"A"
BROKER-DEALER AGENCY
SELLING AGREEMENT
This Agreement is made among the following three parties:
1. RELIASTAR BANKERS SECURITY LIFE INSURANCE COMPANY
0000 Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxx, Xxx Xxxx 00000
a New York domiciled stock life insurance company
(hereinafter "INSURER"); and,
2. WASHINGTON SQUARE SECURITIES, INC.
00 Xxxxxxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
an affiliate of Insurer, registered as a broker-dealer with
the Securities and Exchange Commission ("SEC") and a member
of the National Association of Securities Dealers, Inc.
("NASD") (hereinafter "GENERAL DISTRIBUTOR"); and,
3. ______________________________________
______________________________________
Street
______________________________________
City State ZIP
registered as a broker-dealer with the SEC and a member of the
NASD and licensed as an insurance agency (hereinafter
"BROKER-DEALER").
RECITALS:
WHEREAS, Broker-Dealer is licensed as an insurance agency in order to
satisfy state insurance law requirements with respect to the sale of traditional
life insurance policies as well as variable insurance products which are
registered securities with the SEC.
WHEREAS, the parties wish to enter into an agreement for the
distribution of Variable Contracts and Traditional Life Insurance Policies by
Broker-Dealer; and
WHEREAS, Insurer has appointed General Distributor as principal
underwriter and distributor (as those terms are defined by the Investment
Company Act of 1940) of the Variable Contracts and has authorized General
Distributor to enter into selling agreements with registered broker-dealers for
the solicitation and sale of Variable Contracts; and,
WHEREAS, Insurer and General Distributor propose to have
Broker-Dealer's registered representatives who are licensed as life
insurance/variable contract agents in appropriate jurisdictions
("Representatives") solicit and sell Variable Contracts and Traditional Life
Insurance Policies; and,
WHEREAS, Insurer and General Distributor propose to have Broker-Dealer
provide certain supervisory and administrative services as hereinafter described
with respect to the solicitation and sales of Variable Contracts and Traditional
Life Insurance Policies.
NOW THEREFORE, in consideration of the premises and the mutual
covenants hereinafter set forth, the parties now agree as follows:
1. DEFINITIONS
In this Agreement,
(a) The words "Variable Contract" shall mean those variable life
insurance policies and variable annuity contracts identified
in Section 1 of Compensation Schedule A attached hereto, and
as may hereafter be amended.
Insurer may in its sole discretion and without notice to
Broker-Dealer, suspend sales of any Variable Contracts or
amend any policies or contracts evidencing such Variable
Contracts if, in Insurer's opinion, such suspension or
amendment is: (1) necessary for compliance with federal,
state, or local laws, regulations, or administrative order(s);
or, (2) necessary to prevent administrative or financial
hardship to Insurer. In all other situations, Insurer shall
provide 30 days notice to Broker-Dealer prior to suspending
sales of any Variable Contracts or amending any policies or
contracts evidencing such Variable Contracts.
Insurer may issue and propose additional or successor
products, in which event Broker-Dealer will be informed of the
product and its related Commission Schedule. If Broker-Dealer
does not agree to distribute such product(s), it must notify
Insurer in writing within 30 days of receipt of the Commission
Schedule for such product(s). If Broker-Dealer does not
indicate disapproval of the new product(s) or the terms
contained in the related Commission Schedule, Broker-Dealer
will be deemed to have thereby agreed to distribute such
product(s) and agreed to the related Commission Schedule which
shall be attached to and made a part of this Agreement.
(b) The words "Traditional Life Insurance Policy" shall mean those
life insurance policies and annuity contracts identified in
Section 2 of Compensation Schedule A attached hereto, and as
may hereafter be amended.
Insurer may in its sole discretion and without notice to
Broker-Dealer, suspend sales of any Traditional Life Insurance
Policies or amend any policies or contracts evidencing such
Traditional Life Insurance Policies if, in Insurer's opinion,
such suspension or amendment is: (1) necessary for compliance
with federal, state, or local laws, regulations, or
administrative order(s); or, (2) necessary to prevent
administrative or financial hardship to Insurer. In all other
situations, Insurer shall provide 30 days notice to
Broker-Dealer prior to suspending sales of any Traditional
Life Insurance Policies or amending any policies or contracts
evidencing such Traditional Life Insurance Policies.
Insurer may issue and propose additional or successor
products, in which event Broker-Dealer will be informed of the
product and its related Compensation Schedule. If
Broker-Dealer does not agree to distribute such product(s), it
must notify Insurer in writing within 30 days of receipt of
the Compensation Schedule for such product(s). If
Broker-Dealer does not indicate disapproval of the new
product(s) or the terms contained in the related Compensation
Schedule, Broker-Dealer will be deemed to have thereby agreed
to distribute such product(s) and agreed to the related
Compensation Schedule which shall be attached to and made a
part of this Agreement.
2. AGENCY APPOINTMENT
On the effective date, Insurer and General Distributor appoint
Broker-Dealer and Broker-Dealer accepts the appointment to solicit
sales of and to sell Variable Contracts and Traditional Life Insurance
Policies, pursuant to the terms of this Agreement.
3. DUTIES OF BROKER-DEALER
(a) SUPERVISION OF REPRESENTATIVES. Broker-Dealer shall have full
responsibility for the training and supervision of all
Representatives who are engaged directly or indirectly in the
offer or sale of the Variable Contracts, and all such persons
shall be subject to the control of Broker-Dealer with respect
to such persons' securities regulated activities in connection
with the Variable Contracts. Broker-Dealer will cause the
Representatives to be trained in the sale of the Variable
Contracts, will cause such Representatives to qualify under
applicable federal and state laws to engage in the sale of the
Variable Contracts; will cause such Representatives to be
registered representatives of Broker-Dealer before such
Representatives engage in the solicitation of applications for
the Variable Contracts; and will cause such Representatives to
limit solicitation of applications for the Variable Contracts
to jurisdictions where Insurer has authorized such
solicitation. Broker-Dealer shall cause such Representatives'
qualifications to be certified to the satisfaction of General
Distributor and shall notify General Distributor if any
Representative ceases to be a registered representative of
Broker-Dealer or ceases to maintain the proper licensing
required for the sale of the Variable Contracts. All parties
shall be liable for their own negligence and misconduct under
this paragraph.
(b) REPRESENTATIVES INSURANCE COMPLIANCE. Broker-Dealer, prior to
allowing its Representatives to solicit for sales or sell the
Variable Contracts and Traditional Life Insurance Policies,
shall require such representatives to be validly insurance
licensed, registered and appointed by Insurer as a variable
contract/life insurance agent in accordance with the
jurisdictional requirements of the place where the
solicitations and sales take place as well as the solicited
person's or entity's place of residence.
Broker-Dealer shall assist Insurer in the appointment of
Representatives under the applicable insurance laws to sell
Variable Contracts and Traditional Life Insurance Policies.
Broker-Dealer shall fulfill all Insurer requirements in
conjunction with the submission of licensing/appointment
papers for all applicants as insurance agents of Insurer. All
such licensing/appointment papers shall be submitted to
Insurer or its designee by Broker-Dealer. Notwithstanding such
submission, Insurer shall have sole discretion to appoint,
refuse to appoint, discontinue, or terminate the appointment
of any Representative as an insurance agent of Insurer.
(c) COMPLIANCE WITH NASD RULES OF FAIR PRACTICE AND FEDERAL AND
STATE SECURITIES LAWS. Broker-Dealer shall fully comply with
the requirements of the National Association of Securities
Dealers, Inc., the Securities Exchange Act of 1934 and all
other applicable federal and state laws. In addition,
Broker-Dealer will establish and maintain such rules and
procedures as may be necessary to cause diligent supervision
of the securities activities of the Representatives as
required by applicable law or regulation. Upon request by
General Distributor, Broker-Dealer shall furnish such records
as may be necessary to establish such diligent supervision.
(d) NOTICE OF REPRESENTATIVE'S NONCOMPLIANCE. In the event a
Representative fails or refuses to submit to supervision of
Broker-Dealer or otherwise fails to meet the rules and
standards imposed by Broker-Dealer on its Representatives,
Broker-Dealer shall advise General Distributor of this fact
and shall immediately notify such Representative that he or
she is no longer authorized to sell the Variable Contracts or
Traditional Life Insurance Policies and Broker-Dealer shall
take whatever additional action may be necessary to terminate
the sales activities of such Representative relating to such
contracts and policies.
(e) PROSPECTUSES, SALES PROMOTION MATERIAL AND ADVERTISING.
Broker-Dealer shall be provided, without any expense to
Broker-Dealer, with prospectuses relating to the Variable
Contracts and such other supplementary sales material as
General Distributor determines is necessary or desirable for
use in connection with sales of the Variable Contracts and
Traditional Life Insurance Policies.
NO SALES PROMOTION MATERIALS OR ANY ADVERTISING RELATING TO
THE VARIABLE CONTRACTS AND TRADITIONAL LIFE INSURANCE
POLICIES, INCLUDING WITHOUT LIMITATION GENERIC ADVERTISING
MATERIAL WHICH DOES NOT REFER TO INSURER BY NAME, SHALL BE
USED BY BROKER-DEALER UNLESS THE SPECIFIC ITEM HAS BEEN
APPROVED IN WRITING BY GENERAL DISTRIBUTOR PRIOR TO SUCH USE.
In addition, Broker-Dealer shall not print, publish or
distribute any advertisement, circular or any document
relating to Insurer unless such advertisement, circular or
document shall have been approved in writing by Insurer prior
to such use.
Upon termination of this Agreement, all prospectuses, sales
promotion material, advertising, circulars, documents and
software relating to the sales of Insurer's contracts shall be
promptly turned over to Insurer free from any claim or
retention of rights by the Broker-Dealer.
Insurer represents that the prospectus and registration
statement relating to the Variable Contracts contain no untrue
statements of material fact or omission to state material
fact, the omission of which makes any statement contained in
the prospectus and registration statement misleading. Insurer
agrees to indemnify Broker-Dealer from and against any claims,
liabilities and expenses which may be incurred under the
Securities Act of 1933, the Investment Company Act of 1940,
common law or otherwise arising out of a breach of the
agreement in this paragraph.
Broker-Dealer agrees to hold harmless and indemnify Insurer
and General Distributor against any and all claims,
liabilities and expenses which Insurer or General Distributor
may incur from liabilities arising out of or based upon any
alleged or untrue statement other than statements contained in
the registration statement, prospectus or approved sales
material of any Variable Contract.
In accordance with the requirements of the laws of the several
states, Broker-Dealer shall maintain complete records
indicating the manner and extent of distribution of any such
solicitation material, shall make such records and files
available to staff of Insurer or its designated agent in field
inspections and shall make such material available to
personnel of state insurance departments, the NASD or other
regulatory agencies, including the SEC, which have regulatory
authority over Insurer or General Distributor. Broker-Dealer
holds Insurer, General Distributor and their affiliates
harmless from any liability arising from the use of any
material which either (a) has not been specifically approved
by Insurer in writing, or (b) although previously approved,
has been disapproved, in writing, for further use.
(f) SECURING APPLICATIONS. All applications for Variable Contracts
and Traditional Life Insurance Policies shall be made on
application forms supplied by Insurer and all payments
collected by Broker-Dealer or any Representative thereof shall
be remitted promptly in full, together with such application
forms and any other required documentation, directly to
Insurer at the address indicated on such application or to
such other address as Insurer may, from time-to-time,
designate in writing. Broker-Dealer shall review all such
applications for accuracy and completeness. Checks or money
orders in payment on any such Variable Contract or Traditional
Life Insurance Policy shall be drawn to the order of
"ReliaStar Bankers Security Life Insurance Company." All
applications are subject to acceptance or rejection by Insurer
at its sole discretion. All records or information obtained
hereunder by Broker-Dealer shall not be disclosed or used
except as expressly authorized herein, and Broker-Dealer will
keep such records and information confidential, to be
disclosed only as authorized or if expressly required by
federal or state regulatory authorities.
