Variable Products Compliance Agreement
Exhibit (b)(8)(h)
This Variable Products Compliance Agreement is made and executed by and between EquiTrust
Investment Management Services, Inc. (“EquiTrust”), a Delaware corporation having its principal
offices at 0000 Xxxxxxxxxx Xxxxxx, Xxxx Xxx Xxxxxx, Xxxx; and Modern Woodmen of America (the
“Society”), a fraternal benefit society having its principal offices at 0000 0xx Xxxxxx, Xxxx
Xxxxxx, Xxxxxxxx 00000.
Recital
The Society desires to have EquiTrust provide compliance services to the Society, as
described herein, with respect to the Society’s variable annuity contracts which are underwritten
and sold by the Society.
NOW THEREFORE, in consideration of the mutual covenants and obligations hereinafter expressed
and for the consideration recited herein, the Society and EquiTrust hereby covenant, stipulate and
agree as follows:
Part 1 — SERVICES
1.1 Scope of Services. From and after the date of this Agreement, EquiTrust agrees to provide to
the Society certain compliance functions with respect to the variable annuity contracts issued by
the Society, as identified and listed in the schedule of contract and certificate forms and riders
annexed hereto as Schedule A. Such compliance functions shall consist of the activities set forth
and described in the Description of Services and Fees annexed hereto and incorporated herein as
Schedule B. Schedules A and B may be amended from time to time by mutual written agreement of the
Society and EquiTrust.
1.2 Additional Services. EquiTrust shall review any additional compliance requirements at the
request of the Society and EquiTrust will provide the Society with a written proposal to include
specific services to be provided, an implementation schedule and any associated fees and expenses.
1.3 Compensation. In consideration of the services provided under this Agreement for and on behalf
of the Society, the Society will pay EquiTrust quarterly such compensation and reimburse EquiTrust
for such expenses as are provided for in Schedule B. EquiTrust agrees that the compensation
payable pursuant to Schedule B shall be accepted by EquiTrust as full compensation from the
Society for the services described in Schedule B.
1.4 Society Directives. EquiTrust shall, in all cases and at all times, to the extent there is
reasonable notice thereof, observe and obey the rules, regulations, instructions and directives of
the Society as the Society may, from time to time, promulgate for its operations, and shall not
bind the Society in contravention of any such rules, regulations, instructions or directives.
EquiTrust shall not, however, upon reasonable prior notice to the Society, be responsible for
observing or obeying any rule, regulation, instruction or directive of the Society, if in so doing,
EquiTrust, in the opinion of its counsel, would be in violation of any statute, rule or regulation
promulgated by any governmental authority with jurisdiction thereover.
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1.5 Referral of Communications. EquiTrust shall handle all correspondence of a routine nature and
other general functions necessary to provide compliance services pursuant to this Agreement and
shall maintain files relative thereto. EquiTrust shall immediately notify the Society of all
attorney letters or other communications notifying EquiTrust of threatened or actual litigation
against EquiTrust or the Society for which the Society is a party. The Society shall forward to
EquiTrust, immediately upon receipt, all complaints and inquiries, and all attorney letters
containing complaints received by the Society but appropriate for EquiTrust response. EquiTrust
will dispatch responses within a reasonable period or as required by appropriate law, whichever is
sooner, and will copy the Society on such responses to all complaints. The Society shall have an
opportunity to review EquiTrust’s response to all attorney letters and EquiTrust will not mail or
otherwise transmit any such written responses to such attorney letters without the prior approval
of the Society.
Part 2 — STANDARDS OF PERFORMANCE
2.1 Licensure. EquiTrust will be properly licensed with each state or other jurisdiction as
required in order to provide the services covered by this Agreement.
2.2 General Standard. The Society will monitor, oversee and audit the services of EquiTrust as
provided herein in accordance with the Society’s duties to comply with Rule 38a-l of the
Investment Company Act related to the services described in Schedule B. EquiTrust agrees to
provide documentation, data and access as necessary for the Society to fulfill its Rule 38a-l
obligations related to the services described in Schedule B. EquiTrust agrees to maintain a
compliance program for services described in Schedule B and agrees to adopt and implement written
policies and procedures reasonably designed to prevent violations of federal securities law and
violations of state insurance laws as applicable.
2.3 Reservation of Management Authority. Services as are rendered by EquiTrust are subject to the
express limitation that they shall in no way constitute a relinquishment of the management
responsibility of the Society, which shall not be relieved of any obligation or liability to which
it would otherwise be subject by law as a result of these services being rendered. The authority
granted and delegated in Schedule B can be amended or removed in the sole discretion of the
Society.
