PRINCIPAL UNDERWRITER AGREEMENT
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FOR
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VARIABLE ANNUITIES AND VARIABLE LIFE INSURANCE
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BETWEEN
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RIVERSOURCE DISTRIBUTORS, INC.
------------------------------
AND
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RIVERSOURCE LIFE INSURANCE CO. OF NEW YORK
------------------------------------------
This Principal Underwriter Agreement for Variable Annuities and Variable Life
Insurance ("Agreement") is entered into by and between RiverSource Life
Insurance Co. of New York ("RSLICNY"), a New York corporation, and RiverSource
Distributors, Inc. ("RDI"), a Delaware Corporation, effective this first (1st)
day of January 2007 ("Effective Date").
Whereas, RSLICNY is a life insurance company duly organized and validly
existing under the laws of the state of New York and is subject to supervision
by the New York State Insurance Department;
Whereas, RSLICNY maintains certain separate accounts named in Exhibit A to
this Agreement as may be amended from time to time ("Separate Accounts");
Whereas, the Separate Accounts were duly created and established by RSLICNY or
by its affiliated life insurance company domiciled in New York prior to
December 31, 2006;
Whereas, the Separate Accounts of American Centurion Life Assurance Company (
the "Affiliated Insurer") were transferred to RSLICNY by operation of law and
incident to the merger of the Affiliated Insurer with and into RSLICNY on
December 31, 2006, and simultaneously, IDS Life Insurance Company of New York
was renamed RSLICNY;
Whereas, each Separate Account is registered as a unit investment trust under
the Investment Company Act of 1940 ("1940 Act");
Whereas, the Separate Accounts serve as segregated investment accounts for
certain variable annuity contracts and variable life insurance policies
("Contracts") named in Exhibit A to this Agreement and issued by RSLICNY and
its Affiliated Insurer prior to December 31, 2006;
Whereas, the Contracts are registered under the Securities Act of 1933 (1933
Act);
#ven
Whereas, RSLICNY desires to retain RDI to act as principal underwriter for the
distribution and sale of the Contracts in order to satisfy the requirements of
the federal securities laws, and such future and additional Contracts as may
be issued after the Effective Date ("Future Contracts);
Whereas, RDI is registered as a broker dealer under the 1934 Act and is a
member of the National Association of Securities Dealers Inc. ("NASD");
NOW, THEREFORE, In consideration of the mutual promises contained herein the
parties agree as follows:
1. REPRESENTATIONS OF RDI.
RDI represents and warrants that it is registered with the National
Association of Securities Dealers, Inc. ("NASD") and Securities
Exchange Commission ("SEC") as a broker-dealer under the 1934 Act and
is qualified to do business in those jurisdictions where RSLICNY is
licensed and qualified to do business and the Contracts are offered.
RDI represents and warrants that it is and shall remain during the
term of this Agreement in compliance with Section 9(a) of the 1940
Act.
2. APPOINTMENT OF PRINCIPAL UNDERWRITER.
On the Effective Date of the Agreement, RSLICNY appoints RDI and RDI
accepts the appointment to serve as principal underwriter of the
Contracts and the Future Contracts in all jurisdictions where the
Contracts and the Future Contracts may be lawfully sold, subject to
the registration requirements of the 1933 Act, the 1934 Act and the
1940 Act.
3. SELLING AGREEMENTS.
In order to accomplish the distribution of the Contracts and the
Future Contracts, RDI is authorized to enter into selling agreements,
substantially in the form attached hereto as Exhibit B ("Selling
Agreements"), with other broker dealer firms that are registered under
the 1934 Act and are members of the NASD ("Selling Firms").
RSLICNY may refuse to appoint any Selling Firm, affiliated or
networked insurance agency of the Selling Firm and any affiliated
person of any of the foregoing entities as its agent under the
insurance laws of the jurisdictions in which the Contracts and the
Future Contracts may be offered and may terminate such appointment as
provided for in the Selling Agreement.
4. DUTIES OF RDI.
(a) Compliance
#ven
RDI will fully comply with the requirements of the NASD, the SEC and
all other federal and state laws applicable to the underwriting and
distribution of the Contracts and the Future Contracts through Selling
Firms. Upon request by RSLICNY, RDI will furnish such records as may
be necessary to establish such compliance.
(b) Prospectuses, Sales Literature and Advertising.
In accordance with the requirements of the laws of several states, and
rules of the NASD and SEC, RDI will act in conformity with final
disclosure documents describing the Contracts and the Future
Contracts. RDI will not give any information or make any
representations or statements on behalf of or concerning RSLICNY in
connection with the Contracts and the Future Contracts other than
information or representations contained in the registration
statement, prospectus or statement of additional information
pertaining to the Separate Accounts and the Contracts and the Future
Contracts, as such materials may be amended from time to time or as
may be contained in sales literature prepared and approved by RSLICNY.
RDI will not use, and will take reasonable steps to ensure that no
Selling Firm uses any sales promotion or advertising materials in
connection with the offering and sale of the Contracts and the Future
Contracts which has not been approved in writing by RSLICNY prior to
such use.
(c) Purchase Payments
RDI agrees that all payments tendered with or in respect of any
application for a Contract or a Future Contract and the Contract or a
Future Contract when issued is the property of RSLICNY. All payments
made for or under the Contracts (including Future Contracts) shall be
made by check payable to RSLICNY, or by such other method RSLICNY
specifies as acceptable. In the event RDI receives any payment in
respect of a Contract or a Future Contract, RDI shall hold such
payment in a fiduciary capacity and shall promptly transmit such
payment to RSLICNY.
(d) Books, Records and Reports
RDI will comply with all applicable requirements of the 1934 Act and
the NASD including the requirements to maintain and preserve books and
records pursuant to Section 17(a) of the 1934 Act and the rules
thereunder.
(e) Indemnification
RDI hereby agrees to hold harmless and indemnify RSLICNY against any
and all claims, liabilities and expenses which RSLICNY may incur from
liabilities arising out of or based upon any breach of this Agreement
by RDI.
#ven
(f) Assistance to Selling Firms
RDI may assist RSLICNY in obtaining sales of the Contracts and Future
Contracts through Selling Firms by providing Selling Firms (and with
the consent of the Selling Firms, their registered personnel) with
wholesaling support services including but not limited to the
following:
o product information regarding the Contracts (and Future
Contracts) which has been prepared by or approved in advance
of its use by RSLICNY
o sales strategies and sales materials for the Contracts (and
Future Contracts) which have been prepared by or approved in
advance of their use by RSLICNY
o sponsoring informational events regarding the Contracts (and
Future Contracts) for Selling Firms and their registered
personnel
o answering technical product questions about the Contracts (and
Future Contracts) for the Selling Firm and its registered
personnel
5. REPRESENTATIONS OF RSLICNY.
(a) RSLICNY represents and warrants that it is domiciled in the
State of New York and licensed by the New York State Insurance
Department to offer the Contracts (including Future Contracts)
and is licensed in other jurisdictions in which the
Contracts(including Future Contracts) may be offered.
(b) RSLICNY, as issuer of the Contracts and Future Contracts, and
on behalf of the Separate Accounts, has registered each
Separate Account as a unit investment trust under the 1940 Act
and has registered each Contract under the 1933 Act, and will
register each Future Contract under the 1933 Act.
(c) RSLICNY will meet any requirements of the departments of
insurance in the jurisdictions in which the Contracts and
Future Contracts are available for sale regarding filing of
advertising and sales literature.
(d) RSLICNY represents and warrants that it is and shall remain
during the term of this Agreement in compliance with Section
9(a) of the 1940 Act.
6. DUTIES OF RSLICNY.
(a) Prospectuses, Sales Literature and Advertising
(i) RSLICNY will provide RDI prospectuses relating to the
Contracts and Future Contracts and such other sales
literature and advertising materials
#ven
as RSLICNY determines is necessary or desirable for
use in connection with sales of the Contracts and
Future Contracts.
(ii) RSLICNY represents and warrants that the
prospectus(es) and registration statement(s) relating
to the Contracts and Future Contracts will contain no
untrue statements of material fact or omission to
state a material fact, the omission of which makes any
statement contained in the prospectus(es) and
registration statement(s) misleading.
(b) Applications for Contracts and Future Contracts
All applications for Contracts and Future Contracts are
subject to acceptance or rejection by RSLICNY at its sole
discretion. If rejected, RSLICNY will refund the initial
payment to the Selling Firm for the benefit of the purchaser
if the Selling Agreement so provides, otherwise, RSLICNY will
refund the purchase payment directly to the purchaser.
(c) Variable Contract Delivery
RSLICNY will transmit Contracts and Future Contracts to
Selling Firms for delivery to the owner if the Selling
Agreement so provides, otherwise RSLICNY will mail the
Contract or Future Contract directly to the owner.
