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American Skandia Life American Skandia Marketing,
Assurance Corporation Incorporated
One Corporate Drive One Corporate Drive
Shelton, CT 06484-0883 Xxxxxxx, XX 00000-0000
Telephone (000) 000-0000 Telephone (000) 000-0000
Fax (000) 000-0000 Fax (000) 000-0000
INSURANCE PRODUCTS SALES AGREEMENT
THIS AGREEMENT is made this __ day of __________________, , by and among
American Skandia Life Assurance Corporation ("ASLAC"), a Connecticut insurance
company; American Skandia Marketing, Incorporated ("ASM"), a Delaware
corporation (ASLAC and ASM referred to collectively as "American Skandia");
_________________________________________________________ ("Broker-Dealer"), a
__________________________ corporation; and any and all undersigned insurance
agency affiliates of Broker-Dealer ("Associated Insurance Agencies").
WHEREAS, ASLAC offers certain variable annuity contracts, modified
guaranteed annuity contracts and variable life insurance policies which are
deemed to be securities under the Securities Act of 1933 (the "1933 Act")
(collectively the "Registered Contracts"), as well as certain fixed and variable
annuity contracts and life insurance contracts that are exempt from registration
under the 1933 Act ("Non-Registered Contracts") (Registered Contracts and
Non-Registered Contracts referred to collectively, as "Contracts"); and
WHEREAS, ASLAC has appointed ASM, a broker-dealer, as the Distributor
of the Registered Contracts; and
WHEREAS, Broker-Dealer is a broker-dealer engaged in the sale of
securities and other investment products, including variable insurance products,
and is licensed in certain states as an insurance agent or agency; and
WHEREAS, in those states where Broker-Dealer cannot obtain the
necessary licenses as an insurance agent or agency, Broker-Dealer has entered
into an agreement with Associated Insurance Agency to act on its behalf in the
capacity of insurance agent; and
WHEREAS, in the event that Broker-Dealer and Associated Insurance
Agency are the same party, the duties, responsibilities and privileges of
Associated Insurance Agency under this Agreement shall be undertaken by
Broker-Dealer; and
WHEREAS, ASLAC and ASM, in their individual capacities, proposes to
authorize Broker-Dealer and any undersigned Associated Insurance Agency to
solicit sales of the Contracts and ongoing premium and purchase payments to the
Contracts;
InsProdSalesAgr (3/98) Page 1 of 1
NOW THEREFORE, in consideration of the premises and mutual promises contained
herein including the Schedule(s), as amended from time to time, the parties
hereto agree as follows:
1. APPOINTMENT AND AUTHORIZATION
(a) ASLAC and ASM hereby authorize Broker-Dealer to solicit sales of
Contracts identified in the attached Schedule(s). ASLAC hereby appoints
Broker-Dealer, and any Associated Insurance Agency, in their capacity as
licensed insurance agency, to solicit sales of the Contracts and ongoing premium
and purchase payments in all states where ASLAC is authorized to do business and
where Broker-Dealer and/or Associated Insurance Agency is properly licensed and
appointed on a non-exclusive basis. Broker-Dealer and Associated Insurance
Agency accept such appointment and authorization, and each agrees to: (i) use
its best efforts to find purchasers of the Contracts that satisfy ASLAC's issue
requirements; (ii) provide ongoing service to such purchasers, including
information consulting services, as described below; and (iii) where
appropriate, to make appropriate efforts to conserve and retain Contracts that
are with ASLAC.
(b) Broker-Dealer and Associated Insurance Agency are authorized to
represent ASLAC and ASM only to the extent expressly granted in this Agreement.
No further authority is granted or implied. Except for this Agreement, no other
legal relationship is intended or exists between American Skandia and
Broker-Dealer or American Skandia and Associated Insurance Agency.
2. REPRESENTATIONS AND WARRANTIES
(a) ASLAC, ASM, Broker-Dealer and Associated Insurance Agency each
represent and warrant to one another that they and the officers signing below
have full power and authority to enter into this Agreement, and that this
Agreement has been duly and validly executed by them and constitutes a legal,
valid and binding agreement.
(b) ASM represents and warrants to Broker-Dealer that ASM is registered
as a broker-dealer with the Securities and Exchange Commission (the "SEC") under
the Securities Exchange Act of 1934 ("1934 Act") and under the state securities
laws of each jurisdiction in which such registration is required to distribute
the Registered Contracts, and that it is a member in good standing of the
National Association of Securities Dealers, Inc. (the "NASD").
(c) Broker-Dealer represents and warrants to ASM that Broker-Dealer is,
and at all times when performing its functions and fulfilling it obligations
under this Agreement, will be, registered with the SEC as a broker-dealer under
the 1934 Act and under the state securities laws of each jurisdiction in which
such registration is required for the sale of the Contracts, and is a member in
good standing of the NASD. Broker-Dealer will notify ASM immediately, in
writing, if such registration is terminated or suspended, and shall take all
reasonable actions to reinstate such registration. Broker-Dealer further
represents and warrants to ASLAC that Broker-Dealer is a properly licensed
insurance agency in each jurisdiction in which such licensing is required for
purposes of receiving compensation in connection with the Contracts, except in
those states where Broker-Dealer has an Associated Insurance Agency that acts in
the capacity of licensed insurance agency for purposes of receiving
compensation.
