THE GUARDIAN INSURANCE & ANNUITY COMPANY, INC.
AGREEMENT OF GENERAL AGENCY
Agreement made this _________ day of ____________, 19___ by and between The
Guardian Insurance & Annuity Company, Inc. ("GIAC"), a Delaware corporation and
a wholly-owned subsidiary of The Guardian Life Insurance Company of America
("Guardian Life"), having its Principal office located at 0 Xxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx, 00000 and ________________ ("Principal").
1. The undersigned Principal is presently a General Agent of Guardian Life in
accordance with an Agreement of General Agency bearing an effective date
of _______________ ("Guardian Life GA Agreement").
2. GIAC hereby appoints the Principal a General Agent of GIAC for the limited
purpose of conducting and overseeing the business relating to GIAC's
Variable Whole Life Insurance Policies with Modified Scheduled Premiums
marketed under the name Park Avenue Life ("PAL") and GIAC's Flexible
Premium Variable Universal Life policy marketed under the name Park Avenue
VUL ("VUL"). There may be one or more policies marketed under the PAL name
and, where necessary or appropriate, this Agreement will distinguish
between them by appending the year of introduction. Currently, there are
two policies marketed under this name - "PAL '95 and PAL '97."
3. The Principal shall at all times be associated with Park Avenue Securities
LLC ("PAS"), a Broker-Dealer registered with the Securities and Exchange
Commission ("SEC") and a member of the National Association of Securities
Dealers, Inc. ("NASD") as an NASD Registered Representative or NASD
Registered Principal and, if the particular jurisdiction requires, shall
be licensed or registered as a securities agent of PAS. The Principal must
at all times be validly licensed, registered or appointed by GIAC as a
variable contracts agent in accordance with the requirements of the
jurisdiction where solicitations for PAL and VUL contracts occur. The
Principal, his agents, brokers and Field Representatives may solicit for
and sell PAL and VUL contracts in any jurisdiction where such contracts
are filed and approved for sale by the governmental authorities having
jurisdiction, provided the Principal, his agents, brokers and Field
Representatives are all validly licensed, registered or otherwise
qualified as required for the solicitation and sale of the PAL and VUL
contracts in such jurisdictions.
4. To the extent applicable, the Principal shall comply strictly with: (a)
the laws, rules and regulations of all jurisdictions (state and local) in
which the Principal, his agents, brokers and Field Representatives solicit
applications for and sell PAL and VUL contracts; (b) federal laws and the
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rules and regulations of the SEC; (c) the rules of the NASD; (d) the rules
and procedures of PAS, and (e) the rules and procedures of GIAC. The
Principal understands that failure to comply with such laws, rules,
regulations and procedures may result in disciplinary action against the
Principal by the SEC, a state or other local regulatory agency that has
jurisdiction, the NASD, PAS or GIAC. Before any solicitations or sales of
PAL and VUL are made, the Principal shall become familiar with and abide
by the laws, rules, regulations and procedures of all the above mentioned
agencies or parties as are currently in effect and as they may be changed
from time to time.
5. The Principal shall have all applications for PAL and VUL accurately
completed or reviewed and signed by the applicant and shall submit the
applications to GIAC through PAS together with all payments received from
applicants without any reductions. The Principal, his agents, brokers and
Field Representatives shall cause all checks or orders for PAL and VUL to
be made payable to GIAC. GIAC shall reject any application that is
submitted by or on behalf of a Principal, his agents, brokers and Field
Representatives not appropriately licensed as required by paragraph 3 of
this Agreement.
6. The Principal, his agents, brokers and Field Representatives shall not
make any statements concerning PAL and VUL except those that are contained
in the current prospectuses for PAL and VUL and the prospectuses for their
underlying variable investment options and they shall not solicit for
applications or make sales through the use of mailings, advertisements or
sales literature or any other method of contact unless the material or a
complete description of the method has been filed with the NASD and
received written approval of PAS from a Registered Principal whose office
is located in a PAS Office of Supervisory Jurisdiction as that term is
defined by NASD rules.