(d) Retention of Rights by RSLICNY
RSLICNY reserves the right to reject any and all applications
and payments submitted, discontinue writing any form of
Contract or Future Contract, take possession of and cancel any
Contract or Future Contract and return the payment or any part
of it, and make any compromise or settlement in respect of a
Contract or Future Contract. RSLICNY may in its sole
discretion and without notice to RDI, suspend sales of any
Contract or Future Contract or amend any policies or contracts
evidencing such Contracts or Future Contracts if, in RSLICNY'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 RSLICNY. In all other
situations, RSLICNY will provide 30 days notice to RDI prior
to suspending sales of any Contract, Future Contract or
amending any policies or contracts evidencing such Contracts
or Future Contracts.
(e) Payment of Amounts Due Selling Firms under Selling Agreements
If requested by RDI, and as an administrative convenience to
RDI, RSLICNY may pay compensation due to one or more Selling
Firms (including Selling Firms which are affiliated with RDI
and RSLICNY) in accordance with the terms of the Selling
Agreement with each Selling Firm ("Commission Processing
Services").
#ven
RSLICNY shall have no discretion as to either the timing or
the amount of such payments to any Selling Firm. RSLICNY will
pay all such compensation to the Selling Firms in the name of
RDI. If RSLICNY provides these Commission Processing Services
to RDI, then RSLICNY's books and records will reflect all
transactions performed on behalf of RDI in connection with
these services. RSLICNY will preserve and maintain these books
and records in conformity with the requirements of Rules 17a-3
and 17a-4 under the 1934 Act. RDI will retain overall
responsibility for the records kept for it by RSLICNY in
providing these services, exactly as if RDI rather than
RSLICNY made these payments. RSLICNY acknowledges that it
holds all books and records with respect to these services on
behalf of and as agent for RDI whose property they are and
shall remain.
If RSLICNY provides Commission Processing Services to RDI,
then RDI shall pay RSLICNY its allocated cost of the
Commission Processing Services, provided that all such
allocated costs and expenses: a) shall be equitable among all
parties to this Agreement; b) shall be in conformance with all
state insurance regulatory requirements applicable to RSLICNY;
and, c) shall be accounted for by RDI in accordance with
guidance issued by the Securities and Exchange Commission and
by the NASD in Notice To Members 03-63. As necessary to meet
any of the foregoing requirements, the parties may supplement
this Agreement from time to time with a written schedule that
details the method of cost allocation agreed upon by the
parties and either agreed to or acquiesced in by all
functional regulators having jurisdiction over the parties to
this Agreement.
(f) Indemnification
RSLICNY hereby agrees to hold harmless and indemnify RDI
against any and all claims, liabilities and expenses which RDI
may incur from liabilities arising out of or based upon
RSLICNY's breach of any of its duties under this Agreement.
(g) Books, Records and Reports
RSLICNY will comply with all applicable requirements of the
1934 Act and the NASD including the requirements to maintain
and preserve books and records pursuant to Section 17(a) of
the 1934 Act and the rules thereunder regarding confirmations
RSLICNY sends on behalf of the Selling Firms for payments
RSLICNY receives under the Contracts and the Future Contracts,
for transactions RSLICNY processes under the Contracts and the
Future Contracts, and for commissions related to the Contracts
and Future which RSLICNY pays to Selling Firms on behalf of
RDI. RSLICNY shall hold such books and records on behalf of
and as agent for RDI whose property they are and shall remain,
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.
#ven
7. COMPENSATION OF PRINCIPAL UNDERWRITER.
RSLICNY shall pay RDI its allocated costs and expenses of acting as
RSLICNY's principal underwriter for the Contracts and Future
Contracts, provided that all such allocated costs and expenses: a)
shall be equitable among all parties to this Agreement; b) shall be in
accordance with the requirements prescribed in New York Insurance
Department Regulation No. 33; and c) shall be accounted for by RDI in
accordance with guidance issued by the Securities and Exchange
Commission and by the NASD in Notice To Members 03-63. As necessary to
meet any of the foregoing requirements, the parties may supplement
this Agreement from time to time with a written schedule that details
the method of cost allocation agreed upon by the parties and either
agreed to or acquiesced in by all functional regulators having
jurisdiction over the parties to this Agreement.
8. TERMINATION.
This Agreement may be terminated, without cause, by either party upon
sixty (60) days prior written notice, without penalty; and may be
terminated immediately, by either party for failure to perform
satisfactorily or other cause; and will be terminated immediately if
RDI ceases to be registered as a broker dealer under the 1934 Act and
a member of the NASD. This Agreement will also terminate immediately
upon assignment without the prior written consent of both parties.
9. GENERAL PROVISIONS.
(a) Amendment and Entirety
This is the entire Agreement between RSLICNY and RDI with
respect to the subject matter of this Agreement. No additions,
amendments or modifications of this Agreement or any waiver of
any provision will be valid unless approved, in writing, by
authorized representatives of RSLICNY and RDI. In addition, no
waiver of any default or failure of performance by either
party will affect the other party's rights with respect to a
subsequent default or failure.
(b) Independent Contractor Relationship
This Agreement does not create the relationship of employer
and employee between the parties to this Agreement. RSLICNY
and RDI are independent contractors with respect to each
other, and their respective employees and agents.
(c) Assignment
Neither RSLICNY nor RDI will assign or transfer, in whole or
in part, this Agreement or any of the benefits accrued or to
accrue hereunder, without prior written consent of an
authorized representative of each party.
#ven
(d) Governing Law
It is agreed by the parties that this Agreement will be
governed by the laws of the State of New York.
(e) Severability
It is understood and agreed by the parties 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 part, terms 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 part, term
or provision held to be invalid.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and attested as of the Effective Date.
RIVERSOURCE LIFE INSURANCE CO. ATTEST:
OF NEW YORK
By: By:
----------------------------------- -----------------------------------
Name: Name:
--------------------------------- ---------------------------------
Title: Title:
-------------------------------- --------------------------------
RIVERSOURCE DISTRIBUTORS, INC. ATTEST:
By: By:
----------------------------------- -----------------------------------
Name: Name:
--------------------------------- ---------------------------------
Title: Title:
-------------------------------- --------------------------------
#ven
EXHIBIT A
Separate Accounts and Contracts:
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RIVERSOURCE OF NEW YORK VARIABLE ANNUITY ACCOUNT 1:
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Privileged Assets Select Annuity (File No. 333-00041)
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RIVERSOURCE OF NEW YORK VARIABLE ANNUITY ACCOUNT 2:
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ACL Personal Portfolio Plus 2/ACL Personal Portfolio (File No. 333-00519)
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RiverSource AccessChoice Select Variable Annuity (File No. 333-134154)
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RiverSource Endeavor Select Variable Annuity (File No. 333-101051)
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RiverSource FlexChoice Select Variable Annuity (File No. 333-134154)
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RiverSource Innovations Select Variable Annuity (File No. 333-101051)
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RiverSource Innovations Variable Annuity (File No. 333-101051)
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RIVERSOURCE OF NEW YORK ACCOUNT SBS:
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Symphony Annuity (File No. 33-45776)
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RIVERSOURCE OF NEW YORK ACCOUNT 4:
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IDS Life of New York Variable Retirement & Combination Retirement Annuities
(File No. 2-78194)
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IDS Life of New York Employee Benefit Annuity (File No. 33-52567)
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IDS Life of New York Flexible Annuity (File No. 33-4174)
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RIVERSOURCE OF NEW YORK VARIABLE ANNUITY ACCOUNT:
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IDS Life of New York Flexible Portfolio Annuity (File No. 333-03867)
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RiverSource Retirement Advisor Variable Annuity (File No. 333-91691)
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RiverSource Retirement Advisor Advantage Variable Annuity/RiverSource
Retirement Advisor Select Variable Annuity (File No. 333-91691)
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RiverSource Retirement Advisor Advantage Plus Variable Annuity/RiverSource
Retirement Advisor Select Plus Variable Annuity (File No.333-91691)
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RiverSource Retirement Advisor 4 Advantage Plus VA/RiverSource Retirement
Advisor 4 Select Plus VA (File No. 333-91691)
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RIVERSOURCE OF NEW YORK ACCOUNT 7:
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Single Premium Variable Life Insurance Policy (File No. 33-10334)
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RIVERSOURCE OF NEW YORK ACCOUNT 8:
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IDS Life of New York SuccessionSelect Variable Life Insurance
(File No. 333-42257)
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IDS Life of New York Variable Universal Life Insurance (File No. 33-15290)
------------------------------------------------------------------------------
IDS Life of New York Variable Second-To-Die Life Insurance
(File No. 333-42257)
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IDS Life of New York Variable Universal Life III (File No. 333-44644)
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IDS Life of New York Variable Universal Life IV/Variable Universal Life IV -
Estate Series (File No. 333-44644)
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#ven
EXHIBIT B
SELLING AGREEMENT
FOR RIVERSOURCE LIFE INSURANCE CO. OF NEW YORK
ANNUITY AND LIFE PRODUCTS
This AGREEMENT ("Agreement") dated , 2007("Effective Date") is
---------------
among RIVERSOURCE LIFE INSURANCE CO. OF NEW YORK ("Company"), RIVERSOURCE
DISTRIBUTORS, INC. ("Distributor", together with Company, "RiverSource"),
("Broker-Dealer") and ("Agency"), and its affiliated
------------- --------------
insurance agencies identified on Exhibit A who have also executed this
Agreement or an Affiliate Participation Agreement (each an "Agency").
