Item 24 (b) Exhibit (3) Underwriting or Distribution of contracts between the Depositor and Principal Underwriter
Item
24
(b)
Exhibit
(3)
Underwriting
or Distribution of contracts between the Depositor and Principal
Underwriter
MARKETING
COORDINATION AND
ADMINISTRATIVE
SERVICES AGREEMENT
This
Agreement entered into this 27 day of July, 2000, between Nationwide Life
Insurance Company ("Nationwide"), and Nationwide Investment Services Corporation
(“NISC”).
Nationwide
proposes to develop, issue and administer, and NISC proposes to provide the
exclusive national distribution services for certain annuity and life products
(the "Products").
The
parties hereby agree as follows:
|
A.
|
ADMINISTRATION
OF PRODUCTS
|
|
|
1.
|
Appointment
of Product Administration
|
|
|
Nationwide
is hereby appointed Product Administrator for the
Products.
|
|
|
2.
|
Duties
of Nationwide
|
|
|
Nationwide
will perform in a proper and timely manner, those functions enumerated
in
the column marked "Nationwide" in the "Analysis of Administrative
Functions," attached hereto as EXHIBIT A, and incorporated herein
by
reference.
|
|
|
3.
|
Duties
of NISC
|
|
|
NISC
will perform in a proper and timely manner, those functions enumerated
in
the column marked "NISC" in the "Analysis of Administrative Functions,"
attached hereto as EXHIBIT A, and incorporated herein by
reference.
|
|
B.
|
MARKETING
COORDINATION AND SALES
ADMINISTRATION
|
|
|
1.
|
Distribution
of Products
|
|
|
The
Products will be distributed through registered representatives of
NASD
broker-dealer firms, appointed by Nationwide, who shall be duly qualified
and licensed as agents (the "Agents"), in accordance with applicable
state
insurance authority.
|
|
|
2.
|
NISC
shall be the exclusive National Distributor of the
Products.
|
|
|
3.
|
Appointment
and Termination of Agents
|
|
|
Appointment
and termination of Agents shall be processed and executed by
Nationwide. NISC reserves the right to require Nationwide to
consult with it regarding licensing
decisions.
|
|
|
4.
|
Advertising
|
|
|
NISC
shall not print, publish or distribute any advertisement, circular
or
document relating to the Products or relating to Nationwide unless
such
advertisement, circular or document has been approved in writing
by
Nationwide. Such approval shall not be unreasonably withheld,
and shall be given promptly, normally within five (5) business
days. Neither Nationwide nor any of its affiliates shall print,
publish or distribute any advertisement, circular or document relating
to
the Products or relating to NISC unless such advertisement, circular
or
document has been approved in writing by NISC. Such approval
shall not be unreasonably withheld, and shall be given promptly,
normally
within five (5) business days. However, nothing herein shall
prohibit any person from advertising the Products on a generic
basis.
|
|
|
5.
|
Marketing
Conduct
|
|
|
The
parties will jointly develop standards, practices and procedures
respecting the marketing of the Products. Such standards,
practices and procedures are intended to help Nationwide meet its
obligations as an issuer under the securities laws, to assure compliance
with state insurance laws, and to help NISC meet its obligations
under the
securities laws as National Distributor. These standards,
practices and procedures are subject to continuing review and neither
Nationwide nor NISC will object unreasonably to changes to such standards,
practices and procedures recommended by the other to comply with
the
intent of this provision.
|
|
|
6.
|
Sales
Material and Other Documents
|
|
|
a.
|
Sales
Material
|
|
|
1)
|
Nationwide
shall develop and prepare all promotional material to be used in
the
distribution of the Products, in consultation with
NISC.
|
|
|
2)
|
Nationwide
is responsible for the printing and the expense of providing such
promotional material.
|
|
|
3)
|
Nationwide
is responsible for approval of such promotional material by state
insurance regulators, where
required.
|
|
4)
|
NISC
and Nationwide agree to abide by the Advertising and Sales Promotion
Material Guidelines, attached hereto as EXHIBIT B, and incorporated
herein
by reference.
|
|
|
b.
|
Prospectuses
|
|
|
1)
|
Nationwide
is responsible for the preparation and regulatory clearance of any
required registration statements and prospectuses for the
Products.
