--------------------------------------------
New England Life Insurance Company Exhibit 1.A.3(b)(ii)
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General Agent Appointment Page AG-1104-96
Incentive This Incentive Career Contract ("The Contract) is made
Career and entered into by and among the General Agent, the
Contract Agent, and New England Life Insurance Company of
Boston, Massachusetts ("the Company").
GENERAL AGENT
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Name
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Address
The Company has appointed the General Agent as the
General Agent for the territory as of the Effective
Date above. The appointment of the General Agent
supersedes any prior appointment of any other general
agent for the same territory.
All terms and conditions of this General Agent
Appointment Page are hereby made a part of and shall
be incorporated into the Contract.
General Agent
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Signature (Date Signed)
By:
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Authorized signature if General Agent (Date Signed)
is not an individual
Effective Date of General Agent Appointment by the
Company: ____________________________
This Incentive Career Contract is made and
entered into by and among the General
------------------------------------ Agent, the Agent, and New England Life
New England Life Insurance Company Insurance Company of Boston, Massachusetts
------------------------------------ ("the Company"). The General Agent for
purposes of the Contract shall be the
person indicated on the General Agent
Appointment Page appointed by the Company
as the General Agent for the territory.
Incentive
Career
Contract AGENT
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Name
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------------------------------------------
Address
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Social Security Number
The provision set forth herein, the
Schedule of Agent Compensation and any
amendments attached hereto are hereby made
part of the Incentive Career Contract
("the Contract").
The Contract shall supersede all
previous agreements between the General
Agent, the Agent, and the Company with
respect to policies or coverages, credited
to the Agent, whose Home Office Receipt
Dates are on or after the Effective Date
of the Contract.
The parties to the Contract agree that
the law of the Commonwealth of
Massachusetts shall govern the Contract in
all respects.
The Contract shall take effect on the
__________ day of _____________, 19__
("the Effective Date").
Agent
------------------------------------------
Signature (Date Signed)
New England Life Insurance Company
By:
---------------------------------------
Authorized Officer (Date Approved and
Countersigned)
Contract
Provisions
THE AGENCY
(1) Appointment. The Agent is appointed as a full-time life insurance agent of
the Company and may solicit and procure applications for policies of the
Company in the territory of the General Agent and such other territory as
may be agreed upon, without exclusive representation. It is understood and
agreed that such activity is the Agent's principal business activity and is
conducted primarily for the Company. In the event the General Agent is
terminated, the Agent's Contract shall continue in effect and (a) the Agent,
without further act or notice, may continue to solicit and procure
applications and submit them to such representative as may be appointed by
the Company until the Company shall appoint a new General Agent, and (b) the
Company shall succeed to the rights and duties of the General Agent until
the Company shall appoint a new General Agent. Any expense allowance
agreement between the terminated General Agent and the Agent terminates as
of the effective date of the General Agent's termination, but the Company
reserves the right to keep any given agreement in effect and to modify it
until the appointment of the new General Agent.
(2) Substitution of Parties. The Agent hereby consents to the substitution as a
party to the Contract in place of a terminated General Agent, as of the
effective date of termination, a new successor General Agent appointed by
the Company as the General Agent for the territory. The Agent will be
furnished with evidence of any new appointment in the form of the General
Agent Appointment Page which shall amend and be a part of the Contract.
(3) Authority. The Agent is authorized to deliver policies only upon the payment
to him of the premiums due thereon, and upon compliance with the terms,
conditions and provisions of such policies and the rules of the Company. The
Agent shall not make, alter or discharge any contracts or agreements, waive
forfeitures, or incur any obligation or liability for which the General
Agent or the Company shall be responsible. The Agent is authorized to
collect with respect to a policy only the first premium due, and other
payments as specifically authorized by the Company, and shall promptly remit
such to the General Agent. In summary, the Agent shall strictly adhere to
all rules and procedures established by the Company's Compliance Program for
the marketing of insurance products and services.
(4) Duties and Relationship. The Agent shall be free to determine for himself
the time, place and manner for the solicitation of applications for
policies, but so far as is consistent with such freedom shall conform to the
rules of the Company and of the General Agent in the conduct of business. It
is agreed that the Agent is an independent contractor, and nothing in this
Contract shall be construed to create the relationship of employer and
employee between the Agent and the Company or between the Agent and the
General Agent.
(5) Status. For purposes of the Company's qualified plans, other fringe
benefits, Social Security or other laws, plans or benefits applicable to
full-time life insurance agents, the Agent will be treated as an active
full-time agent at the end of a given calendar year in which the Agent meets
the requirements for a Year of Qualified Service set forth in the Schedule
of Agent Compensation in effect for policies credited in such year. Any
agent who fails to meet such requirements for a given calendar year shall
not be treated as a full-time agent of the Company but will remain under
this Contract. However, such agent's business activity will not be deemed to
be the solicitation of insurance primarily for the Company. An agent,
whether full-time or not, who elects retirement from the Company's qualified
plans for full-time life insurance agents shall be defined and treated
thereafter as a retired agent without regard to whether the agent has met
the requirements for a Year of Qualified Service.
