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EXHIBIT 3 (B)
FORM OF SELLING AGREEMENT
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CANADA LIFE INSURANCE COMPANY OF NEW YORK
Home Xxxxxx
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
SELLING AGREEMENT
AGREEMENT by and between Canada Life Insurance Company of New York
(CLNY), a New York Corporation and Canada Life of America Financial Services,
Inc. (CLAFS), a Georgia Corporation, a registered broker-dealer with the
Securities and Exchange Commission under the Securities Act of 0000 (xxx 0000
Xxx), and a member of the National Association of Securities Dealers, Inc.
(NASD);
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(Selling Broker-Dealer), also a registered broker-dealer under the 1934 Act and
member of the NASD: and
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(General Agent).
I. INTRODUCTION
WHEREAS, CLNY has issued certain annuity contracts, and these Contracts
are registered under the Securities Act of 0000 (xxx 0000 Xxx) (Contracts or
Contracts collectively); and
WHEREAS, CLNY has authorized CLAFS as principal underwriter to enter
into agreements, subject to the consent of the CLNY, with Selling Broker-Dealers
and General Agents for the distribution of the Contracts; and
WHEREAS, Selling Broker-Dealer and General Agent wish to participate in
the distribution of the Contracts;
NOW THEREFORE, in consideration of the promises and the Mutual covenants
hereinafter contained, the parties hereto agree as follows:
II. APPOINTMENT
Subject to the terms and conditions of this Agreement, CLNY and CLAFS
hereby appoint _________________________________ as Selling Broker-Dealer and
_____________________________________ as General Agent for the solicitation of
applications for the purchase of the Contracts, and Selling Broker-Dealer and
General Agent accept such appointment.
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III. AUTHORITY AND DUTIES OF GENERAL AGENT
A. Licensing and Appointment of Producers
General Agent is authorized to appoint Producers to solicit sales of
the Contracts. General Agent warrants that all Producers appointed by General
Agent pursuant to this Agreement shall not solicit nor aid, directly or
indirectly, in the solicitation of any application for any Contract until that
Producers is fully licensed under New York insurance law and, in connection with
securities regulated Contracts, is a fully registered representation of Selling
Broker-Dealer. General Agent shall prepare and transmit the appropriate
licensing and appointment forms to CLNY. General Agent shall pay all fees to
state insurance regulatory authorities in connection with obtaining necessary
licenses and appointments for Producers. All fees payable to regulatory
authorities in connection with the initial CLNY appointment of producers who
already possess necessary insurance licenses shall be paid by General Agent.
Any renewal license fees due after the initial appointment shall be paid by
General Agent. General Agent shall periodically provide CLNY with a list of
all Producer appointed by General Agent and the jurisdictions where such
Producers are licensed to solicit sales of the contracts. General Agent agrees
to fulfill all requirements set forth in the General Letter or Recommendation
attached as Exhibit A in conjunction with the submission of licensing and
appointment papers for all applicants as Producers submitted by General Agent.
B. Rejection of Producer
CLAFS, or CLNY may, by written notice to General Agent, refuse to
permit any Producer the right to solicit applications for the sale of any of the
Contracts, require General Agent to cause any Producer to cease such
solicitations or sales and cancel the appointment of any Producer.
C. Supervision of Producers
General Agent shall supervise any Producers appointed pursuant to this
Agreement to solicit sales of the Contracts and bear responsibility for all acts
and omissions of each Producer. General Agent shall comply with and exercise all
responsibilities required by applicable federal and state law and regulations.
General Agent shall not be responsible for those supervisory responsibilities
belonging to Selling Broker-Dealer under applicable securities laws which
include, but are not limited to, supervising and training Producers in their
capacity as registered representatives. Nothing contained in this Agreement or
otherwise shall be deemed to make any Producer appointed by General Agent an
employee or agent of CLNY or CLAFS. If the act or omission of a Producer or any
other employee of General Agent is the proximate cause of any claim, damage or
liability (including reasonable attorneys' fees) to CLNY or CLAFS, General Agent
shall be responsible and liable therefor
Before a producer is permitted to sell the Contracts, General Agent,
Selling Broker-Dealer and Producer shall have entered into a written agreement
pursuant to which: 1) Producer is appointed a Producer of General Agent and a
registered representative of Selling Broker-Dealer, 2) Producer agrees that his
or her selling activities relating to securities regulated contracts shall be
under the supervision and control of Selling Broker Dealer and his or her
selling activities relating to insurance regulated Contracts shall be under the
supervision and control of general Agent; and 3) that Producer's right to
continue to sell such Contracts is subject to his or her continued compliance
with such agreement and any procedures, rules or regulations implemented by
Selling Broker-Dealer or General Agent.