(d) Associated Insurance Agency represents and warrants to ASLAC that
Associated Insurance Agency is, and at all times when performing its functions
and fulfilling its obligations under this Agreement, will be, a properly
licensed insurance agency in each jurisdiction in which such licensing is
required for purposes of soliciting sales of the Contracts and receiving
compensation in connection with the Contracts and for ongoing premiums or
purchase payments thereon.
(e) Broker-Dealer and Associated Insurance Agency represent and warrant
to American Skandia that each is, or will be, Year 2000 compliant in a timely
manner, and that each shall be able to perform all of the services and/or
obligations contemplated by or under this Agreement without interruption in a
manner that is Year 2000 compliant.
3. COMPLIANCE WITH REGULATORY REQUIREMENTS
Broker-Dealer shall comply with all rules and regulations of
the SEC and NASD governing the sale of the Registered Contracts and all
applicable state insurance laws, rules and regulations. Broker-Dealer and
Associated Insurance Agency shall comply with all applicable state and federal
laws and the rules and regulations of governmental or regulatory agencies
affecting or governing the sale of the Contracts including, but not limited to,
those of the Department of Labor, in connection with the sale of Contracts
deemed subject to the Employee Retirement Income Security Act. Broker-Dealer and
Associated Insurance Agency shall also comply with all applicable rules and
administrative procedures of American Skandia.
4. LICENSING AND/OR APPOINTMENT OF REGISTERED REPRESENTATIVES
(a) ASLAC hereby authorizes Broker-Dealer to designate registered
representatives who are associated persons of Broker-Dealer for appointment by
ASLAC as individual insurance agents, for the purpose of soliciting sales of the
Registered Contracts ("Registered Representatives"). Broker-Dealer and
Associated Insurance Agency (where required) are hereby authorized to designate
individual insurance agents affiliated with Broker-Dealer or Associated
Insurance Agency, for the purpose of soliciting sales of the Non-Registered
Contracts ("Agents"). Broker-Dealer and Associated Insurance Agency shall not
recommend a Registered Representative or Agent for appointment by ASLAC unless
such Registered Representative or Agent is duly licensed as an insurance agent
in the state(s) in which it is proposed that such Registered Representative or
Agent will solicit sales of the Contracts. Registered Representatives and Agents
must specify with each Contract application, the Broker-Dealer and/or Associated
Insurance Agency on whose behalf the application has been solicited. If a
Registered Representative of Broker-Dealer or Agent of Associated Insurance
Agency is no longer to be treated as the agent of record on a Contract,
Broker-Dealer or Associated Insurance Agency must immediately notify ASLAC in
writing and, within thirty (30) business days of such notice, identify a
Registered Representative of Broker-Dealer or Agent of Associated Insurance
Agency who will act as the substitute agent of record.
(b) Broker-Dealer and Associated Insurance Agency are solely
responsible for the conduct of Registered Representatives and/or Agents
associated with such Broker-Dealer and/or Associated Insurance Agency, as well
as for monitoring ongoing compliance with applicable federal and state laws,
rules and regulations and applicable NASD rules. American Skandia is not liable
and undertakes no obligations under any agreement between Broker-Dealer and
Registered Representative or Associated Insurance Agency and its Agents unless
American Skandia has specifically agreed to do so in writing.
(c) ASLAC, at its sole discretion, reserves the right to refuse to
appoint any Registered Representative or Agent or, once appointed, to terminate
or refuse to renew any Registered Representative's or Agent's appointment with
ASLAC. By written notice to Broker-Dealer or Associated Insurance Agency, ASLAC
may require Broker-Dealer or Associated Insurance Agency to cause Registered
Representatives or Agents to cease soliciting Contracts and additional premiums
or purchase payments thereon on behalf of ASLAC or require Broker-Dealer or
Associated Insurance Agency to cancel the appointment by ASLAC of any of their
Registered Representatives or Agents. Broker-Dealer and Associated Insurance
Agency shall notify ASM immediately in writing if any Registered Representative
appointed by ASLAC ceases to be a Registered Representative of Broker-Dealer, is
disciplined or suspended by the NASD or by Broker-Dealer, or if any Registered
Representative or Agent ceases to be properly licensed or is the subject of a
disciplinary proceeding in any state.