Distributor joins this Agreement in its role as principal underwriter of
Company's variable annuity contracts and variable life insurance policies
("Variable Contracts") only.
RECITALS
The purpose of this Agreement is to establish the terms and conditions under
which Broker-Dealer and Agency (collectively, "Authorized Selling Firm") will
service Accounts and market and sell those insurance products issued by the
Company, as set forth in one or more attached Product Exhibit(s), which may
include variable annuity contracts, variable life insurance policies, fixed
annuities, and fixed life insurance policies.
RiverSource and Authorized Selling Firm intend that Authorized Selling Firm
will be responsible for managing and supervising Producers in marketing and
selling Company's Products and servicing Company's Accounts pursuant to this
Agreement.
In consideration of the mutual covenants contained herein, the parties agree
as follows:
1. DEFINITIONS. As used in this Agreement, the following terms shall have
----------------------------------------------------------------------
the following meanings:
-----------------------
1.1 "ACCOUNTS" are those annuity and life insurance Contracts
issued by Company that Company authorizes Agency,
Broker-Dealer, and their Producers to service under this
Agreement.
1.2 "AGENCY" is an insurance agency licensed in one or more states
and affiliated with Broker-Dealer by ownership or contract
with respect to the sale of Products under this Agreement.
Broker-Dealer may also act as "Agency."
1.3 "AUTHORIZED SELLING FIRM" means the Broker-Dealer taken
together with the Agency or Agencies, with respect to the sale
of Products and servicing of Accounts under this Agreement, in
accordance with the terms and conditions of the SEC no-action
letter First of America Brokerage Service, Inc. (dated
----------------------------------------
September 28, 1995).
1.4 "BROKER-DEALER" is an entity duly registered as a
broker-dealer with the Securities and Exchange Commission
("SEC"), the National Association of Securities Dealers
("NASD"), and states where required.
1.5 "COMPANY RULES" mean any written instructions, bulletins,
manuals, training materials, and any underwriting or
suitability guidelines provided to Authorized Selling Firm by
the Company or that may be posted on the RiverSource Web Site
located ▇▇▇▇://▇▇▇.▇▇▇▇▇▇▇▇▇▇▇.▇▇▇/▇▇▇▇▇▇▇▇▇▇▇▇.
----------------------------------------
1.6 "CONTRACT" or "Contracts" are those annuity or variable life
insurance policy validly issued by Company to a purchaser
meeting underwriting standards of the Company.
1.7 "HYPERLINK" shall mean a direct link from the Authorized
Selling Firm's Internet or Intranet site to the RiverSource
Web Site located ▇▇▇▇://▇▇▇.▇▇▇▇▇▇▇▇▇▇▇.▇▇▇/▇▇▇▇▇▇▇▇▇▇▇▇.
----------------------------------------
1.8 "LICENSED ASSISTANT" is an individual who is appropriately
registered with the NASD who assists Producer in providing
service for Products and Accounts.
1.9 "PRODUCER" is a duly licensed individual who sells Products
and services Accounts as an employee or independent contractor
of Agency or Broker-Dealer and who is appropriately registered
with the NASD and licensed and appointed in accordance with
all applicable insurance laws.
Page 10 of 25
RSLICNY-RDI PRINCIPAL UNDERWRITER AGMT
DOC#2194790
1.10 "PRODUCTS" OR "PRODUCT" are those annuity and life insurance
products issued by Company which will be marketed, sold, or
serviced by Agency, Broker-Dealer, and their Producers under
this Agreement, and which are set forth on attached Exhibit A
and further detailed on Product Exhibits.
1.11 "REPLACEMENT" is the sale of a Product which is funded by the
purchaser with money obtained from the liquidation of another
life insurance policy or annuity contract.
1.12 "TERRITORY" means the state of New York.
2. TERM OF AGREEMENT. This Agreement, once fully executed by the parties
hereto, shall remain in effect beginning upon the Effective Date until
it is terminated in accordance with Section 9, "Termination."
3. APPOINTMENT AND AUTHORIZATION OF AGENCY AND BROKER-DEALER.
3.1 APPOINTMENT AND AUTHORIZATION OF AGENCY AND BROKER-DEALER.
Company and Distributor appoint Agency and authorize
Broker-Dealer to solicit sales of and sell Products and
service Accounts in accordance with the terms and conditions
of this Agreement as an Authorized Selling Firm. Agency and
Broker-Dealer accept the appointment and authorization. These
two appointments, taken together, constitute the appointment
of Authorized Selling Firm. Authorized Selling Firm's
authority is nonexclusive and is limited to the performance of
the services and responsibilities set forth in this Agreement.
4. DUTIES, OBLIGATIONS AND LIMITATIONS OF AUTHORIZED SELLING FIRM.
Beginning on the Effective Date, Authorized Selling Firm will
faithfully perform all of Authorized Selling Firm's duties within the
scope of the agency relationship created under this Agreement to the
best of Authorized Selling Firm's knowledge, skill, and judgment. As
Authorized Selling Firm, Agency and Broker-Dealer shall be jointly and
severally responsible and liable to RiverSource for the faithful
performance of all obligations and duties except those that this
Agreement specifically identifies as duties of Broker-Dealer.
Authorized Selling Firm's duties shall include, but not be limited to
the following:
4.1 RECRUITMENT OF PRODUCERS. Authorized Selling Firm may recruit
Producers to sell Products and/or service Accounts under the
supervision of Authorized Selling Firm. A Producer so
recruited may not solicit or sell Products or service Accounts
prior to acquiring any required state insurance license(s) in
the state(s) where such Producer will solicit or sell Products
or Service Accounts, being registered with the NASD as a
representative of the Broker-Dealer, being appointed by
Company as an agent, and completing the training described in
Section 4.5.15.
4.2 LICENSED ASSISTANT. Authorized Selling Firm may allow
Producer's Licensed Assistants to perform telephone
transactions authorized by the Contract owner if permitted by
the current Product prospectus and Company Rules. Authorized
Selling Firm is responsible for the supervision of Licensed
Assistants. A Licensed Assistant may not perform telephone
transactions for any Contract owner prior to being
appropriately registered with the NASD as a representative of
the Broker-Dealer.
4.3 LICENSING, REGISTRATION, AND APPOINTMENT OF AGENCY, PRODUCERS,
AND LICENSED ASSISTANTS. Agency shall be responsible for the
preparation and submission of licensing forms and the
assurance that all Producers recruited by Authorized Selling
Firm are appropriately licensed as insurance agents in the
state(s) where such Producers will solicit and sell Products
and service Accounts. Broker-Dealer shall be responsible for
the preparation and submission to the NASD of representative
registration forms and the assurance that all Producers and
Licensed Assistants are and remain registered as
representatives of Broker-Dealer with the NASD. Authorized
Selling Firm shall be responsible for investigating the
character, work experience, and background of any proposed
Producer and upon request will provide Company with copies of
such investigations. Authorized Selling Firm shall recommend
Producers for appointment with Company, but Company shall
retain sole authority to make appointments and may, at its
discretion, refuse to permit any Producer to solicit Contracts
for the sale of the Products or to service the Accounts.
Company shall be responsible for the preparation and
submission of appointment forms and the payment of appointment
fees in those states that require the Company to appoint
Producers.
Page 11 of 25
RSLICNY-RDI PRINCIPAL UNDERWRITER AGMT
DOC#2194790
4.4 COMPLIANCE WITH COMPANY RULES AND APPLICABLE LAWS. Authorized
Selling Firm will comply with all Company Rules and with all
applicable federal and state laws and regulations. Authorized
Selling Firm must access the Company Rules at the RiverSource
Web Site located ▇▇▇▇://▇▇▇.▇▇▇▇▇▇▇▇▇▇▇.▇▇▇/▇▇▇▇▇▇▇▇▇▇▇▇. The
----------------------------------------
Company Rules may be changed by Company at its sole discretion.
4.5 SUPERVISION AND ADMINISTRATION. Authorized Selling Firm shall
have full, joint and several responsibility for the training
and supervision of all of its Producers who are engaged
directly or indirectly in the solicitation or sale of the
Products or the servicing of Accounts and the activities of
all of its Licensed Assistants. Producers and Licensed
Assistants shall be subject to the control of Authorized
Selling Firm with respect to their securities and insurance
regulated activities in connection with the Products.
