CANADA LIFE INSURANCE COMPANY OF NEW YORK
A wholly-owned subsidiary of
The Canada Life Assurance Company
Home Office
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
(000) 000-0000
Annuity Service Xxxxxx
0000 Xxxxxx Xxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
(000) 000-0000
SELLING AGREEMENT
AGREEMENT by and between Canada Life Insurance Company of New York
(CLNY), a New York Corporation, a wholly- owned subsidiary of The Canada Life
Assurance Company of Canada; Canada Life of America Financial Services, Inc.
(CLAFS), a registered broker-dealer with the Securities and Exchange Commission
under the Securities Act of 0000 (xxx 0000 Xxx), and a member of the National
Association of Securities Dealers, Inc. (NASD) and Xxxxxxxx Financial Services
Inc. (Xxxxxxxx Financial) also a registered broker-dealer and member of the
NASD;
________________________________________________________________________________
________________________________________________________________________________
(Selling Broker-Dealer), also a registered broker-dealer and member of the
NASD; and
________________________________________________________________________________
________________________________________________________________________________
(General Agent).
I. INTRODUCTION
WHEREAS, CLNY has issued certain annuity contracts, and these
Contracts are registered under the Securities Act of 0000 (xxx 0000 Xxx) and
the Investment Company Act of 1940 (the "1940 Act") (Contracts or Contracts
collectively); and
WHEREAS, CLNY has authorized CLAFS as principal underwriter and
Xxxxxxxx Financial as promotional agent to enter into agreements, subject to
the consent of CLNY, with Selling Broker-Dealers and General Agents for the
distribution of the Contracts; and
WHEREAS, CLNY and CLAFS have entered into a Promotional Agent Distribution
Agreement with Xxxxxxxx Financial that Xxxxxxxx Financial shall secure duly
qualified Selling Broker-Dealers and General Agents to CLNY and CLAFS for the
distribution of the Contracts, refer these Selling Broker-Dealers and General
Agents to CLNY for information in obtaining licenses, registrations and
appointments to enable the registered representatives and producers of these
Selling Broker-Dealers and General Agents to sell the Contracts, and provide
educational meetings to familiarize these Selling Broker-Dealers and General
Agents and their registered representatives and producers with the provisions
and features of the Contracts; and
WHEREAS, Selling Broker-Dealer and General Agent with to participate
in the distribution of the Contracts;
NOW THEREFORE, in consideration of the premises and the mutual
covenants hereinafter contained, the parties hereto agree as follows:
II. APPOINTMENT
Subject to the terms and conditions of this Agreement, CLNY and CLAFS
hereby appoint _________________________ as Selling Broker-Dealer and
____________________________ as General Agent for the solicitation of
applications for the purchase of the Contracts, and Selling Broker-Dealer and
General Agent accept such appointment.
III. AUTHORITY AND DUTIES OF GENERAL AGENT
A. LICENSING AND APPOINTMENT OF PRODUCERS
General Agent is authorized to appoint producers to solicit sales of
the Contracts. General Agent warrants that all producers appointed by General
Agent pursuant to this Agreement shall not solicit nor aid, directly or
indirectly, in the solicitation of any application for any Contract until that
producer is fully licensed under New York insurance laws and, in connection
with securities regulated Contracts, is a fully registered representative of
Selling Broker-Dealer. General Agent shall prepare and transmit the
appropriate licensing and appointment forms to CLNY. General Agent shall pay
all fees to New York insurance regulatory authorities in connection with
obtaining necessary licenses and appointments for producers. All fees payable
to New York regulatory authorities in connection with the initial CLNY
appointment of producers who already possess necessary insurance licenses shall
be paid by CLNY. Any renewal license fees due after the initial appointment
and the current renewal, or between the last previous renewal and current
renewal; otherwise, renewal fees shall be paid by General Agent. "Production"
is defined as either a new issued Contract or an additional purchase payment on
a previously issued Contract. General Agent shall periodically provide CLNY
with a list of all producers appointed by General Agent when such producers are
licensed in New York to solicit sales of the contracts. General Agent agrees
to fulfill all requirements set forth in the General Letter of Recommendation
attached as Exhibit A in conjunction with the submission of licensing and
appointment papers for all applicants as producers submitted by General Agent.
