensated, etc.).
D. In the event that notice of termination of this entire Agreement is
given by any party hereto, the obligation to pay the Supplemental Trail
Commission will survive for three years from the effective date of such
termination. No Supplemental Trail Commission will be payable for the quarter in
which that third anniversary of termination occurs, or thereafter.
E. Subject to Condition D above, Supplemental Trail Commission will be paid
to the Selling Agency for as long as each Eligible Contract continues to remain
an Eligible Contract as herein defined, and for as long as the Selling Agency
continues to be licensed as an insurance agency and appointed with Company.
F. The obligation to pay Supplemental Trail Commission runs from Company to
Selling Agency only. All distribution of Supplemental Trail Commission is the
Selling Agency's responsibility. No claim made by or on behalf of any individual
representative for Supplemental Trail Commission will be honored by Company, and
no expense, including (without limitation) attorney fees, that an Selling Agency
or a representative may incur to determine the individual representative's
entitlement to Supplemental Trail Commission, will be absorbed by or reimbursed
by Company.
G. In all cases, the amount of commission described above is the total
compensation available for distribution from Company, or any of its
subsidiaries, affiliates, or other related entities owned or controlled by
American Express Company, whether under this Agreement or under any other
agreement between or among Company, Selling Agency, or any other party. See
Addendum A, above, for details of payment of commission at time of sale.
Agreed to on _________________, 1999.
American Enterprise Life Insurance Company Xxxxx Fargo Securities, Inc.
Company Selling Agency and Selling Agency's
Broker
By:________________________ By:_______________________________
Title:_____________________ Title:____________________________
Date:______________________ Date:_____________________________
American Express Financial Advisors Inc.
Distributor
By:________________________
Title:_____________________
Date:______________________
Addendum C to Exhibit A: Products, Territory and Commissions
Addendum to Exhibit A of the Selling Agreement between American Enterprise Life
Insurance Company ("Company"), American Express Financial Advisors Inc.
("Distributor"), Xxxxx Fargo Securities, Inc.("Selling Agency") and Xxxxx Fargo
Securities, Inc. ("Selling Agent's Broker") dated November 15, 1999. This
Addendum is effective for the states, and from the date(s), specified on Exhibit
A, executed by the parties to this Agreement.
The Products to be offered through Selling Agent is a flexible premium variable
annuity known as the Xxxxx Fargo Advantage Credit Variable Annuity, which will
be offered only in the Territory shown in Exhibit A.
COMMISSION:
The commission payable for contracts described in this Addendum will be as
follows:
(a) ____% gross of all premiums for issue ages of both owner and annuitant
not exceeding age 80 (qualified or non-qualified).
(b) ____% gross of all premiums for issue ages of both owner and annuitant
of 81-85 (qualified or non-qualified).
(c) No commission is payable for policies described in this Addendum where
the issue age of either the annuitant or owner exceeds age 85
(qualified or non-qualified No commission is payable on the sale of
Products under this Agreement if that sale involves replacement of an
asset or investment issued by Company or by any other insurance
company owned or controlled by American Express Company.
CHARGEBACK:
In the event of the surrender of an annuity within forty days of the issue date,
there will be a chargeback of all commissions paid with respect to premium
received in accordance with the following schedule. After this "free look"
period, no chargebacks will be assessed.
Agreed to on _________________, 1999.
American Enterprise Life Insurance Company Xxxxx Fargo Securities, Inc.
Company Selling Agency and Selling
Agency's Broker
By:_________________________ By:_____________________________
Title:______________________ Title:__________________________
American Express Financial Advisors Inc.
Distributor
By:_________________________
Title:______________________
Addendum D to Exhibit A
Supplemental Trail Commission
by and between American Enterprise Life Insurance Company ("Company"), American
Express Service Corporation (Distributor), Xxxxx Fargo Securities, Inc. (Selling
Agency) and Well Fargo Securities, Inc. (Selling Agency's Broker) dated November
15, 1999. This Addendum is effective November 15, 1999, and applies only to the
sale of the Xxxxx Fargo Advantage Credit Variable Annuity described in Addendum
C, above.
Supplemental Trail Commission:
1. In addition to the compensation shown in other Addenda to this Agreement,
Company agrees to pay to Selling Agency a Supplemental Trail Commission as
shown in #2, below, subject to all the conditions in #3 below.
2. Payment. At the end of each calendar quarter, Company shall calculate and
pay the Supplemental Trail Commission as follows:
Supplemental Trail Compensation = Eligible Value x Annual Rate
----------------------------
4
Where:
A. Annual Rate of the Supplemental Trail Commission is agreed to be ____
basis points, starting in Year 2 of the life of an Eligible Contract.