(6) Professional Liability and Fidelity Coverages. The Agent shall contribute
such amounts as required by the Company for the Company's fidelity program
or, at the discretion of the Company, the Agent shall secure such fidelity
bond coverage as the Company may require. Further, the Agent agrees to
purchase professional liability (errors and omissions) coverage required by
the Company and other liability coverages as may be required by the Company
from time to time.
(7) Covenant Not To Compete. For a period of two years after termination of the
Contract, the Agent shall not, directly or indirectly, contact the
policyholders of the Company in the territory of the General Agent or
policyholders of the Company owning policies for which the Agent is agent of
record for the purpose of inducing any policyholder to lapse, cancel, fail
to renew or replace any policy. For a period of one hundred eighty (180)
days after termination of the Contract the Agent shall not, directly or
indirectly, contact or contract with any agent of the General Agent for the
purpose of inducing such agent to solicit in the territory of the General
Agent on behalf of any other insurance company or financial services
organization. If the 180 day or two year periods referred to herein shall be
deemed unenforceable at law, then such periods shall be reduced to such
periods as shall be legally enforceable.
The General Agent and the Company may pursue all remedies, including
injunction, to assure compliance with the covenants in this Section and
shall, if successful, be entitled to recover from the Agent all costs and
expenses incurred in pursuing such remedies, including reasonable
attorney's fees.
(8) Service Xxxx License.
(a) Grant of License.
The Company hereby grants to the Agent a non-exclusive, personal and
non-transferable right and license to use the service marks the
Company uses in its business, including "The New England," the logo of
The New England and the trading name "New England Life Insurance
Company" (hereinafter referred to as "Marks") in the territory of the
General Agent in connection with the products and services of the
Company and its affiliates upon the terms and conditions contained
herein.
(b) Term.
This license shall be in effect as long as the Licensee is an Agent of
the Company.
(c) Use and Ownership of Service Marks.
The Agent shall use the Marks only with the products and services of
the Company and its affiliates and in accordance with the rules of the
Company. The Agent acknowledges the Company's exclusive right, title
and interest in and to the Marks and will not at any time do or cause
to be done any act or thing contesting or in any way impairing any
part of such right, title and interest.
(d) Termination.
This License shall terminate: (I) when the Contract terminates, or
(ii) if the Agent makes any assignment of assets or business for the
benefit of creditors or if a trustee or receiver is appointed to
administer or conduct the Agent's business or affairs or if the Agent
is adjudged in any legal proceeding to be either a voluntary or
involuntary bankrupt, or (iii) if the Agent fails to comply with any
provision of this License, after written notice thereof to the Agent
by the Company.
Upon termination of this License the Agent shall immediately cease and
desist from all use of the Marks in any way, including any use as a
trade name, and will deliver up to the Company all material, papers
and other media upon which the Marks appear and the Agent shall at no
time adopt or use without the Company's prior written consent any word
or xxxx which is likely to be similar to or confused with the Marks.
The Agent shall take all steps to notify the telephone company
listings which may be required in connection with such cessation of
use of the Marks.
(9) Policyholder Records.
The Agent agrees to furnish during regular business hours to the Company's
authorized representative any and all books and policyholder records in the
Agent's possession which belong to the General Agent or the Company. This
shall not include any books and records which belong to the Agent.
(10) Furniture and Supplies.
Any office supplies, furniture, equipment and fixtures provided by the
Company or the General Agent shall, at all times, be the property of the
General Agent or the Company, as the case may be, subject to the use and
control of the authorized representative of the Company or the General
Agent and also subject to any particular terms and conditions agreed upon
between the Agent and the General Agent. In the event that a termination of
this Contract takes place for any reason whatsoever, all of the above
property shall be immediately turned over to the authorized representative
of the General Agent or the Company.
COMPENSATION
(11) Payment. The General Agent, or after his termination the Company on his or
its behalf, shall pay to the Agent, his estate or assigns, the compensation
provided in the Schedule of Agent Compensation, subject to the provisions
of the Contract and of the Schedule.
(12) Schedule of Agent Compensation. The Schedule of Agent Compensation which
shall apply is the Company's published Schedule of Agent Compensation, and
such Schedule is incorporated herein by reference. Copies of the Schedule
will be furnished to the Agent by the General Agent or the Company.
It is understood and agreed that the right is reserved to the Company at
any time, or from time to time, to change in whole or in part the Schedule
of Agent Compensation including changes to the Year of Qualified Service
("YQS") requirement. No change will reduce any commission or service fee
rates payable on policies credited as new business to the Agent before such
change. Any changes to the YQS requirement or any other qualification
requirement shall be applicable to all policies credited under the
Contract.
(13) Right of Offset. The General Agent, or the Company, may at any time offset
against any commissions or other items payable or owing from the General
Agent or the Company and its affiliates to the Agent, his estate,
beneficiaries, or assigns, any indebtedness of the Agent to the Company
and its affiliates or the General Agent which may exist at any time,
whether such indebtedness is based on debts accrued under the Contract or
any other agreement, implied or written, with the Company and its
affiliates; and such indebtedness shall be a first and prior lien against
commissions or other items due or to become due to the Agent under the
Contract or such other agreement.
