EXHIBIT 99.A3A
Exhibit 3(a)
Form of Master Service and Distribution
Compliance Agreement
MASTER SERVICE AND DISTRIBUTION COMPLIANCE AGREEMENT
This Agreement, made this 26th day of February, 1991, by and among IDEX
Distributors, Inc. ("IDI") and Western Reserve Life Assurance Co. of Ohio
("WRL"), on its own behalf and on behalf of WRL Series Life Account and WRL
Series Annuity Account (the "Series Accounts"), separate accounts of WRL.
WHEREAS, WRL offers for sale certain variable life insurance policies
and variable annuity contracts (hereinafter collectively referred to as the
"Policies") funded by the Series Accounts, unit investment trusts registered
under the Investment Company Act of 1940 ("1940 Act"), pursuant to effective
registration statements filed with the Securities and Exchange Commission under
the Securities Act of 1933 ("Securities Act"); and
WHEREAS, IDI is registered as a broker-dealer with the Securities and
Exchange Commission ("SEC") under the Securities Exchange Act of 1934 ("1934
Act") and is a member of the National Association of Securities Dealers, Inc.
("NASD"); and
WHEREAS, WRL desires to engage IDI in connection with the distribution
of the Policies to maintain certain books and records, perform certain
administrative and marketing services, and to fulfill certain regulatory
requirements as set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
I. SERVICES OF XXX
X. APPOINTMENT. WRL hereby appoints IDI, and IDI hereby accepts the
appointment as, Master Service and Distributor of the Policies.
B. DUTIES. IDI shall perform certain administrative, regulatory and
other services with respect to the distribution of the Policies as described
herein. IDI agrees to use its best efforts in performing such activities.
C. WRITTEN AGREEMENTS. IDI shall enter into Agreements with
broker-dealer firms ("Broker-Dealers") whose registered representatives have
been or shall be licensed and appointed as life insurance agents of WRL. WRL
shall pay all fees associated with the appointment of such registered
representatives shall be authorized to solicit applications for the purchase of
the Policies. Such Agreements shall include such terms and conditions as IDI may
determine not inconsistent with this Agreement. Provided, however, any such
Agreement shall provide in substance:
1. Broker-Dealer shall ensure that the Policies will be offered,
sold and serviced only through persons who comply with all
appropriate state insurance licensing requirements.
2. Broker-Dealer shall agree that in performing its duties under
the Policies, Broker-Dealer shall be acting as an independent
contractor, and not as an agent or employee of WRL or IDI.
3. Broker-Dealer shall indemnify and hold harmless WRL and IDI
from any claims, damages, expenses, liabilities or causes of
action, asserted or brought by anyone, resulting from any
negligent, fraudulent, or intentional acts, omissions, or
errors of Broker-Dealer, its employees, registered
representatives, other representatives, or agents in the
offering for sale, solicitation, or servicing of the Policies,
and from any negligent, fraudulent, or
intentional acts, omissions, or errors of Broker-Dealer, its
employees, registered representatives, other representatives,
or agents in violation of Federal or State laws or regulations
and NASD rules of any nature, applicable to the offering for
sale, solicitation, or servicing of the Policies.
4. Broker-Dealer shall assume full responsibility for the
activities of all persons associated with it who are engaged
directly or indirectly in the sales and securities operations
of Broker-Dealer. Broker-Dealer shall indemnify and hold
harmless IDI and WRL from any claims, damages, expenses,
liabilities or causes of action, asserted or brought by
anyone, resulting from any private business transactions of
any associated persons which are the subject of this
paragraph.
In obtaining and entering into written Agreements with Broker-Dealers,
IDI will in all respects conform to the requirements of all state and federal
law, and the Rules of Fair Practice of the NASD.
D. RECORDKEEPING. IDI shall maintain and preserve, or cause to be
maintained and preserved, such accounts, books, and other documents as are
required of it by the 1940 Act, the 1934 Act and any other applicable laws and
regulations, including without limitation Rules 17a-3 and 17a-4 under the 1934
Act. The books, accounts and records of IDI as to services provided hereunder
shall be maintained so as to disclose clearly and accurately the nature and
details of the transactions.
