AMENDED AND RESTATED DISTRIBUTION AND SERVICING AGREEMENT
FOR VARIABLE ANNUITY CONTRACTS
This Amended and Restated Distribution and Servicing Agreement for Variable
Annuity Contracts (the "Agreement") is made effective as of January 1, 2015 by
and between CMFG Life Insurance Company ("CMFG Life"), a mutual life insurance
company, and CUNA Brokerage Services, Inc. ("CBSI" and, with CMFG Life, the
"Parties"), a registered broker-dealer.
WHEREAS, the Parties wish to amend and restate their existing Amended and
Restated Distribution Agreement, amended most recently effective February 23,
2011, and their Amended and Restated Servicing Agreement, effective January 1,
2008, (together, the "Prior Agreements") which govern the distribution of CMFG
Life's variable annuity contracts.
WHEREAS, CMFG Life's business of variable annuity contracts is in runoff, and
has been in runoff since 2011.
WHEREAS, the Parties wish to amend and restate their and replace the Prior
Agreements with this Agreement.
NOW, THEREFORE, for good and valuable considerations, the Parties agree as
follows:
1. Appointment. CBSI agrees to continue to act as CMFG Life's principal
underwriter and distributor for all of CMFG Life's variable annuity
contracts which require distribution by a registered broker-dealer.
2. Duties of CBSI.
a. Registration Under the 1934 Act. CBSI is registered as a
broker-dealer under the Securities Exchange Act of 1934 (the "1934 Act")
and has secured and will maintain authorizations, licenses,
qualifications, and permits necessary to perform its obligations under
this Agreement in those states requested by CMFG Life.
b. Membership in the Financial Industry Regulatory Authority. CBSI
currently holds and shall maintain a membership in the Financial Industry
Regulatory Authority ("FINRA").
c. Responsibility for Securities Activities.
CBSI shall assume full responsibility for the securities activities of all
persons engaged directly or indirectly in the distribution operations for
CMFG Life's variable annuity products, including but not limited to
training, supervision, and control as contemplated under appropriate
provisions of the 1934 Act and regulations thereunder and by the rules of
FINRA. All persons directly or indirectly involved in such variable
annuity securities activities shall be registered representatives or
registered principals of CBSI as appropriate to their activities. Also,
each registered representative selling the product and at least one
registered principal shall be properly licensed as an insurance agent of
CMFG Life.
Further, CBSI represents and warrants that during the term of this
Agreement, it will maintain and implement (a) policies and procedures
designed to comply with all applicable rules of
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FINRA, including but not limited to rules relating to suitability
of variable annuity recommendations, (b) a training program for its
registered representatives designed to ensure that such persons gather
information concerning a customer's financial status, tax status,
investment objective and other relevant information prior to recommending
the purchase or exchange of a variable annuity contract and (c) a
reasonable system of sales supervision designed to achieve compliance
with the rules of FINRA. CBSI agrees to provide a report to CMFG Life
upon request, certifying that CBSI is in compliance with items (a)
through (c) above. Each such report shall be certified by a senior
manager of CBSI who has responsibility for items (a) through (c). CBSI
understands and acknowledges that CMFG Life may conduct an inspection
and/or audit of CBSI on a periodic basis to ensure compliance with items
(a) through (c) above, and CBSI agrees to make reasonable accommodation
to CMFG Life to enable CMFG Life to inspect documents directly related to
the sale and suitability of any CMFG Life variable annuity product, which
documents CBSI shall be responsible for maintaining.
d. Appointment of Registered Persons and Maintenance of Personnel Records.
CBSI shall have the authority and responsibility for the
appointment and registration of those persons who will be registered
representatives and registered principals. CBSI shall direct the
maintenance of all personnel records of such persons.
e. Maintenance of Net Capital. CBSI shall maintain required net
capital at levels which will comply with maximum aggregate indebtedness
provisions under the provisions of the 1934 Act, any regulation
thereunder, and any FINRA rules
f. Required Reports. CBSI shall have the responsibility for
preparation and submission of any reports or other materials required by
any regulatory authority having proper jurisdiction.
g. Limitations on Authority. CBSI is not authorized to give any
information or to make any representations concerning the variable
annuity contracts of CMFG Life other than the statements contained in the
current registration statement filed with the Securities and Exchange
Commission or such sales literature as may be authorized by CMFG Life.
3. Duties of CMFG Life.
a. Maintenance of Accounting Records. Except as set forth above, CMFG
Life shall maintain and hold, on behalf of and as agent for CBSI, those
records pertaining to variable annuity contracts required to be
maintained and preserved by the 1934 Act, any regulations thereunder, and
any applicable FINRA rules. All such books and records are, and shall at
all times remain, the property of CBSI and shall at all times be subject
to inspection by duly authorized officers, auditors, and representatives
of CBSI and by the Securities and Exchange Commission, FINRA, and other
regulatory authorities having proper jurisdiction.
b. Confirmation of Transactions. On behalf of CBSI and acting as agent
for CBSI, CMFG Life shall confirm all transactions required to be
confirmed in the form and manner required by the 1934 Act, any
regulations thereunder, and any FINRA rules.
c. Furnishing Materials. CMFG Life shall furnish to CBSI copies of
prospectuses, financial statements and other documents which CBSI
reasonably requests for use in connection with the solicitation, sale and
distribution of CMFG Life's variable annuity contracts.