B. REJECTION OF PRODUCER
CLAFS, or CLNY may, by written notice to General Agent, refuse to
permit any producer the right to solicit applications for the sale of any of
the Contracts, require General Agent to cause any producer to cease such
solicitations or sales and cancel the appointment of any producer.
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C. SUPERVISION OF PRODUCERS
General Agent shall supervise any producers appointed pursuant to this
Agreement to solicit sales of the Contracts and bear responsibility for all
acts and omissions of each producer. General Agent shall comply with and
exercise all responsibilities required by applicable federal and New York law
and regulations. General Agent shall not be responsible for those supervisory
responsibilities belonging to Selling Broker-Dealer under applicable securities
laws which include, but are not limited to, supervising and training producers
in their capacity as registered representatives. Nothing contained in this
Agreement or otherwise shall be deemed to make any producer appointed by
General Agent an employee or agent of CLNY, CLAFS or Xxxxxxxx Financial. If
the act or omission of a producer or any other employee of General Agent is the
proximate cause of any claim, damage or liability (including reasonable
attorneys' fees) to CLNY, CLAFS or Xxxxxxxx Financial, General Agent shall be
responsible and liable therefor.
Before a producer is permitted to sell the Contracts, General Agent,
Selling Broker-Dealer and producer shall have entered into a written agreement
pursuant to which: 1) producer is appointed a producer of General Agent and a
registered representative of Selling Broker-Dealer; 2) producer agrees that his
or selling activities relating to securities regulated contracts shall be under
the supervision and control of Selling Broker-Dealer and his or her selling
activities relating to insurance regulated Contracts shall be under the
supervision and control of General Agent; and 3) that producer's right to
continue to sell such Contracts is subject to his or continued compliance with
such agreement and any procedures, rules or regulations implemented by Selling
Broker-Dealer or General Agent.
IV. AUTHORITY AND DUTIES OF SELLING BROKER-DEALER
A. SUPERVISION OF REGISTERED REPRESENTATIVES
Selling Broker-Dealer agrees that it has full responsibility for the
training and supervision of all persons, including producers of General Agent,
associated with Selling Broker-Dealer who are engaged directly or indirectly in
the offer or sale of securities regulated Contracts. All such persons shall be
subject to the control of Selling Broker-Dealer with respect to their
securities regulated activities. Broker-Dealer shall: 1) train and supervise
producers, in their capacity as registered representatives, in the sale of
securities regulated Contracts 2) use its best efforts to cause such producers
to qualify under applicable federal and New York laws to engage in the sale of
securities regulated Contracts when required; 3) provide CLNY and CLAFS, to
their satisfaction, with evidence of producers' qualifications to sell
securities regulated Contracts; and 4) notify CLNY if any of such producers
ceases to be a registered representative of Selling Broker-Dealer. Selling
Broker-Dealer agrees that a producer must be a registered representative of
Selling Broker-Dealer before engaging in the solicitation of any securities
regulated Contracts and have entered into the written agreement more fully
described in Section III, Paragraph C. CLNY and CLAFS shall not have any
responsibility for the supervision of any registered representative or any
other employee or affiliate of Selling Broker-Dealer. If the act or omission
of a registered representative or any other employee or affiliate of Selling
Broker-Dealer is the proximate cause of any claim, damage or liability
(including reasonable attorney's fees) to CLNY, CLAFS or Xxxxxxxx Financial,
Selling Broker-Dealer shall be responsible and liable therefore.
Selling Broker-Dealer shall fully comply with the requirements of the
National Association of Securities Dealers, Inc. and of the Securities Exchange
Act of 1934 and all other applicable federal or state laws. Selling
Broker-Dealer shall establish such rules and procedures as may be necessary to
cause diligent supervision of the securities activities of the producers. Upon
request by CLNY or CLAFS, Broker-Dealer shall furnish such records as may be
necessary to establish diligent supervision.
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V. AUTHORITY AND DUTIES OF GENERAL AGENT
AND SELLING BROKER DEALER
A. CONTRACTS
The securities and insurance regulated Contracts issued by CLNY to which this
Agreement applies are listed in Schedule I which may be amended from time to
time by CLNY. CLNY, in its sole discretion, with prior or concurrent written
notice to Selling Broker-Dealer and General Agent, may suspend distribution of
any Contracts. CLNY also has the right to amend any Contracts at any time.
