"A"
BROKER DEALER AGENCY
SELLING AGREEMENT
This Agreement is made among the following three parties:
1. RELIASTAR LIFE INSURANCE COMPANY
00 Xxxxxxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
a Minnesota domiciled stock life insurance company
(hereinafter "INSURER"); and,
2. WASHINGTON SQUARE SECURITIES, INC.
00 Xxxxxxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
an affiliate of Insurer, registered as a broker-dealer with
the Securities and Exchange Commission ("SEC") and a member of
the National Association of Securities Dealers, Inc.
("NASD") (hereinafter "GENERAL DISTRIBUTOR"); and,
3. ------------------------------
------------------------------
Street
------------------------------
City State ZIP
registered as a broker-dealer with the SEC and a member of the
NASD and licensed as an insurance agency (hereinafter
"BROKER-DEALER").
RECITALS:
Whereas, Broker-Dealer is licensed as an insurance agency in order to
satisfy state insurance law requirements with respect to the sale of traditional
life insurance policies as well as variable insurance products which are
registered securities with the SEC.
Whereas, the parties wish to enter into an agreement for the
distribution of Variable Contracts and Traditional Life Insurance Policies by
Broker-Dealer; and
Whereas, Insurer has appointed General Distributor as principal
underwriter and distributor (as those terms are defined by the Investment
Company Act of 1940) of the Variable Contracts and has authorized General
Distributor to enter into selling agreements with registered broker-dealers for
the solicitation and sale of Variable Contracts; and,
Whereas, Insurer and General Distributor propose to have
Broker-Dealer's registered representatives who are licensed as life
insurance/variable contract agents in appropriate jurisdictions
("Representatives") solicit and sell Variable Contracts and Traditional Life
Insurance Policies; and,
Whereas, Insurer and General Distributor propose to have Broker-Dealer
provide certain supervisory and administrative services as hereinafter described
with respect to the solicitation and sales of Variable Contracts and Traditional
Life Insurance Policies.
NOW THEREFORE, in consideration of the premises and the mutual
covenants hereinafter set forth, the parties now agree as follows:
1. DEFINITIONS
In this Agreement,
(a) The words "Variable Contract" shall mean those variable life
insurance policies and variable annuity contracts identified in Section
1 of Compensation Schedule A attached hereto, and as may hereafter be
amended.
Insurer may in its sole discretion and without notice to
Broker Dealer, suspend sales of any Variable Contracts or amend any
policies or contracts evidencing such Variable Contracts if, in
Insurer's opinion, such suspension or amendment is: (1) necessary for
compliance with federal, state, or local laws, regulations, or
administrative order(s); or, (2) necessary to prevent administrative or
financial hardship to Insurer. In all other situations, Insurer shall
provide 30 days notice to Broker Dealer prior to suspending sales of
any Variable Contracts or amending any policies or contracts evidencing
such Variable Contracts.
Insurer may issue and propose additional or successor
products, in which event Broker Dealer will be informed of the product
and its related Commission Schedule. If Broker Dealer does not agree to
distribute such product(s), it must notify Insurer in writing within
30 days of receipt of the Commission Schedule for such product(s). If
Broker Dealer does not indicate disapproval of the new product(s) or
the terms contained in the related Commission Schedule, Broker Dealer
will be deemed to have thereby agreed to distribute such product(s) and
agreed to the related Commission Schedule which shall be attached to
and made a part of this Agreement.
(b) The words "Traditional Life Insurance Policy" shall mean those life
insurance policies and annuity contracts identified in Section 2 of
Compensation Schedule A attached hereto, and as may hereafter be
amended.
2
Insurer may in its sole discretion and without notice to
Broker Dealer, suspend sales of any Traditional Life Insurance Policies
or amend any policies or contracts evidencing such Traditional Life
Insurance Policies if, in Insurer's opinion, such suspension or
amendment is: (1) necessary for compliance with federal, state, or
local laws, regulations, or administrative order(s); or, (2) necessary
to prevent administrative or financial hardship to Insurer. In all
other situations, Insurer shall provide 30 days notice to Broker Dealer
prior to suspending sales of any Traditional Life Insurance Policies or
amending any policies or contracts evidencing such Traditional Life
Insurance Policies.
Insurer may issue and propose additional or successor
products, in which event Broker Dealer will be informed of the product
and its related Compensation Schedule. If Broker Dealer does not agree
to distribute such product(s), it must notify Insurer in writing
within 30 days of receipt of the Compensation Schedule for such
product(s). If Broker Dealer does not indicate disapproval of the new
product(s) or the terms contained in the related Compensation Schedule,
Broker Dealer will be deemed to have thereby agreed to distribute such
product(s) and agreed to the related Compensation Schedule which shall
be attached to and made a part of this Agreement.
2. AGENCY APPOINTMENT
On the effective date, Insurer and General Distributor appoint Broker
Dealer and Broker Dealer accepts the appointment to solicit sales of
and to sell Variable Contracts and Traditional Life Insurance Policies,
pursuant to the terms of this Agreement.
3. DUTIES OF BROKER DEALER
(a) SUPERVISION OF REPRESENTATIVES. Broker Dealer shall have full
responsibility for the training and supervision of all Representatives
who are engaged directly or indirectly in the offer or sale of the
Variable Contracts, and all such persons shall be subject to the
control of Broker Dealer with respect to such persons' securities
regulated activities in connection with the Variable Contracts. Broker
Dealer will cause the Representatives to be trained in the sale of the
Variable Contracts, will cause such Representatives to qualify under
applicable federal and state laws to engage in the sale of the Variable
Contracts; will cause such Representatives to be registered
representatives of Broker Dealer before such Representatives engage in
the solicitation of applications for the Variable Contracts; and will
cause such Representatives to limit solicitation of applications for
the Variable Contracts to jurisdictions where Insurer has authorized
such solicitation. Broker Dealer shall cause such Representatives'
qualifications to be certified to the satisfaction of General
Distributor and shall notify General Distributor if any Representative
ceases to be a registered representative of Broker Dealer or ceases to
maintain the proper licensing required
3
for the sale of the Variable Contracts. All parties shall be liable
for their own negligence and misconduct under this paragraph.
(b) REPRESENTATIVES INSURANCE COMPLIANCE. Broker Dealer, prior to
allowing its Representatives to solicit for sales or sell the Variable
Contracts and Traditional Life Insurance Policies, shall require such
representatives to be validly insurance licensed, registered and
appointed by Insurer as a variable contract/life insurance agent in
accordance with the jurisdictional requirements of the place where the
solicitations and sales take place as well as the solicited person's or
entity's place of residence.
Broker Dealer shall assist Insurer in the appointment of
Representatives under the applicable insurance laws to sell Variable
Contracts and Traditional Life Insurance Policies. Broker Dealer shall
fulfill all Insurer requirements in conjunction with the submission of
licensing/appointment papers for all applicants as insurance agents of
Insurer. All such licensing/appointment papers shall be submitted to
Insurer or its designee by Broker Dealer. Notwithstanding such
submission, Insurer shall have sole discretion to appoint, refuse to
appoint, discontinue, or terminate the appointment of any
Representative as an insurance agent of Insurer.
(c) COMPLIANCE WITH NASD RULES OF FAIR PRACTICE AND FEDERAL AND STATE
SECURITIES LAWS. Broker Dealer shall fully comply with the requirements
of the National Association of Securities Dealers, Inc., the Securities
Exchange Act of 1934 and all other applicable federal and state laws.
In addition, Broker Dealer will establish and maintain such rules and
procedures as may be necessary to cause diligent supervision of the
securities activities of the Representatives as required by applicable
law or regulation. Upon request by General Distributor, Broker Dealer
shall furnish such records as may be necessary to establish such
diligent supervision.
(d) NOTICE OF REPRESENTATIVE'S NONCOMPLIANCE. In the event a
Representative fails or refuses to submit to supervision of Broker
Dealer or otherwise fails to meet the rules and standards imposed by
Broker Dealer on its Representatives, Broker Dealer shall advise
General Distributor of this fact and shall immediately notify such
Representative that he or she is no longer authorized to sell the
Variable Contracts or Traditional Life Insurance Policies and Broker
Dealer shall take whatever additional action may be necessary to
terminate the sales activities of such Representative relating to such
contracts and policies.
(e) PROSPECTUSES, SALES PROMOTION MATERIAL AND ADVERTISING.
Broker-Dealer shall be provided, without any expense to Broker Dealer,
with prospectuses relating to the Variable Contracts and such other
supplementary sales material as General Distributor determines is
necessary or desirable for use in connection with sales of the Variable
Contracts and Traditional Life Insurance Policies.
4
NO SALES PROMOTION MATERIALS OR ANY ADVERTISING RELATING TO
THE VARIABLE CONTRACTS AND TRADITIONAL LIFE INSURANCE POLICIES,
INCLUDING WITHOUT LIMITATION GENERIC ADVERTISING MATERIAL WHICH DOES
NOT REFER TO INSURER BY NAME, SHALL BE USED BY BROKER DEALER UNLESS THE
SPECIFIC ITEM HAS BEEN APPROVED IN WRITING BY GENERAL DISTRIBUTOR PRIOR
TO SUCH USE.
In addition, Broker Dealer shall not print, publish or
distribute any advertisement, circular or any document relating to
Insurer unless such advertisement, circular or document shall have been
approved in writing by Insurer prior to such use.
Upon termination of this Agreement, all prospectuses, sales
promotion material, advertising, circulars, documents and software
relating to the sales of Insurer's contracts shall be promptly turned
over to Insurer free from any claim or retention of rights by the
Broker Dealer.
Insurer represents that the prospectus and registration
statement relating to the Variable Contracts contain no untrue
statements of material fact or omission to state material fact, the
omission of which makes any statement contained in the prospectus and
registration statement misleading. Insurer agrees to indemnify Broker
Dealer from and against any claims, liabilities and expenses which may
be incurred under the Securities Act of 1933, the Investment Company
Act of 1940, common law or otherwise arising out of a breach of the
agreement in this paragraph.
Broker Dealer agrees to hold harmless and indemnify Insurer
and General Distributor against any and all claims, liabilities and
expenses which Insurer or General Distributor may incur from
liabilities arising out of or based upon any alleged or untrue
statement other than statements contained in the registration
statement, prospectus or approved sales material of any Variable
Contract.
In accordance with the requirements of the laws of the several
states, Broker Dealer shall maintain complete records indicating the
manner and extent of distribution of any such solicitation material,
shall make such records and files available to staff of Insurer or its
designated agent in field inspections and shall make such material
available to personnel of state insurance departments, the NASD or
other regulatory agencies, including the SEC, which have regulatory
authority over Insurer or General Distributor. Broker Dealer holds
Insurer, General Distributor and their affiliates harmless from any
liability arising from the use of any material which either (a) has not
been specifically approved by Insurer in writing, or (b) although
previously approved, has been disapproved, in writing, for further use.
(f) SECURING APPLICATIONS. All applications for Variable Contracts and
Traditional Life Insurance Policies shall be made on application forms
supplied by Insurer and all payments collected by Broker Dealer or any
Representative thereof shall be remitted promptly in full, together
with such application forms
5
and any other required documentation, directly to Insurer at the
address indicated on such application or to such other address as
Insurer may, from time-to-time, designate in writing. Broker Dealer
shall review all such applications for accuracy and completeness.
Checks or money orders in payment on any such Variable Contract or
Traditional Life Insurance Policy shall be drawn to the order of
"ReliaStar Life Insurance Company." All applications are subject to
acceptance or rejection by Insurer at its sole discretion. All records
or information obtained hereunder by Broker Dealer shall not be
disclosed or used except as expressly authorized herein, and Broker
Dealer will keep such records and information confidential, to be
disclosed only as authorized or if expressly required by federal or
state regulatory authorities.
(g) COLLECTION OF PURCHASE PAYMENTS. Broker Dealer agrees that all
money or other consideration tendered with or in respect of any
application for a Variable Contract or Traditional Life Insurance
Policy and the Variable Contract or Traditional Life Insurance Policy
when issued is the property of Insurer and shall be promptly remitted
in full to Insurer without deduction or offset for any reason,
including by way of example but not limitation, any deduction or offset
for compensation claimed by Broker Dealer.
(h) POLICY DELIVERY. Insurer will transmit Variable Contracts and
Traditional Life Insurance Policies to Broker Dealer for delivery to
Policyowners. Broker Dealer hereby agrees to deliver all such Variable
Contracts to Policyowners within ten (10) days of their receipt by
Broker Dealer from Insurer. Broker Dealer agrees to indemnify and hold
harmless Insurer for any and all losses caused by Broker Dealer's
failure to perform the undertakings described in this paragraph. Broker
Dealer hereby authorizes Insurer to set off any amount it owes Insurer
under this paragraph against any and all amounts otherwise payable to
Broker Dealer by Insurer.
(i) FIDELITY BOND. Broker Dealer represents that all directors,
officers, employees and Representatives of Broker Dealer who are
licensed pursuant to this Agreement as Insurer's agents for state
insurance law purposes or who have access to funds of Insurer,
including but not limited to funds submitted with applications for the
Variable Contracts and Traditional Life Insurance Policies, 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. This bond shall be maintained by Broker
Dealer at Broker Dealer's expense. Such bond shall be, at least, of the
form, type and amount required under the NASD Rules of Fair Practice.
Insurer may require evidence, satisfactory to it, that such coverage is
in force and Broker Dealer shall give prompt written notice to Insurer
of any notice of cancellation or change of coverage.
Broker Dealer assigns any proceeds received from the fidelity
bonding company to Insurer to the extent of Insurer's loss due to
activities covered by the bond. If there is any deficiency amount,
whether due to a deductible or otherwise, Broker Dealer shall promptly
pay Insurer such amount on demand
6
and Broker Dealer hereby indemnifies and holds harmless Insurer from
any such deficiency and from the costs of collection thereof (including
reasonable attorneys' fees).
4. COMPENSATION
(a) VARIABLE CONTRACTS. Insurer, on behalf of General Distributor,
shall pay a dealer concession to Broker Dealer on all sales of Variable
Contracts through its Representatives, in accordance with the form of
Compensation Schedule A attached hereto, which is in effect when
purchase payment on such Variable Contracts are received by Insurer.
Dealer concessions will be paid as a percentage of premiums received in
cash or other legal tender and accepted by Insurer on applications
obtained by Broker Dealer's Representatives unless otherwise indicated
in Compensation Schedule A. Upon termination of this Agreement, all
compensation payable hereunder shall cease; however, Broker Dealer
shall continue to be liable for any chargebacks or for any other
amounts advanced by or otherwise due Insurer hereunder.
Insurer will pay all such Compensation to the Broker Dealer.
Broker Dealer agrees to hold Insurer and General Distributor harmless
from all claims of its Representatives for compensation in respect of
Representative's sales of Variable Contracts.