(d) Broker-Dealer and Associated Insurance Agency represent, warrant
and certify that, on their own behalf, and as agent on behalf of ASLAC, each:
(i) has performed due diligence in compliance with state law and has duly
investigated and performed a thorough background check into the character and
fitness of any Registered Representatives or Agent; (ii) is not aware of any
felony or misdemeanor convictions in the last 10 years arising out of conduct
involving embezzlement, fraudulent conversion or misappropriation of funds or
securities, or involving violations of ss.ss.1341, 1342, or 1343 of Title 18 of
the United States Code or any subsequent amendments thereto; and (iii) is
satisfied that each such Registered Representative and/or Agent that
Broker-Dealer and/or Associated Insurance Agency has designated is trustworthy,
financially responsible, in good business standing and competent for appointment
to act as an individual insurance agent of ASLAC. Broker-Dealer and Associated
Insurance Agency agree, to the extent permitted by law, to provide ASLAC with
copies of any and all background check reports and any additional documentation
in connection with the investigation into the background of the designated
Registered Representative or Agent. Broker-Dealer and Associated Insurance
Agency affirm that in conducting such due diligence, they have acted or will act
as agents on behalf of ASLAC.
(e) Registered Representatives who are duly licensed as insurance
agents and appointed by ASLAC shall have authority to solicit sales of the
Registered Contracts and Non-Registered Contracts and additional premiums and
purchase payments thereon. In addition, certain group variable annuity contracts
that are sold as funding vehicles for qualified plans and that are exempt from
registration under the 1933 Act ("Qualified Contracts") may only be solicited by
Registered Representatives of Broker-Dealer. Agents who are not registered
representatives of Broker-Dealer but who are properly insurance licensed and
associated with Broker-Dealer and/or Associated Insurance Agency in the
applicable jurisdiction may only solicit Non-Registered Contracts.
(f) Broker-Dealer and Associated Insurance Agency agree to assist ASLAC in
appointing insurance licensed Registered Representatives and Agents, under
applicable state insurance laws. Broker-Dealer and Associated Insurance Agency
also agree to comply with ASLAC's requirements regarding the submission of
licensing or appointment documentation for proposed Registered Representatives
and Agents.
5. SUPERVISORY RESPONSIBILITIES
(a) Broker-Dealer shall have full responsibility for training and
supervision of all Registered Representatives and all other persons associated
with Broker-Dealer who are involved directly or indirectly in the offer or sale
of the Registered Contracts, and to the extent required by SEC and/or NASD
rules, certain Non-Registered Contracts that are Qualified Contracts. All such
persons shall be subject to the supervision and control of Broker-Dealer with
respect to such persons' activities in connection with the sale of Registered
Contracts and Qualified Contracts. Associated Insurance Agency shall have full
responsibility for training and supervision of all Agents who are involved
directly or indirectly in the offer or sale of the Contracts and for Agent's
compliance with applicable state insurance laws. Broker-Dealer and Associated
Insurance Agency shall be responsible for all acts and omissions of each
Registered Representative or Agent, as applicable. ASLAC and ASM shall not incur
liability or have any responsibility for the supervision of Registered
Representatives or Agents.
(b) Before Registered Representatives begin soliciting sales of the
Registered Contracts or Qualified Contracts, Broker-Dealer and Associated
Insurance Agency must insure that the Registered Representatives are: (i) an
associated person of Broker-Dealer; (ii) licensed, registered or otherwise
qualified under applicable federal and state laws to engage in such activities
and any applicable NASD registration; (iii) trained in the sale of the such
Contracts; and (iv) only soliciting sale of such Contracts in jurisdictions
where ASLAC has authorized such solicitations.
(c) Before Registered Representatives or Agents engage in the sale of
the Non-Registered Contracts, Broker-Dealer and Associated Insurance Agency must
insure that such individuals are: (i) licensed or otherwise qualified under
applicable state laws to engage in such activities; (ii) trained in the sale of
such Contracts; and (iii) only soliciting sales of such Contracts in
jurisdictions where ASLAC has authorized such solicitations.
(d) Broker-Dealer and Associated Insurance Agency are responsible for
supervising and reviewing its Registered Representatives' use of sales
literature and advertising and all other communications with the public related
to the Contracts. With regard to Registered Contracts, no sales solicitation,
including the delivery of supplemental sales literature or other materials,
shall occur, be delivered to, or used with a prospective purchaser unless
accompanied or preceded by the appropriate then current product prospectus,
unless such material is not required to be so presented.
(e) Broker-Dealer and Associated Insurance Agency shall establish rules
and procedures as may be necessary to cause diligent supervision of the
securities activities of Registered Representatives, employees and/or affiliated
persons or organizations. Upon request by ASLAC or ASM, Broker-Dealer and
Associated Insurance Agency shall furnish in a timely fashion any records or
other documentation evidencing such diligent supervision.
(f) When properly authorized by a Contract owner, Broker-Dealer and
Associated Insurance Agency shall execute any electronic or telephone
transactions in accordance with the current procedures communicated by ASLAC and
as may be described in the prospectus(es) applicable to the Contracts.
Broker-Dealer agrees that, in consideration for the electronic and telephone
transaction privileges available under the Contracts, ASLAC will not be liable
for any loss incurred as a result of acting upon electronic or telephone
instructions containing unauthorized, incorrect or incomplete information
received from Broker-Dealer, Associated Insurance Agency, Registered
Representatives or Agents.
