"A"
BROKER-DEALER AGENCY
SELLING AGREEMENT
This Agreement is made among the following three parties:
1. RELIASTAR BANKERS SECURITY LIFE INSURANCE COMPANY
0000 Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxx, Xxx Xxxx 00000
a New York 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.
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 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.
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 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 Bankers Security 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 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 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 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 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__.
IN WITNESS WHEREOF, we set our hands this ____ day of _________________,
199__.
INSURER:
RELIASTAR BANKERS SECURITY LIFE
INSURANCE COMPANY
By: ________________________________
Title: _____________________________
GENERAL DISTRIBUTOR:
WASHINGTON SQUARE SECURITIES, INC.
By: ______________________________
Title: ___________________________
BROKER-DEALER:
By: ______________________________
Title: ___________________________
"B"
BROKER-DEALER AGENCY
SELLING AGREEMENT
This Agreement is made among the following four parties:
1. RELIASTAR BANKERS SECURITY LIFE INSURANCE COMPANY
0000 Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxx, Xxx Xxxx 00000
a New York 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 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:
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.
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.
(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.
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.
(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 Bankers Security 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).
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.
(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 Bankers Security 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 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.
(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 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.
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.
(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__.
IN WITNESS WHEREOF, we set our hands this ____ day of _________________,
199__.
INSURER:
RELIASTAR BANKERS SECURITY LIFE
INSURANCE COMPANY
By: ________________________________
Title: _____________________________
GENERAL DISTRIBUTOR:
WASHINGTON SQUARE SECURITIES, INC.
By: ________________________________
Title: _____________________________
BROKER-DEALER:
____________________________________
By: ________________________________
Title: _____________________________
AGENCY:
____________________________________
By: ________________________________
Title: _____________________________
"C"
BROKER-DEALER AGENCY SELLING AGREEMENT
FOR VARIABLE CONTRACTS
This Agreement is made among the following three parties:
1. RELIASTAR BANKERS SECURITY LIFE INSURANCE COMPANY
0000 Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxx, Xxx Xxxx 00000
a New York 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.
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.
(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.
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 Bankers Security 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).
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.
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 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.
(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__.
IN WITNESS WHEREOF, we set our hands this ____ day of _________________,
199__.
INSURER:
RELIASTAR BANKERS SECURITY LIFE
INSURANCE COMPANY
By: ________________________________
Title: _____________________________
GENERAL DISTRIBUTOR:
WASHINGTON SQUARE SECURITIES, INC.
By: ________________________________
Title: _____________________________
BROKER-DEALER:
____________________________________
By: ________________________________
Title: _____________________________
"D"
BROKER-DEALER AGENCY SELLING AGREEMENT
FOR VARIABLE CONTRACTS
This Agreement is made among the following four parties:
1. RELIASTAR BANKERS SECURITY LIFE INSURANCE COMPANY
0000 Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxx, Xxx Xxxx 00000
a New York 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.
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 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.
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 money
orders in payment on any such Variable Contract shall be drawn to the
order of "ReliaStar Bankers Security 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).
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 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.
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.
(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__.
IN WITNESS WHEREOF, we set our hands this ____ day of _________________,
199__.
INSURER:
RELIASTAR BANKERS SECURITY LIFE
INSURANCE COMPANY
By: ________________________________
Title: _____________________________
GENERAL DISTRIBUTOR:
WASHINGTON SQUARE SECURITIES, INC.
By: ________________________________
Title: _____________________________
BROKER-DEALER:
____________________________________
By: ________________________________
Title: _____________________________
AGENCY:
____________________________________
By: ________________________________
Title: _____________________________
SCHEDULE A
BROKER/DEALER AGENCY COMPENSATION SCHEDULE
FOR RELIASTAR BANKERS SECURITY VARIABLE CONTRACTS
EFFECTIVE
I
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, canceled, changed or replaced.
This Schedule is applicable to the following Variable Contracts:
1. FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY 85-251 AND STATE EXCEPTIONS
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
(1st Year) 3.60% 3.60%
Basic Renewal and
Lifetime Renewal
Commissions 3.60% 3.60%
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. Broker-Dealer agrees that in the event a
Representative ceases to be an associated person of Broker-Dealer or ceases
to be validly licensed or registered, Broker- Dealer shall not receive any
compensation based on any Variable Contract, its values or on premiums or
purchase payments thereafter received by ReliaStar Bankers Security Life
Insurance Company and/or WSSI from such former Representative's customers.
Provided, however, if within 60 days after such Representative ceases to be
a representative of Broker-Dealer, Broker-Dealer designates another
registered representative of Broker-Dealer to service the former
Representative's business, the compensation not paid shall be payable to
Broker-Dealer. If an assigned Representative's replacement is not
designated within such 60 day period, Broker-Dealer may not thereafter
designate a replacement Representative for such Variable contracts and
shall not be entitled to such compensation.
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
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 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.
5. 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.
6. 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.
7. 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.
8. 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.