The payment of premiums, purchase payments, commissions and other
fees and payments in connection with the Policies shall be reflected on the
books, records and accounts of IDI as required under applicable NASD regulations
and federal and state securities law requirements. WRL and IDI, from time to
time during the term of this Agreement, shall agree as to the ministerial
responsibility for maintaining and preserving the books, records and accounts
kept in connection with the Policies; provided, however, in the case of books,
records and accounts kept pursuant to a requirement of applicable law or
regulation, the ultimate and legal responsibility for maintaining and preserving
such books, records and accounts shall be that of the party which is required to
maintain or preserve such books, records and accounts under the applicable law
or regulations, and such books, records and accounts shall be maintained and
preserved under the supervision of that party.
E. PROMOTIONAL PROGRAM. IDI shall prepare a sales promotional program
for the Policies and assist agents in utilizing the program. In addition, IDI
shall provide Broker-Dealers and agents with sufficient quantities of sales
promotional materials, prospectuses, sample Policies, applications and any
necessary service forms.
F. SALES MATERIAL AND OTHER DOCUMENTS.
1. IDI'S RESPONSIBILITIES. IDI shall be responsible for:
(a) the design, preparation and printing of promotional
material to be used in the distribution of the Policies, subject to WRL's
approval; and
(b) the approval of promotional material by the SEC and the
NASD, where required.
2. WRL'S RESPONSIBILITIES.
(a) WRL shall provide IDI with sufficient quantities of
prospectuses regarding the Policies and the Series Account.
(b) WRL shall be responsible for the approval of promotional
material by state and other local insurance regulatory authorities, if required.
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G. PAYMENTS TO BROKER-DEALERS. Commissions or other fees due to the
Broker-Dealer or its representatives in connection with the sale of the Policies
shall be paid by WRL acting on behalf of and as a ministerial duty for IDI to
the persons entitled thereto in accordance with the applicable agreement between
each such Broker-Dealer or representative and IDI and/or WRL. IDI shall assist
WRL in the payment of such amounts as WRL shall reasonably request, provided
that IDI shall not be required to perform any acts that would subject it to
registration under the insurance laws of any state. The responsibility of IDI
shall include the performance of all activities by IDI necessary in order that
the payment of such amounts fully complies with all applicable state and federal
securities laws. Unless otherwise agreed to by WRL in writing, neither IDI nor
any representatives shall have an interest in any surrender charges, deductions
or other fees payable to WRL as set forth herein.
H. COMPLIANCE. IDI shall, at all times, when performing its functions
under this Agreement, be registered as a securities broker-dealer with the SEC
and be a member of the NASD and licensed or registered as a securities
broker-dealer in those jurisdictions where the performance of the duties
contemplated by this Agreement would require such licensing or registration. IDI
represents and warrants that it shall otherwise comply with provisions of
federal and state law in performing its duties hereunder.
I. PAYMENT OF EXPENSES BY WRL. WRL shall pay the costs incurred in
connection with IDI's provision of services hereunder and the distribution of
the Policies, including those expenses incurred in connection with the printing
of the prospectuses of the Series Account and for WRL Series Fund, Inc. (the
"Fund") to be used in connection with the distribution of the Policies (to the
extent that the Fund does not incur such expenses), and the preparation of sales
literature and promotional materials for the Policies. WRL shall xxxxxxx XXX
with copies of all documents that IDI reasonably requests for use in connection
with the distribution of the Policies.