(g) In the event a Registered Representative or Agent performs any
unauthorized, incorrect or incomplete transaction(s) with respect to a
Contract(s), Broker-Dealer and/or Associated Insurance Agency shall bear sole
responsibility for any and all financial liability resulting from such conduct,
shall immediately notify ASLAC in writing, and, in the case of unauthorized
transactions, shall act to terminate the sales activities of such Registered
Representative or Agent relating to the Contract(s).
(h) In the event a Registered Representative, Agent or an other persons
associated with Broker-Dealer who is involved in the sale or servicing of the
Contracts fails to meet the Broker-Dealer's or Associated Insurance Agency's
rules and standards, Broker-Dealer or Associated Insurance Agency, as the case
may be, shall immediately notify ASLAC in writing and shall terminate the sales
or servicing activities of such person related to the Contracts.
6. MISREPRESENTATION
Broker-Dealer, Associated Insurance Agency, Registered Representatives,
and Agents, in connection with soliciting sales of the Contracts or soliciting
additional premiums, purchase payments, or other transactions under a Contract,
shall not give any information or make any representations or statements
concerning the Contracts which are materially misleading or omit to state
material facts necessary in order to make the statements made not misleading, or
which are not contained in or otherwise consistent with information or
representations contained, (i) in the case of a Registered Contract, in the
prospectus, statement of additional information and registration statement for
the Contracts, or in reports or proxy statements thereof, or in promotional,
sales or advertising material or other information supplied and approved in
writing by ASLAC or ASM for such use, (ii) in the case of Qualified Contracts,
in any disclosure statement distributed by ASLAC, or (iii) in the case of
Non-Registered Contracts, in the contracts or materials furnished by ASLAC.
Broker-Dealer, Associated Insurance Agency, Registered Representatives, and
Agents may not modify or represent that they may modify any such prospectus,
statement of additional information, registration statement, disclosure
statement, contract, promotional, sales or advertising materials.
7. USE OF ADVERTISING AND PROMOTIONAL MATERIAL
Broker-Dealer, Associated Insurance Agency, Registered Representatives,
and Agents shall not use or distribute, in writing or electronically, any
advertisement or sales literature, as defined in Section 2210 of the NASD
Conduct Rules or applicable state insurance law, relating to the Contracts,
unless the specific item has been provided by American Skandia or has first been
approved for use in writing by American Skandia. American Skandia reserves the
right to recall any material provided by them at any time for any reason, and
Broker-Dealer and Associated Insurance Agency shall promptly comply with any
such request for the return of material and shall not use any such material
thereafter. Additionally, Broker-Dealer or Associated Insurance Agency must
return all manuals, forms, supplies, and any other properties furnished by
American Skandia immediately upon termination of this Agreement. Broker-Dealer,
Associated Insurance Agency, Registered Representatives, and Agents shall comply
with IM-2210-2 of the NASD Conduct Rules regarding Communications with the
Public about Variable Life Insurance and Variable Annuities.
8. SOLICITING APPLICATIONS AND PAYMENTS
(a) Broker-Dealer and Associated Insurance Agency shall review all
applications, enrollment forms or other forms seeking Contracts, additional
coverage or reinstatement of coverage under a Contract for completeness and
accuracy, as well as compliance with applicable suitability standards.
Broker-Dealer and Associated Insurance Agency shall ensure that each such form
shall bear evidence of approval by one of its principals indicating that it has
been reviewed for suitability. Broker-Dealer will promptly, but in no case later
than the end of the next business day following receipt by Broker-Dealer or a
Registered Representative, forward all complete and correct applications, forms
and/or other required documentation, together with any payments received with
the such forms, without deduction for compensation unless there has been a
written agreement for netting of sales or service compensation payable by
American Skandia to Broker-Dealer and/or Associated Insurance Agency, as
applicable.
(b) American Skandia may authorize Broker-Dealer and Associated
Insurance Agency to transmit applications, forms and/or other required
documentation to American Skandia via electronic transmission, subject to all
applicable administrative procedures and rules of American Skandia.
Broker-Dealer and Associated Insurance Agency shall provide such information in
a form and manner that is mutually agreeable to American Skandia and
Broker-Dealer and Associated Insurance Agency. Any agreement between the parties
hereto relating to electronic transmission of applications, forms and other
required documentation ("Electronic Transmission Agreement") is incorporated
into this Agreement by reference and will provide standards as to timeliness and
accuracy of electronic transmissions as well as establish rules as to liability
for any losses due to delays or transmission errors. Any Electronic Transmission
Agreement will only modify this Agreement to the extent indicated.
(c) All requests for Contracts, additional coverage, or reinstatement
of coverage are subject to ASLAC's acceptance. ASLAC reserves the right, in its
sole discretion, to reject any such request and refund or return any payment
made thereon. ASLAC also reserves the right to prescribe conditions, rules, and
regulations for the offer and acceptance of its Contracts, including additional
coverage thereon or reinstatement of coverage, which may be changed from time to
time. ASLAC will forward changes to such conditions, rules, and regulations to
Broker-Dealer or Associated Insurance Agency at their last known mailing
address.