B. SECURING APPLICATION
Each application for a Contract shall be made on an application form
provided by CLNY, and all payments collected by Selling Broker-Dealer, General
Agent or any registered representative and producer shall be remitted promptly
in full, together with such application form and any other required
documentation, directly to CLNY at the address indicated on such application or
to such other address as may be designated. Selling Broker-Dealer and General
Agent shall review all such applications for completeness. Check or money
order in payment of such Contracts should be made payable to the order of
"Canada Life Insurance Company of New York." All applications are subject to
acceptance or rejection by CLNY in its sole discretion.
C. RECEIPT OF MONEY
All money payable in connection with any of the Contracts, whether as
premium, purchase payment or otherwise and whether paid by or on behalf of any
contract owner or anyone else having an interest in the Contracts, is the
property of CLNY and shall be transmitted immediately in accordance with the
administrative procedures of CLNY without any deduction or offset for any
reason including, but not limited to, any deduction or offset for compensation
claimed by Selling Broker-Dealer or General Agent, unless there has been a
prior arrangement for net wire transmissions between CLNY and Selling
Broker-Dealer or General Agent.
D. NOTICE OF PRODUCER'S NONCOMPLIANCE
Selling Broker-Dealer shall notify CLAFS and General Agent in the
event a producer fails or refuses to submit to the supervision of Selling
Broker-dealer or General Agent in accordance with this Agreement, the agreement
between Selling Broker-Dealer, General Agent and producer referred to in
Section III, Paragraph C and Section IV, Paragraph A, or otherwise fails to
meet the rules and standards imposed by Selling Broker-Dealer or its registered
representatives or General Agent or its producers. Selling Broker-Dealer or
General Agent shall also immediately notify such producer that he or she is no
longer authorized to sell the Contracts, and both Selling Broker-Dealer and
General Agent shall take whatever additional action may be necessary to
terminate the sales activities of such producer relating to the Contracts.
E. SALES PROMOTION, ADVERTISING AND PROSPECTUSES
No sales promotion materials, circulars, documents or any advertising
relating to any of the Contracts shall be used by Selling Broker-Dealer,
General Agent or any producers unless the specific item has been approved in
writing by CLAFS and CLNY prior to use. Selling Broker-Dealer shall be
provided by Xxxxxxxx Financial, without any expense to Selling Broker-Dealer,
with prospectuses and other material determined to be necessary for use
relating to securities regulated Contracts. Nothing in these provisions shall
prohibit Selling Broker-Dealer or General Agent from advertising life insurance
and annuities on a generic basis.
4
VI. COMPENSATION
A. COMMISSIONS AND FEES
Commissions and fees payable to Selling Broker-Dealer or General Agent
in connection with the securities regulated Contracts shall be paid on behalf
of CLAFS by CLNY to Selling Broker-Dealer or General Agent, or as otherwise
directed or required by law. Commissions and fees payable to Selling
Broker-Dealer, General Agent or producer in connection with the insurance
regulated Contracts shall be paid by CLNY to Selling Broker-Dealer or General
Agent, or as otherwise directed or required by law. Selling Broker-Dealer or
General Agent, as applicable, shall pay producer. CLAFS will provide Selling
Broker-Dealer and General Agent with a copy of CLNY's current Schedule I.
Unless otherwise provided in Schedule I, commissions will be paid as a
percentage of premiums or purchase payments (collectively, Payments) received
in cash or other legal tender and accepted by CLNY on applications obtained by
the various producers appointed by General Agent hereunder. Upon termination
of this Agreement, all compensation to the Selling Broker-Dealer and General
Agent hereunder shall cease. However, Selling Broker-Dealer and General Agent
shall be entitled to receive compensation for all new and additional premium
payments which are in process at the time of termination, and shall continue to
be liable for any chargebacks pursuant to the provisions of said Contracts,
Commissions and Fee Schedule, or for any other amounts advanced by or otherwise
due CLAFS or CLNY hereunder.
B. TIME OF PAYMENT
CLNY will pay any commissions due General Agent hereunder no later
than within fifteen (15) days after the end of the calendar month in which
Payments upon which such commission is based are accepted by CLNY.