(b) TRADITIONAL LIFE INSURANCE POLICIES. Insurer shall pay commissions
to Broker Dealer on all sales of Traditional Life Insurance Policies
through its Representatives in accordance with the form of Compensation
Schedule A attached hereto, which is in effect when purchase payments
on such Traditional Life Insurance Policies are received by Insurer.
Commissions will be paid as a percentage of premiums received in cash
or other legal tender and accepted by insurer on applications obtained
by Broker-Dealer's Representatives unless otherwise indicated in
Compensation Schedule A. Upon termination of this Agreement, all
compensation payable hereunder shall cease; however, Broker Dealer
shall continue to be liable for any chargebacks or for any other
amounts advanced by or otherwise due Insurer hereunder.
Insurer will pay all such compensation to the Broker Dealer.
Broker Dealer agrees to hold Insurer harmless from all claims of its
Representatives for compensation in respect of Representative's sales
of Traditional Life Insurance Policies.
(c) COMMISSION STATEMENTS. Broker Dealer will be provided with copies
of its Representatives' commission statements together with Broker
Dealer's own commission statement for each commission payment period in
which commissions are payable. Broker Dealer agrees that, except as to
clerical errors and material undisclosed facts, if any, such statements
constitutes a complete and accurate statement of the commission account
unless written notice is
7
provided to Insurer within 120 days after the date of the statement,
which notice specifically sets forth the objections or exceptions
thereto.
(d) COMPENSATION SCHEDULES. The initial Compensation Schedule A is
attached.
Insurer and General Distributor reserve the right to change,
amend, or cancel any Compensation Schedule as to business produced
after such change by mailing notice of such change in the form of a new
Compensation Schedule to Broker Dealer. Such change shall be effective,
unless otherwise specified, ten (10) days after the notice is mailed.
(e) RIGHTS OF REJECTION AND SETTLEMENT. Insurer reserves the right to
reject any and all applications and collections submitted, to
discontinue writing any form of policy, to take possession of and
cancel any policy and return the premium or any part of it, and to make
any compromise settlement in respect of a policy. Broker Dealer will
not be entitled to receive or retain any compensation on premiums or
parts of premiums Insurer does not receive and retain because of such
rejection, discontinuance, cancellation, or compromise settlement. If
compensation has been paid to which Broker Dealer is not entitled, any
amount credited will be charged back, and if the account balance is
insufficient to cover the credited amount, Broker Dealer as applicable
agrees to promptly repay the credited amount.
5. TERMINATION
This Agreement may be terminated, without cause, by any party upon
thirty (30) days prior written notice; and may be terminated, for
failure to perform satisfactorily or other cause, by any party
immediately; and shall be terminated if Broker Dealer ceases to be
registered as a broker dealer under the Securities Exchange Act of 1934
and a member of the NASD or, if Broker Dealer ceases to maintain its
insurance agent license(s) in good standing in the jurisdictions in
which it conducts business.
6. ARBITRATION
Any dispute, claim or controversy arising out of or in connection with
this Agreement shall be submitted to arbitration pursuant to the NASD's
arbitration facilities. If the subject matter of the dispute, claim or
controversy is not within the scope of matters which may arbitrated
through the NASD arbitration facilities, then such dispute, claim or
controversy shall, upon the written request of any party, be submitted
to three arbitrators, one to be chosen by each party, and the third by
the two so chosen. If either party refuses or neglects to appoint an
arbitrator within thirty (30) days after the receipt of the written
notice from the other party requesting it to do so, the requesting
party may appoint two arbitrators. If the two arbitrators fail to agree
in the selection of a third arbitrator
8
within thirty (30) days of their appointment, each of them shall name
two, of whom the other shall decline one and the decision shall be
made by drawing lots. All arbitrators shall be active or retired
executive officers of insurance companies not under the control of any
party to this Agreement. Each party shall submit its case to the
arbitrators within thirty (30) days of the appointment of the third
arbitrator. The arbitration shall be held in Minneapolis, Minnesota
at the times agreed upon by the arbitrators. The decision in writing of
any two arbitrators, when filed with the parties hereto shall be final
and binding on both parties. Judgment may be entered upon the final
decision of the arbitrators in any court having jurisdiction. Each
party shall bear the expense of its own arbitrator and shall jointly
and equally bear with the other party the expense of the third
arbitrator and of the arbitration.
7. GENERAL PROVISIONS
(a) ADDITIONS, AMENDMENTS, MODIFICATIONS & WAIVERS. This Agreement
shall not be effective until approved by Insurer and General
Distributor. Insurer and General Distributor reserve the right to amend
this Agreement at any time, and the submission of an application by
Broker Dealer after notice of any such amendment has been sent shall
constitute Broker Dealer's agreement to any such amendment. No
additions, amendments or modifications of this Agreement or any waiver
of any provision will be valid unless approved, in writing, by one of
Insurer's duly authorized officers. In addition, no approved waiver of
any default, or failure of performance by Broker Dealer will affect
Insurer's or General Distributor's rights with respect to any later
default or failure of performance.
(b) INDEPENDENT CONTRACTOR RELATIONSHIP. This Agreement does not
create the relationship of employer and employee between the parties
to this Agreement. Insurer and General Distributor are independent
contractors with respect to Broker Dealer and its Representatives.
(c) ASSIGNMENTS. Broker Dealer will not assign or transfer, either
wholly or partially, this Agreement or any of the benefits accrued or
to accrue under it, without the written prior consent of a duly
authorized officer of the Insurer and General Distributor.
(d) SERVICE OF PROCESS. If Broker Dealer receives or is served with any
notice or other paper concerning any legal action against Insurer or
General Distributor, Broker Dealer agrees to notify Insurer immediately
(in any event not later than the first business day after receipt) by
telephone and further agrees to transmit any papers that are served or
received by facsimile to (000) 000-0000 and by overnight mail to
Insurer's Office of General Counsel.
(e) SEVERABILITY. It is understood and agreed by the parties to this
Agreement that if any part, term or provision of this Agreement is held
to be invalid or in conflict with any law or regulation, the validity
of the remaining portions or provisions will not be affected, and the
parties' rights and obligations will be
9
construed and enforced as if this Agreement did not contain the
particular part, term or provision held to be invalid.
(f) GOVERNING LAW. It is agreed by the parties to this Agreement that
the Agreement and all of its provisions will be governed by the laws of
the State of Minnesota.
(g) LIMITATIONS. No party other than Insurer shall have the authority
on behalf of Insurer to make, alter, or discharge any policy, contract,
or certificate issued by Insurer, to waive any forfeiture or to grant,
permit, nor extend the time for making any payments nor to guarantee
earnings or rates, nor to alter the forms which Insurer may prescribe
or substitute other forms in place of those prescribed by Insurer, nor
to enter into any proceeding in a court of law or before a regulatory
agency in the name of or on behalf of Insurer, nor to open any bank
account in the full legal name of Insurer, any derivation thereof or
any tradename thereof.
8. TERRITORY
Broker Dealer's territory is limited geographically to those
jurisdictions in which the Variable Contracts and Traditional Life
Insurance Policies may lawfully be offered, provided that Broker
Dealer's right to solicit sales of and to sell the Variable Contracts
and Traditional Life Insurance Policies in such jurisdictions is not
exclusive.
9. EFFECTIVE DATE
This Agreement shall be effective ________________, 199__.
10
IN WITNESS WHEREOF, we set our hands this ____ day of _________________, 199__.
INSURER:
RELIASTAR LIFE INSURANCE COMPANY
By: _____________________________
Title: _____________________________
GENERAL DISTRIBUTOR:
WASHINGTON SQUARE SECURITIES, INC.
By: _____________________________
Title: _____________________________
BROKER DEALER:
______________________________________
By: _____________________________
Title: _____________________________
11
"B"
BROKER DEALER AGENCY
SELLING AGREEMENT
This Agreement is made among the following four parties:
1. RELIASTAR LIFE INSURANCE COMPANY
00 Xxxxxxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
a Minnesota domiciled stock life insurance company
(hereinafter "INSURER"); and,
2. WASHINGTON SQUARE SECURITIES, INC.
00 Xxxxxxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
an affiliate of Insurer, registered as a broker-dealer with
the Securities and Exchange Commission ("SEC") and a member of
the National Association of Securities Dealers, Inc.
("NASD") (hereinafter "GENERAL DISTRIBUTOR"); and,
3. ______________________________
______________________________
Street
______________________________
City State ZIP
registered as a broker-dealer with the SEC and a
member of the NASD (hereinafter "BROKER-DEALER"); and,
4. ______________________________
______________________________
Street
______________________________
City State ZIP
an affiliate of Broker-Dealer and a licensed insurance agency
(hereinafter "AGENCY").
1
RECITALS:
Whereas, Broker-Dealer has become affiliated with Agency in order to
satisfy state insurance law requirements with respect to the sale of variable
insurance products which are registered securities with the SEC.
Whereas, the parties wish to enter into an agreement for the
distribution of Variable Contracts and Traditional Life Insurance Policies by
Broker-Dealer and Agency; and
Whereas, Insurer has appointed General Distributor as principal
underwriter and distributor (as those terms are defined by the Investment
Company Act of 1940) of the Variable Contracts and has authorized General
Distributor to enter into selling agreements with registered broker-dealers for
the solicitation and sale of Variable Contracts; and,
Whereas, Insurer and General Distributor propose to have
Broker-Dealer's registered representatives who are affiliated with Agency and
who are licensed as life insurance/variable contract agents in appropriate
jurisdictions ("Representatives") solicit and sell Variable Contracts and
Traditional Life Insurance Policies; and,
Whereas, Insurer proposes to authorize Agency's employees who are not
registered representatives of Broker-Dealer but who are licensed as life
insurance agents in appropriate jurisdictions ("Agents") to solicit and sell
Traditional Life Insurance Policies; and,
Whereas, Insurer and General Distributor propose to have Broker-Dealer
provide certain supervisory and administrative services as hereinafter described
with respect to the solicitation and sales of Variable Contracts; and,
Whereas, Insurer proposes to have Agency provide certain supervisory
and administrative services as hereinafter described with respect to the
solicitation and sales of Traditional Life Insurance Policies by its Agents and
by Representatives who are affiliated with Agency.
NOW THEREFORE, in consideration of the premises and the mutual
covenants hereinafter set forth, the parties now agree as follows:
2
1. DEFINITIONS
In this Agreement,
(a) The words "Variable Contract" shall mean those variable life
insurance policies and variable annuity contracts identified in Section
1 of Compensation Schedule A attached hereto, and as may hereafter be
amended.
Insurer may in its sole discretion and without notice to
Broker Dealer, suspend sales of any Variable Contracts or amend any
policies or contracts evidencing such Variable Contracts if, in
Insurer's opinion, such suspension or amendment is: (1) necessary for
compliance with federal, state, or local laws, regulations, or
administrative order(s); or, (2) necessary to prevent administrative or
financial hardship to Insurer. In all other situations, Insurer shall
provide 30 days notice to Broker Dealer prior to suspending sales of
any Variable Contracts or amending any policies or contracts evidencing
such Variable Contracts.
Insurer may issue and propose additional or successor
products, in which event Broker Dealer will be informed of the product
and its related Commission Schedule. If Broker Dealer does not agree to
distribute such product(s), it must notify Insurer in writing within
30 days of receipt of the Commission Schedule for such product(s). If
Broker Dealer does not indicate disapproval of the new product(s) or
the terms contained in the related Commission Schedule, Broker Dealer
will be deemed to have thereby agreed to distribute such product(s) and
agreed to the related Commission Schedule which shall be attached to
and made a part of this Agreement.
(b) The words "Traditional Life Insurance Policy" shall mean those life
insurance policies and annuity contracts identified in Section 2 of
Compensation Schedule A attached hereto, and as may hereafter be
amended.
Insurer may in its sole discretion and without notice to
Broker Dealer, suspend sales of any Traditional Life Insurance Policies
or amend any policies or contracts evidencing such Traditional Life
Insurance Policies if, in Insurer's opinion, such suspension or
amendment is: (1) necessary for compliance with federal, state, or
local laws, regulations, or administrative order(s); or, (2) necessary
to prevent administrative or financial hardship to Insurer. In all
other situations, Insurer shall provide 30 days notice to Broker Dealer
prior to suspending sales of any Traditional Life Insurance Policies or
amending any policies or contracts evidencing such Traditional Life
Insurance Policies.
3
Insurer may issue and propose additional or successor
products, in which event Broker Dealer will be informed of the product
and its related Compensation Schedule. If Broker Dealer does not agree
to distribute such product(s), it must notify Insurer in writing
within 30 days of receipt of the Compensation Schedule for such
product(s). If Broker Dealer does not indicate disapproval of the new
product(s) or the terms contained in the related Compensation Schedule,
Broker Dealer will be deemed to have thereby agreed to distribute such
product(s) and agreed to the related Compensation Schedule which shall
be attached to and made a part of this Agreement.
2. AGENCY APPOINTMENTS
On the effective date,
(a) Insurer and General Distributor appoint Broker Dealer and Broker
Dealer accepts the appointment to solicit sales of and to sell Variable
Contracts only, pursuant to the terms of this Agreement.
(b) Insurer appoints Agency, and Agency accepts the appointment to
solicit sales of and to sell Traditional Life Insurance Policies only,
pursuant to the terms of this Agreement.
3. DUTIES OF BROKER DEALER
(a) SUPERVISION OF REPRESENTATIVES. Broker Dealer shall have full
responsibility for the training and supervision of all Representatives
who are engaged directly or indirectly in the offer or sale of the
Variable Contracts, and all such persons shall be subject to the
control of Broker Dealer with respect to such persons' securities
regulated activities in connection with the Variable Contracts. Broker
Dealer will cause the Representatives to be trained in the sale of the
Variable Contracts, will cause such Representatives to qualify under
applicable federal and state laws to engage in the sale of the Variable
Contracts; will cause such Representatives to be registered
representatives of Broker Dealer before such Representatives engage in
the solicitation of applications for the Variable Contracts; and will
cause such Representatives to limit solicitation of applications for
the Variable Contracts to jurisdictions where Insurer has authorized
such solicitation. Broker Dealer shall cause such Representatives'
qualifications to be certified to the satisfaction of General
Distributor and shall notify General Distributor if any Representative
ceases to be a registered representative of Broker Dealer or ceases to
maintain the proper licensing required for the sale of the Variable
Contracts. All parties shall be liable for their own negligence and
misconduct under this paragraph.
4
(b) REPRESENTATIVES INSURANCE COMPLIANCE. Broker Dealer, prior to
allowing its Representatives to solicit for sales or sell the Variable
Contracts, shall require such representatives to be validly insurance
licensed, registered and appointed by Insurer as a variable contract
agent in accordance with the jurisdictional requirements of the place
where the solicitations and sales take place as well as the solicited
person's or entity's place of residence.
