Exhibit 10.26
AGREEMENT
AGREEMENT made as of the 1st day of August, 1999, by and between
Allstate Insurance Company, an Illinois insurance company, (" Allstate") and LSA
Securities, Inc., an Oregon Corporation, ("LSA") and an indirect wholly owned
subsidiary of Allstate Insurance Company;
WHEREAS, LSA desires to offer to the public certain variable insurance
products and mutual funds ("Products"). The products will be issued by life
insurance subsidiaries of Allstate ("Life Insurers") and offered through LSA' s
Registered Representatives ("Representatives"). For purposes of this Agreement,
the term Representative is limited to those LSA Registered Representatives in
the Allstate Agent Division who are also licensed and appointed agents of such
Life Insurers and Allstate; and
WHEREAS, Allstate currently acts as paymaster for compensation relating
to the sale of certain fixed products payable by the Life Insurers to certain
Allstate Agents.
WHEREAS, Allstate Life Insurance Company, an Illinois insurance company
and wholly owned subsidiary of Allstate ("Allstate Life") and Lincoln Benefit
Life Company have obtained no-action relief from the staff of the Securities and
Exchange Commission ("SEC") in a letter dated September 12, 1988, (the "XXXX
No-Action Letter") in which the SEC staff indicated it would not recommend
enforcement action if, subject to certain conditions, each of them acted as
paymaster for an affiliated broker/dealer with respect to contracts issued by
them;
WHEREAS, Allstate and Allstate Life shall be directed by essentially
the same management.
NOW, THEREFORE, in consideration of their mutual promises, Allstate and
LSA hereby agree as follows:
1. PAYMENT OF COMPENSATION AND EXPENSES
A. COMPENSATION FOR SALE OF PRODUCTS. Allstate shall act as
"paying agent" on behalf of LSA for all commissions and other
compensation payable by LSA for the sale of Products effected
through Representatives.
B. COMPENSATION TO ALLSTATE. Allstate shall be compensated for
actual costs and expenses incurred in performing services
under the terms and conditions of this Agreement. Payments for
services provided hereunder shall be remitted through the
intercompany settlement process. Allstate shall not be
entitled to any share of the commission (s) paid as a result
of the services provided hereunder.
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2. PERFORMANCE OF SERVICES
A. RATE OF COMPENSATION. The rate of compensation payable to
Representative(s) shall be paid in accordance with the
instructions set forth in Exhibit A, which may be amended from
time to time pursuant to further written agreement between the
parties. Allstate and LSA acknowledge that Representatives
shall have no interest in this Agreement or right to any
compensation to be paid by or on behalf of LSA hereunder prior
to their receipt thereof. LSA may, from time to time, provide
Allstate with updated instructions in accordance with the
format provided in Exhibit A. Said request shall be in writing
and shall be provided to Allstate no less than thirty (30)
days prior to the date on which said revised instructions
shall take effect. In making payments hereunder, Allstate is
providing a clerical and ministerial service to LSA, and
Allstate shall not exercise any discretion over the amount or
allocation of the payments.
B. IDENTIFICATION OF COMPENSATION. Compensation to be paid on
behalf of LSA under the terms and conditions of this
Agreement, may be included with other compensation paid by
Allstate, but any compensation attributable to LSA shall be
identified as such on supporting statements provided to
payees.
C. NO RIGHT TO SETTLE. Allstate shall have no right to settle any
claim(s) brought by Representative(s) with regard to
compensation payable by LSA, except as specifically directed
in writing by LSA.
D. BOOKS AND RECORDS. During the term of this Agreement, and for
a period of three (3) years after its expiration, Allstate
shall maintain and preserve books and records relating to
compensation paid hereunder on behalf of, and as agent for,
LSA in compliance with Rules 17a-3 and 17a-4 under the
Securities Exchange Act of 1934 (the "1934 Act") and Rule 2820
of the Conduct Rules adopted by the National Association of
Securities Dealers, Inc. In addition, compensation payments
shall be reflected on the books and records maintained by LSA.
Allstate represents that any books or records it maintains on
behalf of LSA belong solely to LSA and, at the request of LSA,
shall be made available to LSA for its use or for inspection
by any state, federal, or other regulator with jurisdiction
over LSA. Upon reasonable notice to Allstate, LSA shall have
the right during normal business hours and at its own expense,
to inspect the books and records relating to the compensation
paid hereunder.