(d) ASLAC will forward Contracts once issued to Broker-Dealer or
Associated Insurance Agency for delivery to the Contract owner according to
procedures established by ASLAC, unless ASLAC has provided otherwise.
Broker-Dealer and Associated Insurance Agency shall deliver each such Contract
to the respective Contract owner. With respect to Registered Contracts,
Broker-Dealer must deliver the Contract within the five (5) business days after
receipt by Broker-Dealer or Associated Insurance Agency. Broker-Dealer shall be
liable to ASLAC for any loss incurred by ASLAC (including consequential damages
and regulatory penalties) due to any delay by Broker-Dealer, Associated
Insurance Agency, Registered Representative or Agent in delivering such
Contract. Notwithstanding the above obligation, ASLAC reserves the right to
transmit documentation directly to the Contract owner.
(e) Notwithstanding Paragraph 8(d), Broker-Dealer, Associated Insurance
Agency, Registered Representative or Agent shall not deliver a life insurance
contract to a Contract owner if the Registered Representative or Agent or any
employees or affiliated persons of Broker-Dealer or Associated Insurance Agency
have knowledge that the Contract owner's health has changed since the
application was taken or unless a premium payment previously has been made and
accepted by ASLAC on such Contract. Any such Contract must be returned to ASLAC
at its Home Office.
9. PREMIUM PAYMENTS
All premium or purchase payments (hereinafter collectively referred to
as "Payments") are the property of ASLAC and shall be transmitted to ASLAC by
Broker-Dealer or Associated Insurance Agency immediately upon receipt by
Broker-Dealer or Associated Insurance Agency or any Agent or Registered
Representative in accordance with ASLAC's administrative procedures.
Broker-Dealer or Associated Insurance Agency may not deduct or offset any
compensation claimed by Broker-Dealer or Associated Insurance Agency, unless
there has been a written agreement for netting of sales or service compensation
payable by American Skandia to Broker-Dealer and/or Associated Insurance Agency,
as applicable. CUSTOMER CHECKS SHALL BE MADE PAYABLE TO THE ORDER OF "AMERICAN
SKANDIA LIFE ASSURANCE CORPORATION." ASLAC reserves the right to reject and
return any Payment for any reason.
10. COMPENSATION
(a) ASLAC will pay sales and/or service compensation to Broker-Dealer
(or, if required by law, to Associated Insurance Agency) in connection with the
Contracts according to the terms of the applicable Schedule(s) in effect as of
the date sales and/or service compensation is payable under the Contract.
Schedules effective on or after the issue date of a Contract will govern all
subsequent sales and/or service compensation payable for such Contract on or
after the Schedule effective date. The amount of compensation payable under any
Schedule(s), the continued availability of any compensation option(s) and other
conditions relating to payment of such compensation are subject to change upon
written notice to Broker-Dealer and Associated Insurance Agency, as applicable.
(b) ASLAC provides compensation for sale of the Contracts, as
commissions and/or asset-based compensation. ASLAC may also provide compensation
in relation to providing information consulting services to Registered Contract
owners on behalf of ASLAC. Information consulting services consist of
communicating, and where necessary, explaining to Registered Contract owners,
certain types of statistical information regarding the investment options
available under the Registered Contracts. Information consulting fees are
payable for providing such services to Registered Contract owners and not for
the sale of such Contracts. Information consulting fees may not be payable on
all Registered Contracts.
(c) Compensation to the Registered Representatives or Agents by
Broker-Dealer or the Associated Insurance Agency on Contracts solicited by the
Registered Representatives or Agents and issued by ASLAC will be governed by
agreements between Broker-Dealer or the Associated Insurance Agency and their
respective Registered Representatives or Agents. Any payment thereof will be the
Broker-Dealer's or Associated Insurance Agency's sole responsibility.
(d) If there is a change in the agent of record after the issue date of
a Contract, any subsequent compensation payable in connection with such Contract
will be governed by the compensation option elected by the agent of record at
the time the Contract was issued.
(e) Broker-Dealer and Associated Insurance Agency expressly authorize
ASLAC to charge against all compensation due or to become due to Broker-Dealer
or Associated Insurance Agency under this Agreement any amount paid or
liabilities incurred by ASLAC under this Agreement. Additionally, ASLAC may
deduct at any time any indebtedness or obligation Broker-Dealer or Associated
Insurance Agency owes ASLAC from any monies due under this Agreement.
(f) American Skandia shall not be obligated to pay any compensation
related to Registered Contracts if Broker-Dealer is disqualified from continued
registration with the NASD. In such event, American Skandia will hold any such
compensation from the date of such disqualification, provided Broker-Dealer (i)
commences an appeal to the NASD within 180 days following the disqualification
notice; (ii) actively pursues such appeal; and (iii) notifies American Skandia
of an appeal as well as the outcome of such appeal. American Skandia may, at its
sole discretion, require documentation regarding the outcome of said appeal.
Should Broker-Dealer's NASD registration be reinstated, all compensation due or
becoming due during the period of disqualification shall be immediately paid,
without interest, provided such payment does not violate any NASD rules or
regulations in effect at the time of such payment.