7. In connection with the Principal's appointment as a GIAC General Agent for
the purpose set forth in paragraph 2 above, the entire Guardian Life GA
Agreement referred to above and attached hereto as the Exhibit, including
all compensation adjustment provisions, is incorporated herein by
reference. Guardian Life GA Agreement compensation provisions that do not
apply to PAL and VUL are as noted below. All references to "Company"
within the Guardian Life GA Agreement shall apply with full force and
effect to GIAC. Additionally, the Registered Representative's Agreement
between the Principal and PAS and the Agent's Agreement between the
Principal and GIAC are incorporated herein by reference and attached
hereto as Exhibits.
8. The Principal shall be paid overriding commissions for sales of PAL and
VUL policies as outlined in Appendix A of this Agreement.
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9. Expense Allowance Payment ("EAP") provisions contained in Section 4 and
Appendix G of the Guardian Life GA Agreement shall not apply to PAL and
VUL (except for the use of PAL and VUL first year commissions on policy
premiums in determining the rate that will apply to non-PAL business in
accordance with the provisions contained in Appendix G, Schedule G-II, (B)
2). The Principal shall instead receive EAP on PAL and VUL as outlined in
Appendix B of this Agreement.
10. The Principal shall be paid commissions on personally produced PAL and VUL
business as outlined in of this Agreement .
11. Allocation of VUL premiums and the effect thereof on compensation is
described in Appendix D of this Agreement.
12. The Principal shall be responsible to the Company for any indebtedness
resulting from PAL chargebacks applied to PAL business personally produced
by the Principal and to PAL business produced by the agents, brokers and
Field Representatives of the Principal.
13. This Agreement may be terminated as outlined in Section 5 of the Guardian
Life GA Agreement. In addition, it shall be automatically terminated if
the Guardian Life GA Agreement, PAS Registered Representative Agreement or
GIAC Agent's Agreement is terminated.
IT SHALL BE EXPRESSLY UNDERSTOOD BY THE PRINCIPAL THAT THIS AGREEMENT SHALL NOT
BE EFFECTIVE UNLESS THE PRINCIPAL IS VALIDLY LICENSED IN ACCORDANCE WITH THE
REQUIREMENTS OF THE JURISDICTIONS WHERE SOLICITATIONS BY THE PRINCIPAL AND THE
AGENTS, BROKERS AND FIELD REPRESENTATIVES OF THE PRINCIPAL FOR PAL AND VUL
POLICIES OCCUR.
IN WITNESS WHEREOF, the parties hereto have caused this agreement to be executed
as of the day and year first written above.
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WITNESS Authorized Company Officer
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WITNESS General Agent
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APPENDIX A
A. Overriding Commission Schedule (Percentages of Premium)
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PAL Unscheduled
Payments & VUL
Policy Years PAL Policy Premiums VUL Target Premiums Excess Premiums
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1 5% 5% 0.5%
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2 through 5 4% 3% 0.5%
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6 through 10 2% 3% 0.5%
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No overrides on PAL policies shall be payable on PAL policy premiums skipped
under the Premium Skip Option of the PAL policy. If unscheduled payments are
received when policies should be on the Premium Skip Option, renewal overrides
on such payments shall be based on renewal rates of PAL policy premiums applied
up to amounts of premium that correspond to renewal PAL policy premiums that
would otherwise have been paid if not for the Premium Skip Option being in
effect with standard renewal rates on unscheduled payments applied to any
premiums received above such PAL policy premium levels.
B. First Policy Year Overriding Commission Chargebacks on PAL '95 Policies
First policy year overriding commissions on policy premiums shall be charged
back to the Principal on PAL '95 policies that are surrendered or lapsed prior
to the policies having been in force for at least 18 months in accordance with
the following:
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Policy Months of PAL '95 Surrenders or Lapses Chargeback Percentages
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1-3 75%
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4-6 70%
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7-10 65%
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11-13 55%
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14 50%
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15 40%
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16 30%
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17 20%
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18 10%
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APPENDIX B
A. Expense Allowance Payments (Percentages of First Year Commissions)
------------------
Product Rate
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PAL 62%
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VUL 69%
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The term "first year commissions" shall be understood to include first policy
year Field Representative compensation at $13.75 per 1,000 of life production
credits.
