CONSOLIDATED UNDERWRITING AND
ADMINISTRATIVE SERVICES AGREEMENT
This CONSOLIDATED UNDERWRITING AND ADMINISTRATIVE SERVICES AGREEMENT is
effective April 30, 2010 between and among Commonwealth Annuity and Life
Insurance Commonwealth Annuity, a Massachusetts corporation ("Commonwealth
Annuity"), on its own behalf and on behalf of each of its separate investment
accounts (collectively, the "Accounts") as set forth in Appendix A hereto,
and Epoch Securities, Inc., a Delaware corporation ("Epoch").
WHEREAS, Commonwealth Annuity and the Accounts issue certain variable annuity
contracts or variable insurance policies (the "Contracts") which may be
deemed to be securities under the Securities Act of 1933 (the "1933 Act"),
and the laws of some states;
WHEREAS, Epoch, an affiliate of Commonwealth Annuity, is registered as a
broker-dealer with the Securities and Exchange Commission ("SEC") under the
Securities Exchange Act of 1934 (the "1934 Act") and is a member of the
Financial Industry Regulatory Authority ("FINRA," formerly known as the
National Association of Securities Dealers, Inc.).
WHEREAS, the parties desire Epoch to act as principal underwriter for the
Accounts set forth in Exhibit A, as may be amended from time-to-time by
mutual consent of the parties, to enter into selling agreements with
independent broker-dealers in connection with the sale of the contract, and
to assume full responsibility for the securities activities of all "persons
associated" (as that term is defined in Section 3(a)(18) of the 0000 Xxx)
with Epoch and engaged directly or indirectly in the variable contract
operations (the "associated persons");
WHEREAS, the parties desire to have Commonwealth Annuity perform certain
administrative services on behalf of Epoch in connection with the sale and
servicing of the contracts;
WHEREAS, the parties previously entered into Underwriting and Administrative
Services Agreements dated January 22, 2008 and May 1, 2008, respectively, as
amended from time-to-time (collectively, the "Previous Agreements"), which
were substantially identical except for the Appendix A listings of Separate
Accounts, Variable Annuity Contracts, and Variable Life Contracts; and
WHEREAS, for ease of administration and convenience, the parties wish to
merge and consolidate said Previous Agreements into this single Consolidated
Underwriting and Administrative Services Agreement (the "Agreement"), thereby
replacing the Previous Agreements;
NOW, THEREFORE, in consideration of the covenants and mutual promises of the
parties made to each other, it is hereby covenanted and agreed as follows:
1. Commonwealth Annuity hereby appoints Epoch as the principal underwriter of
the Contracts. Epoch will promote such Variable Contracts in those states in
which Commonwealth Annuity has variable contract authority and in which the
Contracts are qualified for sale under applicable state law, as Commonwealth
Annuity shall so notify Epoch from time to time. Epoch shall suspend its
efforts to effectuate sales of the Contracts in such jurisdictions as
Commonwealth Annuity may request at any time.
2. Epoch shall assume responsibility for the activities of all persons
engaged directly or indirectly in the promotion of the solicitation of the
Contracts, including but not limited to the continued compliance by itself
and its associated persons with the FINRA Rules of Practice and Federal and
state securities laws, to the extent applicable in connection with the sale
of the contracts.
3. Epoch may enter into sales agreements and/or services agreements with
independent broker-dealers for the sale and/or servicing of the Contracts
through their registered representatives; provided, however, that no such
registered representative shall be allowed to participate in the solicitation
of the Contracts unless such person has been appointed to solicit variable
contracts by Commonwealth Annuity in any state in which such solicitations
may occur. All such agreements shall provide that each independent
broker-dealer will assume full responsibility for continued compliance by
itself and its associated persons with applicable laws and regulations,
including but not limited to the FINRA Rules of Fair Practice and Federal and
state securities laws.