Authorized Selling Firm shall be responsible for all acts or
omissions of Producers and Licensed Assistants. Authorized
Selling Firm's supervisory and administrative responsibilities
include, but are not limited to:
4.5.1 ensuring that Producers and Licensed Assistants comply
with Company Rules and all federal and state laws and
regulations applicable to the Products and Accounts;
4.5.2 ensuring that Producers comply with all terms of this
Agreement in soliciting and selling the Products and
servicing the Accounts;
4.5.3 ensuring that Licensed Assistants comply with all
terms of this Agreement in providing any service to
the Contract owner;
4.5.4 supplying Producers with sales literature and
application forms approved by Company;
4.5.5 assisting Producers and Licensed Assistants in
responding to customer inquiries;
4.5.6 promptly delivering to Producers relevant Company
communications and Company Rules concerning Products
and/or Accounts, such as changes in rates, regulatory
notices or new Product announcements;
4.5.7 on all Replacements, ensuring that Producers provide
Product applicants sufficient information and
disclosures to ensure the suitability of the
Replacement. Such information shall include that which
NASD Members and their affiliated persons are expected
to provide in sales involving a Replacement ,
information required under applicable state insurance
law and regulation and the following:
(a) all fees, expenses, and possible charges, such
as surrender charges, on both the new and the
surrendered investments;
(b) any change in the investment risk to the
Product applicant;
(c) any change in the nature or the provider of any
guarantees associated with the Product and/or the
surrendered product;
All such information will be retained by Agency for
six years from the date of the completion and
signature of any application, and will be made
available to Company in accordance with Section 4.10,
"Accurate Record; Audit," of this Agreement;
4.5.8 notifying Company if any Agency or Producer fails to
maintain the required state insurance license or
ceases to be a registered representative of
Broker-Dealer;
4.5.9 promptly informing Company of any violation of law or
Company Rules by Authorized Selling Firm, Producer or
Licensed Assistant, or of any complaint by a Contract
owner or regulatory agency regarding the activities of
Authorized Selling Firm, Producer, Licensed Assistant
or the Company or Distributor with respect to the
Products or servicing of Accounts;
4.5.10 any other duties necessary or appropriate to perform
Authorized Selling Firm's obligations under this
Agreement;
4.5.11 on the use of electronic and automated Web-based
order-entry, processing, servicing, and administration
systems, ensuring that adequate supervision and
security and access controls are in place to prevent
the improper, unauthorized or fraudulent use of or
access to the order-entry, servicing,
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or administration system(s);
4.5.12 notifying company of any suspected or actual improper,
unauthorized or fraudulent use of or access to the
order-entry, servicing, or administration system(s);
4.5.13 cooperating fully with Company in any investigation of
any suspected or actual improper, unauthorized or
fraudulent use of or access to the order-entry,
servicing or administration system(s);
4.5.14 Broker-Dealer will fully comply with and will ensure
Agency, Producers, and Licensed Assistant's compliance
with the requirements of the NASD, the SEC, and all
other applicable federal and state laws, and, with
Agency, will establish and maintain such rules and
procedures as may be necessary to cause diligent
supervision of the securities activities of Agency,
Producers, and Licensed Assistants. Broker-Dealer's
duties with respect to Agency, Producers, and Licensed
Assistant's securities activities, include, but are
not limited to:
(a) delivering to each person submitting an
application a current prospectus for the
Product to be furnished by RiverSource in the
form required by the applicable federal and
state law;
(b) reviewing all Product applications for
accuracy and completeness, and determining the
suitability of the sale, which includes
reasonable efforts to obtain information
concerning the applicant's financial and tax
status, investment objectives, and any other
information used or considered reasonable in
making a Product recommendation;
(c) complying with all applicable requirements of
the Securities Exchange Act of 1934 ("1934
Act") and the NASD, including the requirements
to maintain and preserve books and records
pursuant to Section 17(a) of the 1934 Act and
the rules thereunder and making such records
and files available to RiverSource and
personnel of state insurance departments, the
NASD, SEC or other regulatory agencies which
have authority over RiverSource;
4.5.15 ensuring that their Producers who market and sell the
Products and service the Accounts are trained on (i)
the product specifications and features; (ii) all
Company Rules and other requirements communicated to
Authorized Selling Firm that RiverSource has adopted
to satisfy insurance laws and regulations regarding
replacements; (iii) standards that RiverSource has
established for and communicated to Authorized Selling
Firm and their Producers to use in meeting their
respective duties to ensure suitable sales of the
Products before they begin to solicit or sell
Products; and (iv) completing all Company forms used
in connection with servicing Accounts. If Authorized
Selling Firm chooses not to use Company-provided
materials in training their Representatives on (i),
(ii), and (iii) above, then Authorized Selling Firm
shall provide to RiverSource, for approval,
documentation of its own form and content of training
to be used, prior to the execution of this Agreement;
After the execution of this Agreement, to the extent
that Authorized Selling Firm uses any training
material related to the sale of the Products or the
servicing of Accounts that differs from that contained
in the Company-provided training material, Authorized
Selling Firm must provide that training material to
RiverSource for approval prior to use. Authorized
Selling Firm shall also be responsible for assuring
that its Producers comply with all Company Rules and
with the applicable suitability requirements of the
National Association of Securities Dealers, Inc.
("NASD"), and any state or federal law, as amended
from time to time, in selling the Products and
servicing the Accounts; and
4.5.16 ensuring that Producers, in servicing Accounts, are
performing only those services listed on Exhibit B
hereto. Company may amend Exhibit B at any time upon
written notice to Authorized Selling Firm.
4.6 COLLECTION AND SUBMISSION OF PREMIUMS. RiverSource and
Authorized Selling Firm agree that Authorized Selling Firm
will ensure that its Producers collection and timely
remittance of premiums received from the sale of Products is
as required by the Company Rules. All premiums associated with
sales of variable life insurance policies will be remitted
using the Check with Application method described in the
Company Rules. Five methods of collection and remittance are
available for variable annuity sales. Agency and Broker-Dealer
will decide which method it will employ for variable annuity
sales - Check with Application; Net Wire; Net Wire through
clearing
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broker; Gross Sweep; or Gross ACH through clearing broker. See
the Company Rules for a description of each method.
4.7 SOLICITATION. Authorized Selling Firm, through Producers, will
solicit applicants who appear to meet Company's and
Distributor's underwriting and suitability standards, provided
that nothing in this Agreement shall be deemed to require
Authorized Selling Firm to solicit any particular customer's
application for a Product. Authorized Selling Firm is not
allowed to solicit applications for or sell Products indicated
under "Servicing Only" on the most current Exhibit A.
4.8 APPLICATION AND ELECTRONIC OR WEB-BASED ORDER ENTRY.
Authorized Selling Firm is responsible for obtaining all
signatures required on each application and must deliver to
Company the application and all instruments necessary to
establish and issue a Contract under this Agreement.
Authorized Selling Firm must ensure that all information sent
to Company by means of electronic or automated web-based order
entry, processing, service or administration system is
complete and accurate. Authorized Selling Firm agrees to pay
Company for all expenses and as-of-costs reasonably incurred
by Company in connection with incomplete or inaccurate
information.
4.9 COMPANY PROPERTY. Authorized Selling Firm will safeguard,
maintain, and account for all policies, forms, manuals,
equipment, supplies, and advertising, sales, and servicing
literature furnished to Authorized Selling Firm and Producers
by RiverSource and will destroy or return the same to
RiverSource, at its discretion and promptly upon request.
4.10 ACCURATE RECORD; AUDIT. As required by applicable laws and
Company Rules, Authorized Selling Firm will keep identifiable
and accurate records and accounts of all business and
transactions effected pursuant to this Agreement. Upon
reasonable notice and at reasonable times, continuing during a
period of one year following the termination of this
Agreement, Authorized Selling Firm will permit RiverSource to
visit, inspect, examine, audit, and verify, at Authorized
Selling Firms offices or elsewhere, all accounts, files,
documents, books, reports, work papers, compliance manuals,
compliance reports, compliance rules and procedures, and other
records belonging to or in the possession or control of
Authorized Selling Firm relating to the business covered by
this Agreement, and to make copies thereof and extracts
therefrom, provided that such audit shall not unreasonably
interfere with Authorized Selling Firm's normal course of
business. Upon reasonable notice, Authorized Selling Firm
shall make and provide copies to RiverSource of such accounts,
files, documents, books, reports, work papers, compliance
manuals, compliance reports, compliance rules and procedures,
and other records belonging to or in the possession or control
of Authorized Selling Firm.
4.11 APPROVED ADVERTISING. No sales promotions, promotional
materials, or any advertising relating to Products or Company
or Distributor ("Sales Material") distributed to either
customers or Producers shall be used by Authorized Selling
Firm or Producers unless the specific item has been approved
in writing by Company and/or Distributor before use. Any Sales
Material developed by Authorized Selling Firm will become the
sole property of Company and/or Distributor once approved. Any
modification of the promotional materials to enable the use of
such in a financial institution setting must also be approved
in accordance with this section.