C. AMENDMENT OF SCHEDULES
CLAFS, CLNY and Xxxxxxxx Financial may, upon at least ten (10) days'
prior written notice to Selling Broker- Dealer and General Agent, change the
Contracts, Commissions and Fee Schedule by written amendment of such Schedule.
Any such change shall apply to compensation due on applications received by
CLNY after the effective date of such notice.
D. PROHIBITION AGAINST REBATES
CLAFS or CLNY may terminate this Agreement if Selling Broker-Dealer,
General Agent or any producer of General Agent rebates, offers to rebate or
withholds any part of any Payments on the Contracts. If Selling Broker-Dealer,
General Agent or any producer of General Agent shall at any time induce or
endeavor to induce any owner of any Contract issued hereunder to discontinue
payments or to relinquish any such Contract, except under circumstances where
there is reasonable grounds for believing the Contract is not suitable for such
person, any and all compensation due Selling Broker-Dealer or General Agent
hereunder shall cease and terminate.
E. INDEBTEDNESS AND RIGHT OF SET OFF
Nothing contained in this Agreement shall be construed as giving
Selling Broker-Dealer or General Agent the right to issue any indebtedness on
behalf of CLNY, CLAFS or Xxxxxxxx Financial. Selling Broker-Dealer and General
Agent hereby authorize CLNY as agent of CLAFS to set off liabilities of Selling
Broker-Dealer and General Agent to CLNY, CLAFS or Xxxxxxxx Financial against
any and all amounts otherwise payable to Selling Broker-Dealer or General
Agent.
5
VII. GENERAL PROVISIONS
A. WAIVER
Failure of any 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 to be, or shall
constitute, a waiver of any other provisions, whether or not similar, nor shall
any waiver constitute a continuing waiver.
B. LIMITATIONS
No party other than CLNY shall have the authority to: 1)make, alter,
or discharge any Contract issued by CLNY; 2)waive any forfeiture or extend the
time of making any Payments; or 3) enter into any proceeding in a court of law
or before a regulatory agency in the name of or on behalf of CLNY. No party
other than CLAFS and Xxxxxxxx Financial, respectively, shall have the authority
to: 1) alter the forms or substitute other forms in place of those prescribed
by CLAFS or Xxxxxxxx Financial; or 2) enter into any proceeding in a court of
law or before a regulatory agency in the name of or on behalf of CLAFS or
Xxxxxxxx Financial.
C. FIDELITY BOND AND OTHER LIABILITY COVERAGE
Selling Broker-Dealer and General Agent hereby assign any proceeds
received from a fidelity bonding company, error and omissions or other
liability coverage to CLNY, CLAFS or Xxxxxxxx Financial, to the extent of their
loss due to activities covered by the bond, policy or other liability coverage.
If there is any deficiency amount, whether due to a deductible or otherwise,
Selling Broker-Dealer or General Agent shall promptly pay such amount on
demand. Selling Broker-Dealer and General Agent hereby indemnify and hold
harmless CLNY, CLAFS and Xxxxxxxx Financial from any such deficiency and from
the costs of collection thereof (including reasonable attorneys' fees).
D. BINDING EFFECT
This Agreement shall be binding on and shall inure to the benefit of
the parties to it and their respective successors and assigns provided that
neither Selling Broker-Dealer nor General Agent may assign this Agreement or
any rights or obligations hereunder without the prior written consent of CLNY
and CLAFS.
E. REGULATIONS
All parties agree to observe and comply with the existing laws and
rules or regulations of applicable local, state, or federal regulatory
authorities and with those which may be enacted or adopted during the term of
this Agreement regulating the business contemplated hereby in New York where
the business described herein is to be transacted. Selling Broker-Dealer and
General Agent shall promptly furnish to CLNY and CLAFS or their agent, any
reports and information which the other party may reasonably request for the
purpose of meeting their reporting and recordkeeping requirements under the
insurance laws of New York, and under federal and state securities laws and
rules of the NASD.