(14) Assignments. Assignments will only be made where permitted by law and by
Company rules. No assignment of commissions or other items payable
hereunder shall be effective against the General Agent or the Company
unless the assignment is set forth on Company-approved forms: (a) which
clearly designate the assignee, (b) which recite the General Agent's
and/or the Company's right to a first and prior lien to such commissions
and items under the Contract, (c) which are actually received by the
General Agent from the Agent (d) which are filed with the Company at its
Home Office. Assignment of any other interest whatsoever in the Contract
or delegation of any duties hereunder is prohibited.
(15) When No Compensation Payable; Chargeback. In addition to the conditions
and limitations elsewhere contained in the Contract and the Schedule of
agent Compensation, no compensation shall be payable (1) on premiums for
temporary term insurance; (2) on premiums in default for 90 days or
longer, unless the policy shall be reinstated through the direct
instrumentality of the Agent; (3) on any interest or reserve paid to the
Company in connection with any policy transaction; or (4) after breach of
Contract under Section 16(a). Compensation on premiums refunded by the
Company may be charged back to the Agent.
TERMINATION
(16) Termination.
(a) Breach. If the Agent shall withhold or convert to his own use or for
the benefit of others any moneys, securities, policies or receipts
belonging to the General Agent, the Company and its affiliates, or
shall fail to submit any applications for policies or otherwise
subject the Company or the General Agent to liability by violating any
of the conditions of the Contract or the rules of the Company, the
Contract shall at once terminate without notice, and thereafter the
Agent's claims for compensation or any other benefit under the
Contract shall be forfeited and void.
(b) Notice. The Agent and the General Agent each reserves the right to
terminate the Contract at any time at will and without cause upon
giving (30) days' notice in writing. No change, waiver or modification
of this right to termination, whether oral, in writing, or through
course of conduct, shall be valid, unless memorialized in a writing
signed by the General Agent and a Senior Officer of the Company and
specifically designated as an amendment to Section 16(b) of the
Contract. The parties further agree that this Section 16(b)
constitutes the entire agreement between the parties with respect to
the subject matter hereof, superseding all other prior or
contemporaneous representations or agreements between the parties with
respect thereto. The parties agree that there are no representations,
understandings or agreements relative thereto which are not fully
expressed by the Contract.
(c) Death. The Contract is terminated upon the death of the Agent.
(d) Termination of General Agent. Upon termination of the General Agent,
the Contract shall continue with the Company, and the Company shall
assume the rights and duties of the General Agent, until a new General
Agent is appointed. Payment by the Company to the Agent, his estate or
assigns of any compensation or other items due under the Contract
shall release the Company and the General Agent or his/its
representatives from liability to the extent of such payment.
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New England Life Insurance Company The Company publishes and from time
---------------------------------------- to time may revise the following
Schedule of Agent Compensation, for
use with and subject to all the
provisions of the Incentive Career
Contract.
Each part of the Schedule shall be
in effect as of the effective date
of the Contract. Future changes to
the Schedule shall be effective as
of the date that is announced by
Incentive the Company.
Career
Contract This Schedule of Agent Compensation
shall consist of the following
Parts:
Schedule of Agent
Compensation Part I:
General Provisions
Part II:
First Year and Renewal Commissions
and Service Fees
Part III:
Disability Insurance
Part I:
General
Provisions
For policies credited to the Agent while this Part is in effect.
A. Term Conversions.
The first year commission at conversion shall be reduced by the first year
commission paid on the term insurance if conversion occurs (1) within 120 days
of issue of the term insurance and the new policy has a Policy Date at the
insured's attained age, or (2) before the end of the second policy year of the
term insurance and the new policy has a Policy Date at the insured's age at
issue of the term insurance.
If a term rider is continued after conversion, or if part of the term policy is
continued as a term rider on the new policy, only a 5% commission on the rider
premium will be paid in the first year after conversion; thereafter,
compensation will be paid at the rate for the basic policy.
For compensation purposes, Policy Years for policies issued as term conversions
shall be measured from the date of conversion. All compensation after conversion
is payable to the Agent credited with the conversion.
B. Renewal of Term Policies.
For compensation purposes, Policy Years for renewed term policies shall be
measured from the original Policy Date. All compensation after renewal is
payable to the Agent credited with the original issue. The renewed policy shall
not be credited as new insurance.
C. Replacements, Changes, Rated and Reinsured Policies.
Notwithstanding any other provision of the Contact, payment of compensation
shall be determined by the then current rules and practices of the Company
whenever; (1) any new policy in the judgment of the Company replaces existing
insurance either in the Company or in any affiliate of the Company; (2) any
change except term conversion is made in the terms or conditions of a policy;
(3) an extra premium is charged for a rated policy; or (4) a policy exceeds the
underwriting limit for which the Company is entitled to automatic reinsurance.
D. Riders
Compensation on all riders attached at issue of the basic policy, unless
specified elsewhere in this Schedule, is payable at the rate for the basic
policy. Dividends (and additional premiums paid to provide coverage where the
dividends are insufficient) applied under the provisions of the Cost of Living,
One Year Term Insurance, Additional Protection (Term Insurance Option) riders or
the Custom Life policy, are not subject to compensation.