|
|
|
2)
|
Nationwide
is responsible for the printing of Product prospectuses in such quantities
as the parties agree are necessary to assure sufficient
supplies.
|
|
|
3)
|
Nationwide
is responsible for supplying Agents with sufficient quantities of
Product
prospectuses.
|
|
|
c.
|
Contracts,
Applications and Related Forms
|
|
|
1)
|
Nationwide,
in consultation with NISC, is responsible for the design and printing
of
adequate supplies of Product applications, contracts, related forms,
and
such service forms as the parties agree are
necessary.
|
|
|
2)
|
Nationwide
is responsible for supplying adequate quantities of all such forms
to the
Agents.
|
|
|
7.
|
Appointment
of Agents
|
|
|
a.
|
NISC
will assist Nationwide in facilitating the appointment of Agents
by
Nationwide.
|
|
|
b.
|
Nationwide
will forward all appointment forms and applications to the appropriate
states and maintain all contacts with the
states.
|
|
|
c.
|
Nationwide
will maintain appointment files on Agents, and NISC will have access
to
such files as needed.
|
|
|
8.
|
Licensing
and Appointment Guide
|
Nationwide
shall provide to NISC a Licensing and Appointment Guide (as well periodic
updates thereto), setting forth the requirements for licensing and appointment,
in such quantities as NISC may reasonably require.
|
|
9.
|
Other
|
|
|
a.
|
Product
Training
|
|
|
Nationwide
is responsible for any Product training for the
Agents.
|
|
|
b.
|
Field
Sales Material
|
|
|
1)
|
Nationwide,
in consultation with NISC, is responsible for the development, printing
and distribution of non-public field sales material to be used by
Agents.
|
|
|
2)
|
NISC
shall have the right to review all field sales materials and to require
any modification mandated by regulatory
requirements.
|
|
|
c.
|
Production
Reports
|
Nationwide
will deliver to NISC the items listed in Production Reports to be Provided,
attached hereto as EXHIBIT C, and incorporated herein by reference.
|
|
d.
|
Customer
Service
|
Each
party will notify the other of all material pertinent inquiries and complaints
it receives, from whatever source and to whomever directed, and will consult
with the other in responding to such inquiries and complaints.
|
e.
|
Records
and Books
|
All
books
and records maintained by Nationwide in connection with the offer and sale
of
variable annuity interests funded by a Separate Account are maintained and
preserved in conformity with the requirements of Rule 17a-3 and 17a-4 under
the
1934 Exchange Act, to the extent such requirements are applicable to the
variable annuity operations.
All
such
books and records are maintained and held by Nationwide on behalf of and as
agent for NISC, whose property they are and shall remain. Such books
and records are at all times subject to inspection by the Securities and
Exchange Commission and the National Association of Securities Dealers,
Inc.
|
C.
|
GENERAL
PROVISIONS
|
|
|
1.
|
Waiver
|
The
forbearance or neglect of either party to insist upon strict compliance by
the
other with any of the provisions of this Agreement, whether continuing or not,
or to declare a forfeiture of termination against the other, shall not be
construed as a waiver of any rights or privileges of the forbearing party in
the
event of a further default or failure of performance.
|
|
2.
|
Limitations
|
Neither
party shall have authority on behalf of the other to: make, alter or discharge
any contractual terms of the Products; waive any forfeiture; extend the time
of
making any contributions to the products; guarantee dividends; alter the forms
which either may prescribe; nor substitute other forms in place of those
prescribed by the other.
|
|
3.
|
Binding
Effect
|
This
Agreement shall be binding on and shall inure to the benefit of the parties
to
it and their respective successors and assigns, provided that neither party
shall assign or sub-contract this Agreement or any rights or obligations
hereunder without prior written consent of the other.
|
|
4.
|
Indemnification
|
Each
party ("Indemnifying Party") hereby agrees to release, indemnify and hold
harmless the other party, its officers, directors, employers, agents, servants,
predecessors or successors from any claims or liability arising out of the
acts
or omissions of the Indemnifying Party not authorized by this Agreement,
including the violation of any federal or state law or regulation.
|
|
5.
|
Notices
|
All
notices, requests, demands and other communication under this Agreement shall
be
in writing and shall be deemed to have been given on the date of service if
served personally on the party to whom notice is to be given, or on the date
of
mailing if sent postage prepaid by First Class Mail, Registered or Certified
mail, by overnight mail, properly addressed as follows:
TO
NATIONWIDE:
Nationwide
Life Insurance Company
▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇, Vice President-Sales
Three
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇
TO
NISC:
Nationwide
Investment Services Corporation.