Part 3 — EFFECTIVE DATE, TERM; TERMINATION
3.1 Effective Date; Term. This Agreement shall become and be effective on and as of April 15,
2011, and shall thereafter continue in full force and effect until the earlier of December 31,
2012, or such time as the services described in Schedule B are transitioned to the Society, or the
Society desires to utilize a different service provider from those entities engaged by EquiTrust
to perform the services described in Schedule B.
3.2 Rights and Obligations Upon Termination. Upon the termination of this Agreement, EquiTrust
shall supply the Society with all information and data necessary to provide the compliance
services related to the business covered by this Agreement.
Part 4 — INDEMNIFICATION
4.1 Mutual Indemnification. EquiTrust agrees to indemnify and hold the Society harmless from any
liability, damages or losses which the Society may incur as a result of any claims, actions or
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judgments, negligent or intentional, in connection with EquiTrust’s provision of services to the
Society; provided, however, EquiTrust shall not be responsible for decisions made by the Society or
for actions as directed by Society in writing. The Society similarly agrees to indemnify and hold
EquiTrust harmless for decisions made by the Society or actions as directed by the Society in
writing. Each party warrants to the other that its services and obligations as performed under this
Agreement, including, but not limited to the materials used therein, will not infringe upon the
proprietary interests or rights of third parties and each party will further indemnify, hold
harmless and defend the other party, its directors, officers, agents and employees, against any
infringement liability, claim or action as a result of the actions of the indemnifying party.
4.2 Notice of Claim. If any claim is made by a party which would give rise to a right of
indemnification under §4.1, the party entitled to indemnification (the “Indemnified Party”)
promptly will give notice of the claim to the party required to provide Indemnification (the
“Indemnifying Party”). The Indemnified Party will permit the Indemnifying Party to participate in
such defense at the Indemnifying Party’s expense. The Indemnifying Party will not, in the defense
of any such claim or litigation, consent to entry or any judgment or enter into any settlement
without the written consent of the Indemnified Party which will not be withheld unreasonably. The
Indemnified Party shall cooperate fully with the Indemnifying Party and make available to the
Indemnifying Party all pertinent information under its control relating thereto.
Part 5 — GENERAL PROVISIONS
5.1 Confidential Information. In performing the obligations arising under this Agreement, each
party may have access to and receive disclosure of certain confidential or proprietary information
of the other party (hereinafter “Confidential Information”). Each party shall take all reasonable
steps necessary to protect the confidential and proprietary nature of all Confidential Information
of the other party by affording thereto the same types of protection which the party in possession
of Confidential Information of the other party affords its own confidential and proprietary
information. Except as provided in this Agreement or as reasonably required to perform the
services referenced herein, neither party shall, directly or indirectly, disclose or make
available to any third party, or use for any purpose, any Confidential Information belonging to
the other party. Notwithstanding the foregoing, Confidential Information shall not include: (i)
any information which is or becomes generally available to the public or the insurance industry,
other than as a result of a breach of this Agreement by the party obtaining the Confidential
Information; (ii) any information which is lawfully obtained by the party from a third party,
provided that the third party is not, to the knowledge of the party obtaining the information,
bound by a nondisclosure agreement with respect thereto; or (iii) any information which
subsequently develops from independent sources.
5.2 Inspection of Books and Records. The Society, or others on its behalf, shall have the right at
any reasonable time to inspect all documents relating to the services provided pursuant to this
Agreement. EquiTrust shall provide any and all information concerning the services provided
hereunder which may be required in order to administer this Agreement and to permit the Society to
comply with governmental regulations, examinations, audits and inspections.
5.3 Corporate Authority. EquiTrust and the Society expressly represent and warrant that each has
the authority to enter into this Agreement and that each is not or will not be, by virtue of
entering into this Agreement or otherwise, in breach of any other agreement with any other
society, company, association, firm, person or corporation.
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5.4 Officer Authority. The officers signing this Agreement on behalf of the Society and EquiTrust
represent and warrant that they are authorized to execute this document on behalf of such
corporations pursuant to their bylaws or a resolution of their boards of directors.
5.5 Independent Contractor. EquiTrust is an independent contractor. Nothing contained in this
Agreement shall be construed to create the relationship of employer and employee between the
Society and EquiTrust, nor shall EquiTrust’s employees be considered employees of the Society for
any purposes.
5.6 Arbitration. In the event of any dispute arising between EquiTrust and the Society with
reference to the rights or liabilities of either party under this Agreement, the dispute shall be
referred to three arbitrators (other than present or former officers or employees of EquiTrust, the
Society, any affiliated company or any company with a monetary interest in the dispute) familiar
with the business of insurance. One of the arbitrators shall be chosen by EquiTrust, another by the
Society and a third by the first two. The decision of the arbitrators shall be binding and final.