E. SECURITIES ACTIVITIES. LSA has and assumes full responsibility
for the securities activities of all persons engaged directly
and indirectly in the securities operations, each such person
being an "associated person" of LSA, as defined in Section
3(a)(18) of the 1934 Act and, therefore, a person for whom LSA
has full responsibility with regard to training, supervision
and control, as contemplated by Section 15(b)(4 )(E) of the
0000 Xxx.
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F. ADDITIONAL REQUIREMENTS. In all dealings with or on behalf of
LSA, Allstate shall comply with all applicable provisions of
Exchange Act Release No. 8389, the applicable terms and
conditions of the XXXX No Action Letter, and the applicable
terms and conditions of the TIME INSURANCE CO. No-Action
Letter dated October 17, 1989. Copies of these materials are
attached as Exhibit B to this Agreement.
G. RIGHT TO SUBCONTRACT. Subject to LSA's consent, Allstate may
subcontract to a Third Party Subcontractor ("Subcontractor")
any or all of the services required of it under this
Agreement. Prior to any such subcontracting, Allstate shall
enter into a written Agreement with Subcontractor in which
Subcontractor accepts responsibility for all obligations that
would otherwise be performed by Allstate in accordance with
the terms of this Agreement.
3. MISCELLANEOUS
A. INDEMNIFICATION. Allstate shall be responsible for and
indemnify, defend and hold LSA harmless for any damages,
claims, and/or causes of action brought by third parties
arising out of or due to Allstate's failure to perform in
accordance with the terms and conditions of this Agreement.
Allstate, however, shall not be responsible for any loss of
profits, or any other loss, which is indirect, special,
incidental or consequential, or punitive damages.
B. TERM OF AGREEMENT. This Agreement shall become effective as of
the date of its execution and shall continue in full force and
effect until terminated pursuant to no less than one hundred
and twenty (120) days written notice thereof. This Agreement,
however, may terminate automatically if Allstate and LSA cease
to be affiliated. This Agreement may be amended at any time by
mutual written agreement between the parties hereto.
C. APPLICABLE LAW. This Agreement shall be construed in
accordance with the laws of the state of Illinois without
regard to conflict of law principles.
D. COOPERATION WITH REGULATORY AUTHORITIES. The parties agree to
cooperate fully in any regulatory examination, investigation,
or proceeding or any judicial proceeding arising in connection
with the securities activities of LSA and the Representatives.
The parties shall furnish applicable federal, state and self-
regulatory authorities with jurisdiction over LSA with any
information or reports in connection with the payments made
under this Agreement that such authorities may request in
order to ascertain whether the securities activities described
herein are being conducted in a manner consistent with any
applicable law or regulation.
E. ASSIGNMENT. This Agreement and any rights pursuant hereto are
not subject to assignment by either party hereto without the
prior written consent of the other party, except by operation
of law. The representations, warranties, covenants, and
agreements contained in this Agreement shall be binding upon,
extend to an inure
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to the benefit of the parties hereto, and each of their,
successors and assigns respectively.
F. RELATIONSHIP OF PARTIES. Allstate employees performing duties
hereunder at all times during the term of this Agreement shall
be in the employment, under the supervision and control of
Allstate and shall not be deemed employees of LSA or Allstate
Life.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their authorized officers designated below as of the date specified
above.
ALLSTATE INSURANCE COMPANY LSA SECURITIES, INC.
By: /s/ Xxxxx X. Xxxx By: /s/Xxxxx X. Xxxxxx
----------------- ------------------
Name: Xxxxx X. Xxxx Name: Xxxxx X. Xxxxxx
Title: Vice President and Treasurer Title: President
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EXHIBIT A
[LSA Securities, Inc. Letterhead]
[Letter of Instruction from LSA to Allstate]
Allstate Insurance Company
To Whom It May Concern:
With reference to the Agreement between you and the undersigned
regarding the payment of commissions for securities transactions to our
registered persons ("Representatives") {DRAFTING NOTE: PREVIOUS REFERENCE HAD
BEEN TO "REPS"-I CHANGED TO 'REPRESENTATIVES', IN ORDER TO BE CONSISTENT WITH
THE AGREEMENT}, you are hereby directed to follow these instructions:
o You shall pay commissions to Representatives for the sale of securities
affected on behalf of LSA in accordance with the compensation schedule
attached as Attachment A hereto.
o You will be furnished information regarding compensation payable to
each Representative for each processing period through downloads into
the Ralie system.