4.12 FIDELITY BOND. Authorized Selling Firm represents and warrants
that all directors, officers, employees, and representatives
of the Authorized Selling Firm who are appointed pursuant to
this Agreement as Producers for Company or who have access to
funds of Company, including but not limited to funds submitted
with applications for Products 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 acceptable to Company. The bond
shall be for at least the amount prescribed by the NASD rules.
Broker-Dealer shall maintain the bond at its expense. Company
may require evidence, satisfactory to it, that such coverage
is in force. Authorized Selling Firm shall give prompt written
notice to Company of cancellation or change of coverage.
4.13 LIMITATIONS. Authorized Selling Firm shall have no authority
with respect to RiverSource, nor shall it represent itself as
having such authority, other than as is specifically set forth
in this Agreement. Without limiting the foregoing, neither
Agency nor Broker-Dealer shall, without the express written
consent of Company and/or Distributor, as applicable:
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4.13.1 make, waive, alter or change any term, rate or
condition stated in any Product, Contract or Company
approved Sales Material or other approved forms, or
discharge any Product in the name of Company;
4.13.2 waive a forfeiture;
4.13.3 extend the time for the payment of premiums or other
monies due Company;
4.13.4 accept service of process on behalf of Company or
Distributor;
4.13.5 make, accept or endorse notes, or endorse checks
payable to Company or Distributor, or otherwise incur
any expense or liability on behalf of Company or
Distributor;
4.13.6 offer to pay or pay, directly or indirectly, any
rebate of premium or any other inducement not
specified in the Products;
4.13.7 give or offer to give any advice or opinion regarding
the taxation of any customer's income or estate in
connection with the purchase of any Product;
4.13.8 enter into an agreement with any person or entity to
market or sell the Products without the written
consent of Company and Distributor;
4.13.9 use Company's or Distributor's names, logos,
trademarks, service marks or any other proprietary
designation ("Company Marks")without the prior written
permission of Company; or
4.13.10 engage in, or permit any Producer to engage in, any
systematic program that results in a surrender of
Product(s) - sold either under this Agreement or any
other prior agreement between Authorized Selling Firm
or any of their predecessors and RiverSource - at any
time while this Agreement is in force; or provide data
including Confidential Contract owner Information as
defined in Section 11.2 of this Agreement to any other
person or organization which would allow or facilitate
the surrender of Company's Products. Nothing in this
Agreement shall preclude the replacement of Company's
annuity products with Company's own variable annuity
or variable insurance products, so long as such sales
are suitable and documented according to Section
4.5.7, Replacement Sales. (See also Section 9.3, Post
Termination Limitations, and Section 11,
Confidentiality, generally.).
4.14 CONTRACT DELIVERY TO CONTRACT OWNERS. Authorized Selling Firm
shall return promptly to Company all receipts for delivered
Contracts, all undelivered Contracts, and all receipts for
cancellations, in accordance with Company Rules. Authorized
Selling Firm will ensure prompt delivery of Contracts to
Contract owners by Authorized Selling Firm or their Producers
within 5 business days of receipt of the Contract by the
Authorized Selling Firm or their Producers. Authorized Selling
Firm agrees to indemnify and hold harmless Company for any
loss incurred by Company that results from failure to deliver
Contracts to Contract owners within such 5 business day
period. This section will not apply if Company transmits the
Contract directly to the Contract owner.
4.15 INDIVIDUAL RETIREMENT ACCOUNT. If Authorized Selling Firm
establishes an individual retirement plan through which
Company's Products may be offered, then this Section 4.15
applies to such transactions in addition to all other terms
and conditions under this Agreement.
4.15.1 REPRESENTATIONS. Authorized Selling Firm represents
and warrants to RiverSource that:
(a) An affiliate of Authorized Selling Firm
qualifies under the IRS Regulations 1.408-2 as
custodian ("Custodian") for the individual
retirement account ("Custodial IRAs"), and
will administer the Custodial IRAs in
accordance with the requirements of the
Internal Revenue Code of 1986, as amended (the
"Code") and the rules, regulations, and
rulings adopted in accordance with the Code;
(b) The Custodial ▇▇▇ qualifies as an individual
retirement account under the Code;
(c) it will not submit an application to Company
for the purchase of a Product, on behalf of
any Custodial ▇▇▇ customer, until Authorized
Selling Firm has received from the customer
the completed documents necessary to establish
the Custodial ▇▇▇ account; and
(d) Authorized Selling Firm or an affiliate will
properly respond to any order, levy, summons
or subpoena
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relating to a Custodial ▇▇▇ issued in
connection with a judicial or administrative
proceeding, investigation or inquiry.
4.15.2 MONITORING. RiverSource is not responsible for
monitoring Custodial IRAs with regard to compliance
with the Code or other rules and regulations
promulgated under the Code or applicable state law,
including, but not limited to, those related to
over-contributions, eligibility, income restrictions,
timeliness of contribution, distributions upon death,
state tax law reporting or any other matters related
to the status of any Custodial ▇▇▇ (as it relates to
IRAs specifically or any ownership beneficiary rights
in general). RiverSource is not responsible for
Authorized Selling Firm 's compliance with Authorized
Selling Firm's procedures with respect to the
administration of any Custodial ▇▇▇.
4.15.3 TAX REPORTING. Authorized Selling Firm or an affiliate
will provide such returns or filings and render such
statements and reports as are required for federal
regulatory and tax purposes.
4.15.4 ANNUAL FEE. The annual ▇▇▇ custodial fee (if
applicable) will be charged by Authorized Selling Firm
and not by Company.
4.15.5 ANNUITY DISCLOSURE STATEMENT. Agency must make the
following disclosure in connection with the sale of
individual retirement annuity products into the
Custodial ▇▇▇:
"Your individual retirement annuity ("Annuity ▇▇▇")
has a tax-deferred feature under the Internal Revenue
Code, as does your Custodial ▇▇▇. As a result, when
you transfer your annuity ▇▇▇ to the Custodial ▇▇▇,
your annuity will not provide any necessary or
additional tax deferral. However, your annuity ▇▇▇ has
features other than tax deferral that may help you
reach your retirement goals. Fees charged by the
Insurance Company (if any) will still apply as
outlined in the annuity prospectus and contract."
4.15.6 CUSTODIAN DISCLOSURE AND CHANGE OF CUSTODIAN.
Authorized Selling Firm will provide RiverSource with
the name of its Custodian so that RiverSource has an
opportunity to conduct due diligence, should it choose
to do so. Any change in Custodian or trustee does not
take effect unless approved in writing by Company.
4.16 ACATS. If Authorized Selling Firm and Company agree to provide
for the submission of customer account changes through an
electronic process known as Automated Customer Account
Transfer Service (ACATS) then this section 4.16 will apply.
4.16.1 REPRESENTATIONS AND WARRANTIES. RiverSource and
Authorized Selling Firm have executed and filed the
standard agreement(s) required for participation with
the National Securities Clearing Corporation ("NSCC")
("Standard Agreements"), or have contracted with a
third party service bureau to provide services through
the NSCC. Company and Authorized Selling Firm agree to
participate in the Automated Customer Account Transfer
Service (ACATS) and/or Insurance Processing Services
(IPS) under the applicable terms of the Standard
Agreements and in accordance with the following terms:
(a) Electronic Process for Customer Account
Changes
(i) Authorized Selling Firm may submit
customer account changes, including custodial
account changes, to Company by electronic
transmission ("Transmission") in accordance
with the ACATS/IPS procedures established by
NSCC in the Standard Agreements. Company and
Authorized Selling Firm acknowledge that
compliance with these Transmission procedures
is a good order requirement (i.e. one that
does not require a paper transmission).
Authorized Selling Firm represents and
warrants that the information contained in the
Transmission is accurate and complete. Company
and Authorized Selling Firm acknowledge that
Company will rely upon the information
provided by Authorized Selling Firm in making
the requested changes.
(ii) Authorized Selling Firm will obtain
all appropriate client authorizations on the
Transfer Initiation Form (TIF). Such client
authorizations include, but are not limited
to, those required from third Parties, such as
custodians and trusts, among others.
Authorized Selling Firm ▇▇▇▇
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maintain such TIFs for a period of no less
than six (6) years from the date of the
transfer initiation.
(iii) Company will notify the Authorized
Selling Firm of any errors in requests to
transfer customer accounts. Notification will
be made by Transmission.
(iv) Company will notify the Authorized
Selling Firm when good order requirements have
been met. Notification will be made by
Transmission.
