Exhibit 1(A)(3)(a)(3)
VARIABLE PRODUCTS
DEALER AGREEMENT
(ver. 9/97)
WHEREAS, MML Distributors, LLC ("Distributors") and the Broker-Dealer set forth
on Schedule "A" attached hereto and incorporated herein by reference are
registered with the Securities and Exchange Commission (the "SEC") as
broker-dealers under the Securities Exchange Act of 1934, as amended (the
"Exchange Act") and are members of the National Association of Securities
Dealers, Inc. (the "NASD"); and
WHEREAS, Distributors has been appointed by Massachusetts Mutual Life Insurance
Company ("MassMutual"), MML Bay State Life Insurance Company ("MML Bay State"),
and C.M. Life Insurance Company ("CM Life") (collectively the "Insurance
Companies"; individually an "Insurance Company") to act as the principal
underwriter of certain variable annuity and variable life insurance products
that they issue; and
WHEREAS, Distributors has been authorized by the Insurance Companies to form
selling groups of duly licensed and registered broker-dealers to distribute
these variable annuity and variable life insurance products; and
WHEREAS, Broker-Dealer desires to sell the variable annuity and/or variable life
insurance products described on Schedule B, attached hereto and incorporated
herein by reference (the "Products"); and
WHEREAS, unless Broker-Dealer has insurance licenses in all states where it
offers and sells the Products, Broker-Dealer will consummate some of such sales
through one or more insurance agencies supervised and controlled by or under the
common control with Broker-Dealer (collectively, the "Agencies"; individually,
an "Agency").
NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby agree
as follows:
1. Authorization to Sell and Service. Subject to the terms and conditions of
this Agreement, the Insurance Companies and Distributors appoint and
authorize Broker-Dealer and (if applicable) the Agencies set forth on
Schedule "C" attached hereto and incorporated herein by reference, to
solicit sales of and provide service with respect to the Products in all
states in which Broker-Dealer and (if applicable) Agencies is or are
properly licensed to conduct business (hereinafter Broker-Dealer and all
applicable Agencies are collectively referred to as the "Producers").
Producers are also authorized to deliver or arrange for delivery any
contracts issued by the Insurance Companies and to collect initial premiums
on such contracts. Producers hereby accept such appointment on a
non-exclusive basis and agree to use their best efforts to find purchasers
for the Products acceptable to the Insurance Companies.
2. Commissions. Compensation for sale of the Products by the registered
representatives of Broker-Dealer (the "Registered Representatives") shall
be paid as follows. In all states where Broker-Dealer is insurance
licensed, the appropriate Insurance Company shall pay to Broker-Dealer the
commissions set forth on Schedule "B" (hereinafter referred to as the
"Commissions"). In all states where the Broker-Dealer is not insurance
licensed, Commissions related to sales by the Registered Representatives in
those states will be paid to the appropriate Agencies designated on
Schedule "C". The appropriate Agency is the Agency which is properly
insurance licensed in the state where the sales are made and for which
Commissions are being paid.
Commissions will be paid only on premiums paid to and retained by an
Insurance Company on Products issued in accordance with applications
tendered pursuant to this Agreement. The Insurance Companies expressly
reserve the right to transfer future compensation on Products to other
broker-dealers or registered representatives in the event the owner of a
Product so requests.
The Insurance Companies reserve the unconditional right, upon thirty (30)
days notice, to change the Commissions payable for Products issued,
renewed, converted, exchanged or otherwise modified on or after the
effective date of such change, as set forth in the aforesaid notice of
change. No Commissions will be due and payable for any surrendered, lapsed
or canceled Products which are subsequently reinstated or rewritten through
efforts of representatives of an Insurance Company other than Registered
Representatives.
All Commissions shall be returned to the appropriate Insurance Company if
the contract for the Product is tendered for redemption within seven
business days after acceptance of the application for the Product. In
addition, all Commissions shall be subject to chargeback in accordance with
the terms and conditions, if any, set forth on Schedule "B" or any
attachment thereto.