The standards to be used in the proceedings will be the Commercial Arbitration Rules of the
American Arbitration Association. Each party shall initially pay the costs and fees of the
arbitrator it selects, and the costs and fees of the third arbitrator shall be divided equally by
the parties; provided, however, that the prevailing party in any arbitration proceeding conducted
pursuant to this Section shall be entitled to recover from the other party any costs or expenses
incurred by the prevailing party in connection with the arbitration, including the fees of
arbitrators and the reasonable fees of attorneys, actuaries, accountants and other experts.
5.7 Assignment. Neither party may assign or delegate all or any part of its rights and duties
under this Agreement without the prior written consent by an Authorized Officer of the granting
party.
5.8 Non-Waiver. The waiver of any breach of any term, covenant or condition of this Agreement
shall not be deemed a waiver of any subsequent breach of the same or any other term, covenant or
condition. No term, covenant or condition of this Agreement shall be deemed to have been waived
unless such waiver is in writing and signed by the party charged therewith.
5.9 Notices. Any notice required or permitted under this Agreement shall be deemed sufficiently
given and effective five (5) business days after deposit with the United States Postal Service,
postage-prepaid, registered or certified, return-receipt-requested, by facsimile or other
electronic transmission or upon receipt if delivered personally. Such notice shall be directed as
follows:
EquiTrust Investment Management Services, Inc. |
Modern Woodmen of America | |
Xxxxxxx X. Xxxxxx |
W. Xxxxx Xxxxxx | |
President |
President | |
0000 Xxxxxxxxxx Xxxxxx |
0000 0xx Xxxxxx | |
Xxxx Xxx Xxxxxx, Xxxx 00000 |
Xxxx Xxxxxx, Xxxxxxxx 00000 |
5.10 Titles and Headings. The titles and headings appearing in this Agreement are included for
convenience only and shall not be taken into account in the interpretation, construction or
application of this Agreement.
5.11 Amendment. Any amendment to this Agreement shall be in writing and signed by authorized
representatives of both parties.
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5.12 Entire Agreement. This Agreement, together with the several Schedules appended hereto and
incorporated herein, constitutes the entire agreement between the parties relative to the subject
matter hereof, superseding any and all prior understandings or agreements between the parties and
any subsidiary, parent or affiliated company and may not be amended except by written instrument
executed by the parties.
In witness whereof, EquiTrust and the Society have caused this Agreement to be subscribed
and executed, in duplicate original, by their undersigned officers, duly authorized hereunto, on
the dates hereinafter indicated.
| EquiTrust Investment Management Services, Inc. |
Modern Woodmen of America | |||||
By:
|
/s/ Xxxxxxx X. Xxxxxx
|
By: | /s/ W. Xxxxx Xxxxxx
|
|||
| President | President | |||||
Date: |
Date: | |||||
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Schedule A
SCHEDULE OF CONTRACTS
| Description | SEC File Number | |||
Flexible Premium Deferred Variable Annuity Certificate |
333-63972 | |||
Flexible Premium Deferred Variable Annuity Certificate |
811-10429 | |||
and any and all applicable riders, endorsements, applications and state specific variations of
these forms and certificates.
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Schedule B
| Annual | ||||||||||||||||
| Compliance | Hours | Units | Rate | Annual | ||||||||||||
Form N-4 VA Prospectus preparation/mailing Rule 485-b
filing (1) |
150 | 1 | 125.54 | 18,831 | ||||||||||||
VSO tables prepared VA |
15 | 1 | 167.36 | 2,510 | ||||||||||||
Prospectus supplements (products) —
preparation & filing VA |
10 | 1 | 125.54 | 2,008 | ||||||||||||
Prospectus supplements
(products and subaccounts)
— mailing |
6 | 1 | 125.54 | 1,004 | ||||||||||||
Preparation/mailing Semi-Annual Reports |
16 | 1 | 125.54 | 2,008 | ||||||||||||
Preparation/mailing Annual Reports |
16 | 1 | 125.54 | 2,008 | ||||||||||||
Form N-SAR VA preparation(3) |
8 | 1 | 125.54 | 1,004 | ||||||||||||
Rule 24f-2 Notice VA |
8 | 1 | 125.54 | 1,004 | ||||||||||||
Proxy
Solicitation
(product) (2) |
1 | 125.54 | ||||||||||||||
Proxy Solicitation (subaccounts) |
Per Solicitation | 1 | 1,500 | |||||||||||||
| SEC Examination — Will be billed on a per-hour basis depending on the information to be provided. | ||||||||||||||||
| (1) | A Rule 485-b filing is used when there are no material changes and no SEC review is required. | |
| Rule 485-a filings are done when there are material changes and an SEC review is required. | ||
| The additional hours required in a 485-a filing will be billed at the per-hour rate for the 485-b filing as incurred. | ||
| (2) | A Proxy Solicitation for the VA product will be billed at the per-hour rate for the 485-b filing as incurred. | |
| (3) | Includes review, Edgarizing and filing. |
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