(v) Each party to this Amendment shall
promptly furnish to the other party any
reports and copies of forms which the other
party may request pursuant to that party's
responsibilities under this Amendment and for
the purpose of meeting its reporting and
record keeping obligations under the insurance
laws of any state and under the federal and
state securities laws or the rules of the NASD
or to facilitate the handling of customer
complaints. Authorized Selling Firm shall
provide Company with a copy of the TIF, upon
request, no later than two (2) business days
from the request date.
(b) General
Authorized Selling Firm shall indemnify and hold
harmless RiverSource, its subsidiaries and affiliates
and their respective officers, directors and employees
against any and all losses, claims, damages,
liabilities or expenses (including the reasonable
costs of legal representation and investigation) to
which RiverSource, its subsidiaries and affiliates and
their respective officers, directors and employees may
become subject which arise out of or are based upon
incorrect information submitted to RiverSource in the
Transmission by Authorized Selling Firm or its agent,
or arising out of or based upon a breach or violation
of the Authorized Selling Firm's representations,
warranties, or covenants contained in this Agreement.
4.17. ANTI-MONEY LAUNDERING ("AML")
4.17.1 Authorized Selling Firm warrants and represents that
it has implemented AML programs reasonably calculated
to comply with the USA PATRIOT Act, Bank Secrecy Act,
NASD Rule 3011, and the rules and regulations
promulgated concerning AML.
4.17.2. Authorized Selling Firm represents and warrants that
it has:
o Established AML polices and procedures, including but
not limited to investigating, identifying, and
reporting suspicious activity;
o Designated a compliance officer with oversight
responsibility for the AML program;
o Implemented an ongoing AML training program, including
appropriate updates, for Authorized Selling Firm's
employees, Producers, and Agents with respect to
insurance and annuity Products offered by the Company;
and
o Implemented periodic independent testing of its AML
program in compliance with applicable regulations.
4.17.3 Authorized Selling Firm agrees that if it detects
suspicious activity with respect to its sale or
servicing of an insurance or annuity Product offered
by Company it will provide such information to Company
in accordance with 31 CFR 103.16(b)(3) by sending the
appropriate documentation to: Attn.: Director of
Anti-Money Laundering, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
4.17.4 Authorized Selling Firm agrees that in accordance with
31 CFR 103.137 (c) it will provide RiverSource, upon
reasonable request, with access to information and
records relating to its AML program and the right to
inspect its AML program upon reasonable notice.
5. COMPANY AND DISTRIBUTOR REPRESENTATIONS AND RESPONSIBILITIES.
5.1 REPRESENTATIONS.
5.1.1 Company represents and warrants that (a) it is duly
incorporated in the State of New York and licensed
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in New York; (b) all Products, and all Sales Material
(as defined in Section 4.11, above) provided by
Company or Distributor have been filed and approved as
required by the insurance department of New York; and
(c) these materials comply with all applicable laws
and regulations and rules of the NASD.
5.1.2 Distributor represents and warrants that it is duly
registered as a broker-dealer with the SEC, the NASD,
all fifty states and the District of Columbia, and is
qualified to do business in all states in which
Company is licensed and qualified to do business.
5.1.3 Distributor and Company represent and warrant that
Company, as issuer and on behalf of the underlying
investment account(s), has registered the underlying
investment account(s) of the Products with the SEC as
a security under the Securities Act of 1933 ("1933
Act") and as a unit investment trust under the
Investment Company Act of 1940.
5.1.4 Company represents and warrants that the prospectuses
and registration statements relating to the Products
do not contain any untrue statements of material fact
or any omission to state a material fact, the omission
of which makes any statement contained in the
prospectuses and registration statements misleading.
5.2 PROSPECTUSES, SALES LITERATURE AND ADVERTISING. RiverSource
will provide to Authorized Selling Firm, without any expense
to Authorized Selling Firm, prospectuses for the Products and
such other Sales Material (as defined is Section 4.11, above)
as RiverSource determines is necessary or desirable for use in
connection with sales of the Products.
5.3 TRANSMISSION OF CONTRACTS FOR DELIVERY TO CONTRACT OWNERS.
Company shall send out all Contracts directly to Authorized
Selling Firm or their Producers unless Authorized Selling Firm
requests in writing that Company send out the Contract
directly to the Contract owner. Within 5 business days of
Authorized Selling Firm or their Producer's receipt of the
Contract, Authorized Selling Firm or their Producer must
deliver the Contract to the Contract owner.
5.4 CONFIRMATIONS. Upon Company's acceptance of any payment for a
Product, Company as agent for Distributor will deliver to each
Contract owner a statement confirming the transaction in
accordance with Rule 10b-10 under the 1934 Act.
5.5 CONTRACT OWNER SERVICES. Company shall provide administrative,
accounting, and other services to Contract owners as necessary
and appropriate, in the same manner as such services are
provided to Company's other Contract owners.
5.6 RESERVATION OF RIGHTS. Notwithstanding any other provision of
this Agreement or any other agreement between Company and/or
Distributor and Agency and/or Broker-Dealer, Company reserves
the unconditional right without prior notice to modify any of
the Products in any respect whatsoever, to suspend the sale of
any Products in whole or in part at any time and to contact
Contract owners with a view to retaining their assets with the
Company including the offering of other products sold by the
Company. Company may in its sole discretion refuse to accept
any application for a Contract or any purchase payment or
additional purchase payment for a Contract.
5.7 COMPLIANCE WITH APPLICABLE LAWS. RiverSource will comply with
all federal and state laws and regulations applicable to the
Products and their distribution under this Agreement.
6. COMPENSATION. Company shall pay to Broker-Dealer or Agency, as
applicable, a total compensation on premiums collected pursuant to
this Agreement based on the rates of commission and limitations set
forth on the Product Exhibit(s), Exhibit C hereto, and other
compensation addendum(s), if any. No compensation will be paid on the
sale of a Product under this Agreement if that sale involves
replacement of a Contract or investment issued by Company or by
another insurance company affiliated with RiverSource.
6.1 PRODUCT EXHIBITS. The Product Exhibit(s), including Exhibit A
and commission rates, are subject to change by Company at
anytime, but only upon written notice to Agency. Product
Exhibits are duly given when sent by electronic mail or U.S.
mail to the current or last known primary contact person at
Authorized Selling Firm. No
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such change shall affect compensation for any premiums that
are received and accepted by Company in Minneapolis, MN prior
to effective date of such change. Any Product Exhibit(s)
included in this Agreement or subsequently made a part of this
Agreement may provide other or additional conditions regarding
compensation and, if so, will be controlling to the extent of
such other or additional conditions.
6.2 EXPENSES. Except as otherwise provided in this Agreement, or
subsequently agreed to in writing by RiverSource, Authorized
Selling Firm will be responsible for all costs and expenses of
any kind and nature incurred by Authorized Selling Firm in the
performance of its duties under this Agreement.
6.3 FOR CAUSE TERMINATION COMPENSATION OBLIGATIONS. In the event
of termination of this Agreement for one or more of the
reasons specified below in Section 9.1, Termination for Cause,
no further compensation shall thereafter be payable.
6.4 POST TERMINATION COMPENSATION OBLIGATIONS. Upon termination of
this Agreement, Company's obligation to pay compensation to
Broker-Dealer or to Agency as applicable will immediately
cease except that:
6.4.1 Company will pay compensation, as the same become due
and payable, upon Products for which the application
has been taken and the required premium has been
collected (or has become irrevocably collectable from
a third party) as of the date of termination, and for
which the Company subsequently issues a policy.
6.4.2 Company will charge back against those commissions due
identified in Product Exhibit(s) in the event of
surrenders of Products sold prior to the termination
of this Agreement by Authorized Selling Firm or
Producers. Company will invoice Agency unless Company
and Agency agree upon another method of payment of
such amounts.
6.5 COMPENSATION LIMITATIONS. Agency or Broker-Dealer shall pay
cash or non-cash compensation for Product sales: (i) only to
any person or entity that is appropriately licensed and
appointed to sell Products; (ii) which are accepted by
Company; and (iii) if such payment is in accordance with
applicable laws, regulations, NASD or other self-regulatory
organization rules and Company Rules.
6.6 ADVANCE COMMISSIONS ON INTERNAL REVENUE CODE SECTION 1035
EXCHANGES. If requested by Authorized Selling Firm, Company
will advance commissions monthly, in accordance to the Base
Commission schedules identified in the variable annuity
Product Exhibit(s), based on premium expected to be deposited
with Company to effect an IRC Section 1035 exchange of one
investment product for an annuity Product sold under this
Agreement. In the event that the expected premium does not
reach Company within 90 days of the date of the Product
application, the entire commission for the transaction will be
charged back during the next normal commission cycle.
6.7 COMMISSIONS DISCONTINUED. Notwithstanding anything herein to
the contrary, Company will discontinue paying compensation to
Authorized Selling Firm for Contracts that are no longer
serviced by Authorized Selling Firm.