F. INDEMNIFICATION
1) CLAFS agrees to indemnify and hold harmless Selling Broker-Dealer
and General Agent, their officers, directors and employees, against any and all
losses, claims, damages or liabilities to which they may become subject under
the 1933 Act, the 1934 Act, or other federal or state statutory law or
regulations, at common law or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of a material fact
or any omission or alleged omission to state a material fact required to be
stated or necessary to make the statements made not misleading in the
registration statement for the
6
Contracts or any prospectus included as a part thereof, as from time to time
amended and supplemented. Xxxxxxxx Financial agrees to indemnify and hold
harmless Selling Broker-Dealer and General Agent, their officers, directors and
employees, against any and all losses, claims, damages or liabilities to which
they may become subject under the 1933 Act, 1934 Act, or other federal or state
statutory law or regulations, at common law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue statement of a
material fact or any omission or alleged omission to state a material fact
required to be stated or necessary to make the statements made not misleading
in the registration statement for the shares of Xxxxxxxx Portfolios Inc. (the
"Fund") filed pursuant to the 1933 Act or any prospectus included as part
thereof, as from time to time amended and supplemented.
2) Selling Broker-Dealer and General Agent agree to indemnify and hold
harmless CLAFS, CLNY and Xxxxxxxx Financial, their affiliates and their
officers, directors, and employees, against any and all losses, claims damages
or liabilities to which they may become subject under the 1933 Act, the 1934
Act or other federal or state statutory law or regulation, at common law or
otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon: a) any oral or written
misrepresentation by Selling Broker-Dealer or General Agent or their officers,
directors, employees or agents unless such misrepresentation is contained in
the registration statement for the Contracts or Fund Shares, any prospectus
included as a part thereof, as from time to time amended and supplemented, or
any advertisement or sales literature approved in writing by CLNY and CLAFS
pursuant to Section V, Paragraph E, of this Agreement, or b) the failure of
Selling Broker-Dealer or General Agent or their officers, directors, employees
or agents to comply with any applicable provisions of this Agreement.
G. NOTICES
All notices or communications shall be sent to the address shown in
this Agreement or to such other address as the party may request, by giving
written notice to the other parties.
H. GOVERNING LAW
This Agreement shall be construed in accordance with and governed by
the laws of the State of New York.
I. AMENDMENT OF AGREEMENT
CLNY reserves the right to amend this Agreement in writing at any
time. The submission of an application for the Contracts by Selling
Broker-Dealer or General Agent five or more business days after notice of any
such amendment has been sent to the other parties shall constitute agreement to
such amendments.
J. GENERAL AGENT AS BROKER-DEALER
If Selling Broker-Dealer and General Agent are the same person or
legal entity, such person or legal entity shall have the rights and obligations
hereunder of both Selling Broker-Dealer and General Agent and this Agreement
shall be binding and enforceable by and against such person or legal entity in
both capacities.
K. COMPLAINTS AND INVESTIGATIONS
General Agent, Selling Broker-Dealer, CLNY, and CLAFS and Xxxxxxxx
Financial agree to cooperate fully in the event of any regulatory
investigation, inquiry or proceeding, judicial proceeding or customer complaint
involving the Contracts. In furtherance of the foregoing: 1) each party will
notify all other parties of any such investigation, inquiry, proceeding or
complaint involving the Contracts or affecting the ability of a party to
perform pursuant to this Agreement within 10 days of obtaining knowledge of the
same; and 2) in the case of a customer complaint, the involved parties will
consult with each other prior to sending any written response with respect to
such complaint.
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L. TERMINATION
This Agreement may be terminated, without cause, by any party upon
thirty (30) days' prior written notice; and may be terminated, for cause, by
any party immediately; and shall be terminated if CLAFS and Xxxxxxxx Financial
or Selling Broker-Dealer shall cease to be a registered broker-dealer under the
Securities Exchange Act of 1934 and a member of the NASD.
M. ADDRESS FOR NOTICES
Address for Canada Life Insurance Company of New York
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Address for Canada Life of America Financial Services, Inc.
0000 Xxxxxx Xxxxx Xxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Address for Xxxxxxxx Financial
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Address For Selling Broker-Dealer Address for General Agent
______________________________ ___________________________
______________________________ ___________________________
______________________________ ___________________________
This Agreement shall be effective upon execution by General Agent and
Selling Broker-Dealer, and delivery of the Agreement to CLNY or CLAFS.
Dated:________________________________
Canada Life of America, Financial Xxxxxxxx Financial Services, Inc.