E. Variable Products
(1) For Zenith Accumulator Variable Annuities (ZAVA), commission rates depend on
the number of complete years to maturity as stated in the annuity at time of
issue. Deferral of the original maturity date shall not alter the commission
rate, and renewal commissions or service fees will continue to be paid as
long as purchase payments are made.
(2) No commission or service fee shall be paid to the Agent for variable
products if the Agent is barred from receiving such under National
Association of Securities Dealers regulations.
F. Modified Cash Surrenders.
If a Modified Cash Surrender Value is paid on surrender of a policy, then the
difference in commissions between what has been paid on the policy and what
would have been paid on a yearly renewable term policy as established by the
Company for the same amount and issue age will be charged back.
G. Agents Deferred Compensation Plan.
If the Agent is an active participant in the Agent's Deferred Compensation Plan,
first year commissions will be paid at 90% of the Year 1 commission rates as
long as the Agent remains an active participant in the Plan.
H. Rates Not Shown.
Rates for conversion of group life and rates for policy forms not shown will be
quoted on request.
Part II:
First Year and Renewal
Commissions and Service Fees
Subject to the provisions of the Contract, first year and renewal commissions
and service fees shall be payable to the Agent for policies whose Home Office
Receipt Dates ("HORDs") occur while this Part II is in effect and which are
credited to the Agent under Company rules when the premium or purchase payment
is due and paid to the Company. "XXXX" as used in the Contract shall mean the
date on which the policy or coverage application is received at the Company Home
Office.
The tables of First Year and Renewal Commissions and Service Fees percentages
are set forth below.
For agents active in the Agents Deferred Compensation Plan, all first year
commissions are 90% of the rates shown.
Full Calendar Year and Contract Year shall include years under all nonbrokerage
contracts of the Company.
A. Requirements For A Year of Qualified Service.
For purposes of this Part II, the Agent shall meet requirements for a Year of
Qualified Service for a given calendar year if the Agent in such year earns an
amount of first year commissions, plus salary if the Agent is a Sales Manager,
Brokerage Manager or Product Specialist, as provided in (1) below or, as of the
end of such year, meets the conditions to waive the earnings requirement as
provided in (2) below:
(1) Earnings Requirement
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Full Calendar First Year Minimum
Year Under Commissions** Life and DI**
Full-time Contracts (FYC) FYC
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1* $14,500 $ 7,250
2 16,500 8,250
3 18,500 9,250
4 21,000 10,500
5 and after 23,000 11,500
*For an Agent's first partial calendar year, the requirement will be prorated
based on an annual requirement of $14,500
**Effective for 1996 only. Future years will be as published by the Company.
(2) Waiver Requirement
(a) The Agent must be insured under, and totally disabled in accordance
with, the provisions of field Long Term Disability Insurance plan; or
the Agent must be insured under, and totally disabled in accordance
with, the Waiver of premium provision of the field Group Life Insurance
plan; or
(b) The Agent is a general agent of the Company; or
(c) The Agent is a validating participant in the Incentive Training
Allowance Plan, Jump Start Training Allowance Plan or the Income
Advance Plan; or
(d) The Agent is Age 55-64 with 25 or more Years of Qualified Service.
As of the calendar year in which the Agent attains age 65, the above
waivers shall no longer be available, unless the Agent elects retirement or
meets certain production requirements under Company rules.
B. Requirements To Earn Compensation.
(1) Immediate Vested Renewal. Immediate Vested renewal commissions shall be
payable at the time the respective renewal premium is due and paid to the
Company.
(2) Conditional Vested Renewal. Conditional Vested renewal commissions shall be
payable if at the time the respective premium is due and paid to the Company the
Agent has met any of the following requirements.
(a) The Contract has not terminated and the Agent has in the preceding
calendar year met the requirement for a Year of Qualified Service; or
(b) The Agent has been credited as of the previous year-end with cumulative
individual first year commissions of at least $300,000#; or
(c) The Agent has completed 14 years of Qualified Service; or, for the
following premiums due and paid to the Company, the Agent has completed
the number of Years of Qualified Service as follows.
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Premium Due and Paid Years of
for the Policy Qualified
Year Below Service
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4 8
5 9
6 10
7 11
8 12
9 13
(d) The Agent is on leave of absence authorized by the Company; or
(e) The Contract has terminated by reason of the Agent's death.
(3) Nonvested Renewal Commissions and Service Fees. Non vested renewal
commissions and service fees shall be payable only if, at the time the
respective renewal premium is due and paid, the Contract has not terminated and
the Agent has met the requirements in either B(2)(a) or B(2)(d) above.
#Effective for 1996 issues; values for future issues will be as published by the
Company.
Part IIA: Registered Products (effective 9/1/96) (Rates are a percent of
premium)
For those Agents and Registered Representatives who are properly licensed and
appointed with the Company and NES.