▇▇▇▇▇▇▇
▇▇▇▇▇, Vice President-Compliance ▇▇▇▇▇▇▇
▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇
|
|
6.
|
Amendment
|
|
|
This
Agreement may not be amended or modified except by a written amendment
executed by the parties. Any amendments to this Agreement are
subject to prior approval by the Ohio Department of
Insurance.
|
|
|
7.
|
Governing
Law
|
|
|
This
Agreement shall be construed in accordance with and governed by the
laws
of the State of Ohio.
|
|
|
8.
|
Arbitration
|
The
parties agree that misunderstandings or disputes arising from this Agreement
shall be decided by arbitration, conducted upon request of either party before
three arbitrators (unless the parties agree on a single arbitrator) designated
by the American Arbitration Association, and in accordance with the rules of
such Association. The expenses of the arbitration proceedings
conducted hereunder shall be borne equally by both parties.
|
|
9.
|
Confidentiality
|
Any
information, documents and materials, whether printed or oral, furnished by
either party or its agents or employees to the other shall be held in
confidence. No such information shall be given to any third party,
other than to such sub-contractors of NISC as may be permitted herein, or under
requirements of a lawful authority, without the express written consent of
the
other party.
|
D.
|
TERM
OF AGREEMENT
|
|
|
This
Agreement, including the Exhibits attached hereto, shall remain in
full
force and effect until terminated, and may be amended only by mutual
agreement of the parties in writing. Any decision by either
party to cease issuance or distribution of any specific Product shall
not
effect a termination of the Agreement unless such termination is
mutually
agreed upon, or unless notice is given pursuant to Section E.2.
hereof.
|
|
E.
|
TERMINATION
|
|
|
1.
|
Either
party may terminate this Agreement for cause at any time, upon written
notice to the other, if the other knowingly and willfully: (a) fails
to
comply with the laws or regulations of any state or governmental
agency or
body having jurisdiction over the sale of insurance or securities;
(b)
misappropriates any money or property belonging to the other; (c)
subjects
the other to any actual or potential liability due to misfeasance,
malfeasance, or nonfeasance; (d) commits any fraud upon the other;
(e) has
an assignment for the benefit of creditors; (f) incurs bankruptcy;
or (g)
commits a material breach of this
Agreement.
|
|
|
2.
|
Either
party may terminate this Agreement, without regard to cause, upon
six
months prior written notice to the
other.
|
|
|
3.
|
In
the event of termination of this Agreement, the following conditions
shall
apply:
|
|
|
a)
|
The
parties irrevocably acknowledge the continuing right to use any Product
trademark that might then be associated with any Products, but only
with
respect to all business in force at the time of
termination.
|
|
|
b)
|
In
the event this Agreement is terminated the parties will use their
best
efforts to preserve in force the business issued pursuant to this
Agreement.
|
IN
WITNESS WHEREOF, the parties hereto
have executed this Agreement to be effective as of the date first above
written.
NATIONWIDE
LIFE INSURANCE COMPANY
By: __________________________
▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇
Title:
Vice President - Sales
NATIONWIDE
INVESTMENT SERVICES CORPORATION
By: ________________________
▇▇▇▇▇▇▇
▇▇▇▇▇
Title:
Vice President – Compliance Officer
EXHIBIT
A
ANALYSIS
OF ADMINISTRATIVE FUNCTIONS
|
A.
|
PRODUCT
UNDERWRITING/ISSUE
|
|
NATIONWIDE
|
NISC
|
|
- Establishes
underwriting criteria for application processing and
rejections.
|
- Consults
with regard to new business procedures and
processing.
|
|
- Reviews
the completed application. Applies underwriting/issue criteria
to application.
|
|
- Notifies
Agent and/or customer of any error or missing data necessary to underwrite
application and establish records for owner of Product
("Contract Owner").
|
|
- Prepares
policy data page for approved business and mails with policy to Contract
Owner.
|
|
- Establishes
and maintains all records required for each Contract Owner, as
applicable.
|
|
- Prepares
and mails confirmation and other statements to Contract Owners and
Agents,
as required.