B. First Policy Year EAP Chargebacks on PAL '95 Policies
EAP on policy premiums shall be charged back to the Principal on PAL '95
policies that are surrendered or lapsed prior to the policies having been in
force for at least 18 months in accordance with the following:
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Policy Months of PAL '95 Surrenders or Lapses Chargeback Percentages
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1-3 75%
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4-6 70%
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7-10 65%
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11-13 55%
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14 50%
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15 40%
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16 30%
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17 20%
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18 10%
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APPENDIX C
A. Commission Schedule (Percentages of Premium)
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PAL Unscheduled
Payments & VUL
Policy Years PAL Policy Premiums VUL Target Premiums Excess Premiums
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1 50% 45% 3%
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2 through 10 5% 3% 3%
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The first policy year commission rates of 50% on PAL and 45% on VUL shall be
reduced where policies are issued at ages over 70 with actual rates payable
determined by deducting from the figure 120 ages of applicable insureds as of
policy issue dates on PAL polices and by deducting from the figure 115 ages of
applicable insureds as of policy issue dates on VUL policies.
No compensation shall be payable on PAL policy premiums skipped under the
Premium Skip Option of PAL policies. If unscheduled payments are received when
policies should be on the Premium Skip Option, renewal commissions on such
payments shall be based on renewal rates of PAL policy premiums applied up to
amounts of premium that correspond to renewal PAL policy premiums that would
otherwise have been paid if not for the Premium Skip Option being in effect with
standard renewal rates on unscheduled payments applied to any premiums received
above such PAL policy premium levels.
B. First Policy Year Commission Chargebacks on PAL '95 Policies
First policy year commissions on policy premiums shall be charged back to the
Agent on PAL '95 policies that are surrendered or lapsed prior to the policies
having been in force for at least 18 months in accordance with the following:
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Policy Months of PAL '95 Surrenders or Lapses Chargeback Percentages
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1-3 75%
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4-6 70%
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7-10 65%
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11-13 55%
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14 50%
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15 40%
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16 30%
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17 20%
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18 10%
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APPENDIX D
ALLOCATION OF PREMIUMS AND THEIR EFFECT ON COMPENSATION
A. General
In a first policy year, premiums will first be applied to policy target
premium. These will be compensated at first year rates. Any premiums
received in the first year of a policy exceeding policy target premium
will be considered excess premium to be compensated at excess rates.
In policy years 2 through 10, any premium received up to nine times policy
target premium will be applied as policy target premium and receive
compensation at target premium renewal rates. Any premium exceeding nine
times policy target premium in policy years two through ten will be
considered excess premium to be compensated at excess rates.
In policy years 11 and greater, the compensation on premium received will
be at service fee rates.
B. Increases In Coverage
Coverage increases will be reflected in self-contained segments of
policies that have their own policy effective dates, policy year durations
and policy premiums. Premiums for policies with increases in coverage will
be applied to each coverage and associated target premiums in the order
the coverages were issued (earliest first). When the sum of the premiums
during a given policy year exceeds the sum of all applicable target
premiums, any additional amount will be allocated prorata based on target
premiums for each coverage. The amount thus allocated will be processed as
outlined in the above general description (i.e. it will be processed with
reference to policy years of the coverages and amounts of applicable
target premiums paid).
C. Decreases In Coverage
A coverage decrease will be applied to a last previous coverage increase,
if any, or to the initial coverage should no coverage increase have taken
place. Such decrease will serve to reduce target premium for the full
period so that any regular compensation on subsequent premium received
will be based on lower target premium (i.e. The total of renewal
compensation payable will be based on nine times the lower target
premium). Any premium amount applied over such lower target premium will
be compensated at excess rates for policy years 2 through 10 and at
service fee rates for policy years 11 and greater.
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APPENDIX D (CONTINUED)
First year compensation will be paid on coverage increases only to the
extent such increases should exceed previous coverage decreases.
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