Service
First & Renewal Commissions Fees Excess Premium
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Years Years Years
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Product Vesting 1 2-3 4-6 7-10 11+ 1-10 11+
Variable Life
---------------------------------
Variable Ordinary Life (VL) Immediate 50.0 6.5 3.0
Conditional 4.5 4.5
Non Vested 2.0 2.0 2.0 3.0
Variable Life Paid-up at 65 Immediate 25.0 5.0 3.0
(VL65) Conditional 5.0 5.0
Non Vested 2.0 3.0
Variable Universal Survivorship Immediate 50.0 5.0 5.0 5.0 3.0
(VUSL) Non Vested 4.0 3.0
Variable Term Rider (VTR) Immediate 3.0 3.0 3.0 3.0
Non Vested 3.0
Variable Universal Life (VUL)
Band 1 Immediate 50.0 3.0 3.0 3.0 3.0
Non Vested 3.0 3.0
Band 2 Immediate 50.0 2.0 2.0 2.0 2.0
Non Vested 2.0 2.0
Variable Annuities
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Zenith Accumulator (ZAVA) Immediate 3.0 3.0
Conditional 3.0 3.0
Non Vested 3.0
American Growth Series (AGS)
Normal Option Immediate 3.0 3.0
Conditional 3.0 3.0
Non Vested 3.0
Trail Option Immediate 2.0 1.8
Conditional 1.8 1.7
Non Vested 1.7
For the AGS Trail Option - an additional 0.2% of fund value will be paid during
the second through seventh annuity contract years, and 0.3% thereafter. These
payments will be calculated at the end of each calendar month and paid at the
end of each calendar quarter. The payments through the 10th contract year are
immediate vested, and non-vested thereafter.
Commission Adjustments
(a) Deferred Compensation - For agents in the Agents Deferred Compensation
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Plan, all first year commissions are 90% of the rates shown.
(b) Reductions at High Ages:
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-- VL: FYC decreases by 2 percentage points for each year issue age is over
70.
(c) Policy Bands:
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-- VUL: Band 1 - less than $500,000 face amounts.
Band 2 - face amounts of $500,000 and above.
(d) Target Premiums - are as published by the Company.
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(e) Chargebacks - for all variable life plans, 50% of any FYC paid, net of
------------
compensation on premium refunds, shall be charged back to the Agent for any
coverage which is terminated prior to the 13th month.
(f) Variable Annuities:
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-- ZAVA: Commissions decline 0.25% per year from 3.0% for 10 years to
maturity to 1.0% for 2 years to maturity, and is 0.5% for 1 year to
maturity.
-- AGS: For deposits over attained age 75, Normal Option rates reduce by
0.15% for each year the attained age is over 75. Trail Option rates
reduce by 0.10% for each year attained age is over 75. For the Trail
Option, rate for year 7 is 1.8%.
-- ZAVA and AGS: Rates on renewal deposits are not guaranteed, the rates
shown are currently what would be payable, rates may change in the
future for previous issues.
Part IIB: Non-Registered Products (effective 9/1/96) (Rates are a percent of
premium)
Service
First & Renewal Commissions Fees Excess Premium
--------------------------- ---- --------------
Years Years Years
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Product Vesting 1 2-3 4-6 7-10 11+ 1-10 11+
Traditional Permanent Life
--------------------------
Single
Ordinary Life (OL)
Band 1 Immediate 55.0 8.0
Conditional 4.0 4.0
Non Vested 4.0 2.0
Band 2 Immediate 50.0 5.0
Conditional 5.0 5.0
Non Vested 2.0
Pension Ordinary Life (POL) Immediate 50.0 8.0
Conditional 4.0 4.0
Non Vested 4.0 2.0
Modified Premium Life (MPL)
Band 1 Immediate 55.0 8.0
Conditional 4.0 4.0
Non Vested 4.0 2.0
Band 2 Immediate 50.0 5.0
Conditional 5.0 5.0
Non Vested 2.0
Endowment Paid at 65 (EP65) Immediate 25.0 5.0
Conditional 5.0 5.0
Non Vested 2.0
Graded Premium Life (GPL)
ages 0-59 Immediate 55.0 8.0
Conditional 4.0 4.0
Non Vested 4.0 4.0 2.0
ages 60+ Immediate 55.0 8.0
Conditional 4.0 4.0
Non Vested 4.0 2.0
Limited Payment Life (L65, LP10, LP20)
Number of annual payments
30 or more Immediate 55.0 8.0
Conditional 4.0 4.0
Non Vested 4.0 2.0
20-25 Immediate 50.0 8.0
Conditional 4.0 4.0
Non Vested 4.0 2.0
15 Immediate 40.0 8.0
Conditional 4.0 4.0
Non Vested 4.0 2.0
10 Immediate 30.0 8.0
Conditional 4.0 4.0
Non Vested 4.0 2.0
5 Immediate 20.0 4.0
Conditional 3.0 3.0
Non Vested 1.0 2.0 2.0
Part IIB: Non-Registered Products (effective 9/1/96) (Rates are a percent of
premium)
Service
First & Renewal Commissions Fees Excess Premium
--------------------------- ---- --------------
Years Years Years
-----------------------------------------------------------------------------------------------------------------------
Product Vesting 1 2-3 4-6 7-10 11+ 1-10 11+
Joint
Survivorship Life (OSL) Immediate 55.0 5.0
Conditional 5.0 5.0
Non Vested 2.0
Modified Premium Immediate 50.0 5.0
Survivorship (MPSL) Conditional 5.0 5.0
Non Vested 2.0