II. GENERAL PROVISIONS
A. INSPECTION OF BOOKS AND RECORDS. IDI and WRL agree that all records
relating to services provided hereunder shall be subject to reasonable periodic,
special or other audit or examination by the SEC, NASD, or any state insurance
commissioner or any other regulatory body having jurisdiction. IDI and WRL agree
to cooperate fully in any securities, insurance or judicial regulatory
investigation, inspection, inquiry or proceeding arising in connection with the
services provided under this Agreement, or with respect to IDI or WRL or their
affiliates, to the extent related to the distribution of the Policies. IDI and
WRL will notify each other promptly of any substantive customer complaint or
notice of regulatory proceeding, and, in the case of a customer complaint, will
cooperate in arriving at a mutually satisfactory response. WRL and IDI shall
each cause the other to be furnished with such reports as it may reasonably
request for the purpose of meeting its reporting and recordkeeping requirements.
B. COMPENSATION. Unless otherwise agreed to by the parties hereto, IDI
will receive no compensation for the services IDI performs hereunder. IDI
acknowledges the receipt of good and valid consideration in connection with this
Agreement in that IDI and WRL are each a wholly-owned subsidiary of Pioneer
Western Corporation and IDI recognizes that it is beneficial to it to perform
the duties required of it hereunder.
C. TERMINATION. Subject to termination as hereinafter provided, the
Agreement shall remain in full force and effect until terminated as herein
provided.
1. This Agreement may be terminated by either partner hereto upon
60 days written notice to the other party.
2. This Agreement may be terminated upon written notice of one
party hereto in the event of the bankruptcy or insolvency of
such part to which the notice is given.
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3. This Agreement may be terminated at any time upon the mutual
written consent of the parties hereto.
4. This Agreement shall automatically be terminated in the event
of its assignment.
5. Upon termination of this Agreement, all authorizations,
rights, and obligations shall cease except the obligations to
settle accounts hereunder, including payments of premiums
subsequently received for Policies in effect at the time of
termination or issued pursuant to applications received by WRL
prior to termination.
D. REGISTRATION. WRL agrees to use its best efforts to effect and
maintain the registration of the Policies under the Securities Act and the
Series Accounts under the 1940 Act, and to qualify the Polices under the state
securities and insurance laws. WRL will pay or cause to be paid expenses
(including the fees and disbursements of its own counsel) of the registration
and maintaining of the Policies under the Securities Act and the Series Accounts
under the 1940 Act, and to qualify the Policies under the state securities and
insurance laws.
E. EXCLUSIVITY. The services of IDI to the Series Accounts hereunder
are not to be deemed exclusive and IDI shall be free to render similar services
to other so long as its services hereunder are not impaired or interfered with
hereby.
F. AUTHORITY. IDI shall have authority hereunder only as expressly
granted in this Agreement.
G. BINDING EFFECT. If any provision of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the remainder of
this Agreement shall not be affected thereby. This Agreement constitutes the
entire Agreement between the parties hereto and may not be modified except in
written instrument executed by all parties hereto. This Agreement supersedes in
its entirety any and all previous agreements among the parties hereto with
respect to the Polices; provided, however, any former agreement shall survive
with respect to any Policies offered or sold during the term thereof.
H. MISCELLANEOUS. This Agreement shall be subject to the provisions of
the Investment Company Act and the 1934 Act and the rules, regulations, and
rulings thereunder and of the NASD, from time to time in effect, including such
exemptions from the 1940 Act as the SEC may grant, and the terms hereof shall be
interpreted and construed in accordance therewith. Without limiting the
generality of the foregoing, the term "assignment" shall not include any
transaction exempted from Section 15(b)(2) of the Investment Company Act.
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I. GOVERNING LAW. This Agreement shall be governed by and constituted
in accordance with the laws of the State of Florida.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by their respective officials thereunto duly authorized, as of the day
and year first above written.
WESTERN RESERVE LIFE ASSURANCE
CO. OF OHIO, on its own behalf and
on behalf of WRL SERIES LIFE ACCOUNT and
WRL SERIES ANNUITY ACCOUNT
By: /s/ XXXXXX X. XXXXXX
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Title: PRESIDENT
IDEX DISTRIBUTORS, INC.
By: /s/ G. XXXX XXXXXX
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Title: PRESIDENT