3. Product Availability. The Insurance Companies have qualified the Products
for offer and sale under the applicable insurance laws of various states
and other jurisdictions. Producers and Registered Representatives shall
solicit applications for the Products only in states and jurisdictions
where such Products have been so qualified. Producers shall, upon request,
be provided with a list of those states and jurisdictions in which the
Products have been qualified for sale. The Insurance Companies shall file
and make all statements or reports as are or may be required by the laws of
such state or jurisdiction to maintain these qualifications in effect.
4. Prospectuses. The Insurance Companies and Distributors have caused
registration statements to be prepared describing the material aspects of
the Products. The Insurance Companies represent and warrant for the
effective period of this Agreement that the prospectuses contained in the
registration statements for the Products (the "Prospectuses") do not and
will not contain any untrue statements of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were or
are made, not materially misleading. Distributors or its duly appointed
agent shall furnish Broker-Dealer, at no cost to Broker-Dealer, copies of
the Prospectuses in the number reasonably requested.
If any event shall occur as a result of which it is necessary to amend or
supplement the Prospectus for any Product in order to make the statements
therein, in light of the circumstances under which they were or are made,
true, complete or not misleading, Distributors will promptly furnish to
Broker-Dealer, without charge, any amendments or supplements to the
Prospectuses prepared by the Insurance Companies and supplied to
Distributors sufficient to make the statements made in the Prospectus as so
amended or supplemented true, complete and not misleading.
5. Sales Literature and Materials. In connection with the offer and sale of
the Products, Broker-Dealer is authorized to use both the Prospectuses
contained in the current registration statements for the Products and any
other sales materials relating to the Products that have been provided or
authorized by Distributors. Broker-Dealer shall not, and shall ensure that
Registered Representatives shall not: (i) print, publish, distribute or
utilize any advertising material, prospectuses, circulars, letters,
pamphlets, schedules, stationery, broadcasting or sales material of any
kind relating to the Products, Distributors or to the Insurance Companies
unless such material has been provided by Distributors for such use or
unless prior written approval of Distributors of such material is obtained,
or (ii) orally communicate any information or make representations other
than such information and representations contained in the Prospectuses,
the contracts for the Products, or in any written materials provided or
authorized by Distributors .
Producers are not authorized and are expressly forbidden on behalf of the
Insurance Companies to estimate future dividends or policy performance
except through the use of authorized projections or illustrations provided
by Distributors or an Insurance Company.
Upon termination of this Agreement, all Prospectuses, sales promotion
materials, advertising, circulars, and documents relating to the Products
shall be promptly returned to Distributors or, if requested by
Distributors, destroyed.
6. Producers' Representations and Responsibilities.
a. Insurance Licenses. Broker-Dealer and/or (if applicable) Agencies
shall be properly licensed as an insurance agency, appointed with
the appropriate Insurance Company, and otherwise comply with all
applicable insurance licensing requirements in the jurisdictions
where Registered Representatives will be offering or selling the
Products. Broker-Dealer hereby represents that it is, and/or (if
applicable), the Agencies are, properly authorized under applicable
state law to receive insurance commissions generated from sales of
the Products.
Producers shall ensure that all Registered Representatives are
properly insurance licensed and are appointed by the appropriate
Insurance Company for the sale of the Products in the jurisdictions
where Registered Representatives will be offering or selling the
Products. In states where such licensing and appointment must occur
prior to Producers' and/or Registered Representatives' soliciting
any sales of the Products, Producers shall ensure that such
licensing and appointment occur in compliance with such
requirements. The Insurance Companies will process all insurance
licenses and appointments in accordance with their standard
procedures, and may, in their sole discretion, refuse, terminate or
discontinue any such license or appointment without cause.
b. Securities Licenses. Broker-Dealer represents that it is properly
licensed and registered as a broker-dealer under applicable state
and federal securities law and is a member in good standing of the
NASD. Broker-Dealer shall maintain its broker-dealer registration
under the Exchange Act and, where required, in all jurisdictions
where Registered Representatives will be offering and selling the
Products, and shall always be a member in good standing of the
NASD. Broker-Dealer will notify Distributors immediately if it
ceases to be so registered or licensed or a member of the NASD.