Broker Dealer shall assist Insurer in the appointment of
Representatives under the applicable insurance laws to sell the
Variable Contracts. Broker Dealer shall fulfill all Insurer
requirements in conjunction with the submission of
licensing/appointment papers for all applicants as insurance agents of
Insurer. All such licensing/appointment papers shall be submitted to
Insurer or its designee by Broker Dealer. Notwithstanding such
submission, Insurer shall have sole discretion to appoint, refuse to
appoint, discontinue, or terminate the appointment of any
Representative as an insurance agent of Insurer.
(c) COMPLIANCE WITH NASD RULES OF FAIR PRACTICE AND FEDERAL AND STATE
SECURITIES LAWS. Broker Dealer shall fully comply with the requirements
of the National Association of Securities Dealers, Inc., the Securities
Exchange Act of 1934 and all other applicable federal and state laws.
In addition, Broker Dealer will establish and maintain such rules and
procedures as may be necessary to cause diligent supervision of the
securities activities of the Representatives as required by applicable
law or regulation. Upon request by General Distributor, Broker Dealer
shall furnish such records as may be necessary to establish such
diligent supervision.
(d) NOTICE OF REPRESENTATIVE'S NONCOMPLIANCE. In the event a
Representative fails or refuses to submit to supervision of Broker
Dealer or otherwise fails to meet the rules and standards imposed by
Broker Dealer on its Representatives, Broker Dealer shall advise
General Distributor of this fact and shall immediately notify such
Representative that he or she is no longer authorized to sell the
Variable Contracts and Broker Dealer shall take whatever additional
action may be necessary to terminate the sales activities of such
Representative relating to the Variable Contracts.
(e) PROSPECTUSES, SALES PROMOTION MATERIAL AND ADVERTISING.
Broker-Dealer shall be provided, without any expense to Broker Dealer,
with prospectuses relating to the Variable Contracts and such other
supplementary sales material as General Distributor determines is
necessary or desirable for use in connection with sales of the Variable
Contracts.
5
NO SALES PROMOTION MATERIALS OR ANY ADVERTISING RELATING TO
THE VARIABLE CONTRACTS, INCLUDING WITHOUT LIMITATION GENERIC
ADVERTISING MATERIAL WHICH DOES NOT REFER TO INSURER BY NAME, SHALL BE
USED BY BROKER DEALER UNLESS THE SPECIFIC ITEM HAS BEEN APPROVED IN
WRITING BY GENERAL DISTRIBUTOR PRIOR TO SUCH USE.
In addition, Broker Dealer shall not print, publish or
distribute any advertisement, circular or any document relating to
Insurer unless such advertisement, circular or document shall have been
approved in writing by Insurer prior to such use.
Upon termination of this Agreement, all prospectuses, sales
promotion material, advertising, circulars, documents and software
relating to the sales of the Variable Contracts shall be promptly
turned over to Insurer free from any claim or retention of rights by
the Broker Dealer.
Insurer represents that the prospectus and registration
statement relating to the Variable Contracts contain no untrue
statements of material fact or omission to state material fact, the
omission of which makes any statement contained in the prospectus and
registration statement misleading. Insurer agrees to indemnify Broker
Dealer from and against any claims, liabilities and expenses which may
be incurred under the Securities Act of 1933, the Investment Company
Act of 1940, common law or otherwise arising out of a breach of the
agreement in this paragraph.
Broker Dealer agrees to hold harmless and indemnify Insurer
and General Distributor against any and all claims, liabilities and
expenses which Insurer or General Distributor may incur from
liabilities arising out of or based upon any alleged or untrue
statement other than statements contained in the registration
statement, prospectus or approved sales material of any Variable
Contract.
In accordance with the requirements of the laws of the several
states, Broker Dealer shall maintain complete records indicating the
manner and extent of distribution of any such solicitation material,
shall make such records and files available to staff of Insurer or its
designated agent in field inspections and shall make such material
available to personnel of state insurance departments, the NASD or
other regulatory agencies, including the SEC, which have regulatory
authority over Insurer or General Distributor. Broker Dealer holds
Insurer, General Distributor and their affiliates harmless from any
liability arising from the use of any material which either (a) has not
been specifically approved in writing, or (b) although previously
approved, has been disapproved, in writing, for further use.
6
(f) SECURING APPLICATIONS. All applications for Variable Contracts
shall be made on application forms supplied by Insurer and all
payments collected by Broker Dealer or any Representative thereof
shall be remitted promptly in full, together with such application
forms and any other required documentation, directly to Insurer at the
address indicated on such application or to such other address as
Insurer may, from time-to-time, designate in writing. Broker Dealer
shall review all such applications for accuracy and completeness.
Checks or money orders in payment on any such Variable Contract shall
be drawn to the order of "ReliaStar Life Insurance Company." All
applications are subject to acceptance or rejection by Insurer at its
sole discretion. All records or information obtained hereunder by
Broker Dealer shall not be disclosed or used except as expressly
authorized herein, and Broker Dealer will keep such records and
information confidential, to be disclosed only as authorized or if
expressly required by federal or state regulatory authorities.
(g) COLLECTION OF PURCHASE PAYMENTS. Broker Dealer agrees that all
money or other consideration tendered with or in respect of any
application for a Variable Contract and the Variable Contract when
issued is the property of Insurer and shall be promptly remitted in
full to Insurer without deduction or offset for any reason, including
by way of example but not limitation, any deduction or offset for
compensation claimed by Broker Dealer.
(h) POLICY DELIVERY. Insurer will transmit Variable Contracts to Broker
Dealer for delivery to Policyowners. Broker Dealer hereby agrees to
deliver all such Variable Contracts to Policyowners within ten (10)
days of their receipt by Broker Dealer from Insurer. Broker Dealer
agrees to indemnify and hold harmless Insurer for any and all losses
caused by Broker Dealer's failure to perform the undertakings described
in this paragraph. Broker Dealer hereby authorizes Insurer to set off
any amount it owes Insurer under this paragraph against any and all
amounts otherwise payable to Broker Dealer by Insurer.
(i) FIDELITY BOND. Broker Dealer represents that all directors,
officers, employees and Representatives of Broker Dealer who are
licensed pursuant to this Agreement as Insurer's agents for state
insurance law purposes or who have access to funds of Insurer,
including but not limited to funds submitted with applications for the
Variable Contracts 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. This bond shall be
maintained by Broker Dealer at Broker Dealer's expense. Such bond shall
be, at least, of the form, type and amount required under the NASD
Rules of Fair Practice. Insurer may require evidence, satisfactory to
it, that such coverage is in force and Broker Dealer shall give prompt
written notice to Insurer of any notice of cancellation or change of
coverage.
7
Broker Dealer assigns any proceeds received from the fidelity
bonding company to Insurer to the extent of Insurer's loss due to
activities covered by the bond. If there is any deficiency amount,
whether due to a deductible or otherwise, Broker Dealer shall promptly
pay Insurer such amount on demand and Broker Dealer hereby indemnifies
and holds harmless Insurer from any such deficiency and from the costs
of collection thereof (including reasonable attorneys' fees).
4. DUTIES OF AGENCY
(a) SUPERVISION OF AGENTS AND REPRESENTATIVES. Agency shall have full
responsibility for the training and supervision of all Agents and
Representatives who are engaged directly or indirectly in the offer or
sale of Traditional Life Insurance Policies. Agency will cause the
Agents and Representatives to be trained in the sale of Traditional
Life Insurance Policies, will cause such Agents and Representatives to
qualify under applicable state insurance laws to engage in the sale of
life insurance before such Agents and Representatives engage in the
solicitation of applications for Traditional Life Insurance Policies;
and will cause such Agents and Representatives to limit solicitation of
applications for Traditional Life Insurance Policies to jurisdictions
where Insurer has authorized such solicitation. Agency shall cause such
Agents' and Representatives' qualifications to be certified to the
satisfaction of Insurer and shall notify Insurer if any Agent or
Representative ceases to be an employee of Agency or ceases to maintain
the proper licensing required for the sale of Traditional Life
Insurance Policies. All parties shall be liable for their own
negligence and misconduct under this paragraph.
(b) AGENT INSURANCE COMPLIANCE. Agency, prior to allowing Agents or
Representatives to solicit for sales or sell Traditional Life Insurance
Policies, shall require such agents to be validly insurance licensed,
registered and appointed by Insurer as a life insurance agent in
accordance with the jurisdictional requirements of the place where the
solicitations and sales take place as well as the solicited person's or
entity's place of residence.
Agency shall assist Insurer in the appointment of Agents and
Representatives under the applicable insurance laws to sell Traditional
Life Insurance Policies. Agency shall fulfill all Insurer requirements
in conjunction with the submission of licensing/appointment papers for
all applicants as insurance agents of Insurer. All such
licensing/appointment papers shall be submitted to Insurer or its duly
appointed agent by Agency. Notwithstanding such submission, Insurer
shall have sole discretion to appoint, refuse to appoint, discontinue,
or terminate the appointment of any Agent or Representative as an
insurance agent of Insurer.
8
(c) SALES PROMOTION MATERIAL AND ADVERTISING. Agency shall be provided,
without any expense to Agency, such sales promotion and advertising
materials as Insurer determines is necessary or desirable for use in
connection with sales of Traditional Life Insurance Policies.
NO SALES PROMOTION MATERIALS OR ANY ADVERTISING RELATING TO
TRADITIONAL LIFE INSURANCE POLICIES, INCLUDING WITHOUT LIMITATION
GENERIC ADVERTISING MATERIAL WHICH DOES NOT REFER TO INSURER BY NAME,
SHALL BE USED BY AGENCY UNLESS THE SPECIFIC ITEM HAS BEEN APPROVED IN
WRITING BY INSURER PRIOR TO SUCH USE.
In addition, Agency shall not print, publish or distribute any
advertisement, circular or any document relating to Insurer unless such
advertisement, circular or document shall have been approved in writing
by Insurer prior to such use.
Upon termination of this Agreement, all sales promotion
material, advertising, circulars, documents and software relating to
the sales of Traditional Life Insurance Policies shall be promptly
turned over to Insurer free from any claim or retention of rights by
the Agency.
In accordance with the requirements of the laws of the several
states, Agency shall maintain complete records indicating the manner
and extent of distribution of any such solicitation material, shall
make such records and files available to staff of Insurer or its
designated agent in field inspections and shall make such material
available to personnel of state insurance departments other regulatory
agencies which have regulatory authority over Insurer. Agency holds
Insurer and its affiliates harmless from any liability arising from the
use of any material which either (a) has not been specifically approved
in writing, or (b) although previously approved, has been disapproved,
in writing, for further use.
(d) SECURING APPLICATIONS. All applications for Traditional Life
Insurance Policies shall be made on application forms supplied by
Insurer and all payments collected by Agency or any Agent,
Broker-Dealer or any Representative thereof shall be remitted promptly
in full, together with such application forms and any other required
documentation, directly to Insurer at the address indicated on such
application or to such other address as Insurer may, from
time-to-time, designate in writing. Agency shall review all such
applications for accuracy and completeness. Checks or money orders in
payment on any such Traditional Life Insurance Policy shall be drawn
to the order of "ReliaStar Life Insurance Company." All applications
are subject to acceptance or rejection by Insurer at its sole
discretion. All records or information obtained hereunder by Agency
shall not be disclosed or used except as expressly authorized herein,
and Agency will keep such records and
9
information confidential, to be disclosed only as authorized or if
expressly required by federal or state regulatory authorities.
(e) COLLECTION OF PURCHASE PAYMENTS. Agency agrees that all money or
other consideration tendered with or in respect of any application for
a Traditional Life Insurance Policy and the Traditional Life Insurance
Policy when issued is the property of Insurer and shall be promptly
remitted in full to Insurer without deduction or offset for any reason,
including by way of example but not limitation, any deduction or offset
for compensation claimed by Agency.
(f) POLICY DELIVERY. Insurer may, upon written request of Agency,
transmit Traditional Life Insurance Policies to Agency or Broker-Dealer
for delivery to Policyowners. Agency and Broker-Dealer hereby agree to
deliver all such Traditional Life Insurance Policies to Policyowners
within ten (10) days of their receipt by Agency or Broker-Dealer from
Insurer. Agency and Broker-Dealer agree to indemnify and hold harmless
Insurer for any and all losses caused by Agency's or Broker-Dealer's
failure to perform the undertakings described in this paragraph. Agency
and Broker-Dealer hereby authorize Insurer to set off any amount it
owes Insurer under this paragraph against any and all amounts otherwise
payable to Agency or Broker-Dealer by Insurer.
5. COMPENSATION
(a) VARIABLE CONTRACTS. Insurer, on behalf of General Distributor,
shall pay a dealer concession to Broker Dealer on all sales of Variable
Contracts through such Representatives, in accordance with the form of
Compensation Schedule A attached hereto, which is in effect when
purchase payment on such Variable Contracts are received by Insurer.
Dealer concessions will be paid as a percentage of premiums received in
cash or other legal tender and accepted by Insurer on applications
obtained by Broker Dealer's Representatives unless otherwise indicated
in Compensation Schedule A. Upon termination of this Agreement, all
compensation payable hereunder shall cease; however, Broker Dealer
shall continue to be liable for any chargebacks or for any other
amounts advanced by or otherwise due Insurer hereunder.
Insurer will pay all such Compensation to and in the name of
Broker Dealer. Broker Dealer agrees to hold Insurer and General
Distributor harmless from all claims of its Representatives for
compensation in respect of such Representative's sales of Variable
Contracts.
10
(b) TRADITIONAL LIFE INSURANCE POLICIES. Insurer shall pay commissions
to Broker Dealer on all sales of Traditional Life Insurance Policies
through Agents and Representatives in accordance with the form of
Compensation Schedule A attached hereto, which is in effect when
purchase payments on such Traditional Life Insurance Policies are
received by Insurer. Commissions will be paid as a percentage of
premiums received in cash or other legal tender and accepted by insurer
on applications obtained by Agency's Agents or Broker-Dealer's
Representatives unless otherwise indicated in Compensation Schedule A.
Upon termination of this Agreement, all compensation payable hereunder
shall cease; however, Broker Dealer shall continue to be liable for any
chargebacks or for any other amounts advanced by or otherwise due
Insurer hereunder.
Insurer will pay all such Compensation to and in the name of
Broker Dealer. Agency hereby assigns to Broker Dealer all compensation
which would otherwise be paid to Agency in respect of Representative's
and Agent's sales of Traditional Life Insurance Policies. Agency agrees
to hold Insurer harmless from all claims Agents or Representatives have
for compensation in respect of Agent's or Representative's sales of
Traditional Life Insurance Policies.
(c) COMMISSION STATEMENTS. Broker Dealer will be provided with copies
of its Representatives' commission statements together with Broker
Dealer's own commission statements for each commission payment period
in which commissions are payable. Broker Dealer agrees that, except as
to clerical errors and material undisclosed facts, if any, such
statements constitutes a complete and accurate statement of the
commission account unless written notice is provided to Insurer within
120 days after the date of the statement, which notice specifically
sets forth the objections or exceptions thereto.