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4. Compensation. As compensation for services to be performed pursuant to
this Agreement, CMFG Life shall pay CBSI the amounts specified in Exhibit A
in the manner set forth in such Exhibit.
5. Term and Termination. This Agreement shall commence on the Effective Date
and shall continue for an indefinite period. This Agreement may be
terminated at any time by either party upon written notice to the other
stating the date when such termination shall be effective, provided that
this Agreement may not be terminated or modified by either party if the
effect would be to put CBSI out of compliance with the "net-capital"
requirements of the 1934 Act. Default of any kind shall not have the effect
of terminating this Agreement. To the extent required by applicable law,
notice of termination shall be provided to the Iowa Commissioner of
Insurance.
6. Oversight; Annual Review. CMFG Life shall maintain oversight for the
actions taken by CBSI hereunder. At least annually, the Parties hereto shall
review the provision of goods and services hereunder to ensure that they
have been provided in an acceptable manner.
7. Miscellaneous.
a. Other Agreements. This Agreement supersedes any and all agreements,
including the Prior Agreements, previously made by the parties relating
to the subject matter hereof, and there are no understandings or
agreements other than those incorporated in this Agreement; provided,
however, the Parties shall cooperate to create any necessary audit
documentation regarding the amounts paid under this Agreement, and any
previous such documentation shall not be superseded by this Agreement.
b. Books and Records.
i. OWNERSHIP OF RECORDS. Except as otherwise set forth
herein, all business records and reports, studies, documents and
other information generated pursuant to or relating to this
Agreement or the goods and services provided hereunder (the
"Records") are and shall remain the property of the Party that
created them.
ii. Access to Records. Each Party shall make reasonably
available to the other Party, their agents, attorneys and
accountants, at all times during normal business hours, all
applicable Records owned by it under subsection (b)(i). Each Party
shall promptly respond to any questions from the other Party with
respect to applicable Records and shall confer with one another at
all reasonable times, upon request, concerning this Agreement and
the Parties' applicable operations.
iii. Insurers' Books and Records. Notwithstanding the
foregoing, any books and records that are required, by applicable
law, to be the property of a Party that is an insurance company
shall be the property of that insurance company.
iv. Other. Payments to and on behalf of each Party shall be
properly reflected on the books and records of each Party, so as
to be in compliance with applicable law and regulation.
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c. Indemnification. Each Party (the "Indemnitor") will indemnify the
other Party (an "Indemnitee") and the Indemnitee's directors,
shareholders, officers, agents and employees and hold each of them
harmless from and against any losses, damages, judgments and other costs,
fees and expenses, including reasonable attorneys' fees, resulting from
any breach by the Indemnitor of this Agreement or from the gross
negligence, fraud or willful misconduct of employees and permissible
contractors and agents of the Indemnitor.
d. No Advancements. Except as explicitly contemplated by this
Agreement, no Party shall make any advancement to the other Party
hereunder. In no event may a Party hereunder make any advancements to the
other Party, except to pay for services provided hereunder.
e. Receivership of a Party. If a Party is placed in receivership or
seized by an insurance commissioner or department, then (a) all rights of
such Party shall extend to the appropriate insurance commissioner,
receiver and/or insurance department and (b) all Records shall be made
available to the insurance commissioner, receiver and/or insurance
department and shall be turned over to the insurance commissioner,
receiver and/or insurance department immediately upon request. If any
Party is placed in receivership or seized by an insurance commissioner or
department, then the other Parties shall continue to maintain any
systems, programs and other infrastructure used or useful to provide the
goods and services pursuant to this Agreement so long as such Party is
receiving timely payments required by this Agreement; provided, however,
that in such circumstances, the Parties shall have the termination rights
set forth in the section titled "Term and Termination" above.
f. Funds and Invested Assets. All funds and invested assets of a Party
shall remain the exclusive property of such Party, and shall remain
subject to the control of such Party.
g. Governing Law. This Agreement shall be governed by the laws of the
State of Iowa.
IN WITNESS WHEREOF, the undersigned, as duly authorized officers, have caused
this Agreement to be executed on behalf of their respective companies.
CMFG LIFE INSURANCE COMPANY CUNA BROKERAGE SERVICES, INC.
/s/Alastair C Shore /s/Xxxxxxx X Xxxxxxx
-------------------------------- ----------------------------------
BY: Xxxxxxxx X. Xxxxx BY: Xxxxxxx X. Xxxxxxx
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TITLE: EVP, CFO & Treasurer TITLE: President
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EXHIBIT A
1. CMFG Life shall pay to and on behalf of CBSI, as a dealer
concession either the following or the actuarial equivalent of the
following: six percent (6%) if the purchaser of an annuity is between
the ages of zero (0) and seventy (70) years, five percent (5%) if the
purchaser is between the ages of seventy-one (71) and eighty (80)
years, and three and five-tenths percent (3.5%) if the purchaser is
age eighty-one (81) or older.
2. CBSI shall pay to its registered representatives and to other
broker dealers the compensation specified in the various agreements
between the parties for products sold by such registered
representatives on behalf of CMFG Life.
All fee payments shall be due within 30 days of presentment in good order.
Presentment shall occur monthly or at other times agreed upon by the Parties,
but in no event less frequently than quarterly.
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