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IV. AUTHORITY AND DUTIES OF SELLING BROKER-DEALER
A. Supervision of Registered Representatives
Selling Broker-Dealer agrees that it has full responsibility for the
training and supervision of all persons, including Producers of General Agent,
associated with Selling Broker-Dealer who are engaged directly or indirectly in
the offer or sale of securities regulated Contracts. All such persons shall be
subject to the control of Selling Broker-Dealer with respect to their securities
regulated activities Broker-Dealer shall: 1) train and supervise Producers, in
their capacity as registered representatives in the sale of securities regulated
Contracts; 2) use its best efforts to cause such Producers to qualify under
applicable federal and state laws to engage in the sale of securities regulated
Contracts when required; 3) provide CLNY, to their satisfaction with evidence of
Producers' qualifications to sell securities regulated Contracts, and 4) notify
CLNY if any of such Producers ceases to be a registered representative of
Selling Broker-Dealer. Selling Broker-Dealer agrees that a Producer must be a
registered representative of Selling Broker-Dealer before engaging in the
solicitation of any securities regulated Contracts and have entered into the
written agreement more fully described in Section III, Paragraph C. CLNY and
CLAFS shall not have any responsibility for the supervision of any registered
representative or any other employee or affiliate of Selling Broker-Dealer. If
the act or omission of a registered representative or any other employee or
affiliate of Selling Broker-Dealer is the proximate cause of any claim, damage
or liability (including reasonable attorneys' fees) to CLNY or CLAFS, Selling
Broker-Dealer shall be responsible and liable therefore.
Selling Broker-Dealer shall fully comply with the requirements of the
National Association of Securities Dealers, Inc. and of the Securities Exchange
Act of 1934 and all other applicable federal or state laws. Selling
Broker-Dealer shall establish such rules and procedures as may be necessary to
cause diligent supervision of the securities activities of the Producers. Upon
request by CLNY or CLAFS, Broker-Dealer shall furnish such records as may be
necessary to establish diligent supervision.
V. AUTHORITY AND DUTIES OF GENERAL AGENT
AND SELLING BROKER-DEALER
A. Contracts
The securities and insurance regulated Contract(s) issued by CLNY to
which this Agreement applies are listed in Schedule I which may be amended from
time to time by CLNY. CLNY, in its sole discretion with prior or concurrent
written notice to Selling Broker-Dealer and General Agent, may suspend
distribution of any Contracts. CLNY also has the right to amend any Contract(s)
at any time.
B. Securing Application
Each application for a Contract shall be made on an application form
provided by CLNY, and all payments collected by Selling Broker-Dealer, General
Agent or any registered representative and Producer shall be remitted promptly
in full, together with such application form and any other required
documentation, directly to CLNY at the address indicted on such application or
to such other address as may be designated. Selling Broker-Dealer and General
Agent shall review all such applications for completeness. Check or money order
in payment of such Contracts should be made payable to the order of "Canada
Life Insurance Company of New York". All applications are subject to acceptance
or rejection by CLNY in its sole discretion.
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C. Receipt of Money
All money payable in connection with any of the Contract(s), whether as
premium, purchase payment or otherwise and whether paid by or on behalf of any
contract owner or anyone else having interest in the Contracts, is the property
of CLNY and shall be transmitted immediately in accordance with the
administrative procedures of CLNY without any deduction or offset for any reason
including, but not limited to, any deduction or offset for compensation claimed
by Selling Broker-Dealer or General Agent, unless there has been a prior
arrangement for net wire transmissions between CLNY and Selling Broker-Dealer or
General Agent
D. Notice of Producer's Noncompliance
Selling Broker-Dealer shall notify CLAFS and General Agent in the event
a Producer fails or refuses to submit to the supervision of Selling
Broker-Dealer or General Agent in accordance with this Agreement, the agreement
between Selling Broker-Dealer, General Agent and Producer referred to in Section
III Paragraph C and Section IV, Paragraph A, or otherwise fails to meet the
rules and standards imposed by Selling Broker-Dealer or its registered
representatives or General Agent or its producers. Selling Broker-Dealer or
General Agent shall also immediately notify such Producer that he or she no
longer authorized to sell the Contracts, and both Selling Broker-Dealer and
General Agent shall take whatever additional action may be necessary to
terminate the sales activities of such Producer relating to the Contracts.