(d) COMPENSATION SCHEDULES. The initial Compensation Schedule A is
attached.
Insurer and General Distributor reserve the right to change,
amend, or cancel any Compensation Schedule as to business produced
after such change by mailing notice of such change in the form of a new
Compensation Schedule to Broker Dealer. Such change shall be effective,
unless otherwise specified, ten (10) days after the notice is mailed.
(e) RIGHTS OF REJECTION AND SETTLEMENT. Insurer reserves the right to
reject any and all applications and collections submitted, to
discontinue writing any form of policy, to take possession of and
cancel any policy and return the premium or any part of it, and to make
any compromise settlement in respect of a policy. Broker Dealer will
not be entitled to receive or retain any compensation on premiums or
parts of premiums Insurer does not receive and retain because of such
rejection, discontinuance, cancellation, or compromise settlement. If
compensation has been paid to which Broker Dealer is not entitled, any
amount
11
credited will be charged back, and if the account balance is
insufficient to cover the credited amount, Broker Dealer as applicable
agrees to promptly repay the credited amount.
6. TERMINATION
This Agreement may be terminated, without cause, by any party upon
thirty (30) days prior written notice; and may be terminated, for
failure to perform satisfactorily or other cause, by any party
immediately; and shall be terminated if Broker Dealer ceases to be
registered as a broker dealer under the Securities Exchange Act of 1934
and a member of the NASD or, if Agency ceases to maintain its insurance
agent license(s) in good standing in the jurisdictions in which it
conducts business.
7. ARBITRATION
Any dispute, claim or controversy arising out of or in connection with
this Agreement shall be submitted to arbitration pursuant to the NASD's
arbitration facilities. If the subject matter of the dispute, claim or
controversy is not within the scope of matters which may arbitrated
through the NASD arbitration facilities, then such dispute, claim or
controversy shall, upon the written request of any party, be submitted
to three arbitrators, one to be chosen by each party, and the third by
the two so chosen. If either party refuses or neglects to appoint an
arbitrator within thirty (30) days after the receipt of the written
notice from the other party requesting it to do so, the requesting
party may appoint two arbitrators. If the two arbitrators fail to agree
in the selection of a third arbitrator within thirty (30) days of their
appointment, each of them shall name two, of whom the other shall
decline one and the decision shall be made by drawing lots. All
arbitrators shall be active or retired executive officers of insurance
companies not under the control of any party to this Agreement. Each
party shall submit its case to the arbitrators within thirty (30) days
of the appointment of the third arbitrator. The arbitration shall be
held in Minneapolis, Minnesota at the times agreed upon by the
arbitrators. The decision in writing of any two arbitrators, when filed
with the parties hereto shall be final and binding on both parties.
Judgment may be entered upon the final decision of the arbitrators in
any court having jurisdiction. Each party shall bear the expense of its
own arbitrator and shall jointly and equally bear with the other party
the expense of the third arbitrator and of the arbitration.
12
8. GENERAL PROVISIONS
(a) ADDITIONS, AMENDMENTS, MODIFICATIONS & WAIVERS. This Agreement
shall not be effective until approved by Insurer and General
Distributor. Insurer and General Distributor reserve the right to amend
this Agreement at any time, and the submission of an application by
either Broker Dealer or Agency after notice of any such amendment has
been sent shall constitute Broker Dealer's or Agency's, as applicable,
agreement to any such amendment. No additions, amendments or
modifications of this Agreement or any waiver of any provision will be
valid unless approved, in writing, by one of Insurer's duly authorized
officers. In addition, no approved waiver of any default, or failure of
performance by Broker Dealer or Agency will affect Insurer's or General
Distributor's rights with respect to any later default or failure of
performance.
(b) INDEPENDENT CONTRACTOR RELATIONSHIP. This Agreement does not
create the relationship of employer and employee between the parties
to this Agreement. Insurer and General Distributor are independent
contractors with respect to Broker Dealer, its Representatives, Agency
and its Agents.
(c) ASSIGNMENTS. Neither Broker Dealer nor Agency will assign or
transfer, either wholly or partially, this Agreement or any of the
benefits accrued or to accrue under it, without the written prior
consent of a duly authorized officer of the Insurer and General
Distributor.
(d) SERVICE OF PROCESS. If Broker Dealer or Agency receives or is
served with any notice or other paper concerning any legal action
against Insurer or General Distributor, Broker Dealer or Agency agrees
to notify Insurer immediately (in any event not later than the first
business day after receipt) by telephone and transmit any papers that
are served or received by facsimile to (000) 000-0000 and by overnight
mail to Insurer's Office of General Counsel.
(e) SEVERABILITY. It is understood and agreed by the parties to this
Agreement that if any part, term or provision of this Agreement is held
to be invalid or in conflict with any law or regulation, the validity
of the remaining portions or provisions will not be affected, and the
parties' rights and obligations will be construed and enforced as if
this Agreement did not contain the particular part, term or provision
held to be invalid.
(f) GOVERNING LAW. It is agreed by the parties to this Agreement that
the Agreement and all of its provisions will be governed by the laws of
the State of Minnesota.
13
(g) LIMITATIONS. No party other than Insurer shall have the authority
on behalf of Insurer to make, alter, or discharge any policy, contract,
or certificate issued by insurer, to waive any forfeiture or to grant,
permit, nor extend the time for making any payments nor to guarantee
earnings or rates, nor to alter the forms which Insurer may prescribe
or substitute other forms in place of those prescribed by Insurer, nor
to enter into any proceeding in a court of law or before a regulatory
agency in the name of or on behalf of Insurer, nor to open any bank
account in the full legal name of Insurer, any derivation thereof or
any tradename thereof.
9. TERRITORY
Broker Dealer's territory is limited geographically to those
jurisdictions in which the Variable Contracts may lawfully be offered,
provided that Broker Dealer's right to solicit sales of and to sell the
Variable Contracts in such jurisdictions is not exclusive.
Agency's territory is limited geographically to those
jurisdictions in which the Traditional Life Insurance policies may be
lawfully be offered, provided that Agency's and Broker-Dealer's right
to solicit sales of and to sell the Traditional Life Insurance Policies
in such territory is not exclusive.
10. EFFECTIVE DATE
This Agreement shall be effective ________________, 199__.
14
IN WITNESS WHEREOF, we set our hands this ____ day of _________________, 199__.
INSURER:
RELIASTAR LIFE INSURANCE COMPANY
By: _____________________________
Title: _____________________________
GENERAL DISTRIBUTOR:
WASHINGTON SQUARE SECURITIES, INC.
By: _____________________________
Title: _____________________________
BROKER DEALER:
______________________________________
By: _____________________________
Title: _____________________________
AGENCY:
______________________________________
By: _____________________________
Title: _____________________________
15
"C"
BROKER DEALER AGENCY
SELLING AGREEMENT
FOR VARIABLE CONTRACTS
This Agreement is made among the following three parties:
1. RELIASTAR LIFE INSURANCE COMPANY
00 Xxxxxxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
a Minnesota domiciled stock life insurance company
(hereinafter "INSURER"); and,
2. WASHINGTON SQUARE SECURITIES, INC.
00 Xxxxxxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
an affiliate of Insurer, registered as a broker-dealer with
the Securities and Exchange Commission ("SEC") and a member of
the National Association of Securities Dealers, Inc.
("NASD") (hereinafter "GENERAL DISTRIBUTOR"); and,
3. ______________________________
______________________________
Street
______________________________
City State ZIP
registered as a broker-dealer with the SEC and a member of the
NASD and licensed as an insurance agency (hereinafter
"BROKER-DEALER").
RECITALS:
Whereas, Broker-Dealer is licensed as an insurance agency in order to
satisfy state insurance law requirements with respect to the sale of variable
insurance products which are registered securities with the SEC.
Whereas, the parties wish to enter into an agreement for the
distribution of Variable Contracts by Broker-Dealer; and
Whereas, Insurer has appointed General Distributor as principal
underwriter and distributor (as those terms are defined by the Investment
Company Act of 1940) of the Variable Contracts and has authorized General
Distributor to enter into selling agreements with registered broker-dealers for
the solicitation and sale of Variable Contracts; and,
Whereas, Insurer and General Distributor propose to have Broker-
Dealer's registered representatives who are licensed as life insurance/variable
contract agents in appropriate jurisdictions ("Representatives") solicit and
sell Variable Contracts and,
Whereas, Insurer and General Distributor propose to have Broker-Dealer
provide certain supervisory and administrative services as hereinafter described
with respect to the solicitation and sales of Variable Contracts.
NOW THEREFORE, in consideration of the premises and the mutual
covenants hereinafter set forth, the parties now agree as follows:
1. VARIABLE CONTRACTS
In this Agreement, the words "Variable Contract" shall mean
those variable life insurance policies and variable annuity contracts
identified in Section 1 of the Compensation Schedule attached hereto,
and as may hereafter be amended.
Insurer may in its sole discretion and without notice to
Broker Dealer, suspend sales of any Variable Contracts or amend any
policies or contracts evidencing such Variable Contracts if, in
Insurer's opinion, such suspension or amendment is: (1) necessary for
compliance with federal, state, or local laws, regulations, or
administrative order(s); or, (2) necessary to prevent administrative or
financial hardship to Insurer. In all other situations, Insurer shall
provide 30 days notice to Broker Dealer prior to suspending sales of
any Variable Contracts or amending any policies or contracts evidencing
such Variable Contracts.
Insurer may issue and propose additional or successor
products, in which event Broker Dealer will be informed of the product
and its related Commission Schedule. If Broker Dealer does not agree to
distribute such product(s), it must notify Insurer in writing within
30 days of receipt of the Commission Schedule for such product(s). If
Broker Dealer does not indicate disapproval of the new product(s) or
the terms contained in the related Commission Schedule, Broker Dealer
will be deemed to have thereby agreed to distribute such product(s) and
agreed to the related Commission Schedule which shall be attached to
and made a part of this Agreement.
2. AGENCY APPOINTMENT
On the effective date, Insurer and General Distributor appoint Broker
Dealer and Broker Dealer accepts the appointment to solicit sales of
and to sell Variable Contracts, pursuant to the terms of this
Agreement.
2
3. DUTIES OF BROKER DEALER
(a) SUPERVISION OF REPRESENTATIVES. Broker Dealer shall have full
responsibility for the training and supervision of all Representatives
who are engaged directly or indirectly in the offer or sale of the
Variable Contracts, and all such persons shall be subject to the
control of Broker Dealer with respect to such persons' securities
regulated activities in connection with the Variable Contracts. Broker
Dealer will cause the Representatives to be trained in the sale of the
Variable Contracts, will cause such Representatives to qualify under
applicable federal and state laws to engage in the sale of the Variable
Contracts; will cause such Representatives to be registered
representatives of Broker Dealer before such Representatives engage in
the solicitation of applications for the Variable Contracts; and will
cause such Representatives to limit solicitation of applications for
the Variable Contracts to jurisdictions where Insurer has authorized
such solicitation. Broker Dealer shall cause such Representatives'
qualifications to be certified to the satisfaction of General
Distributor and shall notify General Distributor if any Representative
ceases to be a registered representative of Broker Dealer or ceases to
maintain the proper licensing required for the sale of the Variable
Contracts. All parties shall be liable for their own negligence and
misconduct under this paragraph.
(b) REPRESENTATIVES INSURANCE COMPLIANCE. Broker Dealer, prior to
allowing its Representatives to solicit for sales or sell the Variable
Contracts, shall require such representatives to be validly insurance
licensed, registered and appointed by Insurer as a variable
contract/life insurance agent in accordance with the jurisdictional
requirements of the place where the solicitations and sales take place
as well as the solicited person's or entity's place of residence.
Broker Dealer shall assist Insurer in the appointment of
Representatives under the applicable insurance laws to sell Variable
Contracts. Broker Dealer shall fulfill all Insurer requirements in
conjunction with the submission of licensing/appointment papers for all
applicants as insurance agents of Insurer. All such
licensing/appointment papers shall be submitted to Insurer or its
designee by Broker Dealer. Notwithstanding such submission, Insurer
shall have sole discretion to appoint, refuse to appoint, discontinue,
or terminate the appointment of any Representative as an insurance
agent of Insurer.
(c) COMPLIANCE WITH NASD RULES OF FAIR PRACTICE AND FEDERAL AND STATE
SECURITIES LAWS. Broker Dealer shall fully comply with the requirements
of the National Association of Securities Dealers, Inc., the Securities
Exchange Act of 1934 and all other applicable federal and state laws.
In addition, Broker Dealer will establish and maintain such rules and
procedures as may be necessary to cause diligent supervision of the
securities activities of the Representatives as required by applicable
law or regulation. Upon request by General Distributor, Broker Dealer
shall furnish such records as may be necessary to establish such
diligent supervision.
3
(d) NOTICE OF REPRESENTATIVE'S NONCOMPLIANCE. In the event a
Representative fails or refuses to submit to supervision of Broker
Dealer or otherwise fails to meet the rules and standards imposed by
Broker Dealer on its Representatives, Broker Dealer shall advise
General Distributor of this fact and shall immediately notify such
Representative that he or she is no longer authorized to sell the
Variable Contracts and Broker Dealer shall take whatever additional
action may be necessary to terminate the sales activities of such
Representative relating to such contracts and policies.
(e) PROSPECTUSES, SALES PROMOTION MATERIAL AND ADVERTISING.
Broker-Dealer shall be provided, without any expense to Broker Dealer,
with prospectuses relating to the Variable Contracts and such other
supplementary sales material as General Distributor determines is
necessary or desirable for use in connection with sales of the Variable
Contracts.
NO SALES PROMOTION MATERIALS OR ANY ADVERTISING RELATING TO
THE VARIABLE CONTRACTS, INCLUDING WITHOUT LIMITATION GENERIC
ADVERTISING MATERIAL WHICH DOES NOT REFER TO INSURER BY NAME, SHALL BE
USED BY BROKER DEALER UNLESS THE SPECIFIC ITEM HAS BEEN APPROVED IN
WRITING BY GENERAL DISTRIBUTOR PRIOR TO SUCH USE.
In addition, Broker Dealer shall not print, publish or
distribute any advertisement, circular or any document relating to
Insurer unless such advertisement, circular or document shall have been
approved in writing by Insurer prior to such use.
Upon termination of this Agreement, all prospectuses, sales
promotion material, advertising, circulars, documents and software
relating to the sales of Insurer's contracts shall be promptly turned
over to Insurer free from any claim or retention of rights by the
Broker Dealer.
Insurer represents that the prospectus and registration
statement relating to the Variable Contracts contain no untrue
statements of material fact or omission to state material fact, the
omission of which makes any statement contained in the prospectus and
registration statement misleading. Insurer agrees to indemnify Broker
Dealer from and against any claims, liabilities and expenses which may
be incurred under the Securities Act of 1933, the Investment Company
Act of 1940, common law or otherwise arising out of a breach of the
agreement in this paragraph.