Broker-Dealer shall have all Registered Representatives who will be
soliciting and servicing the Products duly registered with the NASD
as registered representatives and, where required, licensed with
applicable state securities authorities.
c. Lack of Licenses. If a Registered Representative fails to maintain
the required licenses and appointments Producers shall immediately
notify the appropriate Insurance Company and shall advise such
Registered Representative that he or she is no longer authorized to
sell the Products. Producers shall take all additional action
necessary to terminate the sales activities of such Registered
Representatives relating to the Products.
d. Background Investigations. Producers shall investigate all
Registered Representatives relative to their business reputation
and competency to sell the Products. Producers shall cause such
Registered Representatives' qualifications to be certified to the
satisfaction of Distributors and the appropriate Insurance Company.
e. Supervision. All Registered Representatives and Agencies are
persons associated with Broker-Dealer as defined in Section
3(a)(18) of the Exchange Act. Accordingly, Broker-Dealer has full
responsibility for the sales activities of all Registered
Representatives and Agencies engaged directly or indirectly in the
offer or sale of the Products.
Producers shall: (i) train and supervise all Registered
Representatives; (ii) establish such procedures as are necessary to
ensure that all Registered Representatives are properly insurance
and securities licensed; and (iii) upon request by an Insurance
Company, furnish such records as are necessary to establish that
all Registered Representatives are properly licensed, trained and
supervised. If a Registered Representative fails to meet the
supervisory standards imposed by Producers, Producers shall advise
the appropriate Insurance Company and such Registered
Representative that he/she is no longer authorized to sell the
Products.
f. Suitability. Producers shall ensure that Registered Representatives
recommend the purchase of the Products only if the Registered
Representatives have reasonable grounds to believe that such
purchase is suitable for the applicant. A Registered Principal of
Broker-Dealer will make and record all such determinations.
g. Delivery of Prospectuses. Broker-Dealer shall, in compliance with
applicable federal and state securities laws, distribute a current
Prospectus to each person to whom a Product is offered or sold.
h. Delivery of Contracts. If an Insurance Company sends a contract for
a Product to a Producer, then Producers will assure that: (i) the
contract is delivered to the purchaser no later than 5 business
days after Producer's receipt of the contract, and (ii) appropriate
evidence of such delivery to the purchaser is maintained.
Producers, in accordance with Section 8 of this Agreement, shall be
fully responsible for any and all losses and expenses incurred by
an Insurance Company or Distributors as a result of Producers'
failure to satisfy the obligations set forth in this section.
i. Books and Records. Producers shall maintain all books and records
required by applicable laws and regulations in connection with the
offer and sale of the Products. The books, accounts and records of
Producers relating to the sale of the Products shall be maintained
so as to clearly and accurately disclose the nature and details of
the transactions. Without limiting the foregoing, the receipt and
payment of Commissions by Producers pursuant to this Agreement
shall be reflected on Broker-Dealer's and Agencies' books and
records.
j. Confidentiality. Producers shall keep confidential all information
obtained pursuant to this Agreement (including, without limitation,
names of the purchasers of the Products) and shall disclose such
information only if the appropriate Insurance Company has
authorized such disclosure in writing or if such disclosure is
expressly required by duly authorized federal or state regulatory
authorities.
k. Compliance with Laws. Producers shall, and shall ensure that
Registered Representatives, comply with all requirements of the
NASD, the Exchange Act and all other federal and/or state laws
applicable to the solicitation, sale and service of the Products
including, without limitation, all insurance regulations pertaining
to replacements and the rebating of commissions.