(g) Any outstanding indebtedness Broker-Dealer or Associated Insurance
Agency owes ASLAC or ASM shall become immediately due and payable upon
termination of this Agreement.
11. RETURN OF COMPENSATION
If ASLAC is required to refund premiums or purchase payments, or return
account values on any Contract for any reason, then any compensation otherwise
payable will be adjusted as set forth in the Schedule(s). Any compensation
previously paid in connection with such Contract must be repaid to ASLAC or ASM
within thirty (30) business days notice to Broker-Dealer or Associated Insurance
Agency of such a return of amounts in connection with such Contract. American
Skandia shall have the right to offset any such returned compensation against
amounts otherwise payable by American Skandia. American Skandia agrees to notify
Broker-Dealer and Associated Insurance Agency within thirty (30) days after any
action that results in a charge back of compensation.
12. PAYMENT TO ASSOCIATED INSURANCE AGENCY
(a) Broker-Dealer and Associated Insurance Agency represent and warrant
that they are in compliance with the terms and conditions of one or more
no-action letters issued by the SEC with respect to an insurance agency
associated with a registered broker-dealer not registering as a broker-dealer
with the SEC. In reliance on such representation, American Skandia agrees to pay
compensation in connection with the Contracts, that would otherwise be payable
to Broker-Dealer, to the Associated Insurance Agency that is properly state
licensed. Broker-Dealer and Associated Insurance Agency represent and warrant
that any compensation payable by American Skandia in connection with the
Contracts shall be distributed by Associated Insurance Agency only to duly
licensed and properly appointed Registered Representatives and Agents.
(b) Broker-Dealer and Associated Insurance Agency shall notify ASM
immediately in writing if Broker-Dealer and/or and Associated Insurance Agency
fail to comply with any such terms and conditions and shall take such measures
as may be necessary to comply with any such terms and conditions. If Associated
Insurance Agency is the same party as Broker-Dealer, this Paragraph 12 does not
apply, and Broker-Dealer shall undertake all the duties, responsibilities and
privileges under this Agreement.
13. HOLD HARMLESS AND INDEMNIFICATION PROVISIONS
(a) Broker-Dealer and Associated Insurance Agency shall indemnify and
hold American Skandia harmless from any liability, loss or expense sustained as
a result of any acts or omissions, or the violation or noncompliance with any
applicable federal or state law or regulation or any provision of this Agreement
by Broker-Dealer, its Registered Representatives and associated persons of
Broker-Dealer, Associated Insurance Agency and its Agents and any employees or
affiliated persons, of any of the foregoing, including but not limited to, any
claim by one or more Agents or Registered Representatives for amounts alleged to
be payable pursuant to this Agreement for the sale of any Contracts.
(b) American Skandia shall indemnify and hold Broker-Dealer and
Associated Insurance Agency harmless from any liability, loss or expense
sustained as a result of any acts or omissions, or the violation or
noncompliance with any applicable federal or state law or regulation or any
provision of this Agreement by American Skandia and any employees or affiliated
persons of American Skandia.
(c) Indemnification of Broker-Dealer and Associated Insurance Agency by
American Skandia is subject to the condition that Broker-Dealer and Associated
Insurance Agency promptly notify American Skandia of any claim or suit made
against Broker-Dealer or Associated Insurance Agency and that Broker-Dealer and
Associated Insurance Agency allow American Skandia to make such investigation,
settlement, or defense thereof as American Skandia deems prudent.
14. NON-ASSIGNABILITY PROVISION
No assignment of this Agreement or any duty or compensation payable
hereunder shall be valid unless authorized by ASLAC in writing. Every assignment
shall be subject to any indebtedness and obligation Broker-Dealer or Associated
Insurance Agency owes ASLAC and any applicable state insurance laws or
regulations pertaining to such assignments.
15. NON-WAIVER PROVISION
(a) No waiver or modification of this Agreement will be effective
unless it is in writing and is signed by all parties hereto. Notwithstanding the
above, the parties agree that any Schedule(s) to this Agreement may be amended
from time to time, and that such revised Schedule(s) shall be automatically
effective.
(b) Failure of any party to insist on strict compliance with any of the
conditions of this Agreement shall not be construed as a waiver of any of the
conditions, but the same shall remain in full force and effect. No waiver of any
of the provisions of this Agreement shall be deemed, or shall constitute, a
waiver of any other provisions, whether or not similar, nor shall any waiver
constitute a continuing waiver. Failure of any party to terminate the Agreement
for any of the causes set forth in this Agreement will not constitute a waiver
of that party's right to terminate this Agreement at a later time for any of
these causes.
16. AMENDMENTS
Except as stated in Paragraph 15, no amendment to this Agreement will
be effective unless it is in writing and signed by all parties hereto.
17. INDEPENDENT CONTRACTORS
Broker-Dealer and its Registered Representatives, and Associated
Insurance Agency and its Agents are independent contractors with respect to
ASLAC and ASM. Nothing contained in this Agreement is intended to create a
relationship of employee and employer between American Skandia and Broker-Dealer
and/or its Registered Representatives, or Associated Insurance Agency and its
Agents.