7. INDEMNIFICATION.
7.1 INDEMNIFICATION OF COMPANY AND DISTRIBUTOR. Broker-Dealer and
Agency, jointly and severally, shall indemnify, defend and
hold harmless RiverSource and any of its officers, directors,
and employees, from and against any and all losses, claims,
damages, liabilities, actions, costs or expenses to which
RiverSource, or any of its officers, directors and employees,
may become subject (including any legal or other expenses
incurred by it in connection with investigating any claim
against it and defending any action and, provided Authorized
Selling Firm will have given prior written approval of such
settlement or compromise, which consent will not be
unreasonably withheld or delayed, any amounts paid in
settlement or compromise) insofar as such losses, claims,
damages, liabilities, actions, costs or expenses arise out of
or are based upon:
7.1.1 The acts or omissions of Authorized Selling Firm or
any of its employees, agents, Producers or Licensed
Assistants, or Custodians while acting (whether under
actual or apparent authority, or otherwise) on behalf
of Authorized Selling Firm or RiverSource in
connection with this Agreement;
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7.1.2 Any breach of any covenant or agreement made by
Authorized Selling Firm under this Agreement;
7.1.3 The inaccuracy or breach of any representation or
warranty made by Authorized Selling Firm under this
Agreement;
7.1.4 The improper, unauthorized or fraudulent use of any
electronic or Web-based order-entry, servicing or
administration system(s) by any of its employees,
agents, Producers or Licensed Assistants while acting
(whether under actual or apparent authority, or
otherwise) on behalf of Authorized Selling Firm or
RiverSource in connection with this Agreement;
7.1.5 The acts or omissions of the clearing broker and any
employee or agent of clearing broker while performing
the activities covered by this Agreement, including,
but not limited to, the use or handling of any
confidential information or confidential Contract
owner Information as described in Section 11 below.
The indemnity obligation of this paragraph will extend
to any regulatory penalties incurred by RiverSource as
a result of said activities;
This indemnification obligation shall not apply to the
extent that such alleged act or omission is
attributable to RiverSource either because (1)
RiverSource directed the act or omission, or (2) the
act or omission by Authorized Selling Firm or any of
its employees, agents, Producers or Licensed
Assistants was the result of their compliance with the
Company Rules;
7.1.6 (a) unauthorized use of Company Marks or Hyperlink (b)
violation of a third party's intellectual property
rights with respect to Company Marks;
7.1.7 Any loss or misuse of Company data, including Contract
owner Information, by Authorized Selling Firm or its
employees, agents, clearing brokers, custodians, or
any third party that Authorized
Selling Firm discloses the information to or has
requested or instructed that Company disclose the
information to.
7.2 INDEMNIFICATION OF AGENCY AND BROKER-DEALER. RiverSource shall
indemnify, defend and hold harmless Authorized Selling Firm,
any of its officers, directors and employees, from and against
any and all losses, claims, damages, liabilities, actions,
costs or expenses to which Authorized Selling Firm, or any of
its officers, directors and employees, may become subject
(including any legal or other expenses incurred by it in
connection with investigating any claim against it and
defending any action and, provided RiverSource will have given
prior written approval of such settlement or compromise, which
consent will not be unreasonably withheld or delayed, any
amounts paid in settlement or compromise) insofar as such
losses, claims, damages, liabilities, actions, costs or
expenses arise out of or are based upon:
7.2.1 The acts or omissions of RiverSource, or any employee
or agent of RiverSource, (excluding Authorized Selling
Firm, Producers or Licensed Assistants) while acting
(whether under actual or apparent authority or
otherwise) on behalf of RiverSource in connection with
this Agreement;
7.2.2 Any breach of any covenant or agreement made by
RiverSource under this Agreement; or
7.2.3 The inaccuracy or breach of any representation or
warranty made by RiverSource under this Agreement.
7.3 LIMITATION OF LIABILITY. Each party agrees that, as between
the parties, in no event will any party to this Agreement be
responsible to any other party for any incidental, indirect,
consequential, special, punitive, or exemplary damages of any
kind arising from this Agreement, including without
limitation, lost revenues, loss of profits or loss of
business. This limitation does not apply to third party claims
for damages that are covered by the indemnification obligation
under Section 7.
8. ARBITRATION. The parties agree to attempt to settle any
misunderstandings or disputes arising out of this Agreement through
consultation and negotiation in good faith and a spirit of mutual
cooperation. However, if those attempts fail, the parties agree that
any misunderstandings or disputes arising from this Agreement will be
decided by arbitration administered by the American Arbitration
Association in accordance with its Commercial Arbitration
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Rules and Title 9 of the U.S. Code. Judgment on the award rendered by
the arbitrators may be entered in any court having jurisdiction
thereof. The number of arbitrators will be three (unless the parties
to the dispute agree on a single arbitrator), one of whom will be
appointed by the Company or an affiliate, one of whom will be
appointed by Authorized Selling Firm; and the third of whom will be
selected by mutual agreement, if possible, within 30 days of the
selection of the second arbitrator and thereafter by the administering
authority. The Arbitration shall be held in the city of the Company's
principal place of business. The arbitrators will strictly observe the
limitation of liability provisions set forth in Section 7.3 of this
agreement in making any award and will have no authority to award
punitive damages or any other damages not measured by the prevailing
Party's actual damages, and may not, in any event, make any ruling,
finding or award that does not conform to the terms and conditions of
this Agreement. The parties agree that the arbitrator(s) will decide
which party must bear the expenses of the Arbitration. Any Party may
make an application to the arbitrators seeking injunctive relief to
maintain the status quo until such time as the arbitration award is
rendered or the controversy is otherwise resolved. This agreement to
arbitrate shall not preclude either party from obtaining provisional
remedies such as injunctive relief or the appointment of a receiver
from a court having jurisdiction, before, during or after the pendency
of the arbitration. The institution and maintenance of such
provisional remedies shall not constitute a waiver of the right of a
party to submit a dispute to arbitration.
9. TERMINATION.
9.1 TERMINATION FOR CAUSE. At any time during the Term of this
Agreement, RiverSource or Authorized Selling Firm may
terminate this Agreement immediately for cause upon written
notice of such termination to the other party. Such written
notice shall state the cause with specificity. As used in this
Section, the term "cause" shall include any one or more of the
following:
9.1.1 the conviction of any party, its officers or
supervisory personnel of any felony, of fraud, or of
any crime involving dishonesty;
9.1.2 the intentional misappropriation by a party of funds
or property of any other party, or of funds received
for it or for a Product owner or applicant for a
Product;
9.1.3 the cancellation, or the refusal to renew by the
issuing insurance regulatory authority of, any
license, certificate or other regulatory approval
required in order for any party to perform its duties
under this Agreement;
9.1.4 any action by a regulatory authority with jurisdiction
over the activities of a party that would place the
party in receivership or conservatorship or otherwise
substantially interfere or prevent such party from
continuing to engage in the lines of business relevant
to the subject matter hereof;
9.1.5 a party becoming a debtor in bankruptcy (whether
voluntary or involuntary) or the subject of an
insolvency proceeding; or
9.1.6 a material breach of the Agreement by a party.
9.2 TERMINATION WITHOUT CAUSE. RiverSource or Authorized Selling
Firm may terminate this Agreement without cause upon 30 days
prior written notice to the other parties.
9.3 POST TERMINATION LIMITATIONS. For a period of one year after
termination of this Agreement, Broker-Dealer, Agency and
Producers shall not knowingly induce or cause, or attempt to
induce or cause, any systematic effort to recommend, promote,
encourage or endorse the replacement, surrender, or
cancellation of any Product sold under this Agreement or any
prior agreement between or among Company and any of
Broker-Dealer, Agency, or Producer (or any affiliates,
predecessors, successors or assigns of Broker-Dealer, Agency
or Producer) or provide data including Confidential Contract
owner Information as defined by Section 11.2 of this Agreement
to any person or organization that would allow or facilitate
replacement, surrender or cancellation of Products.
10. INDEPENDENT CONTRACTOR. This Agreement is not a contract of
employment. Nothing contained in this Agreement shall be construed or
deemed to create the relationship of joint venture, partnership, or
employer and employee between RiverSource and Authorized Selling Firm.
Each party is an independent contractor and shall be free, subject to
the terms and conditions of this Agreement, to exercise judgment and
discretion with regard to the
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conduct of business.
11. CONFIDENTIALITY.
11.1 Each party agrees that, during the term of this Agreement and
at all times thereafter, it will not disclose to any
unaffiliated person, firm, corporation or other entity any of
the other parties' trade secrets or confidential information,
including, without limitation, the terms of this Agreement;
non-public program materials; member or customer lists;
proprietary information; information as to the other party's
business methods, operations or affairs, or the processes and
systems used in its operations and affairs, or the processes
and systems used in any aspect of the operation of its
business; all whether now known or subsequently learned by it.
If this Agreement is terminated, each party, within 60 days
after such termination, will return to the other parties,
respectively, any and all copies, in whatever form or medium,
of any material disclosing any of the other parties' trade
secrets or confidential information as described above.