l. Payment of Commissions to Agencies. If commission payments are to
be made to Agencies, as provided in Section 2 of this Agreement,
Producers certify that they have received appropriate "no-action"
relief from the SEC, or will conduct the business operations of
Broker-Dealer and Agencies in a manner consistent with applicable
securities law requirements, such that Agencies need not be
registered as broker-dealers under the Exchange Act. Producers
agree to provide Distributors and the appropriate Insurance
Company, upon request, copies of their "no-action" letter or with
other evidence that Agencies' receipt of commissions for Products
is permissible under the Exchange Act and NASD rules.
m. Payment of Commissions to Registered Representatives. Producers
shall pay compensation for the sale of the Products only to
Registered Representatives who, at the time of sale, are properly
insurance licensed and appointed with the appropriate Insurance
Company and registered with the NASD and, where required, properly
licensed with state securities authorities. Producers shall be
solely responsible for the payment of any commissions, payments or
other consideration of any kind whatsoever to the Registered
Representatives in connection with the sale of the Products.
Registered Representatives shall have no recourse against either
the Insurance Companies or Distributors in the event Producers fail
to deliver such compensation to Registered Representatives.
n. Unregistered Personnel. Producers shall ensure that their
unregistered personnel: are not involved in effecting securities
transactions, do not recommend securities or provide other
investment advice, do not respond to questions that require
knowledge of the securities business, direct all securities-related
questions to Registered Representatives, provide only clerical or
ministerial assistance with respect to securities transactions, do
not handle customer funds or customer securities, and do not
receive any commissions or other transaction-related compensation
for sales of Products.
o. Authority. Producers represent that this Agreement has been duly
authorized, executed and delivered by Producers, constitutes a valid
and legally binding obligation, and that neither the execution and
delivery of this Agreement by Producers nor the consummation of the
transactions contemplated herein will result in a breach or violation
of any applicable provision of law or the NASD Conduct Rules, or any
judicial or administrative orders in which Producers are named or any
material agreement or instrument to which they are a party or by which
they are bound.
7. Investigations and Customer Complaints. Producers agree to cooperate fully
in any insurance, securities or other regulatory investigation, inquiry,
inspection or proceeding or in any judicial proceeding arising in
connection with the Products sold or attempted to be sold by the Producers
and/or the Registered Representatives. Producers shall permit applicable
federal and state securities, insurance and other regulatory authorities to
audit their records and shall furnish the foregoing authorities with any
information which such authorities may request in order to ascertain
whether Producers are complying with all applicable laws and/or regulations
with respect to sales of the Products. Producers agree to cooperate with
the Insurance Companies and Distributors in resolving all customer
complaints involving Producers and/or Registered Representatives with
respect to the Products.
Without limiting the foregoing: (i) an Insurance Company or Distributors
will promptly notify Producers of any customer complaint or notice of any
regulatory inspection, inquiry, investigation or proceeding or judicial
proceeding received by the Insurance Company or Distributors with respect
to the Producers or Registered Representatives concerning the Products; and
(ii) Producers will promptly notify the appropriate Insurance Company or
Distributors of any customer complaint or notice of any regulatory
inspection, inquiry, investigation or proceeding or judicial proceeding
received by Producers with respect to the Insurance Company, Distributors,
Registered Representatives or Producers concerning the Products.
8. Indemnification. Each Insurance Company and Distributors hereby agree to
indemnify and hold harmless Producers and each of their employees,
controlling persons, officers or directors against any losses, expenses
(including reasonable attorneys' fees and court costs), damages or
liabilities to which Producers or such affiliates, controlling persons,
officers or directors become subject, under the Securities Act of 1933 or
otherwise, insofar as such losses, expenses, damages or liabilities (or
actions in respect thereof) arise out of or are based upon the Insurance
Company's or Distributors' performance, non-performance or breach of this
Agreement, or are based upon any untrue statement contained in, or material
omission from, the Prospectus for a Product issued by that Insurance
Company.