(g) COLLECTION OF PURCHASE PAYMENTS. Broker-Dealer agrees that all
money or other consideration tendered with or in respect of
any application for a Variable Contract or Traditional Life
Insurance Policy and the Variable Contract or Traditional Life
Insurance Policy when issued is the property of Insurer and
shall be promptly remitted in full to Insurer without
deduction or offset for any reason, including by way of
example but not limitation, any deduction or offset for
compensation claimed by Broker-Dealer.
(h) POLICY DELIVERY. Insurer will transmit Variable Contracts and
Traditional Life Insurance Policies to Broker-Dealer for
delivery to Policyowners. Broker-Dealer hereby agrees to
deliver all such Variable Contracts to Policyowners within ten
(10) days of their receipt by Broker-Dealer from Insurer.
Broker-Dealer agrees to indemnify and hold harmless Insurer
for any and all losses caused by Broker-Dealer's failure to
perform the undertakings described in this paragraph.
Broker-Dealer hereby authorizes Insurer to set off any amount
it owes Insurer under this paragraph against any and all
amounts otherwise payable to Broker-Dealer by Insurer.
(i) FIDELITY BOND. Broker-Dealer represents that all directors,
officers, employees and Representatives of Broker-Dealer who
are licensed pursuant to this Agreement as Insurer's agents
for state insurance law purposes or who have access to funds
of Insurer, including but not limited to funds submitted with
applications for the Variable Contracts and Traditional Life
Insurance Policies, or funds being returned to owners, are and
shall be covered by a blanket fidelity bond, including
coverage for larceny and embezzlement, issued by a reputable
bonding company. This bond shall be maintained by
Broker-Dealer at Broker-Dealer's expense. Such bond shall be,
at least, of the form, type and amount required under the NASD
Rules of Fair Practice. Insurer may require evidence,
satisfactory to it, that such coverage is in force and
Broker-Dealer shall give prompt written notice to Insurer of
any notice of cancellation or change of coverage.
Broker-Dealer assigns any proceeds received from the fidelity
bonding company to Insurer to the extent of Insurer's loss due
to activities covered by the bond. If there is any deficiency
amount, whether due to a deductible or otherwise,
Broker-Dealer shall promptly pay Insurer such amount on demand
and Broker-Dealer hereby indemnifies and holds harmless
Insurer from any such deficiency and from the costs of
collection thereof (including reasonable attorneys' fees).
4. COMPENSATION
(a) VARIABLE CONTRACTS. Insurer, on behalf of General Distributor,
shall pay a dealer concession to Broker-Dealer on all sales of
Variable Contracts through its Representatives, in accordance
with the form of Compensation Schedule A attached hereto,
which is in effect when purchase payment on such Variable
Contracts are received by Insurer. Dealer concessions will be
paid as a percentage of premiums received in cash or other
legal tender and accepted by Insurer on applications obtained
by Broker-Dealer's Representatives unless otherwise indicated
in Compensation Schedule A. Upon termination of this
Agreement, all compensation payable hereunder shall cease;
however, Broker-Dealer shall continue to be liable for any
chargebacks or for any other amounts advanced by or otherwise
due Insurer hereunder.
Insurer will pay all such Compensation to the Broker-Dealer.
Broker-Dealer agrees to hold Insurer and General Distributor
harmless from all claims of its Representatives for
compensation in respect of Representative's sales of Variable
Contracts.
(b) TRADITIONAL LIFE INSURANCE POLICIES. Insurer shall pay
commissions to Broker-Dealer on all sales of Traditional Life
Insurance Policies through its Representatives in accordance
with the form of Compensation Schedule A attached hereto,
which is in effect when purchase payments on such Traditional
Life Insurance Policies are received by Insurer. Commissions
will be paid as a percentage of premiums received in cash or
other legal tender and accepted by insurer on applications
obtained by Broker-Dealer's Representatives unless otherwise
indicated in Compensation Schedule A. Upon termination of this
Agreement, all compensation payable hereunder shall cease;
however, Broker-Dealer shall continue to be liable for any
chargebacks or for any other amounts advanced by or otherwise
due Insurer hereunder.
Insurer will pay all such compensation to the Broker-Dealer.
Broker-Dealer agrees to hold Insurer harmless from all claims
of its Representatives for compensation in respect of
Representative's sales of Traditional Life Insurance Policies.
(c) COMMISSION STATEMENTS. Broker-Dealer will be provided with
copies of its Representatives' commission statements together
with Broker-Dealer's own commission statement for each
commission payment period in which commissions are payable.
Broker-Dealer agrees that, except as to clerical errors and
material undisclosed facts, if any, such statements
constitutes a complete and accurate statement of the
commission account unless written notice is provided to
Insurer within 120 days after the date of the statement, which
notice specifically sets forth the objections or exceptions
thereto.
(d) COMPENSATION SCHEDULES. The initial Compensation Schedule A is
attached.
Insurer and General Distributor reserve the right to change,
amend, or cancel any Compensation Schedule as to business
produced after such change by mailing notice of such change in
the form of a new Compensation Schedule to Broker-Dealer. Such
change shall be effective, unless otherwise specified, ten
(10) days after the notice is mailed.
(e) RIGHTS OF REJECTION AND SETTLEMENT. Insurer reserves the right
to reject any and all applications and collections submitted,
to discontinue writing any form of policy, to take possession
of and cancel any policy and return the premium or any part of
it, and to make any compromise settlement in respect of a
policy. Broker-Dealer will not be entitled to receive or
retain any compensation on premiums or parts of premiums
Insurer does not receive and retain because of such rejection,
discontinuance, cancellation, or compromise settlement. If
compensation has been paid to which Broker-Dealer is not
entitled, any amount credited will be charged back, and if the
account balance is insufficient to cover the credited amount,
Broker-Dealer as applicable agrees to promptly repay the
credited amount.
5. TERMINATION
This Agreement may be terminated, without cause, by any party upon
thirty (30) days prior written notice; and may be terminated, for
failure to perform satisfactorily or other cause, by any party
immediately; and shall be terminated if Broker-Dealer ceases to be
registered as a Broker-Dealer under the Securities Exchange Act of 1934
and a member of the NASD or, if Broker-Dealer ceases to maintain its
insurance agent license(s) in good standing in the jurisdictions in
which it conducts business.
6. ARBITRATION
Any dispute, claim or controversy arising out of or in connection with
this Agreement shall be submitted to arbitration pursuant to the NASD's
arbitration facilities. If the subject matter of the dispute, claim or
controversy is not within the scope of matters which may arbitrated
through the NASD arbitration facilities, then such dispute, claim or
controversy shall, upon the written request of any party, be submitted
to three arbitrators, one to be chosen by each party, and the third by
the two so chosen. If either party refuses or neglects to appoint an
arbitrator within thirty (30) days after the receipt of the written
notice from the other party requesting it to do so, the requesting
party may appoint two arbitrators. If the two arbitrators fail to agree
in the selection of a third arbitrator within thirty (30) days of their
appointment, each of them shall name two, of whom the other shall
decline one and the decision shall be made by drawing lots. All
arbitrators shall be active or retired executive officers of insurance
companies not under the control of any party to this Agreement. Each
party shall submit its case to the arbitrators within thirty (30) days
of the appointment of the third arbitrator. The arbitration shall be
held in Minneapolis, Minnesota at the times agreed upon by the
arbitrators. The decision in writing of any two arbitrators, when filed
with the parties hereto shall be final and binding on both parties.
Judgment may be entered upon the final decision of the arbitrators in
any court having jurisdiction. Each party shall bear the expense of its
own arbitrator and shall jointly and equally bear with the other party
the expense of the third arbitrator and of the arbitration.
7. GENERAL PROVISIONS
(a) ADDITIONS, AMENDMENTS, MODIFICATIONS & WAIVERS. This Agreement
shall not be effective until approved by Insurer and General
Distributor. Insurer and General Distributor reserve the right
to amend this Agreement at any time, and the submission of an
application by Broker-Dealer after notice of any such
amendment has been sent shall constitute Broker-Dealer's
agreement to any such
amendment. No additions, amendments or modifications of this
Agreement or any waiver of any provision will be valid unless
approved, in writing, by one of Insurer's duly authorized
officers. In addition, no approved waiver of any default, or
failure of performance by Broker-Dealer will affect Insurer's
or General Distributor's rights with respect to any later
default or failure of performance.
(b) INDEPENDENT CONTRACTOR RELATIONSHIP. This Agreement does not
create the relationship of employer and employee between the
parties to this Agreement. Insurer and General Distributor are
independent contractors with respect to Broker-Dealer and its
Representatives.
(c) ASSIGNMENTS. Broker-Dealer will not assign or transfer, either
wholly or partially, this Agreement or any of the benefits
accrued or to accrue under it, without the written prior
consent of a duly authorized officer of the Insurer and
General Distributor.
(d) SERVICE OF PROCESS. If Broker-Dealer receives or is served
with any notice or other paper concerning any legal action
against Insurer or General Distributor, Broker-Dealer agrees
to notify Insurer immediately (in any event not later than the
first business day after receipt) by telephone and further
agrees to transmit any papers that are served or received by
facsimile to (000) 000-0000 and by overnight mail to Insurer's
Office of General Counsel.
(e) SEVERABILITY. It is understood and agreed by the parties to
this Agreement that if any part, term or provision of this
Agreement is held to be invalid or in conflict with any law or
regulation, the validity of the remaining portions or
provisions will not be affected, and the parties' rights and
obligations will be construed and enforced as if this
Agreement did not contain the particular part, term or
provision held to be invalid.
(f) GOVERNING LAW. It is agreed by the parties to this Agreement
that the Agreement and all of its provisions will be governed
by the laws of the State of Minnesota.
(g) LIMITATIONS. No party other than Insurer shall have the
authority on behalf of Insurer to make, alter, or discharge
any policy, contract, or certificate issued by Insurer, to
waive any forfeiture or to grant, permit, nor extend the time
for making any payments nor to guarantee earnings or rates,
nor to alter the forms which Insurer may prescribe or
substitute other forms in place of those prescribed by
Insurer, nor to enter into any proceeding in a court of law or
before a regulatory
agency in the name of or on behalf of Insurer, nor to open any
bank account in the full legal name of Insurer, any derivation
thereof or any tradename thereof.
8. TERRITORY
Broker-Dealer's territory is limited geographically to those
jurisdictions in which the Variable Contracts and Traditional Life
Insurance Policies may lawfully be offered, provided that
Broker-Dealer's right to solicit sales of and to sell the Variable
Contracts and Traditional Life Insurance Policies in such jurisdictions
is not exclusive.
9. EFFECTIVE DATE
This Agreement shall be effective ________________, 199__.
IN WITNESS WHEREOF, we set our hands this ____ day of
_________________, 199__.
INSURER:
RELIASTAR BANKERS SECURITY LIFE
INSURANCE COMPANY
By: _____________________________
Title: _____________________________
GENERAL DISTRIBUTOR:
WASHINGTON SQUARE SECURITIES, INC.
By: _____________________________
Title: _____________________________
BROKER-DEALER:
By: _____________________________
Title: _____________________________
"B"
BROKER-DEALER AGENCY
SELLING AGREEMENT
This Agreement is made among the following four parties:
1. RELIASTAR BANKERS SECURITY LIFE INSURANCE COMPANY
0000 Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxx, Xxx Xxxx 00000
a New York domiciled stock life insurance company
(hereinafter "INSURER"); and,
2. WASHINGTON SQUARE SECURITIES, INC.
00 Xxxxxxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
an affiliate of Insurer, registered as a broker-dealer with
the Securities and Exchange Commission ("SEC") and a member of
the National Association of Securities Dealers, Inc. ("NASD")
(hereinafter "GENERAL DISTRIBUTOR"); and,
3. ______________________________________
______________________________________
Street
______________________________________
City State ZIP
registered as a broker-dealer with the SEC and a Member
of the NASD (hereinafter "BROKER-DEALER"); and,
4. ______________________________________
______________________________________
Street
______________________________________
City State ZIP
an affiliate of Broker-Dealer and a licensed insurance agency
(hereinafter "AGENCY").
RECITALS:
WHEREAS, Broker-Dealer has become affiliated with Agency in order to
satisfy state insurance law requirements with respect to the sale of variable
insurance products which are registered securities with the SEC.