o Funds will be transferred to you via wire or the inter-company process.
o Payments made to Representatives may be aggregated with other
compensation payable for other products and services for which you act
as payor.
o You must furnish a statement to each Representative detailing the
compensation paid on behalf of LSA and indicating that such portion is
paid on behalf of LSA.
o You may make deductions from commissions that have been authorized by
LSA or by the Representative.
o In the case of a Representative who is your common law employee, you
are authorized to include securities compensation in the base of
compensation payable to the Representative, and to make deductions for
fringe benefits from such base so long there is no differential in the
proportionate amount of securities compensation earned by the
Representative that is allocated to fringe benefits as compared with
the amount of non- securities compensation earned by the Representative
that is allocated to the same fringe benefits.
o You are authorized to make any deductions from compensation payable to
a Representative for wage garnishments ordered by a court of competent
jurisdiction against such Representative.
o You will furnish us on a monthly basis with a report concerning
compensation paid by you during the month pursuant to the Agreement.
Signed: LSA Securities, Inc.]
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ATTACHMENT A
LSA COMPENSATION SCHEDULE
1. WHAT IS THE COMPENSATION STRUCTURE FOR NEW PRODUCTS?
The compensation structure is as follows:
------------------------------------------------------------------------------------------------------------------
LBL VARIABLE UNIVERSAL LIFE
---------------------------------------------------------- ------------------ --------------------- --------------
AGREEMENT 1ST YEAR RENEWAL YEARS 1ST YEAR
2-5 EXCESS
---------------------------------------------------------- ------------------ --------------------- --------------
Employee Agents (R830, R1500, R3000) 35% 2% 2%
---------------------------------------------------------- ------------------ --------------------- --------------
Non employee Agents (R3001) 40% 2% 2%
---------------------------------------------------------- ------------------ --------------------- --------------
Life Specialists (Countrywide excluding California and 40% 2% 2%
New York)
---------------------------------------------------------- ------------------ --------------------- --------------
Life Specialists (California) 34% 2% 2%
---------------------------------------------------------- ------------------ --------------------- --------------
**Compensation is not paid on the premium for the Primary Insured Term Rider.
----------------------------------------------------------------------------------
ALLSTATE VARIABLE ANNUITY OPTION A
----------------------------------------------------------------------------------
AGREEMENT INITIAL AND SUBSEQUENT PAYMENTS
-------------------------------------- -------------------------------------------
All 2.5%
-------------------------------------- -------------------------------------------
----------------------------------------------------------------------------------
ALLSTATE VARIABLE ANNUITY OPTION B WITH 25 BP TRAIL
----------------------------------------------------------------------------------
AGREEMENT INITIAL AND POLICY VALUE
SUBSEQUENT PAYMENTS
------------------------- ------------------------------- ------------------------
All 1.5% .25%
------------------------- ------------------------------- ------------------------
----------------------------------------------------------------------------------
MUTUAL FUNDS
----------------------------------------------------------------------------------
AGREEMENT FUNDS COMPENSATION
------------------------- ------------------------------- ------------------------
All All 35% of the
Broker-Dealer
Commission
------------------------- ------------------------------- ------------------------
2. IS COMPENSATION ANNUALIZED?
No. For LBL Variable Universal Life, compensation is paid as premiums
are collected. And, for Allstate Variable Annuity, Option A and Option
B compensation is paid as payments are received.
3. HOW IS POLICY VALUE COMPENSATION PAID?
Policy value compensation is paid quarterly, beginning with the first
quarter following the policy Anniversary.
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FOR EXAMPLE: POLICY ISSUED MAY 01, 1999
POLICY ANNIVERSARY IS MAY 01, 2000
THE FIRST POLICY VALUE COMPENSATION IS PAID
OUT IN AUGUST 2000
4. IS THE POLICY VALUE PERCENTAGE OF .25% A QUARTERLY PERCENTAGE?
No. Policy value compensation paid is 25 Basis Points which equals .25%
annually (.00063 Quarterly).
5. WHAT DOES 35% OF THE BROKER-DEALER COMMISSION REPRESENT ON THE SALE OF
MUTUAL FUNDS?
Broker-dealer commissions vary within a Fund family and generally range
from 3% -5% for Class A and B shares. Broker-dealer commissions on
purchases over $250,000 and Class C shares generally range from 1% -2%.
Agent compensation is 35% of the broker- dealer percentage.
