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EXHIBIT 1(b)
INVESTORS BROKERAGE SERVICES, INC.
SELLING GROUP AGREEMENT
THIS AGREEMENT ("Agreement") is made by and between Investors Brokerage
Services, Inc. ("IBS") and Broker-Dealer.
RECITALS:
A. IBS, pursuant to the provisions of Distribution Agreements
("Distribution Agreements") between it and Xxxxxx Investors Life Insurance
Company ("KILICO") and between it and Federal Xxxxxx Life Assurance Company
("FKLA"), acts as the principal underwriter of certain variable annuity
contracts and variable life insurance policies (the "variable products" or
"Contracts") issued by KILICO and FKLA. Such Contracts, and the investment
options available thereunder, are identified in Schedule 1 to this Agreement at
the time that this Agreement is executed, and such other Contracts that may be
added to Schedule 1 from time to time in accordance with Section 1.5 of this
Agreement. IBS desires that Broker-Dealer distribute such variable products in
those states or jurisdictions in which Broker-Dealer, IBS, KILICO, FKLA and the
Contracts are appropriately licensed, qualified or approved, and Broker-Dealer
desires to sell such Contracts, through its agents in such states or
jurisdictions, on the terms and conditions set forth hereinafter. KILICO and
FKLA have authorized IBS to enter into separate written agreements with
broker-dealers pursuant to which such broker-dealers would be authorized to
participate in the distribution of the Contracts and would agree to use their
best efforts to solicit applications for the Contracts to the general public.
B. KILICO and FKLA, pursuant to General Agent Agreements, have
authorized Broker-Dealer or an affiliate to act as a general agent ("General
Agent") for the solicitation of applications for the Contracts and to engage in
the distribution activities contemplated by this Agreement and such General
Agent Agreements.
C. The parties to this Agreement desire that Broker-Dealer be
authorized to solicit applications for the sale of the Contracts to the general
public subject to the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and of the mutual
promises and covenants hereinafter set forth, the parties agree as follows:
Section 1: Representations and Warranties; Authorizations
1.1 Broker-Dealer agrees to use its best efforts on behalf of IBS while
performing the functions set forth herein. Broker-Dealer shall be free to
exercise its own judgment as to whom to solicit and the time, place, and manner
of solicitation. Broker-Dealer shall pay all expenses incurred by it hereunder
and shall comply with all applicable federal and state laws, ordinances and
regulations relating thereto.
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1.2 Broker-Dealer is authorized, except as hereinafter specifically provided,
to cause its representatives ("Registered Representatives") to sell such
Contracts in the states and jurisdictions in which Broker-Dealer and its
Registered Representatives are appropriately licensed, registered or otherwise
qualified and in which the Contracts are duly authorized. Broker-Dealer shall
not have the authority nor shall it grant such authority to any of its
Registered Representatives, on behalf of IBS, and KILICO and/or FKLA: to make,
alter or discharge any Contract or other contract entered into pursuant to a
Contract; to waive any Contract's forfeiture provisions; to extend the time of
paying any premiums; or to receive any monies or premiums from applicants for
or purchasers of the Contracts (except for the sole purpose of forwarding
monies or premiums to KILICO or FKLA). IBS, in its sole discretion, may reject
any application for a Contract submitted to it by the Broker-Dealer or any of
its Registered Representatives.
1.3 IBS, subject to the terms and conditions contained herein, hereby
authorizes Broker-Dealer as an independent contractor, on a non-exclusive
basis, to make sales of such Contracts for which IBS acts as distributor.
Broker-Dealer agrees to direct the sales activities of its Registered
Representatives and to enforce written supervisory procedures to assure strict
compliance with applicable rules and regulations under the Securities Exchange
Act of 1934 ("1934 Act"), the National Association of Securities Dealers, Inc.
("NASD") rules, and other applicable federal and state statutes and
regulations.
1.4 Nothing herein contained shall constitute Broker-Dealer or any of its
Registered Representatives as employees of IBS, KILICO or FKLA in connection
with the solicitation of applications for the Contracts.
1.5 Schedule 1 to this Agreement may be amended by IBS at its sole discretion
from time to time to include other Contracts (or investment options)
distributed by IBS pursuant to the Distribution Agreements or other
distribution agreements with KILICO and FKLA, or to delete Contracts (or
investment options) from the Schedule. The provisions of this Agreement shall
be equally applicable to each Contract listed on Schedule 1 unless the context
otherwise requires.