Broker Dealer agrees to hold harmless and indemnify Insurer
and General Distributor against any and all claims, liabilities and
expenses which Insurer or General Distributor may incur from
liabilities arising out of or based upon any alleged or untrue
statement other than statements contained in the registration
statement, prospectus or approved sales material of any Variable
Contract.
4
In accordance with the requirements of the laws of the several
states, Broker Dealer shall maintain complete records indicating the
manner and extent of distribution of any such solicitation material,
shall make such records and files available to staff of Insurer or its
designated agent in field inspections and shall make such material
available to personnel of state insurance departments, the NASD or
other regulatory agencies, including the SEC, which have regulatory
authority over Insurer or General Distributor. Broker Dealer holds
Insurer, General Distributor and their affiliates harmless from any
liability arising from the use of any material which either (a) has not
been specifically approved by Insurer in writing, or (b) although
previously approved, has been disapproved, in writing, for further use.
(f) SECURING APPLICATIONS. All applications for Variable Contracts
shall be made on application forms supplied by Insurer and all
payments collected by Broker Dealer or any Representative thereof
shall be remitted promptly in full, together with such application
forms and any other required documentation, directly to Insurer at the
address indicated on such application or to such other address as
Insurer may, from time-to-time, designate in writing. Broker Dealer
shall review all such applications for accuracy and completeness.
Checks or money orders in payment on any such Variable Contract shall
be drawn to the order of "ReliaStar Life Insurance Company." All
applications are subject to acceptance or rejection by Insurer at its
sole discretion. All records or information obtained hereunder by
Broker Dealer shall not be disclosed or used except as expressly
authorized herein, and Broker Dealer will keep such records and
information confidential, to be disclosed only as authorized or if
expressly required by federal or state regulatory authorities.
(g) COLLECTION OF PURCHASE PAYMENTS. Broker Dealer agrees that all
money or other consideration tendered with or in respect of any
application for a Variable Contract and the Variable Contract when
issued is the property of Insurer and shall be promptly remitted in
full to Insurer without deduction or offset for any reason, including
by way of example but not limitation, any deduction or offset for
compensation claimed by Broker Dealer.
(h) POLICY DELIVERY. Insurer will transmit Variable Contracts to Broker
Dealer for delivery to Policyowners. Broker Dealer hereby agrees to
deliver all such Variable Contracts to Policyowners within ten (10)
days of their receipt by Broker Dealer from Insurer. Broker Dealer
agrees to indemnify and hold harmless Insurer for any and all losses
caused by Broker Dealer's failure to perform the undertakings described
in this paragraph. Broker Dealer hereby authorizes Insurer to set off
any amount it owes Insurer under this paragraph against any and all
amounts otherwise payable to Broker Dealer by Insurer.
(i) FIDELITY BOND. Broker Dealer represents that all directors,
officers, employees and Representatives of Broker Dealer who are
licensed pursuant to this Agreement as Insurer's agents for state
insurance law purposes or who have access to funds of Insurer,
including but not limited to funds submitted with applications for the
Variable Contracts, or funds being returned to owners, are
5
and shall be covered by a blanket fidelity bond, including coverage for
larceny and embezzlement, issued by a reputable bonding company. This
bond shall be maintained by Broker Dealer at Broker Dealer's expense.
Such bond shall be, at least, of the form, type and amount required
under the NASD Rules of Fair Practice. Insurer may require evidence,
satisfactory to it, that such coverage is in force and Broker Dealer
shall give prompt written notice to Insurer of any notice of
cancellation or change of coverage.
Broker Dealer assigns any proceeds received from the fidelity
bonding company to Insurer to the extent of Insurer's loss due to
activities covered by the bond. If there is any deficiency amount,
whether due to a deductible or otherwise, Broker Dealer shall promptly
pay Insurer such amount on demand and Broker Dealer hereby indemnifies
and holds harmless Insurer from any such deficiency and from the costs
of collection thereof (including reasonable attorneys' fees).
4. COMPENSATION
(a) VARIABLE CONTRACTS. Insurer, on behalf of General Distributor,
shall pay a dealer concession to Broker Dealer on all sales of Variable
Contracts through its Representatives, in accordance with the form of
the Compensation Schedule attached hereto, which is in effect when
purchase payment on such Variable Contracts are received by Insurer.
Dealer concessions will be paid as a percentage of premiums received in
cash or other legal tender and accepted by Insurer on applications
obtained by Broker Dealer's Representatives unless otherwise indicated
in Compensation Schedule A. Upon termination of this Agreement, all
compensation payable hereunder shall cease; however, Broker Dealer
shall continue to be liable for any chargebacks or for any other
amounts advanced by or otherwise due Insurer hereunder.
Insurer will pay all such Compensation to the Broker Dealer.
Broker Dealer agrees to hold Insurer and General Distributor harmless
from all claims of its Representatives for compensation in respect of
Representative's sales of Variable Contracts.
(b) COMMISSION STATEMENTS. Broker Dealer will be provided with copies
of its Representatives' commission statements together with Broker
Dealer's own commission statement for each commission payment period in
which commissions are payable. Broker Dealer agrees that, except as to
clerical errors and material undisclosed facts, if any, such statements
constitutes a complete and accurate statement of the commission account
unless written notice is provided to Insurer within 120 days after the
date of the statement, which notice specifically sets forth the
objections or exceptions thereto.
(c) COMPENSATION SCHEDULES. The initial Compensation Schedule is
attached.
6
Insurer and General Distributor reserve the right to change,
amend, or cancel any Compensation Schedule as to business produced
after such change by mailing notice of such change in the form of a new
Compensation Schedule to Broker Dealer. Such change shall be effective,
unless otherwise specified, ten (10) days after the notice is mailed.
(d) RIGHTS OF REJECTION AND SETTLEMENT. Insurer reserves the right to
reject any and all applications and collections submitted, to
discontinue writing any form of policy, to take possession of and
cancel any policy and return the premium or any part of it, and to make
any compromise settlement in respect of a policy. Broker Dealer will
not be entitled to receive or retain any compensation on premiums or
parts of premiums Insurer does not receive and retain because of such
rejection, discontinuance, cancellation, or compromise settlement. If
compensation has been paid to which Broker Dealer is not entitled, any
amount credited will be charged back, and if the account balance is
insufficient to cover the credited amount, Broker Dealer as applicable
agrees to promptly repay the credited amount.
5. TERMINATION
This Agreement may be terminated, without cause, by any party upon
thirty (30) days prior written notice; and may be terminated, for
failure to perform satisfactorily or other cause, by any party
immediately; and shall be terminated if Broker Dealer ceases to be
registered as a broker dealer under the Securities Exchange Act of 1934
and a member of the NASD or, if Broker Dealer ceases to maintain its
insurance agent license(s) in good standing in the jurisdictions in
which it conducts business.
6. ARBITRATION
Any dispute, claim or controversy arising out of or in connection with
this Agreement shall be submitted to arbitration pursuant to the NASD's
arbitration facilities. If the subject matter of the dispute, claim or
controversy is not within the scope of matters which may arbitrated
through the NASD arbitration facilities, then such dispute, claim or
controversy shall, upon the written request of any party, be submitted
to three arbitrators, one to be chosen by each party, and the third by
the two so chosen. If either party refuses or neglects to appoint an
arbitrator within thirty (30) days after the receipt of the written
notice from the other party requesting it to do so, the requesting
party may appoint two arbitrators. If the two arbitrators fail to agree
in the selection of a third arbitrator within thirty (30) days of their
appointment, each of them shall name two, of whom the other shall
decline one and the decision shall be made by drawing lots. All
arbitrators shall be active or retired executive officers of insurance
companies not under the control of any party to this Agreement. Each
party shall submit its case to the arbitrators within thirty (30) days
of the appointment of the
7
third arbitrator. The arbitration shall be held in Minneapolis,
Minnesota at the times agreed upon by the arbitrators. The decision in
writing of any two arbitrators, when filed with the parties hereto
shall be final and binding on both parties. Judgment may be entered
upon the final decision of the arbitrators in any court having
jurisdiction. Each party shall bear the expense of its own arbitrator
and shall jointly and equally bear with the other party the expense of
the third arbitrator and of the arbitration.
7. GENERAL PROVISIONS
(a) ADDITIONS, AMENDMENTS, MODIFICATIONS & WAIVERS. This Agreement
shall not be effective until approved by Insurer and General
Distributor. Insurer and General Distributor reserve the right to amend
this Agreement at any time, and the submission of an application for
the purchase of a Variable Contract by Broker Dealer after notice of
any such amendment has been sent shall constitute Broker Dealer's
agreement to any such amendment. No additions, amendments or
modifications of this Agreement or any waiver of any provision will be
valid unless approved, in writing, by one of Insurer's duly authorized
officers. In addition, no approved waiver of any default, or failure of
performance by Broker Dealer will affect Insurer's or General
Distributor's rights with respect to any later default or failure of
performance.
(b) INDEPENDENT CONTRACTOR RELATIONSHIP. This Agreement does not
create the relationship of employer and employee between the parties to
this Agreement. Insurer and General Distributor are independent
contractors with respect to Broker Dealer and its Representatives.
(c) ASSIGNMENTS. Broker Dealer will not assign or transfer, either
wholly or partially, this Agreement or any of the benefits accrued or
to accrue under it, without the written prior consent of a duly
authorized officer of the Insurer and General Distributor.
(d) SERVICE OF PROCESS. If Broker Dealer receives or is served with any
notice or other paper concerning any legal action against Insurer or
General Distributor, Broker Dealer agrees to notify Insurer immediately
(in any event not later than the first business day after receipt) by
telephone and further agrees to transmit any papers that are served or
received by facsimile to (000) 000-0000 and by overnight mail to
Insurer's Office of General Counsel.
(e) SEVERABILITY. It is understood and agreed by the parties to this
Agreement that if any part, term or provision of this Agreement is held
to be invalid or in conflict with any law or regulation, the validity
of the remaining portions or provisions will not be affected, and the
parties' rights and obligations will be construed and enforced as if
this Agreement did not contain the particular part, term or provision
held to be invalid.
8
(f) GOVERNING LAW. It is agreed by the parties to this Agreement that
the Agreement and all of its provisions will be governed by the laws of
the State of Minnesota.
(g) LIMITATIONS. No party other than Insurer shall have the authority
on behalf of Insurer to make, alter, or discharge any policy, contract,
or certificate issued by Insurer, to waive any forfeiture or to grant,
permit, nor extend the time for making any payments nor to guarantee
earnings or rates, nor to alter the forms which Insurer may prescribe
or substitute other forms in place of those prescribed by Insurer, nor
to enter into any proceeding in a court of law or before a regulatory
agency in the name of or on behalf of Insurer, nor to open any bank
account in the full legal name of Insurer, any derivation thereof or
any tradename thereof.
8. TERRITORY
Broker Dealer's territory is limited geographically to those
jurisdictions in which the Variable Contracts may lawfully be offered,
provided that Broker Dealer's right to solicit sales of and to sell the
Variable Contracts in such jurisdictions is not exclusive.
9. EFFECTIVE DATE
This Agreement shall be effective ________________, 199__.
9
IN WITNESS WHEREOF, we set our hands this ____ day of _________________, 199__.
INSURER:
RELIASTAR LIFE INSURANCE COMPANY
By: _____________________________
Title: _____________________________
GENERAL DISTRIBUTOR:
WASHINGTON SQUARE SECURITIES, INC.
By: _____________________________
Title: _____________________________
BROKER DEALER:
______________________________________
By: _____________________________
Title: _____________________________
10
"D"
BROKER DEALER AGENCY
SELLING AGREEMENT
FOR VARIABLE CONTRACTS
This Agreement is made among the following four parties:
1. RELIASTAR LIFE INSURANCE COMPANY
00 Xxxxxxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
a Minnesota domiciled stock life insurance company
(hereinafter "INSURER"); and,
2. WASHINGTON SQUARE SECURITIES, INC.
00 Xxxxxxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
an affiliate of Insurer, registered as a broker-dealer with
the Securities and Exchange Commission ("SEC") and a member of
the National Association of Securities Dealers, Inc.
("NASD") (hereinafter "GENERAL DISTRIBUTOR"); and,
3. ______________________________
______________________________
Street
______________________________
City State ZIP
registered as a broker-dealer with the SEC and a member
of the NASD (hereinafter "BROKER-DEALER"); and,
4. ______________________________
______________________________
Street
______________________________
City State ZIP
an affiliate of Broker-Dealer and a licensed insurance agency
(hereinafter "AGENCY").
RECITALS:
Whereas, Broker-Dealer has become affiliated with Agency in order to
satisfy state insurance law requirements with respect to the sale of variable
insurance products which are registered securities with the SEC.
Whereas, the parties wish to enter into an agreement for the
distribution of Variable Contracts by Broker-Dealer and Agency; and
Whereas, Insurer has appointed General Distributor as principal
underwriter and distributor (as those terms are defined by the Investment
Company Act of 1940) of the Variable Contracts and has authorized General
Distributor to enter into selling agreements with registered broker-dealers for
the solicitation and sale of Variable Contracts; and,
Whereas, Insurer and General Distributor propose to have
Broker-Dealer's registered representatives who are affiliated with Agency and
who are licensed as life insurance/variable contract agents in appropriate
jurisdictions ("Representatives") solicit and sell Variable Contracts; and,
Whereas, Insurer and General Distributor propose to have Broker-Dealer
provide certain supervisory and administrative services as hereinafter described
with respect to the solicitation and sales of Variable Contracts; and,
NOW THEREFORE, in consideration of the premises and the mutual
covenants hereinafter set forth, the parties now agree as follows:
1. VARIABLE CONTRACTS
In this Agreement, The words "Variable Contract" shall mean
those variable life insurance policies and variable annuity contracts
identified in Section 1 of the Compensation Schedule attached hereto,
and as may hereafter be amended.
Insurer may in its sole discretion and without notice to
Broker Dealer, suspend sales of any Variable Contracts or amend any
policies or contracts evidencing such Variable Contracts if, in
Insurer's opinion, such suspension or amendment is: (1) necessary for
compliance with federal, state, or local laws, regulations, or
administrative order(s); or, (2) necessary to prevent administrative or
financial hardship to Insurer. In all other situations, Insurer shall
provide 30 days notice to Broker Dealer prior to suspending sales of
any Variable Contracts or amending any policies or contracts evidencing
such Variable Contracts.
2
Insurer may issue and propose additional or successor
products, in which event Broker Dealer will be informed of the product
and its related Commission Schedule. If Broker Dealer does not agree to
distribute such product (s), it must notify Insurer in writing within
30 days of receipt of the Commission Schedule for such product(s). If
Broker Dealer does not indicate disapproval of the new product(s) or
the terms contained in the related Commission Schedule, Broker Dealer
will be deemed to have thereby agreed to distribute such product(s) and
agreed to the related Commission Schedule which shall be attached to
and made a part of this Agreement.