WHEREAS, the parties wish to enter into an agreement for the
distribution of Variable Contracts and Traditional Life Insurance Policies by
Broker-Dealer and Agency; and
WHEREAS, Insurer has appointed General Distributor as principal
underwriter and distributor (as those terms are defined by the Investment
Company Act of 1940) of the Variable Contracts and has authorized General
Distributor to enter into selling agreements with registered broker-dealers for
the solicitation and sale of Variable Contracts; and,
WHEREAS, Insurer and General Distributor propose to have
Broker-Dealer's registered representatives who are affiliated with Agency and
who are licensed as life insurance/variable contract agents in appropriate
jurisdictions ("Representatives") solicit and sell Variable Contracts and
Traditional Life Insurance Policies; and,
WHEREAS, Insurer proposes to authorize Agency's employees who are not
registered representatives of Broker-Dealer but who are licensed as life
insurance agents in appropriate jurisdictions ("Agents") to solicit and sell
Traditional Life Insurance Policies; and,
WHEREAS, Insurer and General Distributor propose to have Broker-Dealer
provide certain supervisory and administrative services as hereinafter described
with respect to the solicitation and sales of Variable Contracts; and,
WHEREAS, Insurer proposes to have Agency provide certain supervisory
and administrative services as hereinafter described with respect to the
solicitation and sales of Traditional Life Insurance Policies by its Agents and
by Representatives who are affiliated with Agency.
NOW THEREFORE, in consideration of the premises and the mutual
covenants hereinafter set forth, the parties now agree as follows:
1. DEFINITIONS
In this Agreement,
(a) The words "Variable Contract" shall mean those variable life
insurance policies and variable annuity contracts identified
in Section 1 of Compensation Schedule A attached hereto, and
as may hereafter be amended.
Insurer may in its sole discretion and without notice to
Broker-Dealer, suspend sales of any Variable Contracts or
amend any policies or contracts evidencing such Variable
Contracts if, in Insurer's opinion,
such suspension or amendment is: (1) necessary for compliance
with federal, state, or local laws, regulations, or
administrative order(s); or, (2) necessary to prevent
administrative or financial hardship to Insurer. In all other
situations, Insurer shall provide 30 days notice to
Broker-Dealer prior to suspending sales of any Variable
Contracts or amending any policies or contracts evidencing
such Variable Contracts.
Insurer may issue and propose additional or successor
products, in which event Broker-Dealer will be informed of the
product and its related Commission Schedule. If Broker-Dealer
does not agree to distribute such product(s), it must notify
Insurer in writing within 30 days of receipt of the Commission
Schedule for such product(s). If Broker-Dealer does not
indicate disapproval of the new product(s) or the terms
contained in the related Commission Schedule, Broker-Dealer
will be deemed to have thereby agreed to distribute such
product(s) and agreed to the related Commission Schedule which
shall be attached to and made a part of this Agreement.
(b) The words "Traditional Life Insurance Policy" shall mean those
life insurance policies and annuity contracts identified in
Section 2 of Compensation Schedule A attached hereto, and as
may hereafter be amended.
Insurer may in its sole discretion and without notice to
Broker-Dealer, suspend sales of any Traditional Life Insurance
Policies or amend any policies or contracts evidencing such
Traditional Life Insurance Policies if, in Insurer's opinion,
such suspension or amendment is: (1) necessary for compliance
with federal, state, or local laws, regulations, or
administrative order(s); or, (2) necessary to prevent
administrative or financial hardship to Insurer. In all other
situations, Insurer shall provide 30 days notice to
Broker-Dealer prior to suspending sales of any Traditional
Life Insurance Policies or amending any policies or contracts
evidencing such Traditional Life Insurance Policies.
Insurer may issue and propose additional or successor
products, in which event Broker-Dealer will be informed of the
product and its related Compensation Schedule. If
Broker-Dealer does not agree to distribute such product(s), it
must notify Insurer in writing within 30 days of receipt of
the Compensation Schedule for such product(s). If
Broker-Dealer does not indicate disapproval of the new
product(s) or the terms contained in the related Compensation
Schedule, Broker-Dealer will be deemed to have thereby agreed
to distribute such
product(s) and agreed to the related Compensation Schedule
which shall be attached to and made a part of this Agreement.
2. AGENCY APPOINTMENTS
On the effective date,
(a) Insurer and General Distributor appoint Broker-Dealer and
Broker-Dealer accepts the appointment to solicit sales of and
to sell Variable Contracts only, pursuant to the terms of this
Agreement.
(b) Insurer appoints Agency, and Agency accepts the appointment to
solicit sales of and to sell Traditional Life Insurance
Policies only, pursuant to the terms of this Agreement.
3. DUTIES OF BROKER-DEALER
(a) SUPERVISION OF REPRESENTATIVES. Broker-Dealer shall have full
responsibility for the training and supervision of all
Representatives who are engaged directly or indirectly in the
offer or sale of the Variable Contracts, and all such persons
shall be subject to the control of Broker-Dealer with respect
to such persons' securities regulated activities in connection
with the Variable Contracts. Broker-Dealer will cause the
Representatives to be trained in the sale of the Variable
Contracts, will cause such Representatives to qualify under
applicable federal and state laws to engage in the sale of the
Variable Contracts; will cause such Representatives to be
registered representatives of Broker-Dealer before such
Representatives engage in the solicitation of applications for
the Variable Contracts; and will cause such Representatives to
limit solicitation of applications for the Variable Contracts
to jurisdictions where Insurer has authorized such
solicitation. Broker-Dealer shall cause such Representatives'
qualifications to be certified to the satisfaction of General
Distributor and shall notify General Distributor if any
Representative ceases to be a registered representative of
Broker-Dealer or ceases to maintain the proper licensing
required for the sale of the Variable Contracts. All parties
shall be liable for their own negligence and misconduct under
this paragraph.
(b) REPRESENTATIVES INSURANCE COMPLIANCE. Broker-Dealer, prior to
allowing its Representatives to solicit for sales or sell the
Variable Contracts, shall require such representatives to be
validly insurance licensed, registered and appointed by
Insurer as a variable contract agent in accordance with the
jurisdictional requirements of
the place where the solicitations and sales take place as well
as the solicited person's or entity's place of residence.
Broker-Dealer shall assist Insurer in the appointment of
Representatives under the applicable insurance laws to sell
the Variable Contracts. Broker-Dealer shall fulfill all
Insurer requirements in conjunction with the submission of
licensing/appointment papers for all applicants as insurance
agents of Insurer. All such licensing/appointment papers shall
be submitted to Insurer or its designee by Broker-Dealer.
Notwithstanding such submission, Insurer shall have sole
discretion to appoint, refuse to appoint, discontinue, or
terminate the appointment of any Representative as an
insurance agent of Insurer.
(c) COMPLIANCE WITH NASD RULES OF FAIR PRACTICE AND FEDERAL AND
STATE SECURITIES LAWS. Broker-Dealer shall fully comply with
the requirements of the National Association of Securities
Dealers, Inc., the Securities Exchange Act of 1934 and all
other applicable federal and state laws. In addition,
Broker-Dealer will establish and maintain such rules and
procedures as may be necessary to cause diligent supervision
of the securities activities of the Representatives as
required by applicable law or regulation. Upon request by
General Distributor, Broker-Dealer shall furnish such records
as may be necessary to establish such diligent supervision.
(d) NOTICE OF REPRESENTATIVE'S NONCOMPLIANCE. In the event a
Representative fails or refuses to submit to supervision of
Broker-Dealer or otherwise fails to meet the rules and
standards imposed by Broker-Dealer on its Representatives,
Broker-Dealer shall advise General Distributor of this fact
and shall immediately notify such Representative that he or
she is no longer authorized to sell the Variable Contracts and
Broker-Dealer shall take whatever additional action may be
necessary to terminate the sales activities of such
Representative relating to the Variable Contracts.
(e) PROSPECTUSES, SALES PROMOTION MATERIAL AND ADVERTISING.
Broker-Dealer shall be provided, without any expense to
Broker-Dealer, with prospectuses relating to the Variable
Contracts and such other supplementary sales material as
General Distributor determines is necessary or desirable for
use in connection with sales of the Variable Contracts.
NO SALES PROMOTION MATERIALS OR ANY ADVERTISING RELATING TO
THE VARIABLE CONTRACTS, INCLUDING WITHOUT LIMITATION GENERIC
ADVERTISING MATERIAL
WHICH DOES NOT REFER TO INSURER BY NAME, SHALL BE USED BY
BROKER-DEALER UNLESS THE SPECIFIC ITEM HAS BEEN APPROVED IN
WRITING BY GENERAL DISTRIBUTOR PRIOR TO SUCH USE.
In addition, Broker-Dealer shall not print, publish or
distribute any advertisement, circular or any document
relating to Insurer unless such advertisement, circular or
document shall have been approved in writing by Insurer prior
to such use.
Upon termination of this Agreement, all prospectuses, sales
promotion material, advertising, circulars, documents and
software relating to the sales of the Variable Contracts shall
be promptly turned over to Insurer free from any claim or
retention of rights by the Broker-Dealer.
Insurer represents that the prospectus and registration
statement relating to the Variable Contracts contain no untrue
statements of material fact or omission to state material
fact, the omission of which makes any statement contained in
the prospectus and registration statement misleading. Insurer
agrees to indemnify Broker-Dealer from and against any claims,
liabilities and expenses which may be incurred under the
Securities Act of 1933, the Investment Company Act of 1940,
common law or otherwise arising out of a breach of the
agreement in this paragraph.
Broker-Dealer agrees to hold harmless and indemnify Insurer
and General Distributor against any and all claims,
liabilities and expenses which Insurer or General Distributor
may incur from liabilities arising out of or based upon any
alleged or untrue statement other than statements contained in
the registration statement, prospectus or approved sales
material of any Variable Contract.
In accordance with the requirements of the laws of the several
states, Broker-Dealer shall maintain complete records
indicating the manner and extent of distribution of any such
solicitation material, shall make such records and files
available to staff of Insurer or its designated agent in field
inspections and shall make such material available to
personnel of state insurance departments, the NASD or other
regulatory agencies, including the SEC, which have regulatory
authority over Insurer or General Distributor. Broker-Dealer
holds Insurer, General Distributor and their affiliates
harmless from any liability arising from the use of any
material which either (a) has not been specifically approved
in writing, or (b) although previously approved, has been
disapproved, in writing, for further use.
(f) SECURING APPLICATIONS. All applications for Variable Contracts
shall be made on application forms supplied by Insurer and all
payments collected by Broker-Dealer or any Representative
thereof shall be remitted promptly in full, together with such
application forms and any other required documentation,
directly to Insurer at the address indicated on such
application or to such other address as Insurer may, from
time-to-time, designate in writing. Broker-Dealer shall review
all such applications for accuracy and completeness. Checks or
money orders in payment on any such Variable Contract shall be
drawn to the order of "ReliaStar Bankers Security Life
Insurance Company." All applications are subject to acceptance
or rejection by Insurer at its sole discretion. All records or
information obtained hereunder by Broker-Dealer shall not be
disclosed or used except as expressly authorized herein, and
Broker-Dealer will keep such records and information
confidential, to be disclosed only as authorized or if
expressly required by federal or state regulatory authorities.
(g) COLLECTION OF PURCHASE PAYMENTS. Broker-Dealer agrees that all
money or other consideration tendered with or in respect of
any application for a Variable Contract and the Variable
Contract when issued is the property of Insurer and shall be
promptly remitted in full to Insurer without deduction or
offset for any reason, including by way of example but not
limitation, any deduction or offset for compensation claimed
by Broker-Dealer.
(h) POLICY DELIVERY. Insurer will transmit Variable Contracts to
Broker-Dealer for delivery to Policyowners. Broker-Dealer
hereby agrees to deliver all such Variable Contracts to
Policyowners within ten (10) days of their receipt by
Broker-Dealer from Insurer. Broker-Dealer agrees to indemnify
and hold harmless Insurer for any and all losses caused by
Broker-Dealer's failure to perform the undertakings described
in this paragraph. Broker-Dealer hereby authorizes Insurer to
set off any amount it owes Insurer under this paragraph
against any and all amounts otherwise payable to Broker-Dealer
by Insurer.