4. Epoch agrees that it will not use any sales literature, as defined under
the rules of the FINRA or by the statutes or regulations of any state in
which the Contracts may be solicited, unless such material has received prior
written approval by Commonwealth Annuity. Epoch, directly or through
Commonwealth Annuity as its agent, will make timely filings with the SEC,
FINRA, and any other securities regulatory authorities of all reports and any
sales literature relating to the Accounts, as may be required by statutes or
regulations to be filed by the principal underwriter.
5. On behalf of the Accounts, Commonwealth Annuity will prepare and submit
(a) all registration statements and prospectuses (including amendments) and
all reports required by law to be filed by the Accounts with Federal and
state securities regulatory authorities, and (b) all notices, proxies, proxy
statements, and periodic reports that are to be transmitted to persons having
voting rights with respect to the Accounts.
6. Commonwealth Annuity will, except as otherwise provided in this Agreement,
bear the cost of all services and expenses, including legal services and
expenses, filing fees, and other fees incurred in connection with (a)
registering the Accounts and contracts and qualifying the contracts for sale
in the various states, (b) preparing, printing, and distributing all
registration statements and prospectuses (including amendments), contracts,
notices, periodic reports, and proxy solicitation material and (c)
preparing, printing and distributing advertising and sales literature used by
Epoch or furnished by Epoch to broker-dealers in connection with offering the
contracts.
7. All costs associated with the variable contract compliance function
including, but not limited to, fees and expenses associated with qualifying
and licensing associated persons with Federal and state regulatory
authorities and the FINRA and with performing compliance-related
administrative services, shall be allocated to Commonwealth Annuity. To the
extent that Epoch incurs out-of-pocket expenses in connection with the
variable contracts compliance function, Commonwealth Annuity shall reimburse
Epoch for such expenses.
8. Sales commissions and other compensation, if any, due to broker-dealers
for the sale of Contracts shall be paid by Commonwealth Annuity through
Epoch. Epoch will reflect such commissions and other compensation on its
books and records, or as otherwise required or permitted by applicable
statutes or regulations. Commonwealth Annuity, as agent for Epoch, agrees to
transmit all sales commissions and other compensation to broker-dealers
having a sales agreement with Epoch. Epoch or Commonwealth Annuity, as agent
for Epoch, shall pay all other
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remuneration due any other persons for other activities relating to the sale
of the Contracts. Commonwealth Annuity shall reimburse Epoch fully and
completely for all amounts, if any, paid by Epoch to any person pursuant to
this Section.
9. Commonwealth Annuity shall, as agent for Epoch, (a) maintain and preserve
in accordance with Rules 17a-3 and 17a-4 under the 1934 Act all books and
records required to be maintained by Epoch in connection with the offer and
sale of the Contracts, which books and records shall remain the property of
Epoch, and shall at all times be subject to inspection by the SEC in
accordance with Section 17(a) of the 1934 Act and by all other regulatory
bodies having jurisdiction over the Contracts, and (b) send a written
confirmation for each contract transaction reflecting the facts of the
transaction and showing that it is being sent by the Company on behalf of
Epoch (acting in the capacity of principal underwriter for the Accounts), in
conformance with the requirements of Rule 10b-10 of the 1934 Act.
10. Each party hereto shall advise the others promptly (a) of any action of
the SEC or any state or federal authorities which affects the registration
or qualification of the Accounts or the contracts, or the right to offer the
contracts for sale, and (b) of any fact or event which makes untrue any
statement in the registration statement or prospectus, or which requires the
making of any change in the registration statement or prospectus, in order to
make the statements therein not misleading.
11. Commonwealth Annuity agrees to be responsible to the Accounts for all
sales and administrative expenses incurred in connection with the
administration of the Contracts and the Accounts other than applicable taxes
arising from income and capital gains of the Accounts and any other taxes
arising from the existence and operation of the Accounts.
12. As compensation for services performed and expenses incurred under this
Agreement, Commonwealth Annuity will receive the charges and deductions as
provided in each outstanding series of Commonwealth Annuity's Contracts.