2. AGENCY APPOINTMENTS
On the effective date, Insurer and General Distributor appoint Broker
Dealer and its affiliated Agency and Broker Dealer and Agency accept
the appointment to solicit sales of and to sell Variable Contracts
only, pursuant to the terms of this Agreement.
3. DUTIES OF BROKER DEALER
(a) SUPERVISION OF REPRESENTATIVES. Broker Dealer shall have full
responsibility for the training and supervision of all Representatives
who are engaged directly or indirectly in the offer or sale of the
Variable Contracts, and all such persons shall be subject to the
control of Broker Dealer with respect to such persons' securities
regulated activities in connection with the Variable Contracts. Broker
Dealer will cause the Representatives to be trained in the sale of the
Variable Contracts, will cause such Representatives to qualify under
applicable federal and state laws to engage in the sale of the Variable
Contracts; will cause such Representatives to be registered
representatives of Broker Dealer before such Representatives engage in
the solicitation of applications for the Variable Contracts; and will
cause such Representatives to limit solicitation of applications for
the Variable Contracts to jurisdictions where Insurer has authorized
such solicitation. Broker Dealer shall cause such Representatives'
qualifications to be certified to the satisfaction of General
Distributor and shall notify General Distributor if any Representative
ceases to be a registered representative of Broker Dealer or ceases to
maintain the proper licensing required for the sale of the Variable
Contracts. All parties shall be liable for their own negligence and
misconduct under this paragraph.
(b) REPRESENTATIVES INSURANCE COMPLIANCE. Broker Dealer, prior to
allowing its Representatives to solicit for sales or sell the Variable
Contracts, shall require such representatives to be validly insurance
licensed, registered and appointed by Insurer as a variable contract
agent in accordance with the jurisdictional
3
requirements of the place where the solicitations and sales take place
as well as the solicited person's or entity's place of residence.
Broker Dealer and Agency shall assist Insurer in the
appointment of Representatives under the applicable insurance laws to
sell the Variable Contracts. Broker Dealer shall fulfill all Insurer
requirements in conjunction with the submission of
licensing/appointment papers for all applicants as insurance agents of
Insurer. All such licensing/appointment papers shall be submitted to
Insurer or its designee by Broker Dealer. Notwithstanding such
submission, Insurer shall have sole discretion to appoint, refuse to
appoint, discontinue, or terminate the appointment of any
Representative as an insurance agent of Insurer.
(c) COMPLIANCE WITH NASD RULES OF FAIR PRACTICE AND FEDERAL AND STATE
SECURITIES LAWS. Broker Dealer shall fully comply with the requirements
of the National Association of Securities Dealers, Inc., the Securities
Exchange Act of 1934 and all other applicable federal and state laws.
In addition, Broker Dealer will establish and maintain such rules and
procedures as may be necessary to cause diligent supervision of the
securities activities of the Representatives as required by applicable
law or regulation. Upon request by General Distributor, Broker Dealer
shall furnish such records as may be necessary to establish such
diligent supervision.
(d) NOTICE OF REPRESENTATIVE'S NONCOMPLIANCE. In the event a
Representative fails or refuses to submit to supervision of Broker
Dealer or otherwise fails to meet the rules and standards imposed by
Broker Dealer on its Representatives, Broker Dealer shall advise
General Distributor of this fact and shall immediately notify such
Representative that he or she is no longer authorized to sell the
Variable Contracts and Broker Dealer shall take whatever additional
action may be necessary to terminate the sales activities of such
Representative relating to the Variable Contracts.
(e) PROSPECTUSES, SALES PROMOTION MATERIAL AND ADVERTISING.
Broker-Dealer shall be provided, without any expense to Broker Dealer,
with prospectuses relating to the Variable Contracts and such other
supplementary sales material as General Distributor determines is
necessary or desirable for use in connection with sales of the Variable
Contracts.
NO SALES PROMOTION MATERIALS OR ANY ADVERTISING RELATING TO
THE VARIABLE CONTRACTS, INCLUDING WITHOUT LIMITATION GENERIC
ADVERTISING MATERIAL WHICH DOES NOT REFER TO INSURER BY NAME, SHALL BE
USED BY BROKER DEALER OR AGENCY UNLESS THE SPECIFIC ITEM HAS BEEN
APPROVED IN WRITING BY GENERAL DISTRIBUTOR PRIOR TO SUCH USE.
4
In addition, neither Broker Dealer nor Agency shall print,
publish or distribute any advertisement, circular or any document
relating to Insurer unless such advertisement, circular or document
shall have been approved in writing by Insurer prior to such use.
Upon termination of this Agreement, all prospectuses, sales
promotion material, advertising, circulars, documents and software
relating to the sales of the Variable Contracts shall be promptly
turned over to Insurer free from any claim or retention of rights by
the Broker Dealer or Agency.
Insurer represents that the prospectus and registration
statement relating to the Variable Contracts contain no untrue
statements of material fact or omission to state material fact, the
omission of which makes any statement contained in the prospectus and
registration statement misleading. Insurer agrees to indemnify Broker
Dealer from and against any claims, liabilities and expenses which may
be incurred under the Securities Act of 1933, the Investment Company
Act of 1940, common law or otherwise arising out of a breach of the
agreement in this paragraph.
Broker Dealer and Agency agree to hold harmless and indemnify
Insurer and General Distributor against any and all claims, liabilities
and expenses which Insurer or General Distributor may incur from
liabilities arising out of or based upon any alleged or untrue
statement other than statements contained in the registration
statement, prospectus or approved sales material of any Variable
Contract.
In accordance with the requirements of the laws of the several
states, Broker Dealer and Agency shall maintain complete records
indicating the manner and extent of distribution of any such
solicitation material, shall make such records and files available to
staff of Insurer or its designated agent in field inspections and shall
make such material available to personnel of state insurance
departments, the NASD or other regulatory agencies, including the SEC,
which have regulatory authority over Insurer or General Distributor.
Broker Dealer and Agency, jointly and severally hold Insurer, General
Distributor and their affiliates harmless from any liability arising
from the use of any material which either (a) has not been specifically
approved in writing, or (b) although previously approved, has been
disapproved, in writing, for further use.
(f) SECURING APPLICATIONS. All applications for Variable Contracts
shall be made on application forms supplied by Insurer and all payments
collected by Broker Dealer or any Representative thereof shall be
remitted promptly in full, together with such application forms and any
other required documentation, directly to Insurer at the address
indicated on such application or to such other address as Insurer may,
from time-to-time, designate in writing. Broker Dealer shall review all
such applications for accuracy and completeness. Checks or
5
money orders in payment on any such Variable Contract shall be drawn
to the order of "ReliaStar Life Insurance Company." All applications
are subject to acceptance or rejection by Insurer at its sole
discretion. All records or information obtained hereunder by Broker
Dealer shall not be disclosed or used except as expressly authorized
herein, and Broker Dealer will keep such records and information
confidential, to be disclosed only as authorized or if expressly
required by federal or state regulatory authorities.
(g) COLLECTION OF PURCHASE PAYMENTS. Broker Dealer agrees that all
money or other consideration tendered with or in respect of any
application for a Variable Contract and the Variable Contract when
issued is the property of Insurer and shall be promptly remitted in
full to Insurer without deduction or offset for any reason, including
by way of example but not limitation, any deduction or offset for
compensation claimed by Broker Dealer.
(h) POLICY DELIVERY. Insurer will transmit Variable Contracts to Broker
Dealer for delivery to Policyowners. Broker Dealer hereby agrees to
deliver all such Variable Contracts to Policyowners within ten (10)
days of their receipt by Broker Dealer from Insurer. Broker Dealer
agrees to indemnify and hold harmless Insurer for any and all losses
caused by Broker Dealer's failure to perform the undertakings described
in this paragraph. Broker Dealer hereby authorizes Insurer to set off
any amount it owes Insurer under this paragraph against any and all
amounts otherwise payable to Broker Dealer by Insurer.
(i) FIDELITY BOND. Broker Dealer represents that all directors,
officers, employees and Representatives of Broker Dealer who are
licensed pursuant to this Agreement as Insurer's agents for state
insurance law purposes or who have access to funds of Insurer,
including but not limited to funds submitted with applications for the
Variable Contracts 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. This bond shall be
maintained by Broker Dealer at Broker Dealer's expense. Such bond shall
be, at least, of the form, type and amount required under the NASD
Rules of Fair Practice. Insurer may require evidence, satisfactory to
it, that such coverage is in force and Broker Dealer shall give prompt
written notice to Insurer of any notice of cancellation or change of
coverage.
Broker Dealer assigns any proceeds received from the fidelity
bonding company to Insurer to the extent of Insurer's loss due to
activities covered by the bond. If there is any deficiency amount,
whether due to a deductible or otherwise, Broker Dealer shall promptly
pay Insurer such amount on demand and Broker Dealer hereby indemnifies
and holds harmless Insurer from any such deficiency and from the costs
of collection thereof (including reasonable attorneys' fees).
6
4. COMPENSATION
(a) VARIABLE CONTRACTS. Insurer, on behalf of General Distributor,
shall pay a dealer concession to Broker Dealer on all sales of Variable
Contracts through such Representatives, in accordance with the form of
the Compensation Schedule attached hereto, which is in effect when
purchase payment on such Variable Contracts are received by Insurer.
Dealer concessions will be paid as a percentage of premiums received in
cash or other legal tender and accepted by Insurer on applications
obtained by Broker Dealer's Representatives unless otherwise indicated
in Compensation Schedule A. Upon termination of this Agreement, all
compensation payable hereunder shall cease; however, Broker Dealer
shall continue to be liable for any chargebacks or for any other
amounts advanced by or otherwise due Insurer hereunder.
Insurer will pay all such Compensation to and in the name of
Broker Dealer or its affiliated Agency. Broker Dealer agrees to hold
Insurer and General Distributor harmless from all claims of its
Representatives for compensation in respect of such Representative's
sales of Variable Contracts.
(b) COMMISSION STATEMENTS. Broker Dealer will be provided with copies
of its Representatives' commission statements together with Broker
Dealer's own commission statements for each commission payment period
in which commissions are payable. Broker Dealer agrees that, except as
to clerical errors and material undisclosed facts, if any, such
statements constitutes a complete and accurate statement of the
commission account unless written notice is provided to Insurer within
120 days after the date of the statement, which notice specifically
sets forth the objections or exceptions thereto.
(c) COMPENSATION SCHEDULES. The initial Compensation Schedule is
attached.
Insurer and General Distributor reserve the right to change,
amend, or cancel any Compensation Schedule as to business produced
after such change by mailing notice of such change in the form of a new
Compensation Schedule to Broker Dealer. Such change shall be effective,
unless otherwise specified, ten (10) days after the notice is mailed.
(d) RIGHTS OF REJECTION AND SETTLEMENT. Insurer reserves the right to
reject any and all applications and collections submitted, to
discontinue writing any form of policy, to take possession of and
cancel any policy and return the premium or any part of it, and to make
any compromise settlement in respect of a policy. Broker Dealer will
not be entitled to receive or retain any compensation on premiums or
parts of premiums Insurer does not receive and retain because of such
rejection, discontinuance, cancellation, or compromise settlement. If
compensation has been paid to which Broker Dealer is not entitled, any
amount
7
credited will be charged back, and if the account balance is
insufficient to cover the credited amount, Broker Dealer as applicable
agrees to promptly repay the credited amount.
5. TERMINATION
This Agreement may be terminated, without cause, by any party upon
thirty (30) days prior written notice; and may be terminated, for
failure to perform satisfactorily or other cause, by any party
immediately; and shall be terminated if Broker Dealer ceases to be
registered as a broker dealer under the Securities Exchange Act of 1934
and a member of the NASD or, if Agency ceases to maintain its insurance
agent license(s) in good standing in the jurisdictions in which it
conducts business.
6. ARBITRATION
Any dispute, claim or controversy arising out of or in connection with
this Agreement shall be submitted to arbitration pursuant to the NASD's
arbitration facilities. If the subject matter of the dispute, claim or
controversy is not within the scope of matters which may arbitrated
through the NASD arbitration facilities, then such dispute, claim or
controversy shall, upon the written request of any party, be submitted
to three arbitrators, one to be chosen by each party, and the third by
the two so chosen. If either party refuses or neglects to appoint an
arbitrator within thirty (30) days after the receipt of the written
notice from the other party requesting it to do so, the requesting
party may appoint two arbitrators. If the two arbitrators fail to agree
in the selection of a third arbitrator within thirty (30) days of their
appointment, each of them shall name two, of whom the other shall
decline one and the decision shall be made by drawing lots. All
arbitrators shall be active or retired executive officers of insurance
companies not under the control of any party to this Agreement. Each
party shall submit its case to the arbitrators within thirty (30) days
of the appointment of the third arbitrator. The arbitration shall be
held in Minneapolis, Minnesota at the times agreed upon by the
arbitrators. The decision in writing of any two arbitrators, when filed
with the parties hereto shall be final and binding on both parties.
Judgment may be entered upon the final decision of the arbitrators in
any court having jurisdiction. Each party shall bear the expense of its
own arbitrator and shall jointly and equally bear with the other party
the expense of the third arbitrator and of the arbitration.
8
7. GENERAL PROVISIONS
(a) ADDITIONS, AMENDMENTS, MODIFICATIONS & WAIVERS. This Agreement
shall not be effective until approved by Insurer and General
Distributor. Insurer and General Distributor reserve the right to amend
this Agreement at any time, and the submission of an application for
the purchase of a Variable Contract by either Broker Dealer or Agency
after notice of any such amendment has been sent shall constitute
Broker Dealer's or Agency's, as applicable, agreement to any such
amendment. No additions, amendments or modifications of this Agreement
or any waiver of any provision will be valid unless approved, in
writing, by one of Insurer's duly authorized officers. In addition, no
approved waiver of any default, or failure of performance by Broker
Dealer or Agency will affect Insurer's or General Distributor's rights
with respect to any later default or failure of performance.
(b) INDEPENDENT CONTRACTOR RELATIONSHIP. This Agreement does not
create the relationship of employer and employee between the
parties to this Agreement. Insurer and General Distributor are
independent contractors with respect to Broker Dealer, its
Representatives, Agency and its Agents.
(c) ASSIGNMENTS. Neither Broker Dealer nor Agency will assign or
transfer, either wholly or partially, this Agreement or any of the
benefits accrued or to accrue under it, without the written prior
consent of a duly authorized officer of the Insurer and General
Distributor.
(d) SERVICE OF PROCESS. If Broker Dealer or Agency receives or is
served with any notice or other paper concerning any legal action
against Insurer or General Distributor, Broker Dealer or Agency agrees
to notify Insurer immediately (in any event not later than the first
business day after receipt) by telephone and transmit any papers that
are served or received by facsimile to (000) 000-0000 and by overnight
mail to Insurer's Office of General Counsel.