E. Sales Promotion, Advertising and Prospectuses
No sales promotion materials, circulars, documents or any advertising
relating to any of the Contracts shall be used by Selling Broker-Dealer, General
Agent or any Producers unless the specific item has been approved in writing by
CLAFS and CLNY prior to use. Selling Broker-Dealer shall be provided, without
any expense to Selling Broker-Dealer, with prospectuses and other material
determined to be necessary for use relating to securities regulated Contracts.
Nothing in these provisions shall prohibit Selling Broker-Dealer or General
Agent from advertising life insurance and annuities on a generic basis.
VI COMPENSATION
A. Commissions and Fees
Commissions and fees payable to Selling Broker-Dealer or General Agent
in connection with the securities regulated Contracts shall be paid on behalf of
CLAFS by CLNY to Selling Broker-Dealer or General Agent, or as otherwise
directed or required by law Commissions and fees payable to Selling
Broker-Dealer, General Agent or Producer in connection with the insurance
regulated Contracts shall be paid by CLNY to Selling Broker-Dealer or General
Agent, or as otherwise directed or required by law. Selling Broker-Dealer or
General Agent, as applicable, shall pay Producer. CLAFS will provide Selling
Broker-Dealer and General Agent with a copy of CLNY's current Contracts,
Commissions and Fee Schedule. Unless otherwise provided in the Contracts,
Commissions and Fee Schedule, commissions will be paid as a percentage of
premiums or purchase payments (collectively, Payments) received in cash or other
legal tender and accepted by CLNY on applications obtained by the various
Producers appointed by General Agent hereunder. Upon termination of this
Agreement, all compensation to the Selling Broker-Dealer and General Agent
hereunder shall cease.
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However, Selling Broker-Dealer and General Agent shall be entitled to receive
compensation for all new and additional premium payments which are in process at
the time of termination, and shall continue to be liable for any chargebacks
pursuant to the provisions of said Contracts, Commissions and Fee Schedule, or
for any other amounts advanced by or otherwise due CLAFS or CLNY hereunder.
B. Time of Payment
CLNY will pay any commissions due General Agent hereunder no later than
within fifteen (15) days after the end of the calendar month in which Payments
upon which such commission is based are accepted by CLNY.
C. Amendment of Schedules
CLAFS and CLNY may, upon at least ten (10) days' prior written notice
to Selling Broker-Dealer and General Agent, change the Contracts, Commissions
and Fee Schedule by written amendment of such Schedule. Any such change shall
apply to compensation due on applications received by CLNY after the effective
date of such notice.
D. Prohibition Against Rebates
CLAFS or CLNY may terminate this agreement if Selling Broker-Dealer,
General Agent or any Producer of General Agent rebates, offer to rebate or
withholds any part of any Payments on the Contract. If Selling Broker-Dealer,
General Agent or any Producer of General Agent shall at any time induce or
endeavor to induce any owner of any Contract issued hereunder to discontinue
payments or to relinquish any such Contract, except under circumstances where
there is reasonable grounds for believing the Contract is not suitable for such
person, any and all compensation due Selling Broker-Dealer or General Agent
hereunder shall cease and terminate.
E. Indebtedness and Right of Set Off
Nothing contained in this Agreement shall be construed as giving
Selling Broker-Dealer or General Agent the right to issue and indebtedness on
behalf of CLNY or CLAFS. Selling Broker-Dealer and General Agent hereby
authorize CLNY as agent of CLAFS to set off liabilities of Selling Broker-Dealer
and General Agent to CLNY or CLAFS against any and all amounts otherwise payable
to Selling Broker-Dealer as General Agent
VII GENERAL PROVISIONS
A. Waiver
Failure of any party to insist upon strict compliance with any of the
conditions of this Agreement shall not be construed as a waiver of any of the
conditions, but the same shall remain in full force and effect. No waiver of any
of the provisions of this Agreement shall be deemed to be, or shall constitute,
a waiver of any other provisions, whether or not similar, nor shall any waiver
constitute a continuing waiver.