FOR EXAMPLE: CUSTOMER PURCHASES $100,000.00 OF
MUTUAL FUNDS BROKER-DEALER EARNS
$4000.00 (4%)
AGENT EARNS $1400.00
($100,000.00 X 4% = $4000.00 X 35%
= $1400.00)
6. WHAT DO I RECEIVE FOR PRODUCTION CREDIT?
On the LBL Variable Universal Life, production credit is 100% of the
First Year Commission Target Premium. Production Credit is not given on
the premium for the Primary Insured Term Rider.
On the Allstate Variable Annuity Option A and Option B, production
credit is 4% of initial and subsequent payments.
On the Mutual Funds, production credit is 2% on all purchases.
7. DO I RECEIVE PRODUCTION CREDIT IF MY CUSTOMER PAYS IN MORE THAN THE
COMMISSION TARGET PREMIUM WITHIN THE FIRST YEAR?
Yes. On the LBL Variable Universal Life product, production credit is
given at 4% on any first year payment in excess of the First Year
Commission Target Premium.
8. IS PRODUCTION CREDIT ANNUALIZED?
For the LBL Variable Universal Life products, production credit is
annualized; however, for the Allstate Variable Annuity and Mutual
Funds, production credit is not annualized.
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9. CAN AN ALLSTATE AGENT PARTNER WITH A LIFE SPECIALIST RECEIVE FULL
PRODUCTION CREDIT?
It depends. As long as the Allstate Agent meets state licensing
requirements as well as Allstate requirements for eligibility to sell.
10. CAN TWO ALLSTATE AGENTS PARTNER ON A POLICY?
Perhaps. Two Allstate Agents can partner on a policy as long as both
Agents meet state licensing requirements as well as Allstate
requirements for eligibility to sell. Licensed Allstate Agents can
split commissions on a policy based on the current split percentages.
Only the writing Agent receives production credit.
11. ARE THE NEW PRODUCTS INCLUDED IN MY OFFICE EXPENSE ALLOWANCE?
The LBL Variable Universal Life, the Allstate Variable Annuity, and the
Mutual Funds are included in Office Expense Allowance.
12. ARE THE NEW PRODUCTS INCLUDED IN MY PRODUCTION ALLOWANCE?
The LBL Variable Universal Life, the Allstate Variable Annuity, and the
Mutual Funds are included in Production Allowance.
13. AM I ABLE TO TRACK THESE POLICIES ON MY ALSTAR?
The Allstate Variable Annuity is included in ALSTAR Inquiry and
Endorsement; however, the LBL Variable Universal Life and the Mutual
Funds are not.
14. IF MY CUSTOMER ALREADY HAS A UNIVERSAL LIFE PRODUCT AND WISHES TO
TERMINATE THAT POLICY AND APPLY FOR AN LBL VARIABLE UNIVERSAL LIFE, DO
I RECEIVE PRODUCTION CREDIT AND COMPENSATION?
The Allstate replacement guidelines apply for the new products. Any
production credit given is based on the difference between the old
policy's first year premium (MAP) and the new policy's first year
premium (Commission Target premium).
Compensation is paid on the difference in premium at the existing
replacement rates. (Life Specialists are paid on the regular new
business rates since they are lower than the replacement rates.)
Surrender charges may apply.
15. WHAT IF THE PREMIUM ON THE OLD POLICY IS MORE THAN THE PREMIUM ON THE
NEW POLICY?
No new production credit or compensation is given.
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16. IF I HAVE A CUSTOMER WHO ALREADY HAS AN ALLSTATE OR LBL ANNUITY AND
WISHES TO TRANSFER THE PREMIUM FROM THE EXISTING ANNUITY AND APPLY FOR
AN ALLSTATE VARIABLE ANNUITY, DO I RECEIVE PRODUCTION CREDIT OR
COMPENSATION? (SURRENDER CHARGES MAY APPLY.)
Production credit and compensation is not paid on the amount
transferred from an existing Allstate or LBL Annuity to any other
Allstate or LBL Annuity (including the Allstate Variable Annuity).
Production credit and compensation is paid on any new payments to the
policy.
17. AM I ABLE TO EARN A BONUS ON THE NEW PRODUCTS?
Each of the new products can help you to qualify for a bonus and bonus
is paid out on each of the new products as long as you have a valid
Series 6 and 63 (if required) NASD license.
18. HOW MUCH CREDIT IS APPLIED TOWARDS THE QUALIFYING PREMIUM AND BONUS
BASE?