(e) SEVERABILITY. It is understood and agreed by the parties to this
Agreement that if any part, term or provision of this Agreement is held
to be invalid or in conflict with any law or regulation, the validity
of the remaining portions or provisions will not be affected, and the
parties' rights and obligations will be construed and enforced as if
this Agreement did not contain the particular part, term or provision
held to be invalid.
(f) GOVERNING LAW. It is agreed by the parties to this Agreement that
the Agreement and all of its provisions will be governed by the laws of
the State of Minnesota.
9
(g) LIMITATIONS. No party other than Insurer shall have the authority
on behalf of Insurer to make, alter, or discharge any policy, contract,
or certificate issued by insurer, to waive any forfeiture or to grant,
permit, nor extend the time for making any payments nor to guarantee
earnings or rates, nor to alter the forms which Insurer may prescribe
or substitute other forms in place of those prescribed by Insurer, nor
to enter into any proceeding in a court of law or before a regulatory
agency in the name of or on behalf of Insurer, nor to open any bank
account in the full legal name of Insurer, any derivation thereof or
any tradename thereof.
8. TERRITORY
Broker Dealer's territory is limited geographically to those
jurisdictions in which the Variable Contracts may lawfully be offered,
provided that Broker Dealer's right to solicit sales of and to sell the
Variable Contracts in such jurisdictions is not exclusive.
9. EFFECTIVE DATE
This Agreement shall be effective ________________, 199__.
10
IN WITNESS WHEREOF, we set our hands this ____ day of _________________, 199__.
INSURER:
RELIASTAR LIFE INSURANCE COMPANY
By: _____________________________
Title: _____________________________
GENERAL DISTRIBUTOR:
WASHINGTON SQUARE SECURITIES, INC.
By: _____________________________
Title: _____________________________
BROKER DEALER:
______________________________________
By: _____________________________
Title: _____________________________
AGENCY:
_______________________________________
By: ______________________________
Title: ______________________________
11
AGENCY
SELLING AGREEMENT
This Agreement is made between:
1. RELIASTAR LIFE INSURANCE COMPANY
00 Xxxxxxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
A MINNESOTA DOMICILED STOCK LIFE INSURANCE COMPANY
(hereinafter "INSURER"); and,
2. ---------------------------------------
---------------------------------------
XXXXXX
---------------------------------------
XXXX, XXXXX ZIP
A LICENSED INSURANCE AGENCY (hereinafter "AGENCY").
IN CONSIDERATION OF THE PREMISES AND THE MUTUAL COVENANTS HEREINAFTER
SET FORTH, THE PARTIES NOW AGREE AS FOLLOWS:
1. DEFINITIONS
In this Agreement, the words "Traditional Life Insurance
Policy" shall mean those life insurance policies and annuity contracts
identified in the attached Compensation Schedule and as may hereafter
be amended.
Insurer may in its sole discretion and without notice to
Agency, suspend sales of any Traditional Life Insurance Policies or
amend any policies or contracts evidencing such Traditional Life
Insurance Policies if, in Insurer's opinion, such suspension or
amendment is: (1) necessary for compliance with federal, state, or
local laws, regulations, or administrative order(s); or, (2) necessary
to prevent administrative or financial hardship to Insurer. In all
other situations, Insurer shall provide 30 days notice to Agency prior
to suspending sales of any Traditional Life Insurance Policies or
amending any policies or contracts evidencing such Traditional Life
Insurance Policies.
1
Insurer may issue and propose additional or successor
products, in which event Agency will be informed of the product and its
related Compensation Schedule. If Agency does not agree to distribute
such product(s), it must notify Insurer in writing within 30 days of
receipt of the Compensation Schedule for such product(s). If Agency
does not indicate disapproval of the new product(s) or the terms
contained in the related Compensation Schedule, Agency will be deemed
to have thereby agreed to distribute such product(s) and agreed to the
related Compensation Schedule which shall be attached to and made a
part of this Agreement.
2. AGENCY APPOINTMENT
On the effective date, Insurer appoints Agency, and Agency accepts the
appointment to solicit sales of and to sell Traditional Life Insurance
Policies pursuant to the terms of this Agreement.
3. DUTIES OF AGENCY
(a) SUPERVISION OF AGENTS AND REPRESENTATIVES. Agency shall have full
responsibility for the training and supervision of all Agents who are
engaged directly or indirectly in the offer or sale of Traditional Life
Insurance Policies. Agency will cause the Agents to be trained in the
sale of Traditional Life Insurance Policies, will cause such Agents to
qualify under applicable state insurance laws to engage in the sale of
life insurance before such Agents engage in the solicitation of
applications for Traditional Life Insurance Policies; and will cause
such Agents to limit solicitation of applications for Traditional Life
Insurance Policies to jurisdictions where Insurer has authorized such
solicitation. Agency shall cause such Agents' qualifications to be
certified to the satisfaction of Insurer and shall notify Insurer if
any Agent ceases to be an employee of Agency or ceases to maintain the
proper licensing required for the sale of Traditional Life Insurance
Policies. All parties shall be liable for their own negligence and
misconduct under this paragraph.
(b) AGENT INSURANCE COMPLIANCE. Agency, prior to allowing Agents to
solicit for sales or sell Traditional Life Insurance Policies, shall
require such agents to be validly insurance licensed, registered and
appointed by Insurer as a life insurance agent in accordance with the
jurisdictional requirements of the place where the solicitations and
sales take place as well as the solicited person's or entity's place of
residence.
Agency shall assist Insurer in the appointment of Agents under
the applicable insurance laws to sell Traditional Life Insurance
Policies.
2
Agency shall fulfill all Insurer requirements in conjunction with the
submission of licensing/appointment papers for all applicants as
insurance agents of Insurer. All such licensing/appointment papers
shall be submitted to Insurer or its duly appointed agent by Agency.
Notwithstanding such submission, Insurer shall have sole discretion to
appoint, refuse to appoint, discontinue, or terminate the appointment
of any Agent as an insurance agent of Insurer.
(c) SALES PROMOTION MATERIAL AND ADVERTISING. Agency shall be provided,
without any expense to Agency, such sales promotion and advertising
materials as Insurer determines is necessary or desirable for use in
connection with sales of Traditional Life Insurance Policies.
NO SALES PROMOTION MATERIALS OR ANY ADVERTISING RELATING TO
TRADITIONAL LIFE INSURANCE POLICIES, INCLUDING WITHOUT LIMITATION
GENERIC ADVERTISING MATERIAL WHICH DOES NOT REFER TO INSURER BY NAME,
SHALL BE USED BY AGENCY UNLESS THE SPECIFIC ITEM HAS BEEN APPROVED IN
WRITING BY INSURER PRIOR TO SUCH USE.
In addition, Agency shall not print, publish or distribute any
advertisement, circular or any document relating to Insurer unless such
advertisement, circular or document shall have been approved in writing
by Insurer prior to such use.
Upon termination of this Agreement, all sales promotion
material, advertising, circulars, documents and software relating to
the sales of Traditional Life Insurance Policies shall be promptly
turned over to Insurer free from any claim or retention of rights by
the Agency.
In accordance with the requirements of the laws of the several
states, Agency shall maintain complete records indicating the manner
and extent of distribution of any such solicitation material, shall
make such records and files available to staff of Insurer or its
designated agent in field inspections and shall make such material
available to personnel of state insurance departments other regulatory
agencies which have regulatory authority over Insurer. Agency holds
Insurer and its affiliates harmless from any liability arising from the
use of any material which either (a) has not been specifically approved
in writing, or (b) although previously approved, has been disapproved,
in writing, for further use.
(d) SECURING APPLICATIONS. All applications for Traditional Life
Insurance Policies shall be made on application forms supplied by
Insurer and all payments collected by Agency or any Agent, thereof
shall be remitted promptly in full, together with such application
forms and any other required documentation, directly to Insurer at the
address indicated on such application or to such other address as
Insurer may, from time-to-time, designate in writing. Agency shall
review all such applications for accuracy and completeness.
3
Checks or money orders in payment on any such Traditional Life
Insurance Policy shall be drawn to the order of "ReliaStar Life
Insurance Company." All applications are subject to acceptance or
rejection by Insurer at its sole discretion. All records or
information obtained hereunder by Agency shall not be disclosed or
used except as expressly authorized herein, and Agency will keep such
records and information confidential, to be disclosed only as
authorized or if expressly required by federal or state regulatory
authorities.
(e) COLLECTION OF PURCHASE PAYMENTS. Agency agrees that all money or
other consideration tendered with or in respect of any application for
a Traditional Life Insurance Policy and the Traditional Life Insurance
Policy when issued is the property of Insurer and shall be promptly
remitted in full to Insurer without deduction or offset for any reason,
including by way of example but not limitation, any deduction or offset
for compensation claimed by Agency.
(f) POLICY DELIVERY. Insurer may, upon written request of Agency,
transmit Traditional Life Insurance Policies to Agency for delivery to
Policyowners. Agency hereby agrees to deliver all such Traditional Life
Insurance Policies to Policyowners within ten (10) days of their
receipt by Agency from Insurer. Agency agrees to indemnify and hold
harmless Insurer for any and all losses caused by Agency's failure to
perform the undertakings described in this paragraph. Agency hereby
authorizes Insurer to set off any amount it owes Insurer under this
paragraph against any and all amounts otherwise payable to Agency by
Insurer.
4. COMPENSATION
(a) TRADITIONAL LIFE INSURANCE POLICIES. Insurer shall pay commissions
to Agency on all sales of Traditional Life Insurance Policies through
Agents in accordance with the applicable Compensation Schedule attached
hereto, which is in effect when purchase payments on such Traditional
Life Insurance Policies are received by Insurer. Commissions will be
paid as a percentage of premiums received in cash or other legal tender
and accepted by insurer on applications submitted by Agency unless
otherwise indicated in the applicable Compensation Schedule. Upon
termination of this Agreement, all compensation payable hereunder shall
cease except as specified in the Compensation Schedule; however, Agency
shall continue to be liable for any chargebacks or for any other
amounts advanced by or otherwise due Insurer hereunder.
Insurer will pay all such Compensation to and in the name of
Agency. Agency agrees to hold Insurer harmless from all claims Agents'
have for compensation in respect of Agents' sales of Traditional Life
Insurance Policies.
(b) COMMISSION STATEMENTS. Agency will be provided with copies of its
Agents' commission statements for each commission payment period in
which
4
commissions are payable. Agency agrees that, except as to clerical
errors and material undisclosed facts, if any, such statements
constitutes a complete and accurate statement of the commission
account unless written notice is provided to Insurer within 120 days
after the date of the statement, which notice specifically sets forth
the objections or exceptions thereto.
(c) COMPENSATION SCHEDULES. The initial Compensation Schedule is
attached.
Insurer reserves the right to change, amend, or cancel any
Compensation Schedule as to business produced after such change by
mailing notice of such change in the form of a new Compensation
Schedule to Agency. Such change shall be effective, unless otherwise
specified, ten (10) days after the notice is mailed.
(d) RIGHTS OF REJECTION AND SETTLEMENT. Insurer reserves the right to
reject any and all applications and collections submitted, to
discontinue writing any form of policy, to take possession of and
cancel any policy and return the premium or any part of it, and to make
any compromise settlement in respect of a policy. Agency will not be
entitled to receive or retain any compensation on premiums or parts of
premiums Insurer does not receive and retain because of such rejection,
discontinuance, cancellation, or compromise settlement. If compensation
has been paid to which Agency is not entitled, any amount credited will
be charged back, and if the account balance is insufficient to cover
the credited amount, Agency as applicable agrees to promptly repay the
credited amount.
(e) RIGHT OF OFFSET. Insurer may offset against any compensation due
Agency under this Agreement, or due Agency by separate agreement from
any affiliated company of ReliaStar Financial Corp., any amounts now
due or subsequently due from Agency to the Insurer, or any affiliated
company of ReliaStar Financial Corp. Any and all amounts due from
Agency shall be a first lien against the compensation due Agency under
this Agreement, prior to any assignment or other agreement Agency might
enter.
Agency shall repay all amounts advanced by Insurer and/or affiliated
company of ReliaStar Financial Corp. Insurer and/or any affiliated
company of ReliaStar Financial Corp. shall not be limited to its right
of offset but may at any time demand immediate repayment.
5. TERMINATION
This Agreement may be terminated, without cause, by any party upon
thirty (30) days prior written notice; and may be terminated, for
failure to perform satisfactorily or other cause, by any party
immediately; and shall be terminated if
5
Agency ceases to maintain its insurance agent license(s) in good
standing in the jurisdictions in which it conducts business.
6. ARBITRATION
Any dispute, claim or controversy arising out of or in connection with
this Agreement shall be submitted to arbitration. Upon the written
request of any party, such dispute shall be submitted to three
arbitrators, one to be chosen by each party, and the third by the two
so chosen. If either party refuses or neglects to appoint an arbitrator
within thirty (30) days after the receipt of the written notice from
the other party requesting it to do so, the requesting party may
appoint two arbitrators. If the two arbitrators fail to agree in the
selection of a third arbitrator within thirty (30) days of their
appointment, each of them shall name two, of whom the other shall
decline one and the decision shall be made by drawing lots. All
arbitrators shall be active or retired executive officers of insurance
companies not under the control of any party to this Agreement. Each
party shall submit its case to the arbitrators within thirty (30) days
of the appointment of the third arbitrator. The arbitration shall be
held in Minneapolis, Minnesota at the times agreed upon by the
arbitrators. The decision in writing of any two arbitrators, when filed
with the parties hereto shall be final and binding on both parties.
Judgment may be entered upon the final decision of the arbitrators in
any court having jurisdiction. Each party shall bear the expense of its
own arbitrator and shall jointly and equally bear with the other party
the expense of the third arbitrator and of the arbitration.
7. GENERAL PROVISIONS
(a) ADDITIONS, AMENDMENTS, MODIFICATIONS & WAIVERS. This Agreement
shall not be effective until approved by Insurer. Insurer reserves the
right to amend this Agreement at any time, and the submission of an
application by Agency after notice of any such amendment has been sent
shall constitute Agency's agreement to any such amendment. No
additions, amendments or modifications of this Agreement or any waiver
of any provision will be valid unless approved, in writing, by one of
Insurer's duly authorized officers. In addition, no approved waiver of
any default, or failure of performance by Agency will affect Insurer's
rights with respect to any later default or failure of performance.
(b) INDEPENDENT CONTRACTOR RELATIONSHIP. This Agreement does not
create the relationship of employer and employee between the parties
to this Agreement. Agency and its Agents are independent contractors
with respect to Insurer.
6
(c) ASSIGNMENTS. Agency shall not assign or transfer, either wholly or
partially, this Agreement or any of the benefits accrued or to accrue
under it, without the written prior consent of a duly authorized
officer of the Insurer.