Services, Inc.
By: /s/ Xxxxx X'Xxxxx III President By: /s/ Xxxxxxx X. Xxxxxxx President
--------------------------------- --------------------------------
Xxxxx X'Xxxxx III Xxxxxxx X. Xxxxxxx
Canada Life Insurance Company of _____________________________________
New York
(General Agent (Please Print)
By: /s/ D. Xxxxx Xxxxx President
---------------------------------
D. Xxxxx Xxxxx
By: __________________________________
(Name and Title - Signature)
______________________________________
(Selling Broker-Dealer Please Print)
By: __________________________________
(Name and Title - Signature)
8
EXHIBIT A
GENERAL LETTER OF RECOMMENDATION
General Agent hereby certifies to Canada Life Insurance Company of New
York (CLNY) that all of the following requirements will be fulfilled in
conjunction with the submission of licensing/appointment papers for all
applicants as producers submitted by General Agent. General Agent will, upon
request, forward proof of compliance with the same to CLNY in a timely manner.
1. We have made a thorough and diligent inquiry and investigation
relative to each applicant's identity, residence and business
reputation and declare that each applicant is personally known to us,
has been examined by us, is known to be of good moral character, has a
good business reputation, is reliable, is financially responsible and
is worthy of a license. Each individual is trustworthy, competent and
qualified to act as an agent for CLNY to hold himself out in good
faith to the general public. We vouch for each applicant.
2. We have on file a U-4 Form which was completed by each applicant. We
have fulfilled all the necessary investigative requirements for the
registration of each applicant as a registered representative through
our NASD member firm, and each applicant is presently registered as an
NASD registered representative.
The above information in our files indicates no fact or condition
which would disqualify the applicant from receiving a license and all
the findings of all investigative information is favorable.
3. We certify that all educational requirements have been met for the
specific state in which each applicant is requesting a license, and
that all such persons have fulfilled the appropriate examination,
education and training requirements.
4. If the applicant is required to submit his or her picture and
signature in the state in which he or she is applying for a license,
we certify that those items forwarded to CLNY are those of the
applicant.
5. We hereby warrant that the applicant is not applying for a license
with CLNY in order to place insurance chiefly and solely on his or her
life or property, lives or property of his or her relatives, or
property or liability of his or her associates.
6. We certify that each applicant will receive close and adequate
supervision, and that we will make inspection when needed of any or
all risks written by these applicants, to the end that the insurance
interest of the public will be property protected.
7. We will not permit any applicant to transact insurance as an agent
until duly licensed therefor. No applicants have been given a
contract or furnished supplies, nor have any applicants been permitted
to write, solicit business, or act as an agent in any capacity, and
they will not be so permitted until the certificate of authority or
license applied for is received.
8. We certify that General Agent, Selling Broker-Dealer and applicant
shall have entered into a written agreement pursuant to which a)
applicant is appointed a producer of General Agent and a registered
representative of Selling Broker-Dealer; b) applicant agrees that his
or her selling activities relating to securities regulated contracts
shall be under the supervision and control of Selling Broker-Dealer
and his or her selling activities relating to insurance regulated
Contracts shall be under the supervision and control of General Agent;
and c) that applicant's right to continue to sell such Contracts is
subject to his or her continued compliance with such agreement and any
procedures, rules or regulations implemented by Selling Broker-Dealer
or General Agent.
SCHEDULE 1
STATEMENT OF COMPENSATION
AS OF APRIL, 1997
Subject to the terms and conditions of this Agreement, CLAFS will pay to
Selling Firm compensation based upon the premiums and purchase payments
received from such Selling Firm, in accordance with applicable law, in the
percentages shown below: (Form 3099)
FOR PRE-AUTHORIZED CHECK CASES - OWNER ISSUE AGE 0-80
POLICY YEARS BROKER-DEALER CONCESSION
1-10 6.5%
11-15 6.5%
16+ 1/5%
FOR OTHER THAN PRE-AUTHORIZED CHECK CASES - OWNER ISSUE AGE 0-80
POLICY YEARS BROKER- DEALER CONCESSION
1-10 6.5%
11-15 6.5%
16+ 1.5%
...............................................................................