Term Life
---------
Yearly Renewable Term (YRT)
Face amount
Less than 1,000,000 Immediate 35.0 6.0
Conditional 4.0 4.0
Non Vested 2.0 2.0 2.0
1,000,000 and over Immediate 30.0 6.0
Conditional 4.0 4.0
Non Vested 2.0 2.0 2.0
YRT 4 0.0 0.0 0.0
10 Year Term (10T) Immediate 45.0 2.0
Conditional 2.0 2.0
Non Vested 2.0
Pension Term (PT) Immediate 15.0 15.0
Conditional 5.0 5.0
Non Vested 2.0
Riders
------
Level, Decreasing, Children's Immediate 40.0 rates of base policy
Flex Term & TIO 0.0 0.0 0.0 0.0 0.0
Paid Up Additions Rider Immediate 3.0 3.0 3.0 3.0
Non Vested 3.0
Universal Life
--------------
Single
Universal Life (UL)
Bands 1-3 Immediate 50.0 4.0 4.0 4.0 3.0
Non Vested 4.0 3.0
Band 4 Immediate 25.0 3.0 3.0 3.0 2.0
Non Vested 3.0 2.0
Pension Universal Life (PUL) Immediate 50.0 3.0 3.0 3.0 3.0
Non Vested 3.0 3.0
Joint
First to Die (FTD) Immediate 50.0 5.0 5.0 5.0 3.0
Non Vested 4.0 3.0
Fixed Annuities
---------------
Single Premium Immediate (SPIA) Immediate 3.0
Single Premium Deferred (SPDA) Immediate 3.0
Flexible Payment Retirement (FRA) Immediate 3.0 3.0
Conditional 3.0 3.0
Non Vested 3.0
Commission Adjustments (see next page)
Commission Adjustments, Target Premiums, Policy Bands
(a) Deferred Compensation - For agents in the Agents Deferred Compensation
---------------------
Plan, all first year commissions are 90% of the rates shown.
(b) Reduction at High Ages
----------------------
FYC decreases by the following percentage points for each year issue age is
over 70 (joint equal age for survivorship policies):
-- OL, MPL, GPL, all term riders: 2%
-- OSL, MPSL, LP10, LP20: 1%
(c) Restrictions on Premium Increases
---------------------------------
-- MPL & MPSL - No FYC on step-up in premium.
-- YRT - No FYC on increases in premium.
-- GPL - A FYC of 45% (reduced for issue age over 70) is payable on annual
premium increases in years 2-21 (subject to qualification requirements
for year 11-21); renewal commissions or service fees are payable on the
balance of premium in years 2-21.
(d) Policy Bands
------------
- OL: Band 1 - less than $250,000 face amounts
Band 2 - face amounts of $250,000 and above
- MPL: Band 1 - less than $500,000 face amounts
Band 2 - face amounts of $500,000 and above
- UL: Band 4 - Business cases with over 25 lives and a minimum average face
of $200,000
- YRT: Band 1 - less than $1,000,000 face amounts
Band 2 - face amounts of $1,000,000 and above
(e) Target Premiums - Are as published by the Company
---------------
(f) Other Adjustments
-----------------
-- SPDA: Subject to full commission chargeback on surrender in the first
6 months, and 50% chargeback on surrender in the second 6 months.
-- FRA: Commissions are reduced to 2 percent for issue ages 60 and over.
-- PT: additional 10% immediate vested payable in years 4 and 5.
-- EP65: FYC reduced for automatic issue policies to 22.5%.
-- L65: Renewal rates for policies with 5-9 premium payments are the
rates shown for the 5 annual premium payments.
Part III:
Disability Insurance
COMMISSIONS
Subject to the provisions of the Contract, commissions and service fees shall be
payable to the Agent for policies whose HORDs occur while this Part III is in
effect and which are credited to the Agent under Company rules when the premium
is due and paid to the Company
GENERAL PROVISIONS
1. Net First Year Annualized Premium (NFYAP) is disability insurance annualized
first year commissionable premium net of any first year lapses and excluding
Premium Refund Riders.
2. Commission credits for Association Disability Insurance policies shall be
split between the Selling Agent and the Endorsement Agent according to the
rules of the Company. The Selling Agent is the agent credited with selling a
specific policy, while the Endorsement Agent is the Agent credited with
obtaining the Endorsement from the Association.
3. No compensation will be payable: (a) on temporary flat extra premiums; (b)
on the amount of permanent table-rated or percentage-rated premiums in
excess of 100%; (c) on any premium waived; or (d) on any administrative fee.
4. Notwithstanding any other provision of the Contract, payment of compensation
shall be determined by the then current rules and practices of the Company
whenever: (a) any new policy in the judgement of the Company replaces
existing insurance either in the Company or in any affiliate of the Company;
(b) multi-life policies are issued as part of a special discount plan
approved in advance; (c) any plan or benefit is first made available after
the effective date of this Part.
5. Unless provided otherwise, compensation payable on supplementary benefits
will be at the same rates and subject to the same provisions as are the
policies to which they are attached.
6. On any policy eligible for discount(s), compensation payable shall be based
upon the actual premiums paid, net of any administrative fee.