On the LBL Variable Universal Life product, 100% of the First Year
Commission Target Premium is applied to both the qualifying premium and
the bonus base.
On the Allstate Variable Annuity, the production credit (4% of initial
and subsequent payments) is applied to the qualifying premium and 100%
of the initial and subsequent payments are applied to the bonus base.
On the Mutual Funds, the production credit (2% of the payments) is
applied to the qualifying purchase and 100% of the broker-dealer
commission is applied to the bonus base.
19. WHAT IS THE DIFFERENCE BETWEEN BONUS BASE AND QUALIFYING PREMIUM?
The qualifying premium is the premium that helps you achieve a bonus
level. The bonus base is the premium that bonus is paid out on.
20. HOW DO I DETERMINE WHAT BONUS LEVEL I ACHIEVE?
The Bonus Level is determined by your TOTAL qualifying premium.
Qualifying premium is the production credit earned on all products
(Permanent, Term, Variable Universal Life, Variable Annuity, and Mutual
Funds)
21. DID BONUS LEVELS CHANGE AS A RESULT OF INCLUDING THESE NEW PRODUCTS?
No. These new products will increase the potential for earning a higher
bonus.
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22. WHAT ARE THE BONUS RATES FOR THE NEW PRODUCTS?
The bonus rates are as follows:
-----------------------------------------------------------------------------------------------------------
VARIABLE UNIVERSAL LIFE BONUS RATES
-----------------------------------------------------------------------------------------------------------
Level Plan C Plan E / Plan I Countrywide California
Life Specialist Life Specialist
-------------- ----------------------- ---------------------- ---------------------- ----------------------
1 10% 12% 5% 6%
-------------- ----------------------- ---------------------- ---------------------- ----------------------
2 16% 20% 8% 10%
-------------- ----------------------- ---------------------- ---------------------- ----------------------
3 24% 28% 13% 14%
-------------- ----------------------- ---------------------- ---------------------- ----------------------
4 32% 40% 19% 21%
-------------- ----------------------- ---------------------- ---------------------- ----------------------
-----------------------------------------------------------------------------------------------------------
ALLSTATE VARIABLE ANNUITY BONUS RATES
-----------------------------------------------------------------------------------------------------------
Level Plan C / Life Specialists Plan E / Plan I
-------------- ------------------------------------------------------- ------------------------------------
1 .3% .5%
-------------- ------------------------------------------------------- ------------------------------------
2 .5% 1.0%
-------------- ------------------------------------------------------- ------------------------------------
3 .8% 1.5%
-------------- ------------------------------------------------------- ------------------------------------
4 1.2% 2.0%
-------------- ------------------------------------------------------- ------------------------------------
-----------------------------------------------------------------------------------------------------------
MUTUAL FUND BONUS RATES*
-----------------------------------------------------------------------------------------------------------
Level Plan C / Life Specialists Plan E / Plan I
-------------- ------------------------------------------------------- ------------------------------------
1 4% 6%
-------------- ------------------------------------------------------- ------------------------------------
2 8% 12%
-------------- ------------------------------------------------------- ------------------------------------
3 12% 18%
-------------- ------------------------------------------------------- ------------------------------------
4 16% 24%
-------------- ------------------------------------------------------- ------------------------------------
*NOTE: Bonus rates are a percentage of the broker-dealer commission for
the Mutual Funds only.