(i) FIDELITY BOND. Broker-Dealer represents that all directors,
officers, employees and Representatives of Broker-Dealer who
are licensed pursuant to this Agreement as Insurer's agents
for state insurance law purposes or who have access to funds
of Insurer, including but not limited to funds submitted with
applications for the Variable Contracts or funds being
returned to owners, are and shall be covered by a blanket
fidelity bond, including coverage for larceny and
embezzlement, issued by a reputable bonding company. This bond
shall be maintained by Broker-Dealer at Broker-Dealer's
expense. Such bond shall be, at least, of the form, type and
amount required under the NASD Rules of Fair Practice. Insurer
may require evidence, satisfactory to it, that such coverage
is in force and Broker-Dealer shall give prompt written notice
to Insurer of any notice of cancellation or change of
coverage.
Broker-Dealer assigns any proceeds received from the fidelity
bonding company to Insurer to the extent of Insurer's loss due
to activities covered by the bond. If there is any deficiency
amount, whether due to a deductible or otherwise,
Broker-Dealer shall promptly pay Insurer such amount on demand
and Broker-Dealer hereby indemnifies and holds harmless
Insurer from any such deficiency and from the costs of
collection thereof (including reasonable attorneys' fees).
4. DUTIES OF AGENCY
(a) SUPERVISION OF AGENTS AND REPRESENTATIVES. Agency shall have
full responsibility for the training and supervision of all
Agents and Representatives who are engaged directly or
indirectly in the offer or sale of Traditional Life Insurance
Policies. Agency will cause the Agents and Representatives to
be trained in the sale of Traditional Life Insurance Policies,
will cause such Agents and Representatives to qualify under
applicable state insurance laws to engage in the sale of life
insurance before such Agents and Representatives engage in the
solicitation of applications for Traditional Life Insurance
Policies; and will cause such Agents and Representatives to
limit solicitation of applications for Traditional Life
Insurance Policies to jurisdictions where Insurer has
authorized such solicitation. Agency shall cause such Agents'
and Representatives' qualifications to be certified to the
satisfaction of Insurer and shall notify Insurer if any Agent
or Representative ceases to be an employee of Agency or ceases
to maintain the proper licensing required for the sale of
Traditional Life Insurance Policies. All parties shall be
liable for their own negligence and misconduct under this
paragraph.
(b) AGENT INSURANCE COMPLIANCE. Agency, prior to allowing Agents
or Representatives to solicit for sales or sell Traditional
Life Insurance Policies, shall require such agents to be
validly insurance licensed, registered and appointed by
Insurer as a life insurance agent in accordance with the
jurisdictional requirements of the place where the
solicitations and sales take place as well as the solicited
person's or entity's place of residence.
Agency shall assist Insurer in the appointment of Agents and
Representatives under the applicable insurance laws to sell
Traditional Life Insurance Policies. Agency shall fulfill all
Insurer requirements in conjunction with the submission of
licensing/appointment papers for all applicants as insurance
agents of Insurer. All such licensing/appointment papers shall
be submitted to Insurer or its duly appointed agent by Agency.
Notwithstanding such submission, Insurer shall have sole
discretion to appoint, refuse to appoint, discontinue, or
terminate the appointment of any Agent or Representative as an
insurance agent of Insurer.
(c) SALES PROMOTION MATERIAL AND ADVERTISING. Agency shall be
provided, without any expense to Agency, such sales promotion
and advertising materials as Insurer determines is necessary
or desirable for use in connection with sales of Traditional
Life Insurance Policies.
NO SALES PROMOTION MATERIALS OR ANY ADVERTISING RELATING TO
TRADITIONAL LIFE INSURANCE POLICIES, INCLUDING WITHOUT
LIMITATION GENERIC ADVERTISING MATERIAL WHICH DOES NOT REFER
TO INSURER BY NAME, SHALL BE USED BY AGENCY UNLESS THE
SPECIFIC ITEM HAS BEEN APPROVED IN WRITING BY INSURER PRIOR TO
SUCH USE.
In addition, Agency shall not print, publish or distribute any
advertisement, circular or any document relating to Insurer
unless such advertisement, circular or document shall have
been approved in writing by Insurer prior to such use.
Upon termination of this Agreement, all sales promotion
material, advertising, circulars, documents and software
relating to the sales of Traditional Life Insurance Policies
shall be promptly turned over to Insurer free from any claim
or retention of rights by the Agency.
In accordance with the requirements of the laws of the several
states, Agency shall maintain complete records indicating the
manner and extent of distribution of any such solicitation
material, shall make such records and files available to staff
of Insurer or its designated agent in field inspections and
shall make such material available to personnel of state
insurance departments other regulatory agencies which have
regulatory authority over Insurer. Agency holds Insurer and
its affiliates harmless from any liability arising from the
use of any material which either (a) has not been specifically
approved in writing,
or (b) although previously approved, has been disapproved, in
writing, for further use.
(d) SECURING APPLICATIONS. All applications for Traditional Life
Insurance Policies shall be made on application forms supplied
by Insurer and all payments collected by Agency or any Agent,
Broker-Dealer or any Representative thereof shall be remitted
promptly in full, together with such application forms and any
other required documentation, directly to Insurer at the
address indicated on such application or to such other address
as Insurer may, from time-to-time, designate in writing.
Agency shall review all such applications for accuracy and
completeness. Checks or money orders in payment on any such
Traditional Life Insurance Policy shall be drawn to the order
of ReliaStar Bankers Security Life Insurance Company." All
applications are subject to acceptance or rejection by Insurer
at its sole discretion. All records or information obtained
hereunder by Agency shall not be disclosed or used except as
expressly authorized herein, and Agency will keep such records
and information confidential, to be disclosed only as
authorized or if expressly required by federal or state
regulatory authorities.
(e) COLLECTION OF PURCHASE PAYMENTS. Agency agrees that all money
or other consideration tendered with or in respect of any
application for a Traditional Life Insurance Policy and the
Traditional Life Insurance Policy when issued is the property
of Insurer and shall be promptly remitted in full to Insurer
without deduction or offset for any reason, including by way
of example but not limitation, any deduction or offset for
compensation claimed by Agency.
(f) POLICY DELIVERY. Insurer may, upon written request of Agency,
transmit Traditional Life Insurance Policies to Agency or
Broker-Dealer for delivery to Policyowners. Agency and
Broker-Dealer hereby agree to deliver all such Traditional
Life Insurance Policies to Policyowners within ten (10) days
of their receipt by Agency or Broker-Dealer from Insurer.
Agency and Broker-Dealer agree to indemnify and hold harmless
Insurer for any and all losses caused by Agency's or
Broker-Dealer's failure to perform the undertakings described
in this paragraph. Agency and Broker-Dealer hereby authorize
Insurer to set off any amount it owes Insurer under this
paragraph against any and all amounts otherwise payable to
Agency or Broker-Dealer by Insurer.
5. COMPENSATION
(a) VARIABLE CONTRACTS. Insurer, on behalf of General Distributor,
shall pay a dealer concession to Broker-Dealer on all sales of
Variable Contracts through such Representatives, in accordance
with the form of Compensation Schedule A attached hereto,
which is in effect when purchase payment on such Variable
Contracts are received by Insurer. Dealer concessions will be
paid as a percentage of premiums received in cash or other
legal tender and accepted by Insurer on applications obtained
by Broker-Dealer's Representatives unless otherwise indicated
in Compensation Schedule A. Upon termination of this
Agreement, all compensation payable hereunder shall cease;
however, Broker-Dealer shall continue to be liable for any
chargebacks or for any other amounts advanced by or otherwise
due Insurer hereunder.
Insurer will pay all such Compensation to and in the name of
Broker-Dealer. Broker-Dealer agrees to hold Insurer and
General Distributor harmless from all claims of its
Representatives for compensation in respect of such
Representative's sales of Variable Contracts.
(b) TRADITIONAL LIFE INSURANCE POLICIES. Insurer shall pay
commissions to Broker-Dealer on all sales of Traditional Life
Insurance Policies through Agents and Representatives in
accordance with the form of Compensation Schedule A attached
hereto, which is in effect when purchase payments on such
Traditional Life Insurance Policies are received by Insurer.
Commissions will be paid as a percentage of premiums received
in cash or other legal tender and accepted by insurer on
applications obtained by Agency's Agents or Broker-Dealer's
Representatives unless otherwise indicated in Compensation
Schedule A. Upon termination of this Agreement, all
compensation payable hereunder shall cease; however,
Broker-Dealer shall continue to be liable for any chargebacks
or for any other amounts advanced by or otherwise due Insurer
hereunder.
Insurer will pay all such Compensation to and in the name of
Broker-Dealer. Agency hereby assigns to Broker-Dealer all
compensation which would otherwise be paid to Agency in
respect of Representative's and Agent's sales of Traditional
Life Insurance Policies. Agency agrees to hold Insurer
harmless from all claims Agents or Representatives have for
compensation in respect of Agent's or Representative's sales
of Traditional Life Insurance Policies.
(c) COMMISSION STATEMENTS. Broker-Dealer will be provided with
copies of its Representatives' commission statements together
with Broker-Dealer's own commission statements for each
commission payment period in which commissions are payable.
Broker-Dealer agrees that, except as to clerical errors and
material undisclosed facts, if any, such statements
constitutes a complete and accurate statement of the
commission account unless written notice is provided to
Insurer within 120 days after the date of the statement, which
notice specifically sets forth the objections or exceptions
thereto.
(d) COMPENSATION SCHEDULES. The initial Compensation Schedule A is
attached.
Insurer and General Distributor reserve the right to change,
amend, or cancel any Compensation Schedule as to business
produced after such change by mailing notice of such change in
the form of a new Compensation Schedule to Broker-Dealer. Such
change shall be effective, unless otherwise specified, ten
(10) days after the notice is mailed.
(e) RIGHTS OF REJECTION AND SETTLEMENT. Insurer reserves the right
to reject any and all applications and collections submitted,
to discontinue writing any form of policy, to take possession
of and cancel any policy and return the premium or any part of
it, and to make any compromise settlement in respect of a
policy. Broker-Dealer will not be entitled to receive or
retain any compensation on premiums or parts of premiums
Insurer does not receive and retain because of such rejection,
discontinuance, cancellation, or compromise settlement. If
compensation has been paid to which Broker-Dealer is not
entitled, any amount credited will be charged back, and if the
account balance is insufficient to cover the credited amount,
Broker-Dealer as applicable agrees to promptly repay the
credited amount.
6. TERMINATION
This Agreement may be terminated, without cause, by any party upon
thirty (30) days prior written notice; and may be terminated, for
failure to perform satisfactorily or other cause, by any party
immediately; and shall be terminated if Broker-Dealer ceases to be
registered as a Broker-Dealer under the Securities Exchange Act of 1934
and a member of the NASD or, if Agency ceases to maintain its insurance
agent license(s) in good standing in the jurisdictions in which it
conducts business.
7. ARBITRATION
Any dispute, claim or controversy arising out of or in connection with
this Agreement shall be submitted to arbitration pursuant to the NASD's
arbitration facilities. If the subject matter of the dispute, claim or
controversy is not within the scope of matters which may arbitrated
through the NASD arbitration facilities, then such dispute, claim or
controversy shall, upon the written request of any party, be submitted
to three arbitrators, one to be chosen by each party, and the third by
the two so chosen. If either party refuses or neglects to appoint an
arbitrator within thirty (30) days after the receipt of the written
notice from the other party requesting it to do so, the requesting
party may appoint two arbitrators. If the two arbitrators fail to agree
in the selection of a third arbitrator within thirty (30) days of their
appointment, each of them shall name two, of whom the other shall
decline one and the decision shall be made by drawing lots. All
arbitrators shall be active or retired executive officers of insurance
companies not under the control of any party to this Agreement. Each
party shall submit its case to the arbitrators within thirty (30) days
of the appointment of the third arbitrator. The arbitration shall be
held in Minneapolis, Minnesota at the times agreed upon by the
arbitrators. The decision in writing of any two arbitrators, when filed
with the parties hereto shall be final and binding on both parties.