7. For agents active in the Agents Deferred Compensation Plan, all first year
commissions are 90% of the rates shown.
8. Conditional Vested Renewals:
Conditional Vested renewal commissions shall be payable if at the time the
respective premium is due and paid to the Company the Agent has met any of the
following:
(a) The Contract has not terminated and the Agent has in the preceding calendar
year met the requirement for a Year of Qualified Service; or
(b) The Agent has been credited as of the previous year-end with cumulative
individual first year commissions of at least $300,000/#/; or
(c) The Agent has completed 14 Years of Qualified Service; or
(d) The Contract has terminated by reason of the Agent's death.
9. Sales Incentives:
Sales Incentives shall be payable on a disability policy issued in a calendar
year if the amount of NFYAP credited to the producer in that year meets the
published rate in effect on the XXXX of the policy as follows:/#/
Incentive Level NFYAP
I $ 8,000
II $15,000
III $40,000
In addition, for Sales Incentive Level I, the Agent must meet any of the
requirements in 7(a) through 7(d) above at the time the renewal premium is due
and paid to the Company.
10. Service Fees:
Service Fees shall be payable only if, at the time the respective renewal
premium is due and paid to the company, the Agent has met the requirement in
7(a) above.
In addition, Service Fees I and II shall be payable on a disability policy
issued in a calendar year if the amount of NFYAP credited to the producer in
that year meets the published rate in effect on the XXXX of the policy as
follows:/#/
Service Fee Level NFYAP
I $ 8,000
II $15,000
# Effective for 1996 issues; values for future issues will be as
published by the Company
Part III: (continued)
Disability Insurance
QUALITY PERSISTENCY BONUS (D.I. BONUS)
Agents will earn a D.I. bonus beginning in 1996, payable the following year, if
certain standards are met. These standards pertain to disability insurance
sales, DI persistency, and DI premium-in-force (PIF).
DI Bonus - First Year Premium
Agents will earn the following additional percentage of collected first year
premium provided that, in the year prior to the year the DI Bonus is earned,
they produce $40,000 NFYAP and have DI Persistency of at least 70%:
5% of collected first year premium up to $40,000, and
10% of the excess, for Provision Policies - 2% of collected first year
premium up to $40,000, and 7% of the excess.
Note: If production in the year the bonus is earned exceeds $40,000 NFYAP, then
the 10% (7% of the Provision Policies) of the excess over $40,000 of
collected first year premium will be paid.
DI Bonus - Renewal Premium
Agents will earn an additional percentage of collected renewal premium based on
their PIF at the beginning of the calendar year and their NFYAP and D.I.
Persistency for the calendar year (Provision not included).
A Bonus Base amount is determined by meeting a minimum amount of PIF and NFYAP
as follows.
PIF NFYAP BONUS Base*
Beginning During Percent of
of Year the Year Renewal Premium
$ 75,000 $25,000 1%
125,000 35,000 3
250,000 45,000 5
500,000 55,000 6
*Non-cumulative, not interpolated
The Bonus Base is then multiplied by a Quality Persistency Factor (QPF) which
may increase, decrease or eliminate the Bonus based on the following schedule:
DI Persistency QPF
Less than 65% 0
65-69 0.3
70-74 0.8
75-79 1.0
80-85 1.1
86 & over 1.2
DI Persistency
DI Persistency for a specified calendar year is calculated by subtracting a
Lapse Ration from 100%.
The Lapse Ratio is expressed as a percent and is a ratio whose numerator is one-
quarter of the sum of Lapses determined as of 8/31, 5/31, and 2/28 of the
specified calendar year and as of 11/30 of the previous calendar year; and whose
denominator is one-quarter of the sum of NFYAP determined as of 8/31, 5/31, and
2/28 of the specified calendar year and as of 11/30 of the previous calendar
year.
Lapses determined as of a specified date (used in the Lapse Ration calculation
above) are the sum of annualized premium on all lapses during the 12 months
prior to that specified date on policies which fail to pay at least 37 months of
premium.
NFYAP determined as of a specified date (in the Lapse Ration calculation above)
is one-third of the total NFYAP during the 36 months prior to the specified
date.
Note: Bonuses are effective for calendar year 1996. Future years will be as
published by the Company.