LIFE SPECIALIST PRODUCTION BONUS
EXAMPLE
QUALIFYING PREMIUM:
--------------------
VARIABLE UNIVERSAL LIFE = 100% of Commission Target Premium
plus 4 % of Excess
VARIABLE ANNUITY = 4% of Initial and Subsequent Payments
MUTUAL FUNDS = 2% of Purchases
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EXAMPLE BASED ON LIFE SPECIALIST QUALIFYING FOR LEVEL = 3
(Qualifying Premium between $34,000 and $39,999)
------------------------------- -------------------------- --------------------------- -------------------------------
PRODUCT PREMIUM/ % APPLIED TO PRODUCTION PRODUCTION CREDIT/QUALIFYING
PURCHASE CREDIT PREMIUM
------------------------------- -------------------------- --------------------------- -------------------------------
Variable Universal Life $15,000 100% $15,000
------------------------------- -------------------------- --------------------------- -------------------------------
Variable Annuity $400,000 4.0% $16,000
------------------------------- -------------------------- --------------------------- -------------------------------
Mutual Fund $300,000 2.0% $6,000
------------------------------- -------------------------- --------------------------- -------------------------------
Total: $37,000
BONUS BASE:
----------
VARIABLE UNIVERSAL LIFE = 100% of Commission Target Premium plus 4% of Excess
VARIABLE ANNUITY = 100% of Initial and Subsequent Payments
MUTUAL FUNDS = 100% of Broker-dealer commissions
---------------------------- ------------------- --------------------- ---------------- --------------- --------------
PRODUCT PREMIUM/ BROKER-DEALER BONUS BASE BONUS RATE BONUS
PURCHASE COMMISSION RATE PAID
---------------------------- ------------------- --------------------- ---------------- --------------- --------------
Variable Universal Life $15,000 N/A $15,000 13.0% $1,950
---------------------------- ------------------- --------------------- ---------------- --------------- --------------
Variable Annuity $400,000 N/A $400,000 0.8% $3,200
---------------------------- ------------------- --------------------- ---------------- --------------- --------------
Mutual Fund $300,000 5.0%* $15,000** 12.0% $1,800
---------------------------- ------------------- --------------------- ---------------- --------------- --------------
Total $6,950
* Broker-dealer commission rates vary within Funds. The 5.0% shown is strictly
an example
** Deposit x broker-dealer commission rate ($300,000 x 5.0%)
NOTE: IF THE LIFE SPECIALIST QUALIFIED FOR CONSISTENCY, THE BONUS PAID WOULD
INCREASE BY $3,100, BECAUSE PAYOUTS ARE AT LEVEL 4 BONUS RATES.
23. CAN I EARN A CONSISTENCY BONUS ON THE NEW PRODUCTS?
Yes. Life Specialists and agents, on Quarterly Bonus, who achieve bonus
level production on a consistent basis, are rewarded with a Consistency
Incentive as part of the Quarterly Bonus payout. To qualify for a
consistency bonus, you must earn a bonus in the current quarter, have
achieved a bonus in at least two of the last three quarters.
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24. WHAT ARE THE CONSISTENCY BONUS RATES?
When you achieve a consistency bonus, your bonus payout is calculated
utilizing the next level bonus rates. If you achieve level 4 and the
consistency bonus, your bonus payout is based on the following:
LBL VARIABLE UNIVERSAL LIFE IS AN EXTRA 5%.
ALLSTATE VARIABLE ANNUITY IS AN EXTRA .3% FOR PLAN C AND LIFE
SPECIALISTS AND .5% FOR PLAN E AND PLAN I. MUTUAL FUNDS ARE AN EXTRA 4%
FOR PLAN C AND LIFE SPECIALISTS AND 6% FOR PLAN E AND PLAN I.
25. ARE THE NEW\V PRODUCTS INCLUDED IN MY PERSISTENCY?
The LBL Variable Universal Life product is included in the 48-month
Life Persistency (LPF); however, the Allstate Variable Annuity and
Mutual Funds are not included.
26. IF I AM ON THE COMPENSATION OPTION FOR BONUS, IS MY COMP RATE THE SAME
AS IT IS ON ALL OTHER PRODUCTS?
Yes. Your comp rate on the LBL Variable Universal Life is as follows:
------------------------------------ --------------------
AGREEMENT LS COMP OPTION
------------------------------------ --------------------
R830 and R1500 6%
------------------------------------ --------------------
R3000 and R3001 8%
------------------------------------ --------------------
NOTE: Annuities and Mutual Funds do not apply.
27. ARE THE NEW PRODUCTS INCLUDED IN MY RETENTION BONUS?
The LBL Variable Universal Life product is eligible for Retention
Bonus; however, the Allstate Variable Annuity and Mutual Funds are not.
28. DO THE NEW PRODUCTS COUNT TOWARDS CROSS LINE SALES?
Yes. The LBL Universal Life, the Allstate Variable Annuity, and the
Mutual Funds are included in Cross Line Sales.
29. CAN THE NEW PRODUCTS HELP ME TO ACHIEVE MY YEAR END AWARDS?
Yes. The LBL Universal Life, the Allstate Variable Annuity, and the
Mutual Funds are included in all current awards.
30. WHAT IS THE "FAST START BONUS"?
The "Fast Start Bonus" is an additional bonus paid on sales of
registered products (variable annuities, mutual funds, and variable
universal life) during the first two full
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calendar quarters after a region completes their rollout for AFA.