Judgment may be entered upon the final decision of the arbitrators in
any court having jurisdiction. Each party shall bear the expense of its
own arbitrator and shall jointly and equally bear with the other party
the expense of the third arbitrator and of the arbitration.
8. GENERAL PROVISIONS
(a) ADDITIONS, AMENDMENTS, MODIFICATIONS & WAIVERS. This Agreement
shall not be effective until approved by Insurer and General
Distributor. Insurer and General Distributor reserve the right
to amend this Agreement at any time, and the submission of an
application by either Broker-Dealer or Agency after notice of
any such amendment has been sent shall constitute
Broker-Dealer's or Agency's, as applicable, agreement to any
such amendment. No additions, amendments or modifications of
this Agreement or any waiver of any provision will be valid
unless approved, in writing, by one of Insurer's duly
authorized officers. In addition, no approved waiver of any
default, or failure of performance by Broker-Dealer or Agency
will affect Insurer's or General Distributor's rights with
respect to any later default or failure of performance.
(b) INDEPENDENT CONTRACTOR RELATIONSHIP. This Agreement does not
create the relationship of employer and employee between the
parties to this Agreement. Insurer and General Distributor are
independent contractors with respect to Broker-Dealer, its
Representatives, Agency and its Agents.
(c) ASSIGNMENTS. Neither Broker-Dealer nor Agency will assign or
transfer, either wholly or partially, this Agreement or any of
the benefits accrued or to accrue under it, without the
written prior consent of a duly authorized officer of the
Insurer and General Distributor.
(d) SERVICE OF PROCESS. If Broker-Dealer or Agency receives or is
served with any notice or other paper concerning any legal
action against Insurer or General Distributor, Broker-Dealer
or Agency agrees to notify Insurer immediately (in any event
not later than the first business day after receipt) by
telephone and transmit any papers that are served or received
by facsimile to (000) 000-0000 and by overnight mail to
Insurer's Office of General Counsel.
(e) SEVERABILITY. It is understood and agreed by the parties to
this Agreement that if any part, term or provision of this
Agreement is held to be invalid or in conflict with any law or
regulation, the validity of the remaining portions or
provisions will not be affected, and the parties' rights and
obligations will be construed and enforced as if this
Agreement did not contain the particular part, term or
provision held to be invalid.
(f) GOVERNING LAW. It is agreed by the parties to this Agreement
that the Agreement and all of its provisions will be governed
by the laws of the State of Minnesota.
(g) LIMITATIONS. No party other than Insurer shall have the
authority on behalf of Insurer to make, alter, or discharge
any policy, contract, or certificate issued by insurer, to
waive any forfeiture or to grant, permit, nor extend the time
for making any payments nor to guarantee earnings or rates,
nor to alter the forms which Insurer may prescribe or
substitute other forms in place of those prescribed by
Insurer, nor to enter into any proceeding in a court of law or
before a regulatory agency in the name of or on behalf of
Insurer, nor to open any bank account in the full legal name
of Insurer, any derivation thereof or any tradename thereof.
9. TERRITORY
Broker-Dealer's territory is limited geographically to those
jurisdictions in which the Variable Contracts may lawfully be offered,
provided that Broker-Dealer's right to solicit sales of and to sell the
Variable Contracts in such jurisdictions is not exclusive.
Agency's territory is limited geographically to those jurisdictions in
which the Traditional Life Insurance policies may be lawfully be
offered, provided that Agency's and Broker-Dealer's right to solicit
sales of and to sell the Traditional Life Insurance Policies in such
territory is not exclusive.
10. EFFECTIVE DATE
This Agreement shall be effective ________________, 199__.
IN WITNESS WHEREOF, we set our hands this ____ day of
_________________, 199__.
INSURER:
RELIASTAR BANKERS SECURITY LIFE
INSURANCE COMPANY
By: _____________________________
Title: _____________________________
GENERAL DISTRIBUTOR:
WASHINGTON SQUARE SECURITIES, INC.
By: _____________________________
Title: _____________________________
BROKER-DEALER:
____________________________________
By: _____________________________
Title: _____________________________
AGENCY:
____________________________________
By: _____________________________
Title: _____________________________
"C"
BROKER-DEALER AGENCY SELLING AGREEMENT
FOR VARIABLE CONTRACTS
This Agreement is made among the following three parties:
1. RELIASTAR BANKERS SECURITY LIFE INSURANCE COMPANY
0000 Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxx, Xxx Xxxx 00000
a New York domiciled stock life insurance company
(hereinafter "INSURER"); and,
2. WASHINGTON SQUARE SECURITIES, INC.
00 Xxxxxxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
an affiliate of Insurer, registered as a broker-dealer with
the Securities and Exchange Commission ("SEC") and a member of
the National Association of Securities Dealers, Inc. ("NASD")
(hereinafter "GENERAL DISTRIBUTOR"); and,
3. ______________________________
______________________________
Street
______________________________
City State ZIP
registered as a broker-dealer with the SEC and a member of the
NASD and licensed as an insurance agency (hereinafter
"BROKER-DEALER").
RECITALS:
WHEREAS, Broker-Dealer is licensed as an insurance agency in order to
satisfy state insurance law requirements with respect to the sale of variable
insurance products which are registered securities with the SEC.
WHEREAS, the parties wish to enter into an agreement for the
distribution of Variable Contracts by Broker-Dealer; and
WHEREAS, Insurer has appointed General Distributor as principal
underwriter and distributor (as those terms are defined by the Investment
Company Act of 1940) of the Variable Contracts and has authorized General
Distributor to enter into selling agreements with registered broker-dealers for
the solicitation and sale of Variable Contracts; and,
WHEREAS, Insurer and General Distributor propose to have
Broker-Dealer's registered representatives who are licensed as life
insurance/variable contract agents in appropriate jurisdictions
("Representatives") solicit and sell Variable Contracts and,
WHEREAS, Insurer and General Distributor propose to have Broker-Dealer
provide certain supervisory and administrative services as hereinafter described
with respect to the solicitation and sales of Variable Contracts.
NOW THEREFORE, in consideration of the premises and the mutual
covenants hereinafter set forth, the parties now agree as follows:
1. VARIABLE CONTRACTS
In this Agreement, the words "Variable Contract" shall mean those variable life
insurance policies and variable annuity contracts identified in Section 1 of the
Compensation Schedule attached hereto, and as may hereafter be amended.
Insurer may in its sole discretion and without notice to Broker-Dealer, suspend
sales of any Variable Contracts or amend any policies or contracts evidencing
such Variable Contracts if, in Insurer's opinion, such suspension or amendment
is: (1) necessary for compliance with federal, state, or local laws,
regulations, or administrative order(s); or, (2) necessary to prevent
administrative or financial hardship to Insurer. In all other situations,
Insurer shall provide 30 days notice to Broker-Dealer prior to suspending sales
of any Variable Contracts or amending any policies or contracts evidencing such
Variable Contracts.
Insurer may issue and propose additional or successor products, in which event
Broker-Dealer will be informed of the product and its related Commission
Schedule. If Broker-Dealer does not agree to distribute such product(s), it must
notify Insurer in writing within 30 days of receipt of the Commission Schedule
for such product(s). If Broker-Dealer does not indicate disapproval of the new
product(s) or the terms contained in the related Commission Schedule,
Broker-Dealer will be deemed to have thereby agreed to distribute such
product(s) and agreed to the related Commission Schedule which shall be attached
to and made a part of this Agreement.
2. AGENCY APPOINTMENT
On the effective date, Insurer and General Distributor appoint
Broker-Dealer and Broker-Dealer accepts the appointment to solicit sales of and
to sell Variable Contracts, pursuant to the terms of this Agreement.
3. DUTIES OF BROKER-DEALER
(a) SUPERVISION OF REPRESENTATIVES. Broker-Dealer shall have full
responsibility for the training and supervision of all
Representatives who are engaged directly or indirectly in the
offer or sale of the Variable Contracts, and all such persons
shall be subject to the control of Broker-Dealer with respect
to such persons' securities regulated activities in connection
with the Variable Contracts. Broker-Dealer will cause the
Representatives to be trained in the sale of the Variable
Contracts, will cause such Representatives to qualify under
applicable federal and state laws to engage in the sale of the
Variable Contracts; will cause such Representatives to be
registered representatives of Broker-Dealer before such
Representatives engage in the solicitation of applications for
the Variable Contracts; and will cause such Representatives to
limit solicitation of applications for the Variable Contracts
to jurisdictions where Insurer has authorized such
solicitation. Broker-Dealer shall cause such Representatives'
qualifications to be certified to the satisfaction of General
Distributor and shall notify General Distributor if any
Representative ceases to be a registered representative of
Broker-Dealer or ceases to maintain the proper licensing
required for the sale of the Variable Contracts. All parties
shall be liable for their own negligence and misconduct under
this paragraph.
(b) REPRESENTATIVES INSURANCE COMPLIANCE. Broker-Dealer, prior to
allowing its Representatives to solicit for sales or sell the
Variable Contracts, shall require such representatives to be
validly insurance licensed, registered and appointed by
Insurer as a variable contract/life insurance agent in
accordance with the jurisdictional requirements of the place
where the solicitations and sales take place as well as the
solicited person's or entity's place of residence.
Broker-Dealer shall assist Insurer in the appointment of
Representatives under the applicable insurance laws to sell
Variable Contracts. Broker-Dealer shall fulfill all Insurer
requirements in conjunction with the submission of
licensing/appointment papers for all applicants as insurance
agents of Insurer. All such licensing/appointment papers shall
be submitted to Insurer or its designee by Broker-Dealer.
Notwithstanding such submission, Insurer shall have sole
discretion to appoint, refuse to appoint, discontinue, or
terminate the appointment of any Representative as an
insurance agent of Insurer.
(c) COMPLIANCE WITH NASD RULES OF FAIR PRACTICE AND FEDERAL AND
STATE SECURITIES LAWS. Broker-Dealer shall fully comply with
the requirements of the National Association of Securities
Dealers, Inc., the Securities Exchange Act of 1934 and all
other applicable federal and state laws. In addition,
Broker-Dealer will establish and maintain such rules and
procedures as may be necessary to cause diligent supervision
of the securities activities of the Representatives as
required by applicable law or regulation. Upon request by
General Distributor, Broker-Dealer shall furnish such records
as may be necessary to establish such diligent supervision.
(d) NOTICE OF REPRESENTATIVE'S NONCOMPLIANCE. In the event a
Representative fails or refuses to submit to supervision of
Broker-Dealer or otherwise fails to meet the rules and
standards imposed by Broker-Dealer on its Representatives,
Broker-Dealer shall advise General Distributor of this fact
and shall immediately notify such Representative that he or
she is no longer authorized to sell the Variable Contracts and
Broker-Dealer shall take whatever additional action may be
necessary to terminate the sales activities of such
Representative relating to such contracts and policies.
(e) PROSPECTUSES, SALES PROMOTION MATERIAL AND ADVERTISING.
Broker-Dealer shall be provided, without any expense to
Broker-Dealer, with prospectuses relating to the Variable
Contracts and such other supplementary sales material as
General Distributor determines is necessary or desirable for
use in connection with sales of the Variable Contracts.
NO SALES PROMOTION MATERIALS OR ANY ADVERTISING RELATING TO
THE VARIABLE CONTRACTS, INCLUDING WITHOUT LIMITATION GENERIC
ADVERTISING MATERIAL WHICH DOES NOT REFER TO INSURER BY NAME,
SHALL BE USED BY BROKER-DEALER UNLESS THE SPECIFIC ITEM HAS
BEEN APPROVED IN WRITING BY GENERAL DISTRIBUTOR PRIOR TO SUCH
USE.
In addition, Broker-Dealer shall not print, publish or
distribute any advertisement, circular or any document
relating to Insurer unless such advertisement, circular or
document shall have been approved in writing by Insurer prior
to such use.
Upon termination of this Agreement, all prospectuses, sales
promotion material, advertising, circulars, documents and
software relating to the sales of Insurer's contracts shall be
promptly turned over to Insurer free from any claim or
retention of rights by the Broker-Dealer.
Insurer represents that the prospectus and registration
statement relating to the Variable Contracts contain no untrue
statements of material fact or omission to state material
fact, the omission of which makes any statement contained in
the prospectus and registration statement misleading. Insurer
agrees to indemnify Broker-Dealer from and against any claims,
liabilities and expenses which may be incurred under the
Securities Act of 1933, the Investment Company Act of 1940,
common law or otherwise arising out of a breach of the
agreement in this paragraph.
Broker-Dealer agrees to hold harmless and indemnify Insurer
and General Distributor against any and all claims,
liabilities and expenses which Insurer or General Distributor
may incur from liabilities arising out of or based upon any
alleged or untrue statement other than statements contained in
the registration statement, prospectus or approved sales
material of any Variable Contract.
In accordance with the requirements of the laws of the several
states, Broker-Dealer shall maintain complete records
indicating the manner and extent of distribution of any such
solicitation material, shall make such records and files
available to staff of Insurer or its designated agent in field
inspections and shall make such material available to
personnel of state insurance departments, the NASD or other
regulatory agencies, including the SEC, which have regulatory
authority over Insurer or General Distributor. Broker-Dealer
holds Insurer, General Distributor and their affiliates
harmless from any liability arising from the use of any
material which either (a) has not been specifically approved
by Insurer in writing, or (b) although previously approved,
has been disapproved, in writing, for further use.
(f) SECURING APPLICATIONS. All applications for Variable Contracts
shall be made on application forms supplied by Insurer and all
payments collected by Broker-Dealer or any Representative
thereof shall be remitted promptly in full, together with such
application forms and any other required documentation,
directly to Insurer at the address indicated on such
application or to such other address as Insurer may, from
time-to-time, designate in writing. Broker-Dealer shall review
all such applications for accuracy and completeness. Checks or
money orders in payment on any such Variable Contract
shall be drawn to the order of "ReliaStar Bankers Security
Life Insurance Company." All applications are subject to
acceptance or rejection by Insurer at its sole discretion. All
records or information obtained hereunder by Broker-Dealer
shall not be disclosed or used except as expressly authorized
herein, and Broker-Dealer will keep such records and
information confidential, to be disclosed only as authorized
or if expressly required by federal or state regulatory
authorities.
(g) COLLECTION OF PURCHASE PAYMENTS. Broker-Dealer agrees that all
money or other consideration tendered with or in respect of
any application for a Variable Contract and the Variable
Contract when issued is the property of Insurer and shall be
promptly remitted in full to Insurer without deduction or
offset for any reason, including by way of example but not
limitation, any deduction or offset for compensation claimed
by Broker-Dealer.
(h) POLICY DELIVERY. Insurer will transmit Variable Contracts to
Broker-Dealer for delivery to Policyowners. Broker-Dealer
hereby agrees to deliver all such Variable Contracts to
Policyowners within ten (10) days of their receipt by
Broker-Dealer from Insurer. Broker-Dealer agrees to indemnify
and hold harmless Insurer for any and all losses caused by
Broker-Dealer's failure to perform the undertakings described
in this paragraph. Broker-Dealer hereby authorizes Insurer to
set off any amount it owes Insurer under this paragraph
against any and all amounts otherwise payable to Broker-Dealer
by Insurer.
(i) FIDELITY BOND. Broker-Dealer represents that all directors,
officers, employees and Representatives of Broker-Dealer who
are licensed pursuant to this Agreement as Insurer's agents
for state insurance law purposes or who have access to funds
of Insurer, including but not limited to funds submitted with
applications for the Variable Contracts, or funds being
returned to owners, are and shall be covered by a blanket
fidelity bond, including coverage for larceny and
embezzlement, issued by a reputable bonding company. This bond
shall be maintained by Broker-Dealer at Broker-Dealer's
expense. Such bond shall be, at least, of the form, type and
amount required under the NASD Rules of Fair Practice. Insurer
may require evidence, satisfactory to it, that such coverage
is in force and Broker-Dealer shall give prompt written notice
to Insurer of any notice of cancellation or change of
coverage.
Broker-Dealer assigns any proceeds received from the fidelity
bonding company to Insurer to the extent of Insurer's loss due
to activities covered by the bond. If there is any deficiency
amount,
whether due to a deductible or otherwise, Broker-Dealer shall
promptly pay Insurer such amount on demand and Broker-Dealer
hereby indemnifies and holds harmless Insurer from any such
deficiency and from the costs of collection thereof (including
reasonable attorneys' fees).
4. COMPENSATION
(a) VARIABLE CONTRACTS. Insurer, on behalf of General Distributor,
shall pay a dealer concession to Broker-Dealer on all sales of
Variable Contracts through its Representatives, in accordance
with the form of the Compensation Schedule attached hereto,
which is in effect when purchase payment on such Variable
Contracts are received by Insurer. Dealer concessions will be
paid as a percentage of premiums received in cash or other
legal tender and accepted by Insurer on applications obtained
by Broker-Dealer's Representatives unless otherwise indicated
in Compensation Schedule A. Upon termination of this
Agreement, all compensation payable hereunder shall cease;
however, Broker-Dealer shall continue to be liable for any
chargebacks or for any other amounts advanced by or otherwise
due Insurer hereunder.
Insurer will pay all such Compensation to the Broker-Dealer.
Broker-Dealer agrees to hold Insurer and General Distributor
harmless from all claims of its Representatives for
compensation in respect of Representative's sales of Variable
Contracts.
(b) COMMISSION STATEMENTS. Broker-Dealer will be provided with
copies of its Representatives' commission statements together
with Broker-Dealer's own commission statement for each
commission payment period in which commissions are payable.
Broker-Dealer agrees that, except as to clerical errors and
material undisclosed facts, if any, such statements
constitutes a complete and accurate statement of the
commission account unless written notice is provided to
Insurer within 120 days after the date of the statement, which
notice specifically sets forth the objections or exceptions
thereto.
(c) COMPENSATION SCHEDULES. The initial Compensation Schedule is
attached. Insurer and General Distributor reserve the right to
change, amend, or cancel any Compensation Schedule as to
business produced after such change by mailing notice of such
change in the form of a new Compensation Schedule to
Broker-Dealer. Such change shall be effective, unless
otherwise specified, ten (10) days after the notice is mailed.
(d) RIGHTS OF REJECTION AND SETTLEMENT. Insurer reserves the right
to reject any and all applications and collections submitted,
to discontinue writing any form of policy, to take possession
of and cancel any policy and return the premium or any part of
it, and to make any compromise settlement in respect of a
policy. Broker-Dealer will not be entitled to receive or
retain any compensation on premiums or parts of premiums
Insurer does not receive and retain because of such rejection,
discontinuance, cancellation, or compromise settlement. If
compensation has been paid to which Broker-Dealer is not
entitled, any amount credited will be charged back, and if the
account balance is insufficient to cover the credited amount,
Broker-Dealer as applicable agrees to promptly repay the
credited amount.
5. TERMINATION
This Agreement may be terminated, without cause, by any party upon thirty (30)
days prior written notice; and may be terminated, for failure to perform
satisfactorily or other cause, by any party immediately; and shall be terminated
if Broker-Dealer ceases to be registered as a Broker-Dealer under the Securities
Exchange Act of 1934 and a member of the NASD or, if Broker-Dealer ceases to
maintain its insurance agent license(s) in good standing in the jurisdictions in
which it conducts business.
6. ARBITRATION
Any dispute, claim or controversy arising out of or in connection with this
Agreement shall be submitted to arbitration pursuant to the NASD's arbitration
facilities. If the subject matter of the dispute, claim or controversy is not
within the scope of matters which may arbitrated through the NASD arbitration
facilities, then such dispute, claim or controversy shall, upon the written
request of any party, be submitted to three arbitrators, one to be chosen by
each party, and the third by the two so chosen. If either party refuses or
neglects to appoint an arbitrator within thirty (30) days after the receipt of
the written notice from the other party requesting it to do so, the requesting
party may appoint two arbitrators. If the two arbitrators fail to agree in the
selection of a third arbitrator within thirty (30) days of their appointment,
each of them shall name two, of whom the other shall decline one and the
decision shall be made by drawing lots. All arbitrators shall be active or
retired executive officers of insurance companies not under the control of any
party to this Agreement. Each party shall submit its case to the arbitrators
within thirty (30) days of the appointment of the third arbitrator. The
arbitration shall be held in Minneapolis, Minnesota at the times agreed upon by
the arbitrators. The decision in writing of any two arbitrators, when filed with
the parties hereto shall be final and binding on both parties. Judgment may be
entered upon the final decision of the arbitrators in
any court having jurisdiction. Each party shall bear the expense of its own
arbitrator and shall jointly and equally bear with the other party the expense
of the third arbitrator and of the arbitration.
7. GENERAL PROVISIONS
(a) ADDITIONS, AMENDMENTS, MODIFICATIONS & WAIVERS. This Agreement
shall not be effective until approved by Insurer and General
Distributor. Insurer and General Distributor reserve the right
to amend this Agreement at any time, and the submission of an
application for the purchase of a Variable Contract by
Broker-Dealer after notice of any such amendment has been sent
shall constitute Broker-Dealer's agreement to any such
amendment. No additions, amendments or modifications of this
Agreement or any waiver of any provision will be valid unless
approved, in writing, by one of Insurer's duly authorized
officers. In addition, no approved waiver of any default, or
failure of performance by Broker-Dealer will affect Insurer's
or General Distributor's rights with respect to any later
default or failure of performance.
(b) INDEPENDENT CONTRACTOR RELATIONSHIP. This Agreement does not
create the relationship of employer and employee between the
parties to this Agreement. Insurer and General Distributor are
independent contractors with respect to Broker-Dealer and its
Representatives.
(c) ASSIGNMENTS. Broker-Dealer will not assign or transfer, either
wholly or partially, this Agreement or any of the benefits
accrued or to accrue under it, without the written prior
consent of a duly authorized officer of the Insurer and
General Distributor.
(d) SERVICE OF PROCESS. If Broker-Dealer receives or is served
with any notice or other paper concerning any legal action
against Insurer or General Distributor, Broker-Dealer agrees
to notify Insurer immediately (in any event not later than the
first business day after receipt) by telephone and further
agrees to transmit any papers that are served or received by
facsimile to (000) 000-0000 and by overnight mail to Insurer's
Office of General Counsel.
(e) SEVERABILITY. It is understood and agreed by the parties to
this Agreement that if any part, term or provision of this
Agreement is held to be invalid or in conflict with any law or
regulation, the validity of the remaining portions or
provisions will not be affected, and the parties' rights and
obligations will be construed and enforced as if this
Agreement did not contain the particular part, term or
provision held to be invalid.
(f) GOVERNING LAW. It is agreed by the parties to this Agreement
that the Agreement and all of its provisions will be governed
by the laws of the State of Minnesota.
(g) LIMITATIONS. No party other than Insurer shall have the
authority on behalf of Insurer to make, alter, or discharge
any policy, contract, or certificate issued by Insurer, to
waive any forfeiture or to grant, permit, nor extend the time
for making any payments nor to guarantee earnings or rates,
nor to alter the forms which Insurer may prescribe or
substitute other forms in place of those prescribed by
Insurer, nor to enter into any proceeding in a court of law or
before a regulatory agency in the name of or on behalf of
Insurer, nor to open any bank account in the full legal name
of Insurer, any derivation thereof or any tradename thereof.
8. TERRITORY
Broker-Dealer's territory is limited geographically to those jurisdictions in
which the Variable Contracts may lawfully be offered, provided that
Broker-Dealer's right to solicit sales of and to sell the Variable Contracts in
such jurisdictions is not exclusive.
9. EFFECTIVE DATE
This Agreement shall be effective ________________, 199__.
IN WITNESS WHEREOF, we set our hands this ____ day of
_________________, 199__.
INSURER:
RELIASTAR BANKERS SECURITY LIFE
INSURANCE COMPANY
By: _____________________________
Title: _____________________________
GENERAL DISTRIBUTOR:
WASHINGTON SQUARE SECURITIES, INC.
By: _____________________________
Title: _____________________________
BROKER-DEALER:
______________________________
By: _____________________________
Title: _____________________________
"D"
BROKER-DEALER AGENCY SELLING AGREEMENT
FOR VARIABLE CONTRACTS
This Agreement is made among the following four parties:
1. RELIASTAR BANKERS SECURITY LIFE INSURANCE COMPANY
0000 Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxx, Xxx Xxxx 00000
a New York domiciled stock life insurance company
(hereinafter "INSURER"); and,
2. WASHINGTON SQUARE SECURITIES, INC.
00 Xxxxxxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
an affiliate of Insurer, registered as a broker-dealer with
the Securities and Exchange Commission ("SEC") and a
member of the National Association of Securities Dealers, Inc.
("NASD") (hereinafter "GENERAL DISTRIBUTOR"); and,
3. ______________________________________
______________________________________
Street
______________________________________
City State ZIP
registered as a broker-dealer with the SEC and a member
of the NASD (hereinafter "BROKER-DEALER"); and,
4. ______________________________________
______________________________________
Street
______________________________________
City State ZIP
an affiliate of Broker-Dealer and a licensed insurance agency
(hereinafter "AGENCY").
RECITALS:
WHEREAS, Broker-Dealer has become affiliated with Agency in order to
satisfy state insurance law requirements with respect to the sale of variable
insurance products which are registered securities with the SEC.
WHEREAS, the parties wish to enter into an agreement for the
distribution of Variable Contracts by Broker-Dealer and Agency; and
WHEREAS, Insurer has appointed General Distributor as principal
underwriter and distributor (as those terms are defined by the Investment
Company Act of 1940) of the Variable Contracts and has authorized General
Distributor to enter into selling agreements with registered broker-dealers for
the solicitation and sale of Variable Contracts; and,
WHEREAS, Insurer and General Distributor propose to have
Broker-Dealer's registered representatives who are affiliated with Agency and
who are licensed as life insurance/variable contract agents in appropriate
jurisdictions ("Representatives") solicit and sell Variable Contracts; and,
WHEREAS, Insurer and General Distributor propose to have Broker-Dealer
provide certain supervisory and administrative services as hereinafter described
with respect to the solicitation and sales of Variable Contracts; and,
NOW THEREFORE, in consideration of the premises and the mutual
covenants hereinafter set forth, the parties now agree as follows:
1. VARIABLE CONTRACTS
In this Agreement, The words "Variable Contract" shall mean those variable life
insurance policies and variable annuity contracts identified in Section 1 of the
Compensation Schedule attached hereto, and as may hereafter be amended.
Insurer may in its sole discretion and without notice to Broker-Dealer, suspend
sales of any Variable Contracts or amend any policies or contracts evidencing
such Variable Contracts if, in Insurer's opinion, such suspension or amendment
is: (1) necessary for compliance with federal, state, or local laws,
regulations, or administrative order(s); or, (2) necessary to prevent
administrative or financial hardship to Insurer. In all other situations,
Insurer shall provide 30 days notice to Broker-Dealer prior to suspending sales
of any Variable Contracts or amending any policies or contracts evidencing such
Variable Contracts.
Insurer may issue and propose additional or successor products, in which event
Broker-Dealer will be informed of the product and its related Commission
Schedule. If Broker-Dealer does not agree to distribute such product (s), it
must notify Insurer in writing within 30 days of receipt of the Commission
Schedule for such product(s). If Broker-Dealer does not indicate disapproval of
the new product(s) or the terms contained in the related Commission Schedule,
Broker-Dealer will be deemed to have thereby agreed to distribute such
product(s) and
agreed to the related Commission Schedule which shall be attached to and made a
part of this Agreement.
2. AGENCY APPOINTMENTS
On the effective date, Insurer and General Distributor appoint Broker-Dealer and
its affiliated Agency and Broker-Dealer and Agency accept the appointment to
solicit sales of and to sell Variable Contracts only, pursuant to the terms of
this Agreement.
3. DUTIES OF BROKER-DEALER
(a) SUPERVISION OF REPRESENTATIVES. Broker-Dealer shall have full
responsibility for the training and supervision of all
Representatives who are engaged directly or indirectly in the
offer or sale of the Variable Contracts, and all such persons
shall be subject to the control of Broker-Dealer with respect
to such persons' securities regulated activities in connection
with the Variable Contracts. Broker-Dealer will cause the
Representatives to be trained in the sale of the Variable
Contracts, will cause such Representatives to qualify under
applicable federal and state laws to engage in the sale of the
Variable Contracts; will cause such Representatives to be
registered representatives of Broker-Dealer before such
Representatives engage in the solicitation of applications for
the Variable Contracts; and will cause such Representatives to
limit solicitation of applications for the Variable Contracts
to jurisdictions where Insurer has authorized such
solicitation. Broker-Dealer shall cause such Representatives'
qualifications to be certified to the satisfaction of General
Distributor and shall notify General Distributor if any
Representative ceases to be a registered representative of
Broker-Dealer or ceases to maintain the proper licensing
required for the sale of the Variable Contracts. All parties
shall be liable for their own negligence and misconduct under
this paragraph.
(b) REPRESENTATIVES INSURANCE COMPLIANCE. Broker-Dealer, prior to
allowing its Representatives to solicit for sales or sell the
Variable Contracts, shall require such representatives to be
validly insurance licensed, registered and appointed by
Insurer as a variable contract agent in accordance with the
jurisdictional requirements of the place where the
solicitations and sales take place as well as the solicited
person's or entity's place of residence.
Broker-Dealer and Agency shall assist Insurer in the
appointment of Representatives under the applicable insurance
laws to sell the Variable Contracts. Broker-Dealer shall
fulfill all Insurer requirements
in conjunction with the submission of licensing/appointment
papers for all applicants as insurance agents of Insurer. All
such licensing/appointment papers shall be submitted to
Insurer or its designee by Broker-Dealer. Notwithstanding such
submission, Insurer shall have sole discretion to appoint,
refuse to appoint, discontinue, or terminate the appointment
of any Representative as an insurance agent of Insurer.
(c) COMPLIANCE WITH NASD RULES OF FAIR PRACTICE AND FEDERAL AND
STATE SECURITIES LAWS. Broker-Dealer shall fully comply with
the requirements of the National Association of Securities
Dealers, Inc., the Securities Exchange Act of 1934 and all
other applicable federal and state laws. In addition,
Broker-Dealer will establish and maintain such rules and
procedures as may be necessary to cause diligent supervision
of the securities activities of the Representatives as
required by applicable law or regulation. Upon request by
General Distributor, Broker-Dealer shall furnish such records
as may be necessary to establish such diligent supervision.
(d) NOTICE OF REPRESENTATIVE'S NONCOMPLIANCE. In the event a
Representative fails or refuses to submit to supervision of
Broker-Dealer or otherwise fails to meet the rules and
standards imposed by Broker-Dealer on its Representatives,
Broker-Dealer shall advise General Distributor of this fact
and shall immediately notify such Representative that he or
she is no longer authorized to sell the Variable Contracts and
Broker-Dealer shall take whatever additional action may be
necessary to terminate the sales activities of such
Representative relating to the Variable Contracts.
(e) PROSPECTUSES, SALES PROMOTION MATERIAL AND ADVERTISING.
Broker-Dealer shall be provided, without any expense to
Broker-Dealer, with prospectuses relating to the Variable
Contracts and such other supplementary sales material as
General Distributor determines is necessary or desirable for
use in connection with sales of the Variable Contracts.
NO SALES PROMOTION MATERIALS OR ANY ADVERTISING RELATING TO
THE VARIABLE CONTRACTS, INCLUDING WITHOUT LIMITATION GENERIC
ADVERTISING MATERIAL WHICH DOES NOT REFER TO INSURER BY NAME,
SHALL BE USED BY BROKER-DEALER OR AGENCY UNLESS THE SPECIFIC
ITEM HAS BEEN APPROVED IN WRITING BY GENERAL DISTRIBUTOR PRIOR
TO SUCH USE.
In addition, neither Broker-Dealer nor Agency shall print,
publish or distribute any advertisement, circular or any
document relating to Insurer unless such advertisement,
circular or document shall have been approved in writing by
Insurer prior to such use.
Upon termination of this Agreement, all prospectuses, sales
promotion material, advertising, circulars, documents and
software relating to the sales of the Variable Contracts shall
be promptly turned over to Insurer free from any claim or
retention of rights by the Broker-Dealer or Agency.
Insurer represents that the prospectus and registration
statement relating to the Variable Contracts contain no untrue
statements of material fact or omission to state material
fact, the omission of which makes any statement contained in
the prospectus and registration statement misleading. Insurer
agrees to indemnify Broker-Dealer from and against any claims,
liabilities and expenses which may be incurred under the
Securities Act of 1933, the Investment Company Act of 1940,
common law or otherwise arising out of a breach of the
agreement in this paragraph.
Broker-Dealer and Agency agree to hold harmless and indemnify
Insurer and General Distributor against any and all claims,
liabilities and expenses which Insurer or General Distributor
may incur from liabilities arising out of or based upon any
alleged or untrue statement other than statements contained in
the registration statement, prospectus or approved sales
material of any Variable Contract.
In accordance with the requirements of the laws of the several
states, Broker-Dealer and Agency shall maintain complete
records indicating the manner and extent of distribution of
any such solicitation material, shall make such records and
files available to staff of Insurer or its designated agent in
field inspections and shall make such material available to
personnel of state insurance departments, the NASD or other
regulatory agencies, including the SEC, which have regulatory
authority over Insurer or General Distributor. Broker-Dealer
and Agency, jointly and severally hold Insurer, General
Distributor and their affiliates harmless from any liability
arising from the use of any material which either (a) has not
been specifically approved in writing, or (b) although
previously approved, has been disapproved, in writing, for
further use.
(f) SECURING APPLICATIONS. All applications for Variable Contracts
shall be made on application forms supplied by Insurer and all
payments collected by Broker-Dealer or any Representative
thereof shall be remitted promptly in full, together with such
application forms and any other required documentation,
directly to Insurer at the address indicated on such
application or to such other address as Insurer may, from
time-to-time, designate in writing. Broker-Dealer shall review
all such applications for accuracy and completeness. Checks or
money orders in payment on any such Variable Contract shall be
drawn to the order of "ReliaStar Bankers Security Life
Insurance Company." All applications are subject to acceptance
or rejection by Insurer at its sole discretion. All records or
information obtained hereunder by Broker-Dealer shall not be
disclosed or used except as expressly authorized herein, and
Broker-Dealer will keep such records and information
confidential, to be disclosed only as authorized or if
expressly required by federal or state regulatory authorities.
(g) COLLECTION OF PURCHASE PAYMENTS. Broker-Dealer agrees that all
money or other consideration tendered with or in respect of
any application for a Variable Contract and the Variable
Contract when issued is the property of Insurer and shall be
promptly remitted in full to Insurer without deduction or
offset for any reason, including by way of example but not
limitation, any deduction or offset for compensation claimed
by Broker-Dealer.
(h) POLICY DELIVERY. Insurer will transmit Variable Contracts to
Broker-Dealer for delivery to Policyowners. Broker-Dealer
hereby agrees to deliver all such Variable Contracts to
Policyowners within ten (10) days of their receipt by
Broker-Dealer from Insurer. Broker-Dealer agrees to indemnify
and hold harmless Insurer for any and all losses caused by
Broker-Dealer's failure to perform the undertakings described
in this paragraph. Broker-Dealer hereby authorizes Insurer to
set off any amount it owes Insurer under this paragraph
against any and all amounts otherwise payable to Broker-Dealer
by Insurer.
(i) FIDELITY BOND. Broker-Dealer represents that all directors,
officers, employees and Representatives of Broker-Dealer who
are licensed pursuant to this Agreement as Insurer's agents
for state insurance law purposes or who have access to funds
of Insurer, including but not limited to funds submitted with
applications for the Variable Contracts or funds being
returned to owners, are and shall be covered by a blanket
fidelity bond, including coverage for larceny and
embezzlement, issued by a reputable bonding company. This bond
shall be maintained by Broker-Dealer at Broker-Dealer's
expense.