B. Eligible Contracts means contracts sold to customers under this Addendum
A to this Agreement which have reached their first contract anniversary as of
the calendar quarter end.
C. Eligible Value means accumulation value (including earnings accrued), as
of the quarter end for which the Supplemental Trail Commission is being
calculated, of all Eligible Contracts for which Option B or C, above, has been
selected. Each option's trail will be calculated separately. Trail checks will
be made payable to the Selling Agency, and will be sent directly to Selling
Agency for distribution.
3. Conditions of Payment:
A. Payment for each quarter's Supplemental Trail Commission shall be final,
and no credits or additions or adjustments shall be made to it. Each quarter is
evaluated independently. Chargebacks will be accounted for in the quarter in
which the contract is returned to the Company.
B. Company will supply supporting information for the calculation, along
with payment, to Selling Agency within 45 business days of the end of each
calendar quarter.
C. The Supplemental Trail Commission does not apply to sales outside the
Territory or to sales which are otherwise excluded from normal commission
payments under Exhibit A and/or any other Addenda to this Agreement (e.g.,
unlicensed sales, sales for which Selling Agency could not otherwise be
compensated, etc.).
D. In the event that notice of termination of this entire Agreement is
given by any party hereto, the obligation to pay the Supplemental Trail
Commission will survive for three years from the effective date of such
termination. No Supplemental Trail Commission will be payable for the quarter in
which that third anniversary of termination occurs, or thereafter.
E. Subject to Condition D above, Supplemental Trail Commission will be paid
to the Selling Agency for as long as each Eligible Contract continues to remain
an Eligible Contract as herein defined, and for as long as the Selling Agency
continues to be licensed as an insurance agency and appointed with Company.
F. The obligation to pay Supplemental Trail Commission runs from Company to
Selling Agency only. All distribution of Supplemental Trail Commission is the
Selling Agency's responsibility. No claim made by or on behalf of any individual
representative for Supplemental Trail Commission will be honored by Company, and
no expense, including (without limitation) attorney fees, that an Selling Agency
or a representative may incur to determine the individual representative's
entitlement to Supplemental Trail Commission, will be absorbed by or reimbursed
by Company.
G. In all cases, the amount of commission described above is the total
compensation available for distribution from Company, or any of its
subsidiaries, affiliates, or other related entities owned or controlled by
American Express Company, whether under this Agreement or under any other
agreement between or among Company, Selling Agency, or any other party. See
Addendum A, above, for details of payment of commission at time of sale.
Agreed to on ___________________, 1999.
American Enterprise Life Insurance Company Xxxxx Fargo Securities, Inc.
Company Selling Agency and Selling Agency's
Broker
By:__________________________ By:________________________________
Title:_______________________ Title:_____________________________
Date:________________________ Date:______________________________
American Express Financial Advisors Inc.
Distributor
By:__________________________
Title:_______________________
Date:________________________
EXHIBIT B TO SELLING AGENCY AGREEMENT
FOR THE SALE OF VARIABLE ANNUITIES
(for use if Payment Options 4.5.3 or 4.5.4 appear on Exhibit A)
The Selling Agency Agreement between American Enterprise Life Insurance
Company ("Company"), American Express Financial Advisors Inc. ("Distributor"),
SA ("Selling Agency") and Broker_Dealer ("Broker-Dealer") dated Effective_Date
("Agreement") is hereby amended as follows. This Amendment is effective
Addendum_Effective_D.
The purpose of this Amendment is to modify Selling Agency's and
Broker-Dealer's obligations and duties under the Agreement with respect to the
process for remitting premiums to Company to enable Authorized Selling Firm to
use the services of a third party, _____(Full name of Clearing Broker, City,
State)_____ ("Clearing Broker"). To the extent there are any inconsistencies
between the Agreement and this Amendment, the provisions contained herein will
supersede the Agreement.
Section 4.4, Supervision and Administration, is amended to replace subsection
4.4.8 (a) with the following: 4.4.8(a) Authorized Selling Firm will instruct
customers to pay their premiums for the Products, by check or bank draft
authorization or wire transfer, with funds to the order of Selling Agency in
accordance with Section 4.5, "Collection and Submission of Premiums."
Section 4.8, Accurate Record, Audit, shall be amended by adding the following,
at the end of the Section: Company will have the right to audit the books of the
Authorized Selling Firm and Authorized Selling Firm will obtain Clearing
Broker's consent for Company to audit the books of Clearing Broker, with respect
to any premium remittance, or the premium remittance process, insofar as either
involves the Clearing Broker.