Epoch will be reimbursed by Commonwealth Annuity for the costs and expenses
it incurs, as set forth in Section 7 above, and may receive additional
compensation, if any, as may be agreed upon by the parties from time-to-time.
If Epoch receives compensation from any third party in connection with
services related to the Contracts, and such services have been or will be
directly or indirectly provided by Commonwealth Annuity, Epoch shall pay such
compensation to Commonwealth Annuity.
13. Each party hereto shall each comply with all applicable provisions of the
Investment Company Act of 1940, Securities Act of 1933 and of all Federal and
state securities and insurance laws, rules and regulations governing the
issuance and sale of the Contracts. Each party hereto agrees to furnish any
other state insurance commissioner or regulatory authority with jurisdiction
over the contracts with any information or reports in connection with
services provided under this Agreement which may be requested in order to
ascertain whether the variable insurance product operations of Commonwealth
Annuity are being conducted in a manner consistent with applicable statutes,
rules and regulations.
14. Commonwealth Annuity agrees to indemnify Epoch against any and all
claims, liabilities and expenses including but not limited to reasonable
attorneys fees which Epoch may incur under the Investment Company Act of
1940, Securities Act of 1933 and all Federal and state securities and
insurance laws, rules and regulations governing the issuance and sale of the
Contracts, common law or otherwise, arising out of or based upon any alleged
untrue statements of material fact
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contained in any registration statement or prospectus of the Account, or any
alleged omission to state a material fact therein, the omission of which
makes any statement contained therein misleading or of any alleged act or
omission in connection with the offering, sale or distribution of the
Contracts by any registered representatives or associated persons of a FINRA
member broker-dealer which has an agreement with Epoch.
Epoch agrees to indemnify Commonwealth Annuity and the Accounts against any
and all claims, demands, liabilities and expenses, including but not limited
to reasonable attorneys fees, which Commonwealth Annuity or the Accounts may
incur, arising out of or based upon any act of Epoch or of any registered
representative of a FINRA member investment dealer which has an agreement
with Epoch and is acting in accordance with Commonwealth Annuity's
instructions. Commonwealth Annuity acknowledges that Epoch may similarly
attempt to hold such FINRA member broker-dealer responsible for the acts of
registered representatives and associated persons; and to the extent
Commonwealth Annuity is obligated to indemnify Epoch under this Agreement,
Epoch agrees to assign its rights against such broker-dealers to Commonwealth
Annuity.
15. This Agreement shall upon execution become effective as of the date
first above written, and
(a) unless otherwise terminated, this Agreement shall continue in effect
from year-to-year;
(b) this Agreement may be terminated by any party at any time upon
giving 60 days' written notice to the other parties hereto; and
(c) this Agreement shall automatically terminate in the event of its
assignment.
16. The initial Accounts and Contracts covered by this Agreement are set
forth in Appendix A. This Agreement, including Appendix A, may be amended at
any time by mutual consent of the parties.
17. This Agreement shall be governed by and construed in accordance with the
laws of Massachusetts.
This Agreement is effective as of the date above first written
COMMONWEALTH ANNUITY EPOCH SECURITIES, INC.