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B. Limitations
No party other than CLNY shall have the authority to: 1) make, alter or
discharge any Contract issued by CLNY; 2) waive any forfeiture or extend die
time of making any Payments; or 3) enter into any proceeding in a court of law
or before a regulatory agency in the name of or on behalf of CLNY. No party
other than CLAFS, shall have the authority to; 1) alter the forms or substitute
other forms in place of those prescribed by CLAFS; or 2) enter into any
proceeding in a court of law or before a regulatory agency in the name of or on
behalf of CLAFS.
C. Fidelity Bond and Other Liability Coverage
Selling Broker-Dealer and General Agent hereby assign any proceeds
received from a fidelity bonding company, error and omissions or other liability
coverage to CLNY or CLAFS as their interest may appear, to the extent of their
loss due to activities covered by the bond, policy or other liability coverage.
If there is any deficiency amount, whether due to a deductible or otherwise,
Selling Broker-Dealer or General Agent shall promptly pay such amount on demand
Selling Broker-Dealer and General Agent hereby indemnify and hold harmless CLNY
and CLAFS from any such deficiency and from the costs of collection thereof
(including reasonable attorneys' fees).
D. Binding Effect
This Agreement shall be binding on and shall inure to the benefit of
the parties to it and their respective successors and assigns provided that
neither Selling Broker-Dealer nor General Agent may assign this Agreement or any
rights or obligations hereunder without the prior written consent of CLNY and
CLAFS.
E. Regulations
All parties agree to observe and comply with the existing laws and
rules or regulations of applicable local, state, or federal regulatory
authorities and with those which may be enacted or adopted during the term of
this Agreement regulating the business contemplated hereby in any jurisdiction
in which the business described herein is to be transacted.
F. Indemnification
1) CLAFS agrees to indemnify and hold harmless Selling Broker-Dealer
and General Agent, their officers, directors and employees, against any and all
losses, claims, damages, or liabilities to which they may become subject under
the 1933 Act, and 1934 Act, or other federal or state statutory law or
regulations, at common law or otherwise insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of a material fact or any
omission or alleged omission to state a material fact required to be stated or
necessary to make the statements made not misleading in the registration
statement for the Contracts or for the shares of Canada Life of America Series
Fund, Inc. (Fund) files pursuant to the 1933 Act, or any prospectus included
as a part thereof, as form time to time amended and supplemented.
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CLAFS agrees to indemnify and hold harmless Selling Broker-Dealer and General
Agent, their officers, directors and employees, against any and all losses,
claims, damages or liabilities to which they may become subject under the 1933
Act, the 1934 Act or other federal or state statutory law or regulation, at
common law or otherwise, insofar as such losses, claims, damages or liabilities
or actions in respect thereof arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact or any omission or
alleged omission to state a material fact required to be stated or necessary to
make the statement made not misleading in any advertisement or sales literature
approved in writing by CLNY and CLAFS pursuant to Section V, Paragraph E, of
this Agreement.
2) Selling Broker-Dealer and General Agent agree to indemnify and hold
harmless CLAFS, CLNY and any wholesaling organization, their officers, directors
and employees against any and all losses, claims, damages or liabilities to
which they may become subject under the 1933 Act, the 1934 Act or other federal
or state statutory law or regulation, at common law or otherwise, insofar as
such losses, claims damages or liabilities (or actions in respect thereof)
arise out of or are based upon:
a) any oral or written misrepresentation by Selling Broker-Dealer or General
Agent or their officers, directors, employees or agents unless such
misrepresentation is contained in the registration statement for the Contracts
or Fund Shares, any prospectus included as a part thereof, as from time to time
amended and supplemented, or any advertisement or sales literature approved in
writing by CLNY and CLAFS pursuant to Section V, Paragraph E, of this Agreement,
or b) the failure of Selling Broker-Dealer or General Agent or their officers,
directors, employees or agents to comply with any applicable provisions of the
Agreement.