Section 4 of the Agreement is hereby amended by inserting a new subsection,
4.13, Compensation to Clearing Broker:
4.13 Compensation to Clearing Broker. Authorized Selling Firm agrees that they
will only pay Clearing Broker for the services authorized herein on a fixed fee
basis. Such fee may be paid on a per-transaction basis only if it is reasonable
in relation to the services rendered, and only if prior written authorization is
obtained from the Company. Authorized Selling Firm will not pay Clearing Broker
a commission or use any form of compensation where the Clearing Broker's fee is
determined by the dollar amount of any given purchase of any Product, unless
Clearing Broker is separately licensed by appropriate state insurance licensing
authorities and appointed to sell Products.
Section 4 of the Agreement is hereby amended by inserting a new subsection,
Section 4.14, Representations and Warranties of Selling Agency and
Broker-Dealer:
4.14 Representations and Warranties of Selling Agency and Broker-Dealer:
4.14.1 Authorized Selling Firm represents and warrants that Clearing Broker
is the designated receiver of premium payments on variable annuity
products sold by Selling Agency.
4.14.2 Authorized Selling Firm represents and warrants that Broker-Dealer
has executed an agreement with the Clearing Broker for the clearing of
premiums which satisfies all requirements of the National Association
for Securities Dealers, Inc.
4.14.3 Authorized Selling Firm represents and warrants that it will ensure
that activities of the Clearing Broker in connection with the Products
will be limited to those specified in this Amendment, and that all
such activities will be performed in accordance with applicable state
and federal laws and regulations. Selling Agency and/or Broker-Dealer
must obtain Company's prior written agreement if the activities of
Clearing Broker are modified in any way.
Section 7.1, Indemnification of Company, is amended by adding the following
subsection: Section 7.1.4 The acts or omissions of the Clearing Broker or any
employee or agent of Clearing Broker while performing the activities covered by
this Agreement. The indemnity obligation of this paragraph will extend to any
regulatory penalties incurred by Company as a result of said activities.
EXHIBIT C
Affiliate Participation Agreement
SAAffiliate1 ("Affiliate") agrees to act as an Affiliate of Selling Agency and
American Enterprise Life Insurance Company ("Company") agrees to appoint
Affiliate in the jurisdiction in the Territory identified on Exhibit A and for
the Products identified on Exhibit A in accordance with the terms and conditions
of the Selling Agreement between Selling Agency, Broker-Dealer, Company and
Distributor dated Effective_Date ("Agreement"), incorporated herein by this
reference, as it may be amended from time to time.
Affiliate acknowledges, warrants, covenants and agrees that:
1. All terms used herein shall have the definitions used in the
Agreement.
2. Affiliate assumes all of the duties and responsibilities of Selling
Agency as an insurance agency under the Agreement except that
Affiliate's rights, duties and responsibilities shall only extend to
the jurisdictions in the Territory on Exhibit A and Products
identified on Exhibit A.
3. Affiliate and Selling Agency are jointly and severally liable for the
performance of Affiliates duties and responsibilities under the
Agreement in the jurisdictions in the Territory identified on Exhibit
A.
4. Affiliate warrants that it has the licenses required to sell annuities
and perform the duties and responsibilities of an insurance agency in
the jurisdictions in the Territory identified on Exhibit A.
5. Selling Agency, by this appointment, agrees that it will forward to
Affiliate any notices from Company which affect Affiliate. Affiliate
agrees that notice from Company to Selling Agency is valid and
effective notice to it.
6. All other provisions of the Agreement will apply to and govern
Affiliate's activities pursuant to this Affiliate Participation
Agreement, including, but not limited to the provisions concerning
amendments to the Agreement.
7. Selling Agency is authorized to execute amendments to the Exhibits and
Addenda on behalf of Selling Agency and Affiliate and Affiliate will
accept, agree to and perform its duties as Affiliate under the
Agreement in accordance with all such amendments upon receiving
written notice thereof from Selling Agency, provided that any term of
such an amendment which would be inconsistent with the terms of this
Affiliate Participation Agreement will require an amendment of the
Affiliate Participation Agreement in order to bind Affiliate to that
term.
8. This Affiliate Participation Agreement may be terminated in accordance
with the termination provision of the main Agreement.
IN WITNESS WHEREOF Affiliate and Selling Agency have signed this Affiliate
Participation Agreement as of ______________________.
SAAffiliate1 SA
Affiliate Selling Agency
By:_____________________ By:______________________________
Title:__________________ Title:___________________________
Send complete form to:
American Enterprise Life Insurance Company
00 Xxxxx 0xx Xxxxxx, Xxxxxxxxxxx, XX 00000, Attn: Contract Manager, Unit 1818
Accepted and appointment of Affiliate made on______________ By: ______________
For American Enterprise Life Insurance Company