Producers shall indemnify and hold harmless the Insurance Companies and
Distributors, their officers, directors, employees, and controlling persons
from and against any damages, losses, liabilities, judgments, settlements,
costs and expenses of any nature whatsoever (including reasonable
attorneys' fees and court costs) or causes of action, asserted or brought
by anyone, resulting or arising out of or based upon an allegation or
finding of: (i) any act or omission of Producers, their employees,
Registered Representatives, associated persons or agents in connection with
the offer or sale of the Products; (ii) any misrepresentation, breach of
warranty or failure to fulfill any covenant, warranty, or obligation made
or undertaken by Producers hereunder; or (iii) any breach or violation of
any of the administrative policies communicated by an Insurance Company or
Distributors to Producers.
9. Payments by Customers. All money payable in connection with the Products,
whether as premium or otherwise, and whether paid by or on behalf of the
owner of any Product or anyone else having an interest in the Products, is
the exclusive property of the appropriate Insurance Company and shall be
drawn payable to Massachusetts Mutual Life Insurance Company, MML Bay State
Life Insurance Company, or C.M. Life Insurance Company, as appropriate.
Such payments shall be promptly transmitted to the
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appropriate Insurance Company and shall not be commingled with Producers'
personal funds. Producers are not authorized to deduct commissions, service
fees, allowances or any other offset for compensation claimed by Producers
from such payments. No cash payments shall be accepted by Producers in
connection with the Products.
10. Submission of Applications. Broker-Dealer shall review all applications for
completeness and suitability to ensure that the application complies with
all requirements set forth in the current Prospectus and other
administrative rules established by the Insurance Companies before
submitting such applications to the Insurance Companies. Producers shall
make available to the appropriate Insurance Company all information,
whether favorable or unfavorable, which comes into Producers' possession
concerning the underwriting of any risks under a Product. Producers shall
follow established Insurance Company administrative procedures with regard
to the processing of applications and related documents. The Insurance
Companies will, as appropriate, advise Producers of these procedures.
All applications, enrollment forms, and other Insurance Company forms
received by Producers in connection with the Products shall be forwarded to
the appropriate Insurance Company's designated office promptly after
receipt by the Producers. All such documents shall be on forms supplied by
the appropriate Insurance Company and are subject to acceptance or
rejection by Distributors and the appropriate Insurance Company in their
sole discretion. If an application or payment is rejected by an Insurance
Company or Distributors and Broker-Dealer has received compensation based
on the rejected payment or application, Broker-Dealer shall promptly repay
such compensation to the appropriate Insurance Company.
11. Fidelity Bond. Producers represent that all of their directors, officers,
employees and Registered Representatives are and shall be continuously
covered by a blanket fidelity bond, including coverage for larceny and
embezzlement, issued by a reputable bonding company. This bond shall be
maintained at Producers' expense and shall be, at least, of the form, type
and amount required under the NASD Conduct Rules. Distributors may require
evidence, satisfactory to it, that such coverage is in force, and Producers
shall give prompt written notice to Distributors of any cancellation or
change of coverage.
Producers hereby assign any proceeds received from the fidelity bonding
company to the Insurance Company and Distributors to the extent of the
Insurance Company's and Distributors' loss due to activities covered by the
bond. If there is any deficiency amount, whether due to a deductible or
otherwise, Producers shall promptly pay the Insurance Company or
Distributors such amount on demand. Producers hereby agree to indemnify and
hold harmless the Insurance Companies and Distributors from any such
deficiency and from the costs of collection (including reasonable
attorneys' fees).
12. Independent Contractors. Producers and their Registered Representatives are
independent contractors with respect to the Insurance Companies and
Distributors and shall not have the right to hold themselves out as
employees, partners, or joint venturers of the Insurance Companies or
Distributors in connection with the solicitation of the Products or
otherwise. Producers may exercise their own judgment as to the time and
manner and performance of their services, except that they shall conform
with the rules, regulations and policies of the Insurance Companies and
Distributors at all times.