Nothing in this Agreement shall require a party to keep
confidential any information that:
11.1.1 the party can prove was known to it prior to any
disclosure by any other party;
11.1.2 is or becomes publicly available through no fault of
the party;
11.1.3 the party can prove was independently developed by it
outside the scope of this Agreement and with no access
to any confidential or proprietary information of any
other party;
11.1.4 is required to be disclosed to governmental regulators
or pursuant to judicial or administrative process or
subpoena;
11.1.5 is required in order to perform that party's
obligation under this Agreement;
11.1.6 is required to be disclosed by any applicable law; or
11.1.7 is mutually agreed upon by all parties to this
Agreement.
11.2 CONFIDENTIAL CONTRACT OWNER INFORMATION means any personally
identifiable information including, but not limited to,
customer account numbers, customer names, addresses, social
security numbers or any information derived therefrom
regarding Contract owners that Company collects or develops or
requests Agency, Broker-Dealer or Producers to collect on
behalf of Company in order for Company to provide the
Products.
11.3 AUTHORIZED SELLING FIRM'S OBLIGATION NOT TO DISCLOSE
CONFIDENTIAL CONTRACT OWNER INFORMATION. Despite anything in
this Agreement to the contrary, Authorized Selling Firm must
not use or disclose Confidential Contract owner Information
for any purpose, including without limitation and by way of
example those purposes prohibited under Sections 4.13.10 and
9.3 of this Agreement, except to perform its obligations under
this Agreement. Additionally, Authorized Selling Firm must:
11.3.1 ensure all employees, Producers, Licensed Assistant,
former Producers, agents, representatives, or any
other party to whom Authorized Selling Firm provides
access to, or discloses Confidential Contract owner
Information to, limit the use and disclosure of
Confidential Contract owner Information for the
purpose of performing Authorized Selling Firm's
obligations under this Agreement;
11.3.2 provide RiverSource with copies of audits and test
result information sufficient to assure RiverSource
that Authorized Selling Firm has implemented
information security measures consistent with this
Section;
11.3.3 implement appropriate measures designed to:
11.3.3.1 ensure the security and confidentiality of
Confidential Contract owner Information;
protect Confidential Contract owner
Information against any anticipated threats or
hazards to the security or integrity of such
information; and
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11.3.3.2 protect against unauthorized access to, or
use of, Confidential Contract owner
Information that could result in substantial
harm or inconvenience to any customer of the
Company or any of its subsidiaries,
affiliates, or licensees; and
11.3.4 ensure all employees, Producers, agents,
representatives, subcontractors, or any other party to
whom Authorized Selling Firm provides access to or
discloses Confidential Contract owner Information to,
implement appropriate measures similar to those
required to be implemented by Authorized Selling Firm
under this Section 11.3.
11.4 EXCEPTION TO AUTHORIZED SELLING FIRM'S OBLIGATION NOT TO
DISCLOSE CONFIDENTIAL CONTRACT OWNER INFORMATION. Authorized
Selling Firm may independently collect and use personally
identifiable information regarding Contract owners covered by
the definition of Confidential Contract owner Information,
other than Contract owner account numbers, to market or sell
additional financial products and services sold by Authorized
Selling Firm if Authorized Selling Firm and its Producers:
11.4.1 comply with Authorized Selling Firm's customer privacy
notice, Company's privacy notice, the
▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act of 1999 and regulations adopted
thereunder, the Fair Credit Reporting Act, state
insurance laws and regulations, and other applicable
laws governing the use and disclosure of personal
identification information.
12. ASSIGNMENT. The parties to this Agreement may not assign this
Agreement without the written approval of RiverSource and Authorized
Selling Firm, except that Distributor may assign this Agreement to
another broker-dealer appropriately registered with the NASD and
Company may assign this Agreement or any rights or obligations
hereunder to any affiliate or company under common control with
Company upon providing Authorized Selling Firm with a least 10
calendar days notice. Any affiliated insurance agency signing below or
which has signed an Affiliate Participation Agreement agrees that
RiverSource or Authorized Selling Firm may assign this Agreement
without the written approval of the affiliated insurance agency.
13. AMENDMENT OF AGREEMENT. RiverSource reserves the right to amend this
Agreement at any time, but no amendment shall be effective until
approved in writing by Authorized Selling Firm, subject to the
provisions of Section 4.5.16, Section 5.6, "Reservation of Rights,"
Section 6, "Compensation" and Section 12, "Assignment," under this
Agreement. Any affiliated insurance agency signing below or that has
executed an Affiliate Participation Agreement acknowledges and agrees
that Agency shall be authorized to execute any amendment or addenda to
this Agreement, on its behalf, and that such execution will be binding
upon it.
14. SETOFFS AND CHARGEBACKS. Broker-Dealer and Agency authorize
Distributor and Company to set off from all amounts otherwise payable
to Broker-Dealer and Agency all liabilities of Broker-Dealer, Agency
or Producers. Broker-Dealer and Agency are jointly and severally
liable for the payment of all moneys due to Distributor or Company
that may arise out of this Agreement or any other agreement between
Broker-Dealer, Agency and Distributor and Company including, but not
limited to, any liability for any chargebacks or for any amounts
advanced by or otherwise due Distributor or Company. Broker-Dealer and
Agency shall pay such amounts to Distributor and Company within 30
days of written request for payment. Distributor and Company do not
waive any of its other rights to pursue collection of any indebtedness
owed by Broker-Dealer or Agency or its Producers to Distributor or
Company. If Distributor or Company initiates legal action to collect
any indebtedness under this Agreement, Broker-Dealer and Agency must
reimburse Distributor and Company for reasonable attorney fees and
expenses in connection with such legal action.
15. MISCELLANEOUS.
15.1 APPLICABLE LAW. This Agreement shall be governed by and
interpreted under the laws of the State of New York.
15.2 SEVERABILITY. Should any part of this Agreement be declared
invalid, the remainder of this Agreement shall remain in full
force and effect, as if the Agreement had originally been
executed without the invalid provisions.
15.3 NOTICE. Subject to Section 6.1 "Product Exhibits," any notice
must be in writing and will be deemed to have
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been duly given if sent by U.S. mail, postage prepaid, or via
a national courier service with the capacity to track its
shipments, to the following entities:
IF TO COMPANY: IF TO DISTRIBUTOR:
RiverSource Life Insurance Co. of New York RiverSource Distributors, Inc
1818 Ameriprise Financial Center ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Compliance Officer (Unit 1818) Attn: Compliance Officer (Unit 1818)
IF TO AGENCY: IF TO BROKER-DEALER:
15.4 BINDING EFFECT. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective
successors and assigns, subject to the provisions of this
Agreement limiting assignment.
15.5 HEADINGS. The headings in this Agreement are for convenience
only and are not intended to have any legal effect.
15.6 DEFINED TERMS. The terms defined in this Agreement are to be
interpreted in accordance with this Agreement. Such defined
terms are not intended to conform to specific statutory
definitions of any state.
15.7 ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement of the parties pertaining to the subject matter of
this Agreement. It supersedes all prior communications,
representations, understandings and agreements of the parties,
whether oral or written, pertaining to the subject matter of
this Agreement.
15.8 SURVIVAL. All terms and conditions of Section 5.6 "Reservation
of Rights"; Section 6.4, "Post Termination Compensation
Obligations"; Section 7, "Indemnification"; Section 9.3 "Post
Termination Limitations"; Section 11, "Confidentiality,"; and
Section 14, "Setoffs and Chargebacks." will survive
termination of this Agreement.
15.9 NO WAIVER. No failure to enforce, nor any breach of any term
or condition of this Agreement, shall operate as a waiver of
such term or condition, or of any other term or condition, nor
constitute nor be deemed a waiver or release of any other
rights at law or in equity, or of claims which any party may
have against any other party, for anything arising out of,
connected with, or based upon this Agreement. Any waiver,
including a waiver of this Section, must be in writing and
signed by the parties to this Agreement.
15.10 RIGHTS AND REMEDIES 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 to this Agreement are
entitled to under state and federal laws.
15.11 COUNTERPARTS. This Agreement may be executed in counterparts,
each of which is an original and all of which together
constitute one and the same instrument.
RIVERSOURCE LIFE INSURANCE CO. NAME
OF NEW YORK
Company Broker Dealer
By: By:
--------------------------------- --------------------------------
Print Name: Print Name:
------------------------- ------------------------
Title: Title:
------------------------------- -----------------------------
Date: Date:
------------------------------- ------------------------------
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(Signatures continued from previous page)
RIVERSOURCE DISTRIBUTORS, INC. NAME
Distributor Agency
By: By:
--------------------------------- --------------------------------
Print Name: Print Name:
------------------------- ------------------------
Title: Title:
------------------------------- -----------------------------
Date: Date:
------------------------------- ------------------------------
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