G. Notices
All notices or communications shall be sent to the address shown in
this Agreement, or to such other address shown in this Agreement, or to such
other address as the party may request, by giving written notice to the other
parties.
H. Governing Law
The Agreement shall be construed in accordance with and governed by the
laws of the state of New York.
J. General Agent as Broker-Dealer
If Selling Broker-Dealer and General Agent are the same person or legal
entity, such person or legal entity shall have the rights and obligations
hereunder of both Selling Broker-Dealer and General Agent and this Agreement
shall be binding and enforceable by and against such person or legal entity in
both capacities.
K. Complaints and Investigations
General Agent, Selling Broker-Dealer CLNY and CLAFS agree to cooperate
fully in the event of any regulatory investigation, inquiry or proceeding,
judicial proceeding, or customer complaint involving the Contracts. In
furtherance of the foregoing: 1) each party will notify all other parties of any
such investigation, inquiry, proceeding or complaint involving the Contracts or
affecting the ability of a party to perform pursuant to this Agreement within
10 days of obtaining knowledge of the same; and 2) in the case of a customer
complaint, the involved parties will consult with each other prior to sending
any written response with respect to such complaint.
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L. Termination
This Agreement may be terminated, without cause, by any party upon
thirty (30) days' prior written notice; and may be terminated, for cause, by any
party immediately; and shall be terminated if CLAFS or Selling Broker-Dealer
shall cease to be a registered broker-dealer under the Securities Exchange Act
of 1934 and a member of the NASD.
M. Address for Notice
Address for Canada Life Insurance Company of New York
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Address for Canada Life of America Financial Services, Inc.
0000 Xxxxxx Xxxxx Xxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
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Address for Selling Broker-Dealer Address for General Agent
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This Agreement shall be effective upon execution by General Agent and Selling
Broker-Dealer, and delivery of the Agreement to CLNY or CLAFS.
Dated:
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Canada Life of America Canada Life Insurance Company
Financial Services, Inc. of New York
By: /s/ Xxxxx X'Xxxxx III /s/ D. Xxxxx Xxxxx
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Xxxxx X'Xxxxx III D. Xxxxx Xxxxx
General Agent, Please Print
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By: Name and Title
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Please print Signature
Selling Broker-Dealer, Please Print
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By: Name and Title
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Please Print Signature
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EXHIBIT A
General Letter of Recommendation
General Agent hereby certifies to Canada Life Insurance of New York
(CLNY) that all of the following requirements will be fulfilled in conjunction
with the submission of papers licensing/appointment for all applicants as
Producers submitted by General Agent. General Agent will, upon request,
forward proof of compliance with the same to CLNY in a timely manner
1. We have made a thorough and diligent inquiry and investigation relative
to each applicant's identify, residence and business reputation and
declare that each applicant is personally known to us, has been
examined by us, is known to be of good moral character, has a good
business reputation, is reliable, is financially responsible and is
worthy of a license. Each individual is trustworthy, competent and
qualified to act as an agent for CLNY to hold himself out in good faith
to the general public. We vouch for each applicant.
2. We have on file a U-4 Form which was completed by each applicant. We
have fulfilled all the necessary investigative requirements for the
registration of each applicant as a registered representative through
our NASD member firm, and each applicant is presently registered as an
NASD registered representative.
The Above information in our files indicates no fact or condition which
would disqualify the applicant from receiving a license and all the
findings of all investigative information is favorable.
3 We certify that all educational requirements have been met for the
specific state in which each applicant is requesting a license, and
that all such persons have fulfilled the appropriate examination,
education and training requirements.
4. If the applicant is required to submit his or her picture and signature
in the state in which he or she is applying for a license, we certify
that those items forwarded to CLNY are those of the applicant.
5. We hereby warrant that the applicant is not applying for a license with
CLNY in order to place insurance chiefly and solely on his or life or
property, lives or property of his or her relatives, or property or
liability of his or her associates.
6. We certify that each applicant will receive close and adequate
supervision, and that we will make inspection when needed of any or all
risks written by these applicants, to the end that the insurance
interest of the public will be properly protected.
7. We will not permit any applicant to transact insurance as an agent
until duly licensed therefor. No applicants have been given a contract
or furnished supplies, nor have any applicants been permitted to write,
solicit business, or act as an agent in any capacity, and they will not
be so permitted until the certificates of authority or license applied
for is received.