18. NOTIFICATION OF COMPLAINTS OR DISCIPLINARY PROCEEDINGS
(a) Broker-Dealer and Associated Insurance Agency agree to notify
American Skandia immediately of any Contract owner complaints or disciplinary
proceedings against Broker-Dealer, Associated Insurance Agency or any Registered
Representatives or Agents relating to the Contracts or any threatened or filed
arbitration action or civil litigation arising out of solicitation or servicing
of the Contracts. Additionally, Broker-Dealer and Associated Insurance Agency
shall promptly forward to American Skandia at its Home Office, by certified
mail, any notice of claim, any legal process or notice of claims served on
Broker-Dealer or Associated Insurance Agency in a suit or proceeding against
Broker-Dealer or Associated Insurance Agency arising out of the conduct of
business under this Agreement.
(b) Broker-Dealer and Associated Insurance Agency shall cooperate with
American Skandia in investigating and responding to any Contract owner
complaint, attorney demand, or inquiry received from state insurance departments
or other regulatory agencies or legislative bodies, and in any settlement or
trial of any actions arising out of the conduct of business under this
Agreement.
(c) Any response by Broker-Dealer or Associated Insurance Agency to an
individual Contract owner complaint arising out of the conduct of business under
this Agreement must be sent to American Skandia for its approval before being
sent to the Contract owner. Any responses to such Contract owner complaints must
be sent to American Skandia not less than five (5) business days before being
sent to the Contract owner, except that if a more prompt response is required,
the proposed response may be communicated to American Skandia by telephone,
facsimile or in person.
(d) Broker-Dealer and Associated Insurance Agency are not authorized,
and are expressly forbidden, from settling or offering to settle any complaint
or litigation from a Contract owner, assignee, beneficiary or other party in
interest to a Contract.
(e) Failure to comply with American Skandia's procedures for
notification, investigation and response to Contract owner complaints by
Broker-Dealer, Associated Insurance Agency, any Registered Representatives or
Agents may be grounds for immediate termination of this Agreement as well as
other limitations contained in Paragraph 13.
19. BOOKS, ACCOUNTS AND RECORDS
Broker-Dealer and Associated Insurance Agency agree to maintain books,
accounts and records so as to clearly and accurately disclose the nature and
details of transactions relating to the Contracts. American Skandia reserves the
right to examine and inspect said records during normal business hours.
Additionally, Broker-Dealer and Associated Insurance Agency shall promptly
submit such books, accounts and records, upon request, to the regulatory and
administrative bodies that have jurisdiction over ASLAC and ASM or any
applicable court of competent jurisdiction.
20. LIMITATIONS
(a) No party other than ASLAC shall have authority on behalf of ASLAC
to incur any indebtedness or liability, to make, alter, or discharge any
Contract issued by ASLAC, to waive any forfeiture provision or to grant, permit,
or extend the time of making any Payments, or to alter the forms which ASLAC may
prescribe or substitute other forms in place of those prescribed by ASLAC or to
enter into any proceeding in a court of law or before a regulatory agency in the
name of or on behalf of ASLAC.
(b) Broker-Dealer and Associated Insurance Agency shall not offer or
pay any rebate of premium or purchase payment or make any offer of or provide
any other inducement not specified in the Contracts, shall not make any
misrepresentation or incomplete comparison between contracts or companies for
the purposes of inducing a policy or contract of any other company to lapse,
forfeit or surrender such policy or contract and shall comply with all
applicable laws and regulations related to replacement of contracts or policies
of insurance.
21. CONFIDENTIALITY & INTELLECTUAL PROPERTY RIGHTS
Each party to this Agreement shall maintain the confidentiality of any
customer list and any material designated as confidential and/or proprietary by
the other party, and shall not use or disclose such information without the
prior written consent of the party designating such material as confidential
and/or proprietary. Broker-Dealer and Associated Insurance Agency agree and
acknowledge that all intellectual property rights, including but not limited to
patents, copyrights, and trademarks, which Broker-Dealer and Associated
Insurance Agency (or any Registered Representatives or Agents) develops or
arising out of any service performed by Broker-Dealer and Associated Insurance
Agency (or any Registered Representatives or Agents) under the terms of this
Agreement are the sole and exclusive property of ASLAC. Broker-Dealer and
Associated Insurance Agency will, at ASLAC's request, provide ASLAC with all
executed documents, including assignment(s) to ASLAC, of all such intellectual
property rights.
22. EXPENSES
Broker-Dealer and Associated Insurance Agency shall bear all of their
expenses in performance of this Agreement.
23. RIGHT TO DISCONTINUE CONTRACTS
ASLAC reserves the right to modify, change or discontinue offering any
of the Contracts at any time in any jurisdiction. To the extent permitted under
the Contracts, ASLAC reserves the right to terminate a Contract in accordance
with its terms or the extent permitted by law or regulation.