Section 2: Representations and Warranties:
Registration, Licensing and Compliance
2.1 Broker-Dealer represents, warrants and covenants that:
a. It is and will remain at all times during the terms
of this Agreement a member in good standing of the NASD and a
broker-dealer duly registered with the Securities and
Exchange Commission ("SEC") under the 1934 Act and licensed
as a broker-dealer in each state or other jurisdiction in
which Broker-Dealer intends to perform its functions and
fulfill its obligations under this Agreement.
b. It is in compliance, and during the term of this
Agreement, will remain in compliance, with all applicable
federal and state security laws and regulations and the
requirements of the NASD and any applicable securities
exchanges of which it is a member.
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c. It is a corporation organized, existing and in good
standing under applicable state law and is qualified to do
business as a corporation in those states or jurisdictions
where it is or will be doing business.
d. Only Registered Representatives of Broker-Dealer who
are agents of KILICO and FKLA, and who are licensed,
registered, or otherwise qualified to offer and sell the
variable products, may do so under this Agreement and as
permitted under the applicable insurance laws of such state
or jurisdiction under which the Registered Representatives
are authorized to perform their activities.
e. It is in compliance with all applicable insurance
laws and regulations, including without limitation state
insurance laws and regulations imposing insurance licensing
requirements.
f. It shall carry out its sales and administrative
obligations under this Agreement in continued compliance with
federal and state laws and regulations, including those
governing securities and/or insurance-related activities or
transactions, as applicable.
g. It has blanket bond insurance coverage.
Broker-Dealer has the affirmative duty to maintain its
blanket bond insurance coverage. Broker-Dealer will notify
IBS immediately in the event a determination is made to
cancel, terminate or substantially modify its blanket bond
insurance coverage.
2.2 Broker-Dealer will be responsible for the training, supervision and
control of its Registered Representatives engaged in the offer and sale of the
Contracts and will supervise strict compliance with applicable federal and
state securities laws and NASD rules. IBS shall have no responsibility in
connection with such program of supervision and compliance.
2.3 If General Agent is an Affiliate of Broker-Dealer as reflected in Recital
B. to this Agreement, then by engaging in the distribution activities
contemplated by this Agreement, Broker-Dealer represents and warrants either
that:
a. Broker-Dealer
(i) Has obtained a letter from the Staff of the
SEC advising Broker-Dealer that the Staff will not
recommend enforcement action if General Agent is not
registered as a broker-dealer with the SEC; or
(ii) Is relying upon a no-action letter issued by
the Staff of the SEC at the request of a broker-dealer
that, also, was a licensed insurance agent engaged in
distribution activities similar to those contemplated
by this Agreement, and where the Staff did not
recommend enforcement action if the insurance agent was
not registered as a broker-dealer with the SEC; and
(iii) Is complying and will continue to comply with the
conditions set forth in such letters at all times while
this Agreement is in effect; or
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b. that at the time that this Agreement becomes
effective and during the term of this Agreement
(I) General Agent is wholly-owned by Broker-Dealer
or an affiliated person of Broker-Dealer or is
wholly-owned by one or more associated persons of
Broker-Dealer;
(ii) General Agent and its personnel will be "associated
persons" of Broker-Dealer within the meaning of Section
3(a)(18) of the 1934 Act;
(iii) General Agent will engage in the offer or sale of the
Contracts only through persons who are also Registered
Representatives of Broker-Dealer;
(iv) General Agent will not receive or handle customer funds
or securities;
(v) Broker-Dealer will be responsible for the training,
supervision and control of its Registered
Representatives engaged in the offer or sale of the
Contracts on behalf of General Agent, as required under
the 1934 Act, the NASD rules and other applicable
federal and state statutes and regulations, and will
also be responsible for the supervision and control of
any of its associated persons who are owners,
directors, or executive officers of General Agent;
(vi) Broker-Dealer will, in the offer and sale of the
Contracts by it or General Agent, comply with all
applicable requirements of the 1934 Act and the NASD,
including the requirement to maintain and preserve
books and records under Section 17(a) of the 1934 Act
and the rules thereunder; and
(vii) Commissions and fees relating to the Contracts will be
reflected in the quarterly FOCUS reports and the fee
assessment reports filed by Broker-Dealer with the NASD.
2.4 Broker-Dealer shall notify IBS and KILICO and FKLA immediately in writing
if Broker-Dealer fails to comply with any of the applicable provisions set
forth above.
2.5 IBS represents and warrants that all Contracts are legally issued,
registered and filed as required by applicable federal securities and state
insurance laws.
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Section 3: Sales Materials
3.1 Broker-Dealer shall submit to IBS, for written approval in advance of
use, all promotional sales, and advertising material and signs involving the
use of IBS's, KILICO's and FKLA's name and/or pertaining to the sale of any
Contract.
3.2 IBS will file such materials or will cause such materials to be filed
with the SEC, the NASD, and with any state securities regulatory authorities,
as appropriate.
Section 4: Compensation
4.1 Except as otherwise stated herein, Broker-Dealer shall be entitled to
commissions with respect to sales of such Contracts it shall make in accordance
with the Schedule of Commissions under the General Agent Agreements with KILICO
and FKLA. Commissions are payable by KILICO and FKLA through IBS or as
otherwise permitted by law or regulations. Any obligation of IBS to pay such
commissions will occur only following receipt of such amounts by IBS from
KILICO or FKLA.
Section 5: Term and Exclusivity of Agreement
5.1 No relationship of principal and agent or partnership or joint venture
between the parties hereto is intended to be established and neither party
shall hold itself out as the agent, partner or joint venturer of or with the
other party in any respect whatsoever. Except for this Agreement and the
General Agent Agreement, no other legal relationship is intended between the
parties.
5.2 This Agreement may be terminated at any time by either party upon thirty
(30) days written notice to the other, and may be terminated immediately by IBS
for cause. For purposes of this Section, "cause" shall mean failure to return
money to clients where appropriate, failure to account for any money received
from or on behalf of IBS, any fraud, misrepresentation or dishonesty in any
relationship with IBS, its affiliates, or any past, present or proposed client,
violation of any federal or state law or regulation, or violation of any of the
terms of this Agreement.
5.3 Notice of termination shall be deemed to be given on the day mailed or
delivered by hand to an officer of either party. If mailed to IBS, such notice
shall be addressed to the principal office of IBS, and if mailed to the
Broker-Dealer, shall be addressed to the last known address as shown on the
records of IBS.
Section 6: Complaints and Investigations
6.1 Broker-Dealer shall cooperate fully in any securities or insurance
regulatory investigation or proceeding or judicial proceeding with respect to
IBS, KILICO and FKLA, and/or Broker-Dealer and its Registered Representatives
or any Affiliate, to the extent that such investigation or proceeding is in
connection with the Contracts marketed under this Agreement.
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Section 7: Assignment
7.1 Broker-Dealer may not assign this Agreement without the prior written
approval of IBS.
7.2 This Agreement is exclusively for and shall inure to the benefit of the
parties hereto, their respective heirs, legal representatives, successors and
assigns and shall not be deemed to create any rights for the benefit of third
parities.
Section 8: Confidentiality
8.1 Each party will keep confidential information it may acquire as a result
of this Agreement regarding IBS, its affiliates' and subsidiaries' affairs,
including any customer list or other propriety information that it may acquire
in the performance of this Agreement, and shall not use such customer list or
information without the prior written consent of the other party which
requirement shall survive the termination of this Agreement.
Section 9: Modification of Agreement
9.1 This Agreement supersedes all prior agreements, either oral or written,
between the parties relating to the Contracts and, except for any amendment of
Schedule 1 pursuant to the terms of Section 1.5 hereof or of the Schedule of
Commissions pursuant to the terms of Section 4 hereof, may not be modified in
any way unless by written agreement signed by all of the parties.
Section 10: Indemnification
10.1 Broker-Dealer shall be responsible and liable for any damages arising
out of the acts or omissions of Broker-Dealer, its Registered Representatives,
and/or its employees and does hereby agree to indemnify and hold IBS harmless
against any loss or expense arising out of any of its Registered
Representatives, any Affiliate and/or employees failure to carry out fully and
without negligence the duties and responsibilities assigned to it herein.
10.2 If any action or proceeding shall be brought against Broker-Dealer
relating to a Contract sold pursuant to this Agreement, Broker-Dealer shall
give prompt written notice to IBS.
10.3 In the event of any dispute with a Contract owner, IBS shall have the
right to take such action as IBS may in its sole discretion deem necessary to
promptly effect a mitigation of damages or limitation of losses without
obtaining the prior consent of Broker-Dealer and without waiving or electing to
relinquish any rights or remedies IBS may have against Broker-Dealer.
10.4 IBS shall have the right to settle with any Contract owner engaged in a
dispute with IBS or Broker-Dealer without the prior consent of Broker-Dealer
and without waiving or electing to relinquish any rights or remedies IBS may
have against Broker-Dealer.