AND LIFE INSURANCE COMPANY
By: /s/ Xxxxxxx Xxxxxxx By: /s/ Xxxxxx Xxxxxx
---------------------------- ----------------------------
Name: Xxxxxxx Xxxxxxx Name: Xxxxxx Xxxxxx
Title: President and CEO Title: Chief Compliance Officer
Date: April 14, 2010 Date: April 14, 2010
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APPENDIX A
ACCOUNTS
--------
Commonwealth Annuity Separate Account A
Commonwealth Select Separate Account
Commonwealth Select Separate Account II
Commonwealth Select Separate Account III
Separate Accounts DEF
Fulcrum Separate Account
Separate Accounts VA-A, VA-B, VA-C, VA-G, VA-H
Separate Account VA-K
Separate Account VA-P
Separate Account KG
Separate Account KGC
Separate Account FUVUL
Group VEL Account
Inheiritage Account
VEL Account
VEL II Account
VEL Account III
Separate Account IMO
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VARIABLE ANNUITY CONTRACTS
CONTRACT FORM MARKETING OR PRODUCT NAME
------------- -------------------------
AVA-FP-67 / FP-69 67 series elective pay / 69 series elective pay
AVA-SP-67 /SP-69 67 series single pay / 69 series single pay
AVA-ST-67 67 series stipulated pay
VFR - 68 67 series group elective (GA)
VFS - 68 67 series group elective (GB), Flexible Fixed(84-92)
A3001-75 75 series elective pay
A3002-75 75 series elective pay
A3003-75 75 series single pay
A3004-75 75 series single pay
X0000-00 Xxxxxxxx XXX (single pay)
A3012-79 78/79 series elective pay
A3013-79 78/79 series elective pay
A3014-79 78/79 series single pay
A3015-79 78/79 series single pay
A3018-91 Exec Annuity Plus 91
A3019-92 Delaware Medallion I
A3020-92 Select Resource I
A3021-93 ExecAnnuity Plus 93
A3022-93 Delaware Medallion II
A3023-95 Pioneer Vision 1
A3025-96 Advantage, Select Resources II, Delaware Medallion III, Pioneer Vision 0,
Xxxxxxx Xxxxxxx Xxxxx, Xxxxxxx
X0000-00 Xxxxxxx Gateway Custom
A3027-98 Xxxxxx Advisor, Pioneer C-Vision, Select Charter
A3028-99 Delaware Golden Medallion, Pioneer Xtra Vision, Xxxxxxx Gateway Plus, Select Reward
A3029-99 Immediate Advantage
A3030-99 Value Generation, Directed Advisory Solutions
A3031-99 Select Acclaim
A3035-00 SBD with EDB, Xxxxxxx Gateway Incentive
A3036- 01 Premier Choice
A3037-02 Optim-L
A3038-02 Gateway Plus II
3038-07 Advantage IV Variable Annuity
3039-07 Preferred Plus Variable Annuity
3040-09 Horizon Variable Annuity
*This list shall be deemed to include riders, endorsements, applications,
specification pages, state variations, certificates, binders and
administrative forms (and all state variations thereof) that are issued with
or used with the Contracts. This list includes those Contracts for which
Epoch has served as commission paying agent on behalf of Commonwealth
Annuity.
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VARIABLE LIFE CONTRACTS*
CONTRACT FORM MARKETING NAME
------------- --------------
1018-87 VEL 87
1018-91 XXX 00
0000-00 XXX 00
0000-00 XXX PG/VEL Plus
1026-94 Variable Inheiritage Select Variable Inheiritage
1027-95 Select Life
1029-94 Group VEL
1029C-94 Group VEL
1030-96 Agency SPVUL 2nd-to-die, Agency SPVUL Single Life,
Agency SPL II Select SPVUL 2nd to-die, Select SPVUL Single Life,
SPL II (Select), Fulcrum
1033-99 IMO, VEL 2001 (Agency), CPA, Xxxxxxx XXX, Select Life Plus,
VEL 2001 (Select)
1034-99 Survivorship VUL ,Survivorship VUL (Select)
*This list shall be deemed to include riders, endorsements, applications,
specification pages, state variations, certificates, binders and
administrative forms (and all state variations thereof) that are issued with
or used with the Contracts. This list includes those Contracts for which
Epoch has served as commission paying agent on behalf of Commonwealth
Annuity.
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APPENDIX B
UNDERWRITING ACTIVITIES
The following is a list of underwriting activities that Epoch shall perform
or cause to be performed on its behalf:
- Payment of trail commissions and commissions, if any, on subsequent
payments to Distributors that have executed Selling Agreements and/or Service
Agreements with Epoch
- Naming in, and review of Contract registration statements
- Reviewing marketing materials, if any, used in connection with the
Contracts
- Review of Separate Account pricing and processing requirements
- Issuance of confirmations with respect to Contract transactions
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