FOR PRE-AUTHORIZED CHECK CASES - OWNER ISSUE AGE 81-84
POLICY YEARS BROKER-DEALER CONCESSION
1-10 3.0%
11-15 3.0%
16+ 1.5%
FOR OTHER THAN PRE-AUTHORIZED CHECK CASES - OWNER ISSUE AGE 81-84
POLICY YEARS BROKER- DEALER CONCESSION
1-10 3.0%
11-15 3.0%
16+ 1.5%
Service Fee at Annuitization if "internal" annuity rates 3.0% if payout = or (greater than) 10 yrs or a life annuity
are used. Service Fee is only paid on annuitized pro- and amount $0-1 million.
ceeds that are past any applicable surrender charge/ 1.25% if amount over $1 million.
period.
2.0% if payout (less than) 10 yrs. & not a life annuity
and amount $0-1 million.
1.25% if amount over $1 million.
Page 2
Chargebacks; (i) In the event a contract is returned to CLNY pursuant to a
"Free Look" provision, the full B/D concession paid thereon or retained by
Selling Firm pursuant to net submission of premiumm or purchased payment shall
be charged back to Selling Firm. (ii) Should any premium or purchase payment
on any Contract issued by CLNY be refunded for any reason, Selling Firm shall
repay or return B/D Concession received by it with respect to such premium or
purchase payment. (iii) If a Contract was not issued as a result of failure by
Selling Firm to submit to CLNY an application sufficient to satisfy state
insurance laws or CLNY eligibility requirements then amounts paid to Selling
Firm shall be returned or repaid. (iv) If a Contract was tendered to CLNY for
redemption within ten business days of the date of activity then amounts paid
to Selling Firm shall be returned or repaid. (v) For full or partial
withdrawals from the Contract other than those made pursuant to a systematic
and/or free withdrawal privilege: 100% of all B/D Concessions paid to Selling
Firms on amount(s) withdrawn within 6 months of such amount(s) being paid to
CLNY and 50% of all B/D Concessions paid to Selling Firm on amount(s) withdrawn
from 7-12 months of such amount(s) being paid to CLNY shall be returned or
repaid. (vi) For annuitizations within 6 months of issue, 100% of all B/D
Concession paid to Selling Firm will be returned or repaid, offset by an amount
from 1.25% to 3%, depending on the amount and duration of payout; and for
annuitizations from months 7-12 after issue, 50% of all B/D Concession paid to
Selling Firm shall be returned or repaid, offset by an amount from 1.25% to 3%,
depending on the amount and duration of the payout. For any premium or
purchase payment that has been in the Contract for more than 12 months, there
shall be no charge back on B/D Concession. To the extent permitted by law, the
amount so charged back may, at the option of CLNY, be set off against B/D
Concession otherwise due to Selling Firm. In addition, such other compensation
will be payable as are from time to time agreed by the parties to the foregoing
Agreement and which is in accordance with applicable law, and will be added to
this Schedule.
EXPENSE ALLOWANCE
Total compensation may consist of agent commissions, override and/or expense
allowance.
If expense allowances are payable, they are subject to the following conditions
and limitations:
1. Lapses and surrenders in the first year, and any returns of first year
premium made by CLNY, will result in proportionate chargebacks of any
expense allowances paid for said premiums.
2. No expense allowance will be used to effect compensation in excess of the
limits of Section 4228 of the Insurance Law of New York.
3. No expense allowance will be due or payable after the termination of this
Contract except for first year expense allowances for policies written
prior to such termination.
4. Notwithstanding any of the other terms and conditions governing payment of
expense allowances in this Contract, and to conform with the requirements
of Section 4228 of the Insurance Law and the applicable regulations
resulting therefrom and other governing sections of the law, the following
will apply:
a. The maximum expense allowance payments shall be such that when added
to first year commissions, exclusive of overriding commissions not
exceeding 5% of first year premiums, the total shall not exceed 91% of
first year premiums for ordinary life and annuity policies and
contracts other than single premium policies and contracts.
b. The maximum expense allowance shall not exceed 100% of the commissions
payable on single premium policies and contracts, or the overall 7% of
premium limit.
In monitoring the maximum allowances rules in this paragraph 4, CLNY will apply
those in a. and b., above, on a "per-policy" basis.