10.5 The indemnification provisions of this Agreement shall remain operative
and in full force and effect, regardless of the termination of this Agreement
and shall survive any such termination.
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10.6 Without limiting the foregoing indemnities, IBS and Broker-Dealer each
agree to indemnify and hold harmless the other against any breach of
representation, warranty or covenant herein by the indemnifying party.
Section 11: Right, Remedies, etc. are Cumulative
11.1 The rights, remedies and obligations contained in this Agreement are
cumulative and are in addition to any and all rights, remedies and obligations,
at law or in equity, which the parties hereto are entitled to under state and
federal laws. Failure of either party to insist upon strict compliance with
any of the conditions of this Agreement shall not be construed as a waiver of
any of the conditions, but the same shall remain in full force and effect. No
waiver of any of the provisions of this Agreement shall be deemed, or shall
constitute a waiver of any other provisions, whether or not similar, nor shall
any waiver constitute a continuing waiver.
Section 12: Notices
12.1 All notices hereunder are to be made in writing and shall be either hand
delivered or transmitted by registered or certified United States mail with
return receipt requested to the principal office of the party and shall be
effective upon delivery, except as otherwise provided in Section 5.2 of this
Agreement.
Section 13: Interpretation, Jurisdiction, etc.
13.1 This Agreement constitutes the whole agreement between the parties
hereto with respect to the subject matter hereof, and supersedes all prior oral
or written understandings, agreements or negotiations between the parties with
respect to the subject matter hereof. No prior writings by or between the
parties hereto with respect to the subject matter hereof shall be used by
either party in connection with the interpretation of any provisions of this
Agreement.
13.2 This Agreement is made in the State of Illinois, and all questions
concerning its validity, construction or otherwise shall be determined under
the laws of Illinois without giving effect to principles of conflict of laws.
Section 14: Headings
14.1 The headings in this Agreement are included for convenience of reference
only and in no way define or delineate any of the provisions hereof or
otherwise affect their construction or effect.
Section 15: Counterparts
15.1 This Agreement may be executed in two or more counterparts, each of
which taken together shall constitute one and the same instrument.
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Section 16: Severability
16.1 This is a severable Agreement. In the event that any provisions
of this Agreement would require a party to take action prohibited by
applicable federal or state law or prohibit a party from taking action
required by applicable federal or state law, then it is the intention of
the parties hereto that such provisions shall be enforced to the extent
permitted under the law, and, in any event, that all other provisions of
this Agreement shall remain valid and duly enforceable as if the provision
at issue had never been a part hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year indicated below.
INVESTORS BROKERAGE
SERVICES, INC. -----------------
("Broker-Dealer")
BY BY
--------------------------- ------------------------
Print Name Print Name
-------------------- -----------------
Title Title
------------------------- ---------------------
Date Date
-------------------------- ---------------------
April 9, 1996
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Schedule 1
to
INVESTORS BROKERAGE SERVICES, INC
SELLING GROUP AGREEMENT
Effective May 1, 1996
XXXXXX INVESTORS LIFE INSURANCE COMPANY
CONTRACTS PRODUCT TYPE
Xxxxxx ADVANTAGE III Flexible Premium, Fixed and
Variable Deferred Annuity
Xxxxxx PASSPORT Variable and Market Value -
Adjusted Deferred Annuity
Xxxxxx SELECT Variable Life
SCHED 1 8/96
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Schedule 1
to
INVESTORS BROKERAGE SERVICES, INC
SELLING GROUP AGREEMENT
Effective May 1, 1996
XXXXXX INVESTORS LIFE INSURANCE COMPANY
CONTRACTS PRODUCT TYPE
Xxxxxx ADVANTAGE III Flexible Premium, Fixed and
Variable Annuity
SCHED1 8/96 B
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SCHEDULE 1
to
INVESTORS BROKERAGE SERVICES, INC.
SELLING GROUP AGREEMENT
EFFECTIVE SEPTEMBER 15, 1995
CONTRACTS INVESTMENT OPTIONS
Xxxxxx Passport Xxxxxx Investors Fund
All Portfolios
Xxxxxx Select Xxxxxx Investors Fund
Money Market Portfolio
Total Return Portfolio
High Yield Portfolio
Equity Portfolio
Government Securities Portfolio
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Schedule 1
to:
INVESTORS BROKERAGE SERVICES, INC.
SELLING GROUP AGREEMENT
Effective March 1, 1997
CONTRACT
Xxxxxx Quick VUL, Policy Form S-4050-A