24. SCOPE OF AGREEMENT
All Schedule(s) attached to this Agreement are incorporated into and
made part of this Agreement. Schedules are subject to change at any time with
proper notice to Broker-Dealer and Associated Insurance Agency.
Breach of any of the Schedules constitutes breach of this Agreement.
25. REVOCATION OF PRIOR AGREEMENTS
Upon execution of this Agreement, all previous agreements between
ASLAC, ASM, Broker-Dealer and Associated Insurance Agency relating to the
subject matter hereof are terminated. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter hereof and
supersedes all prior oral and written understandings, agreements or
negotiations. No prior writings shall be used by Broker-Dealer or Associated
Insurance Agency in connection with the interpretation of any provision of this
Agreement. Notwithstanding, the foregoing, execution of this Agreement shall not
affect any obligations, which have already accrued under any prior agreement.
Any and all acts, or failures to act, occurring during the term of such prior
agreement are governed by the terms of such prior agreement.
26. TERMINATION
(a) This Agreement may be terminated at the discretion of any party to
this Agreement upon thirty (30) days written notice to the other parties, or at
the option of any party hereto upon the breach by any other party of the
representations, warranties and/or covenants and terms of this Agreement.
American Skandia will mail written notice of termination to the last known
mailing address of Broker-Dealer or Associated Insurance Agency. Broker-Dealer
and Associated Insurance Agency should mail any written notice of termination to
ASLAC at the address shown in Paragraph 27. Paragraph 10, 11, 13 and 21 shall
survive any such termination.
(b) This Agreement shall automatically terminate without notice upon
occurrence of any of the following events:
(i) Broker-Dealer or Associated Insurance Agency files for
bankruptcy or dissolution, or financial or corporate reorganization under
federal or state insolvency laws or if organized as a partnership, bankruptcy or
dissolution of any of the partners, except that in such case the Agreement shall
only terminate as to the bankrupt or dissolved partner.
(ii) Fraud or gross negligence by Broker-Dealer or Associated
Insurance Agency in the performance of any duties imposed by this Agreement or
withholding or misappropriation, for Broker-Dealer or Associated Insurance
Agency's own use, funds belonging to ASLAC or ASLAC's Contract owners,
applicants, beneficiaries or payees.
(iii) When and if Broker-Dealer or Associated Insurance Agency
materially breach this Agreement or materially violate applicable Federal or
state laws, including but not limited to federal securities laws or state
insurance laws in any jurisdiction in which Broker-Dealer or Associated
Insurance Agency transact business, whether or not in relation to American
Skandia or Contracts issued by ASLAC.
(iv) When and if Broker-Dealer or Associated Insurance Agency
fail to obtain renewal of a necessary license in any jurisdiction, but only as
to that jurisdiction.
(v) When and if Broker-Dealer is disqualified for continued
membership with the NASD or registration with the SEC, but only as to Registered
Contracts.
27. NOTICE
(a) In the event of sale, transfer or assignment of a controlling
interest in Broker-Dealer or Associated Insurance Agency, notice shall be
provided in writing to ASLAC no less than thirty (30) days before the closing
date.
(b) All notices to American Skandia relating to this Agreement should
be delivered by certified or express mail to:
Associate General Counsel
American Skandia Life Assurance Corporation
Xxx Xxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxxx 00000
All notices to Broker-Dealer and Associated Insurance Agency will be mailed to
their respective address listed below.
28. SEVERABILITY
The provisions of this Agreement are severable. Should any provision of
this Agreement be held unenforceable, those provisions not affected by such
determination shall remain in full force and effect.
29. GOVERNING LAW
This Agreement will be construed in accordance with the laws of the
State of Connecticut exclusive of conflicts of law rules.
30. HEADINGS
The headings in this Agreement are for reference purposes only and
shall not be deemed part of this Agreement or affect its meaning or
interpretation.
By executing this Sales Agreement, Broker-Dealer and any Associated Insurance
Agencies acknowledge that each has read this Agreement in its entirety and is in
agreement with the terms and conditions outlining the rights and duties of
ASLAC, ASM, Broker-Dealer and any Associated Insurance Agencies under this
Agreement.
IN WITNESS WHEREOF, the undersigned parties have executed this Agreement to be
effective as set forth above, upon the Effective Date below.
AMERICAN SKANDIA LIFE ASSURANCE AMERICAN SKANDIA MARKETING,
CORPORATION INCORPORATED
By: ___________________________________ By: ___________________________________
Title: _________________________________ Title: _____________________________________
BROKER-DEALER ASSOCIATED INSURANCE AGENCY
------------------------------------- -------------------------------------
(Name) (Name)
------------------------------------- -------------------------------------
(Street Address) (Street Address)
------------------------------------- -------------------------------------
(City, State, Zip) (City, State, Zip)
By: _______________________________ By: _______________________________
Title: _______________________________ Title:_______________________________
For States: ______________________________
Tax ID#:
PLEASE ATTACH ADDITIONAL SIGNATURE PAGES IF MORE
THAN ONE ASSOCIATED INSURANCE AGENCY EXISTS
EFFECTIVE DATE:
