Exhibit 3(e)
AMENDED AND RESTATED DISTRIBUTION AGREEMENT
BETWEEN
FARMERS NEW WORLD LIFE INSURANCE COMPANY
AND
FARMERS FINANCIAL SOLUTIONS, LLC
THIS AMENDED AND RESTATED AGREEMENT ("Agreement"), entered into as of this
20th day of April, 2006, is between FARMERS NEW WORLD LIFE INSURANCE COMPANY, a
Washington corporation ("FNWL"), on its behalf and on behalf of each separate
account identified in Schedule 1 hereto, and FARMERS FINANCIAL SOLUTIONS, LLC
("Distributor"), a Nevada Limited Liability Company.
WITNESSETH:
WHEREAS, Distributor is a broker-dealer that engages in the distribution
and sales of variable insurance products and may engage in the distribution of
other investment products;
WHEREAS, FNWL desires to issue certain variable insurance products
described more fully below to the public through Distributor acting as principal
underwriter and distributor; and
WHEREAS, FNWL and Distributor acknowledge that Distributor may distribute
variable insurance products and other investment products for other companies.
NOW, THEREFORE, in consideration of their mutual promises, FNWL and
Distributor hereby agree as follows:
1. DEFINITIONS
a. Contracts - The class or classes of variable insurance products set
forth on Schedule 2 to this Agreement as in effect at the time this
Agreement is executed, and such other classes of variable insurance
products that may be added to Schedule 2 from time to time in
accordance with Section 10.b of this Agreement, and including any
riders to such contracts and any other contracts offered in connection
therewith. For this purpose and under this Agreement generally, a
"class of Contracts" shall mean those Contracts issued by FNWL on the
same policy form or forms and covered by the same Registration
Statement.
b. Registration Statement - At any time that this Agreement is in effect,
each currently effective registration statement filed with the SEC
under the 1933 Act on a prescribed form, or currently effective
post-effective amendment thereto, as the case may be, relating to a
class of Contracts, including financial statements included in, and
all exhibits to, such registration statement or post-effective
amendment. For purposes of
Section 8 of this Agreement, the term "Registration Statement" means
any document that is or at any time was a Registration Statement
within the meaning of this Section 1.b.
c. Prospectus - The prospectus included within a Registration Statement,
except that, if the most recently filed version of the prospectus
(including any supplements thereto) filed pursuant to Rule 497 under
the 1933 Act subsequent to the date on which a Registration Statement
became effective differs from the prospectus included within such
Registration Statement at the time it became effective, the term
"Prospectus" shall refer to the prospectus and supplements thereto
most recently filed under Rule 497 under the 1933 Act, from and after
the date on which it shall have been filed. For purposes of Section 8
of this Agreement, the term "any Prospectus" means any document that
is or at any time was a Prospectus within the meaning of this Section
1.c.
d. Fund - An investment company in which the Variable Account invests.
e. Variable Account - A separate account supporting a class or classes of
Contracts and specified on Schedule 1 as in effect at the time this
Agreement is executed, or as it may be amended from time to time in
accordance with Section 10.b of this Agreement.
f. 1933 Act - The Securities Act of 1933, as amended.
g. 1934 Act - The Securities Exchange Act of 1934, as amended.
h. 1940 Act - The Investment Company Act of 1940, as amended.
i. SEC - The Securities and Exchange Commission.
j. NASD - NASD, Inc.
k. Regulations - The rules and regulations promulgated by the SEC under
the 1933 Act, the 1934 Act and the 1940 Act as in effect at the time
this Agreement is executed or thereafter promulgated.
l. Representative - When used with reference to the Distributor, an
individual who is registered as a principal or representative of such
Distributor.
m. Application - An application for a Contract.
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n. Premium - A payment made under a Contract by an applicant or purchaser
to purchase benefits under the Contract.
2. AUTHORIZATIONS AND APPOINTMENT
a. Scope of Authority. FNWL hereby authorizes Distributor on a
non-exclusive agency basis, and Distributor accepts such authority,
subject to the registration requirements of the 1933 Act and the 1940
Act and the provisions of the 1934 Act and conditions herein, to be
the distributor and principal underwriter for the sale of the
Contracts to the public in each state and other jurisdiction in which
the Contracts may lawfully be sold during the term of this Agreement.
Distributor will actively engage in its duties under this Agreement on
a continuous basis while the Registration Statements for the Contracts
remain effective. Distributor shall use its best efforts to market the
Contracts actively subject to compliance with applicable law,
including the rules of the NASD. However, Distributor shall not be
obligated to sell any specific number or amount of Contracts. Also,
the parties acknowledge and agree that Distributor may distribute
variable insurance products and other investment products for other
companies.
b. Limits on Authority. Distributor shall act as an independent
contractor and nothing herein contained shall constitute Distributor
or its agents, officers or employees as agents, officers or employees
of FNWL solely by virtue of their activities in connection with the
sale of the Contracts hereunder. Distributor and its Representatives
shall not have authority, on behalf of FNWL: to make, alter or
discharge any Contract or other insurance policy or annuity entered
into pursuant to a Contract; to waive any Contract forfeiture
provision; to extend the time of paying any Premium; or to receive any
monies or Premiums (except for the sole purpose of forwarding monies
or Premiums to FNWL). Distributor shall not expend, nor contract for
the expenditure of, the funds of FNWL. Distributor shall not possess
or exercise any authority on behalf of FNWL other than that expressly
conferred on Distributor by this Agreement. Distributor acknowledges
and agrees that FNWL shall have the right at any time to suspend or
limit the public offering of the Contracts.
3. SOLICITATION ACTIVITIES
a. Representations, Warranties and Covenants of Distributor. Distributor
represents and warrants to FNWL that Distributor is, and covenants
that it shall remain during the term of this Agreement: (i) registered
as a broker-dealer under the 1934 Act; (ii) a member in good standing
with the NASD; (iii) duly registered under applicable state securities
laws; (iv) in compliance with Section 9(a) of the 1940 Act; and (v)
licensed as an insurance agent with authority to sell the Contracts or
associated with an insurance agent so licensed.
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b. Representatives. No Representative shall solicit the sale of a
Contract unless at the time of such solicitation such individual is
duly registered with the NASD and duly licensed with all applicable
state insurance and securities regulatory authorities, and is duly
appointed as an insurance agent of FNWL.
(1) Appointment by FNWL. FNWL shall take all actions necessary to
effect the appointment of Representatives as may from time to
time be identified by Distributor as qualified to serve as
insurance agents of FNWL; provided, however, that FNWL reserves
the right, in its reasonable discretion, to refuse to appoint any
such person or renew any such appointment or to terminate any
appointment, consistent with its duties and responsibilities
under applicable law.
(2) Distributor Due Diligence. Distributor is [solely] responsible
for investigating the character, work experience, and background
of any Representative prior to recommending the proposed
Representative to FNWL for appointment. Distributor will not
employ, or permit to be associated with it, in any material
connection with the Contracts or the handling of Contract assets,
any person who, to the knowledge of Distributor, is subject to
statutory disqualification as set forth in Section 3(a)(39) of
the 0000 Xxx.
(3) Supervision by Distributor. Distributor is responsible for
supervising the activities of the Representatives and for
ensuring that the Representatives are properly licensed and in
compliance with all applicable federal or state laws, rules and
regulations and all rules and procedures of FNWL provided in
writing by FNWL. Distributor shall notify FNWL promptly, in
writing, of the termination of any Representative.
c. Sales and Solicitation Activities. All solicitation and sales
activities engaged in by Distributor and its Representatives with
respect to the Contracts shall be in compliance with all applicable
federal and state securities laws and regulations, with the rules of
the NASD, as well as with all applicable insurance laws and
regulations, including any laws and regulations related to
suitability, any other applicable federal or state law, rule, or
regulation, and any of the rules and procedures that FNWL may issue
from time to time. In particular, without limiting the generality of
the foregoing:
(1) Distributor, along with appropriate FNWL NASD registered
principals, shall train, supervise and be solely responsible for
the conduct of Representatives with regard to their solicitation
of Applications and Premiums and distribution of the Contracts,
and shall supervise their compliance with applicable rules and
regulations of any insurance or securities regulatory agencies or
self-regulatory organizations that have jurisdiction over
variable insurance product activities.
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(2) Neither Distributor nor any Representative shall offer, attempt
to offer, or solicit Applications for, the Contracts, in any
state or other jurisdiction unless FNWL has notified Distributor
that such Contracts may lawfully be sold or offered for sale in
such state, and has not subsequently revised such notice.
(3) Neither Distributor nor any Representative shall give any
information or make any representation in regard to a class of
Contracts in connection with the offer or sale of such class of
Contracts that is not in accordance with the Prospectus and the
statement of additional information for such class of Contracts,
or in the then-currently effective prospectus or statement of
additional information for a Fund, or in current advertising
materials for such class of Contracts authorized by FNWL.
(4) Distributor and all Representatives agree to distribute and sell
the Contracts in accordance with the market timing and frequent
trading policies of the Variable Accounts as stated in the
then-currently effective prospectus and statement of additional
information for the Contracts.
(5) Completed Applications for the Contracts solicited by Distributor
or Distributor's Representatives shall be transmitted directly to
FNWL (or as otherwise designated by FNWL) generally by noon of
the next business day following their receipt by Distributor, and
in any event within such period required by applicable law. All
payments under the Contracts shall be made by check, money order,
or wire payable to FNWL or by other method acceptable to FNWL as
set forth in the Prospectus. If Distributor holds any Premium at
any time, Distributor shall hold such Premium in a fiduciary
capacity and such Premium shall be remitted promptly to FNWL in
accordance with applicable law. Distributor acknowledges that all
such Premiums, whether by check, money order or wire, shall be
the property of FNWL. Distributor acknowledges that FNWL shall
have the unconditional right to reject, in whole or in part, any
Application or Premium
d. Suitability. In view of both parties' desire to ensure that Contracts
will be sold to purchasers for whom the Contracts will be suitable,
the written agreement between Distributor and its Representatives
shall require that the Representatives not make recommendations to an
applicant to purchase a Contract in the absence of reasonable grounds
to believe that a recommendation to an applicant to purchase a
Contract is suitable for that applicant. Distributor shall review all
Applications for suitability in accordance with suitability standards,
including Rule 2310 of the NASD Conduct Rules and interpretations and
guidance relating thereto, those established by law, rule or
regulation (including variable insurance regulations adopted by states
where the
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Contracts are sold), as well as any standards that may be established
by mutual agreement of FNWL and Distributor from time to time. While
not limited to the following, a determination of suitability shall be
based on information furnished to a Representative after reasonable
inquiry of the applicant concerning his or her financial status
(including occupation, marital status, age, number of dependents, and
risk tolerance), retirement needs, reasons for purchasing a Contract,
investment sophistication and experience, liquid net worth, other
securities holdings, other investments and savings, annual income,
financial situation and needs, insurance and investment objectives,
investment time horizon, tax status, and the likelihood that the
applicant will continue to make any premium payments contemplated by
the Contract applied for and will keep the Contract in force for a
sufficient period of time.
4. PROSPECTUSES, REGISTRATION STATEMENTS, CONTRACT FORMS AND MARKETING
MATERIALS
a. Preparation and Filing of Prospectuses, Registration Statements and
Contract Forms. FNWL shall be responsible for preparing the Contract
forms and filing them with applicable state insurance regulatory
authorities, and for preparing the Prospectuses and Registration
Statements and filing them with the SEC and state regulatory
authorities, to the extent required. FNWL agrees to forward to
Distributor copies of any and all amendments to the Registration
Statement.
b. Notification by FNWL. FNWL agrees to advise Distributor immediately
of:
(1) Any request by the SEC (i) for amendment of the Registration
Statement or (ii) for additional information that FNWL determines
is material to Distributor;
(2) The issuance by the SEC of any stop order suspending the
effectiveness of the Registration Statement or the initiation of
any proceedings for that purpose; and
(3) The occurrence of any material event, if known by FNWL, that
makes untrue any material statement made in the Registration
Statement or that requires the making of a change therein in
order to make any material statement made therein not misleading.
c. Preparation and Filing of Sales Materials. FNWL and Distribution shall
together be responsible for the design, development and preparation of
all promotional, sales, and advertising material relating to the
Contracts, subject to review and approval by Distributor of such
material and documents in accordance with Rule 2210 of the NASD
Conduct Rules. Distributor shall be responsible for filing such
material, as required, with the NASD and any state securities
regulatory authorities. FNWL shall be responsible for filing all
promotional, sales, or advertising material, as required, with any
state insurance regulatory authorities.
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d. Resolution of Comments. The parties shall notify each other
expeditiously of any comments provided by the SEC, NASD or any
securities or insurance regulatory authority described in section
4(c), and will cooperate expeditiously in resolving and implementing
any comments, as applicable. In addition, Distributor shall promptly
furnish to FNWL copies of any letters from the NASD requesting changes
in any promotional, sales, and advertising material used or to be used
in connection with its distribution activities under this Agreement,
and shall not, after receipt of such a letter, use such material until
FNWL shall have approved (or re-approved, as applicable) their use in
writing.
e. Use in Solicitation Activities. FNWL shall be responsible for
furnishing Distributor with such Applications, Prospectuses and other
materials for use by Distributor and Representatives in their
solicitation activities with respect to the Contracts. FNWL shall
notify Distributor of those states or jurisdictions that require
delivery of a statement of additional information with a Prospectus to
a prospective purchaser. Distributor shall not use and shall take
reasonable steps to ensure that its Representatives do not use any
promotional, sales or advertising materials that have not been
approved by FNWL. FNWL has the right to recall promotional, sales, and
advertising material from use at any time by notice to Distributor. In
the event that FNWL chooses to recall any such materials, Distributor
will promptly cease their use and destroy any unused material.
f. Definitions. For purposes of this Agreement, the phrase "promotional,
sales, and advertising material" includes, but is not limited to,
advertisements (such as material published or designed for use in, a
newspaper, magazine, or other periodical, radio, television, telephone
or tape recording, videotape display, signs, or billboards, motion
pictures, telephone directories (other than routine listings)
electronic communications, the Internet or other public media), sales
literature (i.e.; any written communication distributed or made
generally available to customers or the public, including brochures,
circulars, research reports, market letters, form letters, seminar
texts, reprints or excerpts of any other advertisement, sales
literature, or published article whether in electronic or paper form),
Registration Statements, Prospectuses, statements of additional
information, shareholder reports, and proxy materials.
5. COMPENSATION AND EXPENSES
a. FNWL shall pay compensation for sales of the Contracts in accordance
with Schedule 3 attached hereto.
b. FNWL shall pay all expenses, except for commissions to
Representatives, in connection with the variable products including,
but not limited to, the preparation and filing of the Contracts,
Registration Statements, and promotional materials. FNWL may pay forms
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of compensation to the Representatives as paying agent on behalf of
Distributor and will maintain the books and records reflecting such
payments in accordance with the requirements of the 1934 Act on behalf
of Distributor.
6. COMPLIANCE
a. FNWL and Distributor are, and covenant that they shall remain, in
compliance in all material respects with all applicable federal,
state, and self-regulatory organization laws, rules and regulations,
including, without limitation, all laws, rules and regulations listed
on Schedule 4, as it may be amended from time to time by mutual
consent of FNWL and Distributor. The omission of a reference to a law,
rule or regulation in this Agreement shall not be deemed to be
acknowledgement by any party that such law, rule or regulation does
not apply to FNWL or Distributor.
b. Maintaining Registration and Approvals. FNWL shall be responsible for
maintaining the registration of the Contracts with the SEC and any
state securities regulatory authority with which such registration is
required, and for gaining and maintaining approval of the Contract
forms where required under the insurance laws and regulations of each
state or other jurisdiction in which the Contracts are to be offered.
c. Confirmations and 1934 Act Compliance. FNWL, or its appointed
designee, as agent for Distributor, shall confirm to each applicant
for and purchaser of a Contract in accordance with Rule 10b-10 under
the 1934 Act the acceptance of Premiums and such other transactions as
are required by Rule 10b-10 or administrative interpretations
thereunder, or by any other SEC or NASD rule requiring the delivery of
such information. FNWL, or its appointed designee, shall maintain and
preserve such books and records with respect to such confirmations in
conformity with the requirements of Rules 17a-3 and 17a-4 under the
1934 Act to the extent such requirements apply. FNWL, and its
appointed designee, shall maintain, as agent for Distributor, such
other books and records of Distributor pertaining to the offer and
sale of the Contracts and required by the 1934 Act as may be mutually
agreed upon by FNWL and Distributor, including but not limited to
maintaining records of Representatives and of the payment of
commissions and other payments or service fees to Representatives. In
addition, FNWL, or its appointed designee, as agent for Distributor,
shall maintain and preserve such additional accounts, books and
records as are required by FNWL and Distributor by the 1934 Act. FNWL,
and its appointed designee, shall maintain all such books and records
and hold such books and records on behalf of and as agent for
Distributor whose property they are, and acknowledges that such books
and records are at all times subject to inspection by the SEC in
accordance with Section 17(a) of the 1934 Act, the NASD, and by all
other regulatory bodies having jurisdiction over the Contracts or
Distributor.
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d. Maintenance of Books and Records. To the extent FNWL employs
electronic storage media in connection with books and records created,
maintained and stored on behalf of Distributor, FNWL agrees to comply
with the requirements set forth in Rule 17a-4(f)(3)(vii) and 17a-4(i)
of the 1934 Act. With respect to any books and records maintained and
preserved on behalf of Distributor, FNWL hereby undertakes to permit
examination of books and records at any time or from time to time
during business hours by representatives or designees of the SEC, and
to promptly furnish to the SEC or its designee a true, correct,
complete and current hard copy of any or all of any part of such books
and records. Subject to Distributor's approval, FNWL reserves the
right to delegate the duties set forth in this Section 6.c to a third
party administrator.
e. Rule 38a-1 Compliance.
(1) Distributor shall provide to FNWL its adopted written compliance
policies and procedures as required by Rule 38a-1 under the 1940
Act for review and approval by FNWL, as depositor for the
Variable Accounts. Such written compliance policies and
procedures: (i) shall be reasonably designed to prevent
violations of the federal securities laws, as such laws are
defined in Rule 38a-1 under the 1940 Act and relate to
Distributor's duties under this Agreement as principal
underwriter for the Contracts and the Variable Accounts; and (ii)
shall include Distributor's policies and procedures with regard
to compliance with the SEC's pricing rules for Variable Accounts,
including but not limited to Rule 22c-1 under the 1940 Act, and
with regard to FNWL's Disruptive Trading policy as that policy is
disclosed in the Prospectuses for the Contracts (the "Rule 38a-1
policies and procedures").
(2) Distributor will promptly provide the Chief Compliance Officer
for the Variable Accounts with any material changes that have
been made to Distributor's Rule 38a-1 policies and procedures.
Distributor shall retain such written 38a-1 policies and
procedures for the time periods required by Rule 38a-1.
(3) Distributor agrees to cooperate with FNWL in its testing and
annual review of Distributor's Rule 38a-1 policies and procedures
conducted by the Chief Compliance Officer for the Variable
Accounts to determine the adequacy of Distributor's Rule 38a-1
policies and procedures and the effectiveness of their
implementation (the "Annual Review"). Distributor also agrees to
cooperate in any interim testing and reviews of Distributor's
Rule 38a-1 policies and procedures to determine their adequacy
and the effectiveness of their implementation in response to
significant compliance events, changes in business arrangements,
and/or regulatory developments ("Interim Review"). Such
cooperation includes, without limitation, furnishing such
certifications,
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subcertifications, and documentation as the Chief Compliance
Officer for the Variable Accounts shall reasonably request from
time to time.
(4) Distributor will provide FNWL with ongoing, direct, and immediate
access to Distributor's compliance personnel and shall cooperate
with the Compliance Officer for the Variable Accounts in carrying
out FNWL's obligations under Rule 38a-1 to oversee the compliance
program of Distributor.
(5) Distributor will promptly notify the Chief Compliance Officer for
the Variable Accounts in the event that a Material Compliance
Matter, as defined under Rule 38a-1, occurs with respect to
Distributor's 38a-1 policies and procedures and will cooperate
with FNWL in providing FNWL and the Chief Compliance Officer for
the Variable Accounts with periodic and special reports with
regard to the correction of any such Material Compliance Matter.
A "Material Compliance Matter" has the same meaning as the term
defined in Rule 38a-1, and includes any compliance matters that
involves: (1) a violation of the Federal Securities Laws by
Distributor (or its officers, directors, employees, or agents);
(2) a violation of Distributor's Rule 38a-1 policies and
procedures; or (3) a weakness in the design or implementation of
Distributor's Rule 38a-1 policies and procedures.
(6) Distributor (and anyone acting under the direction of
Distributor) will refrain from, directly or indirectly, taking
any action to coerce, manipulate, mislead, or fraudulently
influence the Chief Compliance Officer for the Variable Accounts
in the performance of her or his responsibilities under Rule
38a-1.
f. Privacy. FNWL and Distributor hereby acknowledge and agree that they
are subject to Title V of the Xxxxx-Xxxxx-Xxxxxx Act of 1999 and to
implementing regulations enacted by the SEC ("Regulation S-P"). The
obligation of the parties under Regulation S-P shall include:
(1) Privacy Notices. Any nonpublic personal information regarding
"customers" or "consumers" of the parties, as those terms are
defined in Regulation S-P, shall be shared between the parties
and with others, only in accordance with the disclosures
contained in the Privacy Notices that shall be provided by FNWL
and Distributor to customers in accordance with the requirements
of Regulation S-P.
(2) System Safeguards on Customer Information. As required by Rule 30
under Regulation S-P, FNWL and Distributor shall adopt written
policies and procedures that establish adequate administrative,
technical and physical safeguards for the protection of customer
records and information. These policies and procedures must be
reasonably designed to: (i) ensure the security and
confidentiality of customer records and information, (ii) protect
against anticipated threats or hazards to the security and
integrity of customer records and
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information, and (iii) protect against unauthorized access to or
use of customer records or information. If other applicable
privacy laws, including any such laws or regulations promulgated
by a state or municipality having jurisdiction over the parties,
should afford customers or consumers greater protections or
rights than those provided by the Regulation S-P or should impose
greater obligations or restrictions on the parties ("Additional
Privacy Laws"), the parties shall comply with the terms of such
Additional Privacy Laws.
g. Reports. Each party shall furnish or cause to be furnished to the
other such reports as the party may reasonably request for the purpose
of meeting its reporting and record keeping requirements under the
1933 Act, the 1934 Act and the 1940 Act and regulations thereunder as
well as the insurance laws of the State of Washington and any other
applicable states or jurisdictions, as well as any other applicable
law.
h. Issuance and Administration of Contracts. FNWL, or its appointed
designee, shall be responsible for issuing the Contracts and
administering the Contracts and the Variable Account, including all
Contract owner communications, provided, however, that Distributor,
and its designated Office(s) of Supervisory Jurisdiction and Branch
Office(s) (the "Office(s)") shall have full responsibility for the
securities activities of all persons employed by FNWL, engaged
directly or indirectly in the Contract operations, and for the
training, supervision and control of such persons to the extent of
such activities. Subject to Distributor's approval, FNWL reserves the
right to delegate its duties set forth in this Section 6.h to a third
party administrator.
i. Anti-Money Laundering Compliance. Distributor represents and warrants
that it has, and covenants that it shall continue to have, an
anti-money laundering compliance program as required by NASD Rule
3011. FNWL covenants that it shall implement such anti-money
laundering programs as it may be required to implement by applicable
laws, rules and regulations.
7. INVESTIGATIONS AND PROCEEDINGS
a. Consultation and Cooperation. Distributor and FNWL shall cooperate
fully in any securities or insurance regulatory investigation or
proceeding or judicial proceeding arising in connection with the
offering, sale or distribution of the Contracts distributed under this
Agreement. Without limiting the foregoing, FNWL and Distributor shall
notify each other promptly of any customer complaint or notice of any
regulatory investigation or proceeding or judicial proceeding received
by either party with respect to the Contracts. In addition,
Distributor agrees to furnish regulatory authorities with any
information or reports in connection with the services it provides
under this Agreement that may be requested in order to ascertain
whether the operations of FNWL, Distributor or the Variable Accounts
are being conducted in a manner
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consistent with applicable laws and regulations. Distributor further
agrees to comply with the reporting requirements imposed by NASD
Conduct Rule 3070 with regard to sales of the Contracts and the
activities of Representatives.
b. Customer Complaints. Distributor and FNWL shall cooperate fully in
responding to any customer complaints. Distributor will promptly
provide to FNWL a copy of all customer complaints received by
Distributor concerning or related to the Contracts, FNWL, Distributor,
or its Representatives, in connection with any Contract sold under
this Agreement or regarding any activity of an aforementioned entity
relating to the exercise of its duties or obligations hereunder. FNWL
will promptly provide to Distributor a copy of all customer
correspondence received by FNWL concerning or related to the
Contracts, FNWL, Distributor, or its Representatives, in connection
with any Contract sold under this Agreement or regarding any activity
of an aforementioned entity relating to the exercise of its duties or
obligations hereunder so that Distributor may review such
correspondence and determine whether it constitutes a "complaint."
Distributor will timely provide information as needed to enable FNWL
to respond to such complaints, or will itself respond to any such
complaints if, as Distributor shall determine, such response is
required by federal or state securities laws or the rules of the NASD.
Without limiting the foregoing, FNWL agrees to notify Distributor if
persons associated with FNWL are the subject of any written customer
complaint involving allegations of theft, forgery or misappropriation
of funds or securities, or is the subject of any claim for damages by
a customer, broker, or dealer that is settled for an amount exceeding
$15,000, or for such other amount as Distributor may request from time
to time.
8. INDEMNIFICATION
a. By FNWL. FNWL shall indemnify and hold harmless Distributor and each
person who controls or is associated with Distributor within the
meaning of such terms under the federal securities laws, and any
officer, director, employee or agent of the foregoing, against any and
all losses, claims, damages or liabilities, joint or several
(including any investigative, legal and other expenses reasonably
incurred in connection with, and any amounts paid in settlement of,
any action, suit or proceeding or any claim asserted), to which
Distributor and/or any such person may become subject, under any
statute or regulation, any NASD or SEC rule or interpretation, at
common law or otherwise, insofar as such losses, claims, damages or
liabilities:
(1) arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact or omission or alleged
omission to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, in
light of the circumstances in which they were made, contained in
(i) any Registration Statement or in any Prospectus required to
be filed by FNWL;
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(ii) blue-sky application or other document executed by FNWL
specifically for the purpose of qualifying any or all of the
Contracts for sale under the securities laws of any jurisdiction;
provided that FNWL shall not be liable in any such case to the
extent that such loss, claim, damage or liability arises out of,
or is based upon, an untrue statement or alleged untrue statement
or omission or alleged omission made in reliance upon information
furnished in writing to FNWL by Distributor specifically for use
in the preparation of any such Registration Statement or any
amendment thereof or supplement thereto; or in any Prospectus
required to be filed by FNWL; or
(2) result from any breach by FNWL of any provision of this
Agreement.
This indemnification agreement shall be in addition to any liability
that FNWL may otherwise have; provided, however, that no person shall
be entitled to indemnification pursuant to this provision if such
loss, claim, damage or liability is due to the willful misfeasance,
bad faith, gross negligence or reckless disregard of duty by the
person seeking indemnification.
b. By Distributor. Distributor shall indemnify and hold harmless FNWL and
each person who controls or is associated with FNWL within the meaning
of such terms under the federal securities laws, and any officer,
director, employee of FNWL or agent of the foregoing, against any and
all losses, claims, damages or liabilities, joint or several
(including any investigative, legal and other expenses reasonably
incurred in connection with, and any amounts paid in settlement of,
any action, suit or proceeding or any claim asserted), to which FNWL
and/or any such person may become subject under any statute or
regulation, any NASD rule or interpretation, at common law or
otherwise, insofar as such losses, claims, damages or liabilities:
(1) arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact or omission or alleged
omission to state a material fact required to be stated therein
or necessary in order to make the statements therein not
misleading, in light of the circumstances in which they were
made, contained in (i) any Registration Statement or in any
Prospectus required to be filed by FNWL; (ii) blue-sky
application or other document executed by FNWL specifically for
the purpose of qualifying any or all of the Contracts for sale
under the securities laws of any jurisdiction; in each case to
the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made
in reliance upon information furnished in writing by Distributor
to FNWL specifically for use in the preparation of any such
Registration Statement or any such blue-sky application or any
amendment thereof or supplement thereto, or in any Prospectus
required to be filed by FNWL;
13
(2) result because of any use by Distributor or its Representatives
of promotional, sales or advertising material not authorized by
FNWL or any verbal or written misrepresentations by Distributor
or its Representative or any unlawful sales practices concerning
the Contracts by Distributor or its Representatives under federal
securities laws or NASD regulations;
(3) result from any breach by Distributor of any provision of this
Agreement; or
(4) result from Distributor's own misconduct or negligence.
This indemnification shall be in addition to any liability that
Distributor may otherwise have; provided, however, that no person
shall be entitled to indemnification pursuant to this provision if
such loss, claim, damage or liability is due to the willful
misfeasance, bad faith, gross negligence or reckless disregard of duty
by the person seeking indemnification.
c. General. Promptly after receipt by a party entitled to indemnification
("indemnified person") under this Section 8 of notice of the
commencement of any action as to which a claim will be made against
any person obligated to provide indemnification under this Section 8
("indemnifying party"), such indemnified person shall notify the
indemnifying party in writing of the commencement thereof as soon as
practicable thereafter, but failure to so notify the indemnifying
party shall not relieve the indemnifying party from any liability
which it may have to the indemnified person otherwise than on account
of this Section 8. The indemnifying party will be entitled to
participate in the defense of the indemnified person but such
participation will not relieve such indemnifying party of the
obligation to reimburse the indemnified person for reasonable legal
and other expenses incurred by such indemnified person in defending
herself, himself or itself.
The indemnification provisions contained in this Section 8 shall
remain operative in full force and effect, regardless of any
termination of this Agreement. A successor by law of Distributor or
FNWL, as the case may be, shall be entitled to the benefits of the
indemnification provisions contained in this Section 8.
9. TERMINATION
This Agreement shall terminate automatically if it is assigned by Distributor or
FNWL without the prior written consent of the other party. This Agreement may be
terminated at any time for any reason or for no reason by either party upon 60
days' written notice to the other party, without payment of any penalty. (The
term "assigned" as used in this Section 9 shall not include any transaction
exempted from Section 15(b)(2) of the 1940 Act.) This Agreement may be
terminated at the option of either party to this Agreement upon the other
party's material breach
14
of any provision of this Agreement or of any representation or warranty made in
this Agreement, unless such breach has been cured within 10 days after receipt
of notice of breach from the non-breaching party. Upon termination of this
Agreement, all authorizations, rights and obligations shall cease except the
following: (1) the obligation to settle accounts hereunder, including
commissions on Premiums subsequently received for Contracts in effect at the
time of termination or issued pursuant to Applications received by FNWL prior to
termination; and (2) the agreements contained in Sections 3.c.(4), 5, 6, 7, 8,
10.g and 10.h of this Agreement.
10. MISCELLANEOUS
a. Binding Effect. This Agreement shall be binding on and shall inure to
the benefit of the respective successors and assigns of the parties
hereto provided that neither party shall assign this Agreement or any
rights or obligations hereunder without the prior written consent of
the other party.
b. Schedules. The parties to this Agreement may amend Schedules 1 and 2
to this Agreement from time to time to reflect additions of any class
of Contracts and Variable Accounts. The provisions of this Agreement
shall be equally applicable to each such class of Contracts and each
Variable Account that may be added to the Schedule, unless the context
otherwise requires. FNWL and Distributor may modify Schedules 3 and 4
as mutually agreed in writing from time to time. Any other change in
the terms or provisions of this Agreement shall be by written
agreement between FNWL and Distributor.
c. Rights, Remedies, etc, are Cumulative. The rights, remedies and
obligations contained in this Agreement are cumulative and are in
addition to any and all rights, remedies and obligations, at law or in
equity, which the parties hereto are entitled to under state and
federal laws. Failure of either party to insist upon strict compliance
with any of the conditions of this Agreement shall not be construed as
a waiver of any of the conditions, but the same shall remain in full
force and effect. No waiver of any of the provisions of this Agreement
shall be deemed, or shall constitute, a waiver of any other
provisions, whether or not similar, nor shall any waiver constitute a
continuing waiver.
d. Notices. All notices hereunder are to be made in writing and shall be
given:
if to FNWL, to:
Xxxxxxx X. Xxxxxx, Vice President and Chief Marketing
Officer
Farmers New World Life Insurance Company
0000 00xx Xxxxxx X.X.
Xxxxxx Xxxxxx, XX 00000
15
with a copy to:
Xxxxx X. Xxxxxxx, Xx., Esq.
Farmers New World Life Insurance Company
0000 00xx Xxxxxx X.X.
Xxxxxx Xxxxxx, XX 00000
if to Distributor, to:
Xxxxxx X. Xxxxxx, President
Farmers Financial Solutions, LLC
0000 Xxxxxx Xxxxxx
Xxxx Xxxxxx, XX 00000
or such other address as such party may hereafter specify in writing.
Each such notice to a party shall be either hand delivered or
transmitted by registered or certified United States mail with return
receipt requested, or by overnight mail by a nationally recognized
courier, and shall be effective upon delivery. Failure to provide
written notice shall not constitute a defense to any action unless the
party who did not receive written notice was materially prejudiced
thereby.
e. Interpretation; Jurisdiction. This Agreement constitutes the whole
agreement between the parties hereto with respect to the subject
matter hereof, and supersedes all prior oral or written
understandings, agreements or negotiations between the parties with
respect to such subject matter. No prior writings by or between the
parties with respect to the subject matter hereof shall be used by
either party in connection with the interpretation of any provision of
this Agreement. This Agreement is made in the State of Washington, and
all questions concerning its validity, construction or otherwise shall
be determined under the laws of Washington without giving effect to
principles of conflict of laws.
f. Severability. This is a severable Agreement. In the event that any
provision of this Agreement would require a party to take action
prohibited by applicable federal or state law or prohibit a party from
taking action required by applicable federal or state law, then it is
the intention of the parties hereto that such provision shall be
enforced to the extent permitted under the law, and, in any event,
that all other provisions of this Agreement shall remain valid and
duly enforceable as if the provision at issue had never been a part
hereof.
g. Confidentiality. The parties covenant and agree that they will not at
any time during or after the termination of this Agreement, reveal,
divulge or make known to any person
16
(other than their respective directors, officers, employees, agents,
professional advisors or affiliates who need to know such information
for the performance of obligations hereunder), or use for their own
account or purposes or for any other account or purpose other than the
performance of obligations under this Agreement, any confidential or
proprietary information, including but not limited to information
about applicants for or purchasers of the Contracts, business plans,
product designs, marketing strategies, action plans, pricing, methods,
processes, records, financial information or other data, trade
secrets, customer lists, nonpublic personal information concerning
"consumers" or "customers" as described in Section 6.h herein, or any
other information obtained as a result of this Agreement, whether any
such information is in oral or printed form or on any computer tapes,
computer disks or other forms of electronic or magnetic media
(collectively the "confidential information") used or owned by a party
or any of its affiliates and made known (whether or not with the
knowledge and permission of such party or any of its affiliates, and
whether or not developed, devised or otherwise created in whole or in
part by the efforts of the parties) to the other party at any time by
reason of their association under this Agreement; provided, however,
that confidential information shall not include any information: (i)
that was previously known by a party from a source, other than the
other party (or any affiliate thereof), without an obligation of
confidence; (ii) that was previously disclosed in a lawful manner to a
party without breach of this Agreement or of any other applicable
agreement, and without any requirement of confidentiality; (iii) that
was or is rightfully received from a third party without an obligation
of confidence or from publicly available sources without obligations
of confidence; (iv) that is in the public domain; (v) that was or is
developed by means independent of information provided by a party or
its affiliates. The parties further covenant and agree that they shall
retain all such knowledge and information that they acquire or develop
respecting such confidential information in trust for the sole benefit
of the parties, and their respective successors and assigns provided,
further, that this Agreement shall not restrict any disclosure
required to be made by order of a court or governmental agency of
competent jurisdiction or by a self-regulatory organization of which a
party is a member, except that no such disclosure shall be made sooner
(unless otherwise compelled) than five business days after a party's
written receipt of such an order. The party receiving such an order
shall promptly notify the other parties of the order.
h. Unauthorized Access to Confidential Information. In the event either
party knows or suspects that confidential information has been subject
to unauthorized access, that party shall notify the other party and
shall undertake reasonable steps to prevent further unauthorized
access, to limit and mitigate any reasonably foreseeable harm
resulting from the unauthorized disclosure, and to make such
notifications and take other actions as are required under applicable
law.
17
i. Section and Other Headings. The headings in this Agreement are
included for convenience of reference only and in no way define or
delineate any of the provisions hereof or otherwise affect their
construction or effect.
j. Counterparts. This Agreement may be executed in two or more
counterparts, each of which taken together shall constitute one and
the same instrument.
k. Regulation. This Agreement shall be subject to the provisions of the
1933 Act, 1934 Act, the 1940 Act and the Regulations, and the rules
and regulations of the NASD, from time to time in effect, including
such exemptions from the 1940 Act as the SEC may grant, and the terms
hereof shall be interpreted and construed in accordance therewith.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by such authorized officers on the date specified above.
FARMERS NEW WORLD LIFE INSURANCE COMPANY
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President and Chief
Financial Officer
FARMERS FINANCIAL SOLUTIONS, LLC
Distributor
By: /s/ Xxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: President
18
SCHEDULE 1
VARIABLE ACCOUNTS
For the purposes of this Amended and Restated Agreement entered into as of this
20th day of April, 2006, between FNWL and Distributor, the Variable Accounts are
as follows:
1. Farmers Annuity Separate Account A
2. Farmers Variable Life Separate Account A
SCHEDULE 2
VARIABLE INSURANCE PRODUCTS
For the purposes of this Amended and Restated Agreement entered into as of this
20th day of April, 2006, between FNWL and Distributor, the variable products are
as follows:
1. Farmers Variable Annuity (an individual flexible premium variable annuity)
2. Farmers Variable Universal Life (a flexible premium variable life insurance
policy)
3. Farmers Accumulator VUL (a flexible premium variable life insurance policy)
SCHEDULE 3
SALES COMPENSATION
Distributor shall receive compensation based on such percentages of Premiums
from sales of Contracts as may be selected by its Representatives from the grid
appearing below. All compensation payable to Distributor shall be subject to
FNWL's vesting rules and also to indebtedness, charge-backs and other offsets
and limitations asserted by FNWL against its agents who are also representatives
of Distributor.
FARMERS VARIABLE ANNUITY
% OF
DESCRIPTION OF GDC PAID BY FNWL TO DISTRIBUTOR PREMIUM
---------------------------------------------- -------
GDC paid on issue ages 0 to 80 (limited to $1,000,000) 7.00%
GDC paid on issue ages 81 to 85 (limited to $1,000,000) 4.00%
GDC paid on issue ages 86 to 90 (limited to $1,000,000) 1.00%
FARMERS VARIABLE UNIVERSAL LIFE
% OF
DESCRIPTION OF GDC PAID BY FNWL TO DISTRIBUTOR PREMIUM
---------------------------------------------- -------
1st-year GDC paid "up to target" 69.00%
1st-year GDC paid "on excess of target" 4.74%
2-10 year GDC paid "up to target" 6.60%
2-10 year GDC paid "on excess of target" 4.74%
11 year + paid on all 0.00%
11 year +, FNWL to pay a GDC = 0.185% of Assets under management to be paid
monthly (1/12 of 0.185).
FARMERS ACCUMULATOR VUL
% OF
DESCRIPTION OF GDC PAID BY FNWL TO DISTRIBUTOR PREMIUM
---------------------------------------------- -------
1st-year GDC paid "up to target" 69.00%
1st-year GDC paid "on excess of target" 4.74%
2-10 year GDC paid "up to target" 6.60%
2-10 year GDC paid "on excess of target" 4.74%
11 year + paid on all 2.00%
CASH PRODUCTION INCENTIVE BONUSES OF UP TO 50% OF FIRST YEAR PREMIUMS "UP TO
TARGET" MAY BE PAID ON SALES OF FARMERS VARIABLE UNIVERSAL LIFE AND FARMERS
ACCUMULATOR VUL.
NOTE: NO GDC WILL BE PAID ON TRANSFERRED BALANCES BETWEEN FNWL ACCOUNTS (FNWL TO
FNWL REPLACEMENTS).
SCHEDULE 4
APPLICABLE LAWS AND REGULATIONS
1. Securities Act of 1933, as amended
2. Securities Exchange Act of 1934, as amended
3. Investment Company Act of 1940, as amended
4. Federal Violent Crime Control and Law Enforcement Act of 1994
5. Xxxxx-Xxxxx Xxxxxx Act of 1999
6. USA PATRIOT Act of 2001
7. Economic sanctions programs administered by the U.S. Treasury Department's
Office of Foreign Asset Control
8. Xxxxxxxx-Xxxxx Act of 2002