Such bond shall be, at least, of the form, type and amount
required under the NASD Rules of Fair Practice. Insurer may
require evidence, satisfactory to it, that such coverage is in
force and Broker-Dealer shall give prompt written notice to
Insurer of any notice of cancellation or change of coverage.
Broker-Dealer assigns any proceeds received from the fidelity
bonding company to Insurer to the extent of Insurer's loss due
to activities covered by the bond. If there is any deficiency
amount, whether due to a deductible or otherwise,
Broker-Dealer shall promptly pay Insurer such amount on demand
and Broker-Dealer hereby indemnifies and holds harmless
Insurer from any such deficiency and from the costs of
collection thereof (including reasonable attorneys' fees).
4. COMPENSATION
(a) VARIABLE CONTRACTS. Insurer, on behalf of General Distributor,
shall pay a dealer concession to Broker-Dealer on all sales of
Variable Contracts through such Representatives, in accordance
with the form of the Compensation Schedule attached hereto,
which is in effect when purchase payment on such Variable
Contracts are received by Insurer. Dealer concessions will be
paid as a percentage of premiums received in cash or other
legal tender and accepted by Insurer on applications obtained
by Broker-Dealer's Representatives unless otherwise indicated
in Compensation Schedule A. Upon termination of this
Agreement, all compensation payable hereunder shall cease;
however, Broker-Dealer shall continue to be liable for any
chargebacks or for any other amounts advanced by or otherwise
due Insurer hereunder.
Insurer will pay all such Compensation to and in the name of
Broker-Dealer or its affiliated Agency. Broker-Dealer agrees
to hold Insurer and General Distributor harmless from all
claims of its Representatives for compensation in respect of
such Representative's sales of Variable Contracts.
(b) COMMISSION STATEMENTS. Broker-Dealer will be provided with
copies of its Representatives' commission statements together
with Broker-Dealer's own commission statements for each
commission payment period in which commissions are payable.
Broker-Dealer agrees that, except as to clerical errors and
material undisclosed facts, if any, such statements
constitutes a complete and accurate statement of the
commission account unless written notice is provided
to Insurer within 120 days after the date of the statement,
which notice specifically sets forth the objections or
exceptions thereto.
(c) COMPENSATION SCHEDULES. The initial Compensation Schedule is
attached.
Insurer and General Distributor reserve the right to change,
amend, or cancel any Compensation Schedule as to business
produced after such change by mailing notice of such change in
the form of a new Compensation Schedule to Broker-Dealer. Such
change shall be effective, unless otherwise specified, ten
(10) days after the notice is mailed.
(d) RIGHTS OF REJECTION AND SETTLEMENT. Insurer reserves the right
to reject any and all applications and collections submitted,
to discontinue writing any form of policy, to take possession
of and cancel any policy and return the premium or any part of
it, and to make any compromise settlement in respect of a
policy. Broker-Dealer will not be entitled to receive or
retain any compensation on premiums or parts of premiums
Insurer does not receive and retain because of such rejection,
discontinuance, cancellation, or compromise settlement. If
compensation has been paid to which Broker-Dealer is not
entitled, any amount credited will be charged back, and if the
account balance is insufficient to cover the credited amount,
Broker-Dealer as applicable agrees to promptly repay the
credited amount.
5. TERMINATION
This Agreement may be terminated, without cause, by any party upon thirty (30)
days prior written notice; and may be terminated, for failure to perform
satisfactorily or other cause, by any party immediately; and shall be terminated
if Broker-Dealer ceases to be registered as a Broker-Dealer under the Securities
Exchange Act of 1934 and a member of the NASD or, if Agency ceases to maintain
its insurance agent license(s) in good standing in the jurisdictions in which it
conducts business.
6. ARBITRATION
Any dispute, claim or controversy arising out of or in connection with this
Agreement shall be submitted to arbitration pursuant to the NASD's arbitration
facilities. If the subject matter of the dispute, claim or controversy is not
within the scope of matters which may arbitrated through the NASD arbitration
facilities, then such dispute, claim or controversy shall, upon the written
request of any party, be submitted to three arbitrators, one to be chosen by
each party, and the
third by the two so chosen. If either party refuses or neglects to appoint an
arbitrator within thirty (30) days after the receipt of the written notice from
the other party requesting it to do so, the requesting party may appoint two
arbitrators. If the two arbitrators fail to agree in the selection of a third
arbitrator within thirty (30) days of their appointment, each of them shall name
two, of whom the other shall decline one and the decision shall be made by
drawing lots. All arbitrators shall be active or retired executive officers of
insurance companies not under the control of any party to this Agreement. Each
party shall submit its case to the arbitrators within thirty (30) days of the
appointment of the third arbitrator. The arbitration shall be held in
Minneapolis, Minnesota at the times agreed upon by the arbitrators. The decision
in writing of any two arbitrators, when filed with the parties hereto shall be
final and binding on both parties. Judgment may be entered upon the final
decision of the arbitrators in any court having jurisdiction. Each party shall
bear the expense of its own arbitrator and shall jointly and equally bear with
the other party the expense of the third arbitrator and of the arbitration.
7. GENERAL PROVISIONS
(a) ADDITIONS, AMENDMENTS, MODIFICATIONS & WAIVERS. This Agreement
shall not be effective until approved by Insurer and General
Distributor. Insurer and General Distributor reserve the right
to amend this Agreement at any time, and the submission of an
application for the purchase of a Variable Contract by either
Broker-Dealer or Agency after notice of any such amendment has
been sent shall constitute Broker-Dealer's or Agency's, as
applicable, agreement to any such amendment. No additions,
amendments or modifications of this Agreement or any waiver of
any provision will be valid unless approved, in writing, by
one of Insurer's duly authorized officers. In addition, no
approved waiver of any default, or failure of performance by
Broker-Dealer or Agency will affect Insurer's or General
Distributor's rights with respect to any later default or
failure of performance.
(b) INDEPENDENT CONTRACTOR RELATIONSHIP. This Agreement does not
create the relationship of employer and employee between the
parties to this Agreement. Insurer and General Distributor are
independent contractors with respect to Broker-Dealer, its
Representatives, Agency and its Agents.
(c) ASSIGNMENTS. Neither Broker-Dealer nor Agency will assign or
transfer, either wholly or partially, this Agreement or any of
the benefits accrued or to accrue under it, without the
written prior consent of a duly authorized officer of the
Insurer and General Distributor.
(d) SERVICE OF PROCESS. If Broker-Dealer or Agency receives or is
served with any notice or other paper concerning any legal
action against Insurer or General Distributor, Broker-Dealer
or Agency agrees to notify Insurer immediately (in any event
not later than the first business day after receipt) by
telephone and transmit any papers that are served or received
by facsimile to (000) 000-0000 and by overnight mail to
Insurer's Office of General Counsel.
(e) SEVERABILITY. It is understood and agreed by the parties to
this Agreement that if any part, term or provision of this
Agreement is held to be invalid or in conflict with any law or
regulation, the validity of the remaining portions or
provisions will not be affected, and the parties' rights and
obligations will be construed and enforced as if this
Agreement did not contain the particular part, term or
provision held to be invalid.
(f) GOVERNING LAW. It is agreed by the parties to this Agreement
that the Agreement and all of its provisions will be governed
by the laws of the State of Minnesota.
(g) LIMITATIONS. No party other than Insurer shall have the
authority on behalf of Insurer to make, alter, or discharge
any policy, contract, or certificate issued by insurer, to
waive any forfeiture or to grant, permit, nor extend the time
for making any payments nor to guarantee earnings or rates,
nor to alter the forms which Insurer may prescribe or
substitute other forms in place of those prescribed by
Insurer, nor to enter into any proceeding in a court of law or
before a regulatory agency in the name of or on behalf of
Insurer, nor to open any bank account in the full legal name
of Insurer, any derivation thereof or any tradename thereof.
8. TERRITORY
Broker-Dealer's territory is limited geographically to those jurisdictions in
which the Variable Contracts may lawfully be offered, provided that
Broker-Dealer's right to solicit sales of and to sell the Variable Contracts in
such jurisdictions is not exclusive.
9. EFFECTIVE DATE
This Agreement shall be effective ________________, 199__.
IN WITNESS WHEREOF, we set our hands this ____ day of
_________________, 199__.
INSURER:
RELIASTAR BANKERS SECURITY LIFE
INSURANCE COMPANY
By: _____________________________
Title: _____________________________
GENERAL DISTRIBUTOR:
WASHINGTON SQUARE SECURITIES, INC.
By: _____________________________
Title: _____________________________
BROKER-DEALER:
________________________________________
By: _____________________________
Title: _____________________________
AGENCY:
________________________________________
By: ______________________________
Title: ______________________________
SCHEDULE A
BROKER/DEALER AGENCY COMPENSATION SCHEDULE
FOR RELIASTAR BANKERS SECURITY VARIABLE CONTRACTS
EFFECTIVE_________________
I
This Compensation Schedule shall be used to determine compensation payable to
the Broker/Dealer under the Broker-Dealer Agency Selling Agreement for Variable
Contracts through Broker-Dealer from the Effective Date of this Schedule until
it is suspended, canceled, changed or replaced.
This Schedule is applicable to the following Variable Contracts:
1. FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY 85-251 AND STATE
EXCEPTIONS
Broker-Dealer shall be paid a total dealer concession according to the following
schedule:
Issue Ages 0 - 75
1st Year 96.00%
Excess Premium (1st Year) 5.00%
Basic Renewal and Lifetime Renewal
Commissions 5.00%
II
GENERAL RULES PERTAINING TO VARIABLE CONTRACTS
1. CHANGE OF DEALER AUTHORIZATION. No compensation of any kind shall be
payable in respect of Variable Contracts following Insurer's or General
Distributor's receipt of a change of dealer authorization applicable to
such Variable contract.
2. CHANGE IN REPRESENTATIVE'S STATUS. Broker-Dealer agrees that in the
event a Representative ceases to be an associated person of
Broker-Dealer or ceases to be validly licensed or registered, Broker-
Dealer
shall not receive any compensation based on any Variable Contract, its
values or on premiums or purchase payments thereafter received by
ReliaStar Bankers Security Life Insurance Company and/or WSSI from such
former Representative's customers. Provided, however, if within 60 days
after such Representative ceases to be a representative of
Broker-Dealer, Broker-Dealer designates another registered
representative of Broker-Dealer to service the former Representative's
business, the compensation not paid shall be payable to Broker-Dealer.
If an assigned Representative's replacement is not designated within
such 60 day period, Broker-Dealer may not thereafter designate a
replacement Representative for such Variable contracts and shall not be
entitled to such compensation.
3. EXCLUSIVE COMPENSATION. Broker-Dealer agrees that no compensation of
any kind other than as described herein is payable by Insurer or
General Distributor in respect of Broker-Dealer's sales of Variable
Contracts.
4. VESTING. First year commissions and Basic Renewal commissions in
respect of Variable Contracts issued after the effective date and prior
to the termination date of Broker-Dealer's appointment are vested in
Broker-Dealer and will be paid to Broker-Dealer as and when the related
premium is received by the issuer and applied to the Variable Contract
issued, and provided, however, that no First Year commissions or Basic
Renewal Commissions (Policy years 2 through 10), including those on
cost of living or any other policy increases, will be paid after
Broker-Dealer's appointment has been terminated for more than ten
years.
5. REPLACEMENT BUSINESS. If any policy is issued to replace a policy
previously issued by Insurer or an affiliate, commissions will accrue
only if and to the extent that Insurer's established practices provide
for commissions on such replacements.
6. COMMISSIONS. Commissions shall accrue on Variable Contracts Issued as
and when premiums are received by Insurer and applied as premiums due
or payable on such policies, except as Insurer's practices may
otherwise provide.
7. CHARGE-BACKS. In any case, where Insurer has credited a commission to
Broker-Dealer on the basis of a premium on a Variable Contract issued
and the premium is returned to the purchaser Insurer will charge back
such commissions.
8. ADDITIONAL BENEFITS AND RIDERS. Commissions will be credited based on
premiums for additional benefits (for example, waiver of premium
and term riders) added at issue of a policy at the same rate as applied
to the base policy premium.