(d) SERVICE OF PROCESS. If Agency receives or is served with any notice
or other paper concerning any legal action against Insurer, Agency
agrees to notify Insurer immediately (in any event not later than the
first business day after receipt) by telephone and transmit any papers
that are served or received by facsimile to (000) 000-0000 and by
overnight mail to Insurer's Office of General Counsel.
(e) SEVERABILITY. It is understood and agreed by the parties to this
Agreement that if any part, term or provision of this Agreement is held
to be invalid or in conflict with any law or regulation, the validity
of the remaining portions or provisions will not be affected, and the
parties' rights and obligations will be construed and enforced as if
this Agreement did not contain the particular part, term or provision
held to be invalid.
(f) GOVERNING LAW. It is agreed by the parties to this Agreement that
the Agreement and all of its provisions will be governed by the laws
of the State of Minnesota.
(g) LIMITATIONS. No party other than Insurer shall have the authority
on behalf of Insurer to make, alter, or discharge any policy, contract,
or certificate issued by insurer, to waive any forfeiture or to grant,
permit, nor extend the time for making any payments nor to guarantee
earnings or rates, nor to alter the forms which Insurer may prescribe
or substitute other forms in place of those prescribed by Insurer, nor
to enter into any proceeding in a court of law or before a regulatory
agency in the name of or on behalf of Insurer, nor to open any bank
account in the full legal name of Insurer, any derivation thereof or
any tradename thereof.
8. TERRITORY
Agency's territory is limited geographically to those
jurisdictions in which the Traditional Life Insurance policies may be
lawfully offered, provided that Agency's right to solicit sales of and
to sell the Traditional Life Insurance Policies in such territory is
not exclusive.
9. EFFECTIVE DATE
This Agreement shall be effective _____________, 1996.
IN WITNESS WHEREOF, we set our hands this ____ day of __________, 1996.
7
INSURER:
RELIASTAR LIFE INSURANCE COMPANY
By: -------------------------------
Title: -------------------------------
AGENCY:
----------------------------------------
By: -------------------------------
Title: -------------------------------
BROKER-DEALER AGENCY
COMPENSATION SCHEDULE FOR
RELIASTAR LIFE INSURANCE COMPANY ("RELIASTAR LIFE")
VARIABLE CONTRACTS
EFFECTIVE ________________
This Compensation Schedule shall be used to determine compensation payable to
the Broker-Dealer under the Broker-Dealer Agency Selling Agreement for Variable
Contracts through Broker-Dealer from the Effective Date of this Schedule until
it is suspended, cancelled, changed or replaced.
This Schedule is applicable to the following Variable Contracts:
1. RELIASTAR LIFE SELECT*ANNUITY III
Broker-Dealer shall be paid a total dealer concession according to the
following schedule:
ReliaStar Life has two commission schedules on Select*Annuity III.
Schedule A pays all commissions as a percentage of premiums paid.
Representatives may select on a policy by policy basis which commission
schedule they desire by marking on the application. If the
representative does not select an option, commissions will default to
Schedule A, full front end commissions.
Commission Schedule A:
Total Cumulative* PREMIUM FROM Ages 0-75 Dealer Ages 76-85 Dealer
ISSUE CONCESSION CONCESSION
$ 0 - 4,999 4.0% 2.4%
$ 5,000 - 9,999 5.0% 3.0%
$10,000 + 5.5% 3.3%
Commission Schedule B:
Total Cumulative* PREMIUM FROM Ages 0-75 Dealer Ages 76-85 Dealer
ISSUE CONCESSION CONCESSION
$ 0 - 4,999 3.0% 1.4%
$ 5,000 - 9,999 4.0% 2.0%
$10,000 + 4.5% 2.3%
ANNUAL DEALER CONCESSION TRAIL (AS % OF
YEAR CONTRACT VALUE)**
1 .00%
2 - 6 .20%
7 + .40%
* First premium that brings Cumulative Premium into the next
tier will receive the next tier's rate. Commissions paid on
earlier premiums will not be adjusted.
** Trail commissions will be calculated quarterly (measured from
contract date) based on the contract value at the time. The
first calculation will take place at the end of the 15th
contract month. The trail commission will be paid for eligible
contracts at the end of each calendar quarter.
2. RELIASTAR LIFE SELECT*LIFE II
Broker-Dealer shall be paid a total dealer concession according to the
following schedule:
ISSUE AGES 0-65 ISSUE AGES 66-75
1st Year 90.00% 81.00%
Excess Premium 3.60% 3.60%
(1st Year)
Basic Renewal and 2.00% 2.00%
Lifetime Renewal
Commissions
Asset Based*** 0.25% 0.25%
3. RELIASTAR LIFE SELECT*LIFE III
Broker-Dealer shall be paid a total dealer concession according to the
following schedule:
ISSUE AGES 0-65 ISSUE AGES 66-75
1st Year 63.00% 54.00%
Excess Premium 4.50% 4.50%
(1st Year)
Basic Renewal and 2.50% 2.50%
Lifetime Renewal
Commissions
Asset Based*** 0.10% 0.10%
2
*** Asset Based commissions, per policy, are based on the average
of the twelve monthly Accumulation Values measured at the end
of the Policy Month. The Asset Based Commissions are payable
at the end of each Policy Year when that average is greater
than or equal to $5,000.00. It will be paid concurrently with
the first pay period immediately following the Policy
Anniversary.
II
General Rules Pertaining to Variable Contracts
1. CHANGE OF DEALER AUTHORIZATION. No compensation of any kind shall be
payable in respect of Variable Contracts following Insurer's or
General Distributor's receipt of a change of dealer authorization
applicable to such Variable contract.
2. CHANGE IN REPRESENTATIVE'S STATUS. If a Representative ceases to be an
affiliated person of Broker-Dealer, all compensation in respect of
Variable Contracts written by such Representative shall continue to be
paid to Broker-Dealer (provided Broker-Dealer or another Representative
affiliated with Broker-Dealer holds the required state insurance
licenses and appointments) until the earlier of:
(1) The date of a change of dealer authorization form or other
customer account transfer form signed by the Variable Contract
Owner is filed with Insurer and General Distributor; or
(2) The date the written consent of Broker-Dealer to the block
transfer of all such Variable Contracts to another
broker-dealer with whom ReliaStar Life has a selling agreement
for Variable Contracts is filed with Insurer and General
Distributor.
3. EXCLUSIVE COMPENSATION. Broker-Dealer agrees that no compensation
of any kind other than as described herein is payable by Insurer or
General Distributor in respect of Broker-Dealer's sales of Variable
Contracts.
4. VESTING. First year commissions and Basic Renewal commissions in
respect of Select*Life Variable Contracts issued after the effective
date and prior to the termination date of Broker-Dealer's appointment
are vested in Broker-Dealer and will be paid to Broker-Dealer as and
when the related premium is received by the issuer and applied to the
Select*Life Variable Contract issued, and provided, however, that no
First Year commissions or Basic Renewal Commissions (Policy years 2
through 10), including those on cost of living or any other policy
increases, will be paid after Broker-Dealer's appointment has been
terminated for more than ten years.
3
The Asset Based Commission in respect of a Select*Life Variable
Contract issued after the effective date and prior to the termination
date of Broker-Dealer's appointment is vested in Broker-Dealer for a
period of 120 months from the Policy Date and for a period of 120
months from the effective date of any commissionable increase in
coverage sold by Broker-Dealer's Registered Representatives. Asset
Based Commission, if payable, shall be calculated and paid in
accordance with Footnote (***) above. Asset Based Commissions are not
First Year Commissions, Basic Renewal Commissions, nor Lifetime Renewal
Commissions.
5. RENEWAL OVERWRITE COMMISSIONS. Renewal Overwrite Commission of 50% of
the Basic Renewal Commission or Lifetime Renewal Commission (renewals
paid after 10th policy year) on renewal life insurance premiums paid on
life insurance policies written by Broker-Dealer's Representatives,
will be paid when such aggregate premiums exceed $300,000 per your
contract year. Renewal overwrite will be paid only on policies with an
application signed date of January 1, 1994 and later.
6. REPLACEMENT BUSINESS. If any policy is issued to replace a policy
previously issued by Insurer or an affiliate, commissions will accrue
only if and to the extent that Insurer's established practices
provide for commissions on such replacements.
7. COMMISSIONS. Commissions shall accrue on Variable Contracts issued as
and when premiums are received by Insurer and applied as premiums due
or payable on such policies, except as Insurer's practices may
otherwise provide.
8. CHARGE-BACKS. In any case, where Insurer has credited a commission to
Broker-Dealer on the basis of a premium on a Variable Contract issued
and the premium is returned to the purchaser, Insurer will charge
back such commissions.
9. ADDITIONAL BENEFITS AND RIDERS. Commissions will be credited based on
premiums for additional benefits (for example, waiver of premium and
term riders) added at issue of a policy at the same rate as applied
to the base policy premium.
4
BROKER-DEALER AGENCY
COMPENSATION SCHEDULE FOR
RELIASTAR LIFE INSURANCE COMPANY ("RELIASTAR LIFE")
TRADITIONAL LIFE INSURANCE POLICIES
EFFECTIVE ________________
This Compensation Schedule shall be used to determine compensation payable under
the Broker-Dealer Agency Selling Agreement for Variable Contracts through
Broker-Dealer from the Effective Date of this Schedule until it is suspended,
cancelled, changed or replaced.
I
TABLE OF COMMISSION RATES
TOTAL TOTAL TOTAL LIFETIME
FIRST YEAR BASIC RENEWAL COMMISSION RENEWAL
COMMISSIONS POLICY YEAR COMMISSION
PRODUCT 1ST 2ND 3RD-5TH 6TH-10TH 11TH & LATER
A. LIFE INSURANCE
The Plan 3 90 (A) (B) 3 3 3 3
The Plan 4 72 (A) (B) 3 3 3 3
The Bonus Plan 90 (A) (B) 3 3 3 3
Direction Plus
Issue Ages 0-65 90 (A) (B) 3 3 3 3
Issue Ages 66-80 81 (A) (B) 3 3 3 3
Issue Ages 81-85 45 (A) (B) 3 3 3 3
Term Advantage 5 54(C) 3 3 2 2
Term Advantage 10 54(C) 3 3 2 2
Term Advantage 15 63(C) 3 3 2 2
LT-10 50,000- 72(C) 5 5 2 2
249,999
250,000+ 63(C) 5 5 2 2
YRT 250 63 5 5 2 2
B. ANNUITIES
Summit Assembly 6.3 (E) X/X X/X X/X X/X
Prism Annuity 4.5 (E) N/A N/A N/A N/A
Retirement Income 4.32 (E) X/X X/X X/X X/X
Annuity
FOOTNOTES:
A. First Year Commission on the Plan 3, the Plan 4, Direction Plus and the
Bonus Plan is the stated percentage of the minimum annual premium plus 3%
of the first year premium in excess of the minimum annual premium. In
addition, the stated percentage of the MINIMUM annual premium attributable
to any ------- increase in coverage will be paid to the Agent most recently
selling a commissionable change in the policy with respect to any increase
in coverage made later. An increase in coverage is any increase in face
amount requested by the policyholder or due to a cost of living increase,
or the addition of riders. For ages 66 and over the first Year COMMISSION
may be reduced if the total amount of premium ---------- received in the
first year exceeds $100,000.
B. Payment of the Total Basic Renewal Commission and/or the Total Lifetime
Renewal Commission on The Plan 3, The Plan 4, Direction Plus and Bonus Plan
is suspended upon an increase in coverage until the amount of the premium
payments made after the effective date of such an increase in coverage
exceeds the minimum annual premium attributable to such an increase in
coverage. An increase in coverage is any increase in face amount requested
by the policyholder or due to a cost of living increase, or the addition of
riders.
C. In the event the policyholder exercises the exchange of policy option in
accordance with the provisions of the LT-10 or Term Advantage (5,10, or 15)
policy, a new Total First Year, Total Basic Renewal and Total Lifetime
Renewal Commission will be paid in accordance with the Table beginning with
the effective date of the new LT-10 or Term Advantage (5,10, or 15) policy.
D. The Total First Year commission paid on the Summit Annuity is 6.3% of the
premium through age 75 and 3.24% for issue ages 76 through 85. The Total
First Year Commission paid on the Prism Annuity is 4.5% of premium through
age 75 and 2.34% for issue ages 76 through 85. The Total First Year
Commission paid on the Retirement Income Annuity is 4.32% of premium
through age 75 and 2.16% for issue ages 76 through 85.
II
GENERAL RULES PERTAINING TO TRADITIONAL LIFE COMMISSIONS
1. REPLACEMENT BUSINESS. If any policy is issued to replace a policy
previously issued by Insurer or an affiliate, commissions will accrue only
if and to the extent that Insurer's established practices provide for
commissions on such replacements.
2. COMMISSIONS. Commissions shall accrue on Contracts issued as and when
premiums are received by Insurer and applied as premiums due or payable on
such policies, except as Insurer's practices may otherwise provide.
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3. CHARGE-BACKS. In any case, where Insurer has credited a commission to
Agency on the basis of a premium on a Contract issued and the premium is
returned to the purchaser, Insurer will charge back such commissions.
4. ADDITIONAL BENEFITS AND RIDERS. Commissions will be credited based on
premiums for additional benefits (for example, waiver of premium and term
riders) added at issue of a policy at the same rate as applied to the base
policy premium.
5. COMMISSIONS PAYABLE ON SUBSTANDARD EXTRA PREMIUMS. Commission rates payable
on extra premiums on policies, other than The Plan 3, The Plan 4 and The
Bonus Plan, will be 40% of the commission percentage rate paid on the basic
policy premium. No commissions will be paid on any temporary extra
premiums.
6. VESTING. Upon termination of the Broker-Dealer Agency Selling Agreement,
Total First Year Commissions and Total Basic Renewal Commissions on
Contracts issued after the effective date of Broker-Dealer's Contract and
before the date of termination of Broker-Dealer's appointment will be
payable in accordance with the provisions of your Contract and provided,
however, that no Total First Year Agent's Commissions or Total Basic
Renewal Commissions, including those on cost of living or any other policy
increases, will be paid after appointment has been terminated for more than
ten years. Total Lifetime Renewal Commissions will not be payable after
termination.
7. TERM CONVERSION. Any policy issued as a conversion from an individual term
policy will accrue the same commissions as a regular new policy, unless
Insurer's written rules otherwise provide. Unless converted from a YRT-250
policy in its first five policy years, any Plan 4 policy issued as a
conversion will accrue commissions only on the increase in premium over the
converted individual term policy.
8. CHANGE OF DEALER AUTHORIZATION. No compensation of any kind shall be
payable in respect of Variable Contracts following Insurer's or General
Distributor's receipt of a change of dealer authorization applicable to
such Variable contract.
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