13. Limitations on Authority. Producers and Registered Representatives are not
authorized and are expressly forbidden on behalf of the Insurance Companies
to make, alter, modify, waive or change any of the terms, rates or
conditions of any Insurance Company's forms, Products, contracts or
advertising materials. Producers shall not discharge any provision(s) of
the Products, waive any forfeitures, grant, permit, or extend the time of
making any payments, guarantee earnings, dividends or rates, alter or
substitute the forms which an Insurance Company may prescribe, incur
indebtedness on behalf of the Insurance Companies or Distributors, or enter
into any proceeding in a court of law or before a regulatory agency in the
name of or on behalf of an Insurance Company or Distributors.
14. Offsets. The Insurance Companies and Distributors may deduct from any
compensation due under this Agreement any debt, whether arising under
Sections 8 or 10 of this Agreement or otherwise, of Producers
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to an Insurance Company or to Distributors or any of their affiliates or
subsidiaries. This right of offset is in addition to all other rights the
Insurance Companies and Distributors may have at law or in equity regarding
the collection of debts generally.
15. Notices. All notices or communications to an Insurance Company shall be
sent to: Massachusetts Mutual Life Insurance Company, 000 Xxxxxx Xxxxxx,
Xxxxxxxx, Xxxxxxxxxxx 00000, Attn: Annuity Strategic Business. All notices
sent to Distributors shall be sent to: MML Distributors, LLC, 0000 Xxxx
Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxxxxxx 00000, Attn: Chief Legal Officer. All
notices or communications to Producers shall be sent to the addresses set
forth on the applicable Schedule pages of this Agreement. Any party may
change the address to which notices or communications are to be sent by
giving written notice to the other parties.
16. Term of Agreement. This Agreement shall be effective as of the latest date
appearing on the signature page hereof and shall continue until terminated.
This Agreement shall be terminated immediately if Producers materially
breach this Agreement or if Broker-Dealer shall cease to be registered
under the Exchange Act or be a member in good standing of the NASD. Any
party may terminate this Agreement at any time, without cause, upon written
notice to the other parties. Upon termination of this Agreement, all
authorizations, rights and obligations shall cease except Sections 6(j), 7,
8, 10 and 14 of this Agreement shall survive the termination of this
Agreement, and Producers shall settle all accounts with the Insurance
Companies and shall continue to be responsible for all applicable
chargebacks. Upon termination of this Agreement, Producers shall be
entitled to receive all commissions on Products issued on applications
received by an Insurance Company prior to such termination subject to the
provisions of Section 14 of this Agreement.
17. Amendments. The Insurance Companies and Distributors reserve the
unconditional right to modify the Products, to amend this Agreement and the
Schedules attached hereto, and to suspend the sale of any of the Products
at any time. The submission of an application by Producers after notice of
any such amendment has been sent to Producers shall constitute the
Producers' agreement to any such amendment.
18. Miscellaneous.
a. This Agreement shall be binding on and shall inure to the benefit of
the parties hereto and their respective heirs, administrators,
executors, estates, successors and assigns provided that Producers may
not assign or amend this Agreement or any rights or obligations
hereunder without the prior written consent of Distributors and the
Insurance Companies.
b. This Agreement shall be governed by the laws of the Commonwealth of
Massachusetts and constitutes the entire agreement and understanding
between the parties hereto with respect to the Products.
c. 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
such conditions and no waiver of any of the provisions of this
Agreement shall be deemed or shall constitute a waiver of any other
provisions.
d. This Agreement may be executed in one or more counterparts, each of
which shall be deemed in all respects an original.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed.
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
By: Date:
--------------------------------- ------------------------
Its:
MML BAY STATE LIFE INSURANCE COMPANY C.M. LIFE INSURANCE COMPANY
By: By:
--------------------------------- --------------------------
MML DISTRIBUTORS, LLC.
By:
---------------------------------
Xxxxxxx X. Xxxxxxx, President
Date:
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Print Name of BROKER-DEALER Above
------------------------------------
Authorized Officer Sign Above
Date:
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Print Name of AGENCY Above
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Authorized Officer Sign Above
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