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8. We certify that General Agent, Selling Broker-Dealer and applicant
shall have entered into a written agreement pursuant to which a)
applicant is appointed a Producer of General Agent and a registered
representative of Selling Broker-Dealer; b) applicant agrees that his
or her selling activities relating to securities regulated contracts
shall be under the supervision and control of Selling Broker-Dealer and
his or her selling activities relating to insurance regulated contracts
shall be under the supervision and control of General Agent; and c)
that applicant's right to continue to sell such Contracts is subject to
his or her continued compliance with such agreement and any procedures,
rules or regulations implemented, by Selling Broker-Dealer or General
Agent.
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VARIFUND
SCHEDULE 1 - STATEMENT OF COMPENSATION AS OF FEBRUARY 1, 1997 Subject
to the terms and conditions of this Agreement, CLAFS will pay to Selling Firms
compensation based upon the premiums and purchase payments received from Selling
Firm, in accordance with applicable law, in the percentages shown below:
OPT. A1: SINGLE PREMIUM - OWNER ISSUE AGE 0-80
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Broker-Dealer Concession
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6.5%
OPT. A2: SINGLE PREMIUM - OWNER ISSUE AGE 81-84
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Broker-Dealer Concession
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3.25%
Chargebacks; (i) In the event a Contract is returned to CLNY pursuant to a "Free
Look" provision, the full B/D concession paid thereon or retained by
Selling Firm pursuant to net submission of premium or purchased payment shall be
charged back to Selling Firm.. (ii) Should any premium or purchase payment on
any Contract issued by CLNY be refunded for any reason, Selling Firm shall repay
or return B/D Concession received by it with respect to such premium or purchase
payment. (iii) If a Contract was not issued as a result of failure by Selling
Firm to submit to CLNY an application sufficient to satisfy state insurance laws
or CLNY eligibility requirements then amounts paid to Selling Firm shall be
returned or repaid. (iv) If a Contract was tendered to CLNY for redemption
within ten business days of the date of activity then amounts paid to Selling
Firm shall be returned or repaid. (v) For full or partial withdrawals from the
Contract other than those made pursuant to a systematic and/or free withdrawal
privilege: 100% of all B/D Concessions paid to Selling Firms on amount(s)
withdrawn within 6 months of such amount(s) being paid to CLNY and 50% of all
B/D Concessions paid to Selling Firm on amount(s) withdrawn from 7-12 months of
such amount(s) being paid to CLNY shall be returned or repaid. For any premium
or purchase payment that has been in the Contract for more than 12 months, there
shall be no charge back on B/D Concession. To the extent permitted by law, the
amount so charged back may, at the option of CLNY, be set off against B/D
Concession otherwise due to Selling Firm. In addition, such other compensation
will be payable as are from time to time agreed by the parties to the foregoing
Agreement and which is in accordance with applicable law, and will be added to
this schedule.
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Expense Allowance
Total compensation may consist of agent commissions, override and/or expense
allowance.
If expense allowances are payable, they are subject to the following conditions
and limitations:
1. Lapses and surrenders in the first year, and any returns of first year
premium made by CLNY, will result in proportionate chargebacks of any
expense allowances paid for said premiums.
2. No expense allowance will be used to effect compensation in excess of
the limits of Section 4228 of the Insurance Law of New York.
3. No expense allowance will be due or payable after the termination of
this Contract except for first year expense allowances for policies
written prior to such termination.
4. Notwithstanding any of the other terms and conditions governing payment
of expense allowances in this Contract, and to conform with the
requirements of Section 4228 of the Insurance Law and the applicable
regulations resulting therefrom and other governing sections of the
law, the following will apply:
a. The maximum expense allowance payments shall be such that when
added to first year commissions, exclusive of overriding
commissions not exceeding 5% of first year premiums, the total
shall not exceed 91% of first year premiums for ordinary life
and annuity policies and contracts other than single premium
policies and contracts.
b. The maximum expense allowance shall not exceed 100% of the
commissions payable on single premium policies and contracts,
or the overall 7% of premium limit.
In monitoring the maximum allowances rules in this paragraph 4, CLNY will apply
those in a. and b., above, on a "per-policy" basis.