Part III: Disability Insurance (effective 9/1/96) (Rates are a percent of
premium and are non-cumulative)
First & Renewal Commissions Service Fee
--------------------------- ----------------
Years Years
-----------------------------------------------------------------------------------------------------------
Incentive
Product Vesting Level 1 2-3 4-10 Vesting 11+
------- ------- ----- - --- ---- ------- ---
Preferred Professional (ex CA, FL) Immediate 50.0
& Business Executive (ex CA, FL) Conditional 4.0 4.0 Nonvested 4.0
Business Protector (ex NY, CA, FL) Conditional I 8.0 8.0 Nonvested 8.0
(Physicians excluded from above) Immediate II 12.0 12.0 Nonvested 10.0
Immediate III 17.0 17.0 Nonvested 10.0
Preferred Professional CA, FL Immediate 40.0
& Business Executive CA, FL Conditional 4.0 4.0 Nonvested 4.0
Business Protector CA, FL Conditional I 8.0 8.0 Nonvested 8.0
(Physicians included in above) Immediate II 12.0 12.0 Nonvested 10.0
Immediate III 17.0 17.0 Nonvested 10.0
Key Person, All American, Immediate 30.0
Business Protector (NY) Conditional 4.0 4.0 Nonvested 4.0
Conditional I 8.0 8.0 Nonvested 8.0
Immediate II 12.0 12.0 Nonvested 10.0
Immediate III 17.0 17.0 Nonvested 10.0
Occupation Class A Immediate 25.0
Conditional 4.0 4.0 Nonvested 4.0
Conditional I 8.0 8.0 Nonvested 8.0
Immediate II 12.0 12.0 Nonvested 10.0
Immediate III 17.0 17.0 Nonvested 10.0
All Term Policies except Immediate 8.0
Key Person Conditional 4.0 4.0 Nonvested 4.0
Conditional I 8.0 8.0 Nonvested 8.0
Immediate II 12.0 12.0 Nonvested 10.0
Immediate III 17.0 17.0 Nonvested 10.0
Select 25 Immediate 20.0
Conditional 6.0 6.0 Nonvested 4.0
Conditional I 11.0 11.0 Nonvested 8.0
Immediate II 16.0 16.0 Nonvested 10.0
Immediate III 21.0 21.0 Nonvested 10.0
Select 30 Immediate 15.0
Conditional 4.0 4.0 Nonvested 4.0
Conditional I 9.0 9.0 Nonvested 8.0
Immediate II 14.0 14.0 Nonvested 10.0
Immediate III 19.0 19.0 Nonvested 10.0
Select 35 Immediate 10.0
Conditional 2.0 2.0 Nonvested 4.0
Conditional I 7.0 7.0 Nonvested 8.0
Immediate II 12.0 12.0 Nonvested 10.0
Immediate III 17.0 17.0 Nonvested 10.0
Part III: Disability Insurance (effective 9/1/96) (Rates are a percent of
premium and are non-cumulative)
First & Renewal Commissions Service Fee
--------------------------- ----------------
Years Years
-------------------------------------------------------------------------------------------
Incentive
Product Vesting Level 1 2-3 4-10 Vesting 11+
------- ------- ----- - --- ---- ------- ---
Provision Immediate 30.0
Conditional 8.0 5.0 Nonvested 4.0
Conditional I 10.0 7.0 Nonvested 8.0
Immediate II 13.0 10.0 Nonvested 10.0
Immediate III 14.0 11.0 Nonvested 10.0
ProVision-Select 25 Immediate 25.0
Conditional 7.0 4.0 Nonvested 4.0
Conditional I 8.0 4.5 Nonvested 4.5
Immediate II 9.0 5.0 Nonvested 5.0
Immediate III 11.0 7.0 Nonvested 7.0
ProVision-Select 30 Immediate 20.0
Conditional 5.0 2.0 Nonvested 2.0
Conditional I 6.0 2.5 Nonvested 2.5
Immediate II 7.0 3.0 Nonvested 3.0
Immediate III 9.0 5.0 Nonvested 5.0
Premium Refund Benefit Same as Base Contract 3.5 3.5 3.5 Nonvested 1.75
AIB/FIO Immediate 10.0
Conditional 9.0 9.0 Nonvested 4.0
Conditional I 13.0 13.0 Nonvested 8.0
Immediate II 17.0 17.0 Nonvested 10.0
Immediate III 22.0 22.0 Nonvested 10.0
Provision-FIO Immediate 14.0
Conditional 12.0 12.0 Nonvested 4.0
Conditional I 13.0 13.0 Nonvested 8.0
Immediate II 14.0 14.0 Nonvested 10.0
Immediate III 16.0 16.0 Nonvested 10.0
ProVision-Select 25-FIO Immediate 12.0
Conditional 10.0 10.0 Nonvested 4.0
Conditional I 11.0 11.0 Nonvested 8.0
Immediate II 12.0 12.0 Nonvested 10.0
Immediate III 14.0 14.0 Nonvested 10.0
ProVision-Select 30-FIO Immediate 10.0
Conditional 8.0 8.0 Nonvested 4.0
Conditional I 9.0 9.0 Nonvested 8.0
Immediate II 10.0 10.0 Nonvested 10.0
Immediate III 12.0 12.0 Nonvested 10.0
Commission Adjustments
(a) For agents active in the Agents Deferred Compensation Plan, all first year
commissions are 90% of the rates shown
(b) For Policies with issue age over 65, the first year commission will be 10%.
(c) For 30 and 60 day EP for Preferred Professional, Business Executive, Key
Person, All American, ProVision and Business Protector, the FYC rate is
25%.
(d) Key Person policies are five year term policies. If Renewed at the end of
five years, a new policy will be issued and new first year and renewal
commission will become payable for another five years at the rates
scheduled for such policies.
(e) For All American and Business Protector (NY) policies, the rates for the
first five policy years are repeated every five years the policy continues
in-force, except that the 30% rate in the sixth, eleventh years, etc. will
be a renewal commission. The appropriate Sales Incentives apply in the 2nd-
5th, policy years, and the 2nd-5th policy years of every 5 year period
thereafter that the policy continues in-force.