The "Fast Start Bonus" is paid only to agents who produce at the
quarterly bonus qualification levels. It does not matter whether you
elected the annual or quarterly life production bonus option. If you
produce at the quarterly qualification level, the bonus paid on
registered products will be increased by 50%!
BONUS EXAMPLE:
Fast Fast Total
Qtr 1 Start Qtr 2 Start Fast Start
Bonus Bonus Bonus Bonus Bonus
----- ----- ----- ----- -----
Registered Products $1,200 $600 $1,800 $900 $1,500
Non-Registered Products 1,200 --- 1,300 --- ---
Total 2,400 600 3,100 900 1,500
The "Fast Start Bonus" will be paid at the end of each quarter. Agents
on the annual bonus option will continue to receive their regular
production bonus in July.
31. AS A REGISTERED REP CAN I PURCHASE MUTUAL FUNDS AT NAV?
Yes, registered reps can purchase mutual funds at NAV (net asset
value). Commissions and production credit will not be calculated on
funds purchased at NAV.
32. WILL I STILL RECEIVE COMMISSIONS ON THE LBL INVESTOR'S SELECT VARIABLE
ANNUITIES THAT WERE SOLD PRIOR TO THE INTRODUCTION OF AFA REGISTERED
PRODUCTS?
You will continue to receive commissions from LBL for the existing LBL
VA business that was sold prior to AF A registered products becoming
available for sale in your region. As in the past, these commissions
will not be included in production credit, awards, or benefit
calculations.
33. CAN EXISTING SECURITIES BUSINESS THAT WAS WRITTEN PRIOR TO AFFILIATION
WITH ALLSTATE BE TRANSFERRED TO LSA?
We will allow transfers of existing business with which LSA has a
selling agreement, however, there is no guarantee that the transferring
firm will release the funds. There may also be a transfer fee assessed
and the registered rep will be responsible for payment. We are
providing this opportunity to our registered representative in order to
assist them in servicing their existing customer block.
NOTE THAT NO NEW CUSTOMERS CAN BE SOLD PRODUCTS OUTSIDE OF THE AFA
GROUP OF PRODUCT OFFERINGS. COMPENSATION ON TRANSFERRED BUSINESS
EXCLUDING THE AFA MUTUAL FUND FAMILIES WILL BE PAID AT 50% OF THE
AMOUNT RECEIVED BY LSA AND NO PRODUCTION CREDIT WILL BE GIVEN.
TRANSFERS WITHIN OUR FIVE MUTUAL FUND FAMILIES WILL RECEIVE TRAILING
COMMISSIONS UNDER THE COMMISSION RATE ESTABLISHED FOR AFA. NEW PAYMENTS
WILL RECEIVE PRODUCTION CREDIT FOR AWARDS AND BONUS.
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AS OF AUGUST 1, 1999, THERE ARE 19 INSURANCE CARRIERS WHO HAVE SELLING
AGREEMENTS WITH LSA SECURITIES, INC. THEY ARE AS FOLLOWS:
Allstate Life Insurance Company Allianz Life American Scandia
Fortis Financial Glenbrook Life Guardian Life
Harford Life Ins. Xxxxxxx National Life of Virginia
Security Life of Denver Pacific Life Phoenix Home Life
Transamerica Life and Annuity Sun Life Assurance Life & Annuity Sun America Life
Mass Mutual (formerly Conn. Mutual)
THE FOLLOWING FUND FAMILIES ALSO HAVE SELLING AGREEMENTS WITH LSA SECURITIES,
INC.:
AIM Funds Xxxxx Funds Alliance Funds
Aquila Management Xxxxxxx Group American Funds
Chase Vista Funds Colonial Mutual Funds Xxxxx Funds
Delaware Funds Dreyfus Funds Xxxxx Xxxxx Funds
Evergreen Funds/Keystone Federated/Liberty Fidelity Advisor
Fortis Investors FPA Funds Franklin/Xxxxxxxxx
GAM Funds Guardian Park Avenue Xxxx Xxxxxxx
IDEX Funds Xxxxxx Funds Lord Xxxxxx
MFS Funds Xxxxxx Xxxxxxx/Xxxx Xxxxxx Phoenix Funds
Pilgrim American Pioneer Funds Xxxxxx Funds
Xxxxxxxx Funds Sun America Xxxxxxxxx Funds
Xxx Xxx Funds Xxx Xxxxxx
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