|
|
- Prints,
provides all forms ancillary to issue of contract/policy forms for
Products.
|
|
- Maintains
supply of approved specimen
policy
forms and all ancillary forms,
distributes
same to Agents.
|
|
B.
|
BILLING
AND COLLECTION
|
NATIONWIDE
|
-
|
Receives
premium/purchase payments and reconciles amount received with remittance
media.
|
|
-
|
Updates
Contract Owner records to reflect receipt of premium/purchase payment
and
performs accounting/
|
investment
allocation of each payment received.
|
-
|
Deposits
all cash received under the Products in accordance with the terms
of the
Products.
|
|
C.
|
BANKING
|
NATIONWIDE
|
-
|
Balances,
edits, endorses and prepares daily
deposit.
|
|
-
|
Places
deposits in depository account.
|
|
-
|
Prepares
daily cash journal summary reports
and
|
maintains
same for review by NISC.
|
D.
|
PRICING/VALUATION/ACCOUNTING/TRADING
|
|
NATIONWIDE
|
NISC
|
|
- Maintains
and makes available, as reasonably requested, records used in determining
"Net Amount Available for Investment."
- Collects
information needed in determining Variable Account unit values from
the
Funds including daily net asset value, capital gains or dividend
distributions, and the number of Fund Shares acquired or sold during
the
immediately preceding valuation period.
- Performs
daily unit valuation calculation.
|
- Cooperates
in annual audit of separate account financials conducted for purposes
of
financial statement certification and publication.
- Will
clear and settle Mutual Fund trades on behalf of the separate accounts
using the National Securities Clearing Corporation FUND/Serv
System.
|
|
E.
|
CONTRACT
OWNER SERVICE/
|
|
|
RECORD
MAINTENANCE
|
|
NATIONWIDE
|
NISC
|
|
- Receives
and processes all Contract Owner service requests, including but
not
limited to informational requests, beneficiary changes, and transfers
of
Contract Value among eligible investment options.
|
- Accommodates
customer service function by providing any supporting information
or
documentation which may be in the control of NISC.
|
|
- Maintains
daily records of all changes made to Contract Owner
accounts.
|
|
|
- Researches
and responds to all Contract Owner/Agent inquiries.
|
|
|
- Keeps
all required Contract Owner records.
|
|
|
- Maintains
adequate number of toll free lines to service Contract Owner/Agent
inquiries.
|
|
F.
|
DISBURSEMENTS
|
|
|
(SURRENDERS,
DEATH
|
|
|
CLAIMS,
LOANS)
|
|
NATIONWIDE
|
NISC
|
|
- Receives
and processes surrenders, loans, and death claims in accordance with
established guidelines.
|
|
|
- Prepares
checks for surrenders, loans, and death claims, and forwards to Contract
Owner or Beneficiary. Prepares and mails confirmation statement
of disbursement to Contract Owner/ Beneficiary with copy to
Agent.
|
|
G.
|
COMMISSIONS
|
|
NATIONWIDE
|
NISC
|
|
- Ascertains,
on receipt of applications, whether writing Agent is appropriately
licensed.
|
- Receives
and performs record keeping for investment company payments made
under a
12b-1 Plan.
|
|
- Pays
commissions and other fees in accordance with agreements relating
to
same.
|
|
H.
|
PROXY
PROCESSING
|
|
NATIONWIDE
|
NISC
|
|
- Receives
record date information from Funds Receives proxy solicitation materials
from Funds.
|
|
|
- Prepares
Voting Instruction cards and mails solicitation, if
necessary.
|
|
|
- Tabulates
and votes all Fund Shares in accordance with SEC
requirements.
|
|
I.
|
PERIODIC
REPORTS TO CONTRACT OWNERS
|
|
NATIONWIDE
|
NISC
|
|
- Prepares
and mails quarterly and annual Statements of Account to Contract
Owners.
|
|
|
- Prepares
and mails all semi-annual and annual reports of Variable Account(s)
to
Contract Owners.
|
|
J.
|
REGULATORY/STATEMENT
REPORTS
|
|
NATIONWIDE
|
NISC
|
|
- Prepares
and files Separate Account Annual Statements.
|
- Prepares
and files periodic FOCUS Reports with the NASDR and SEC, as
applicable.
|
|
- Prepares
and mails the appropriate, required IRS reports at the Contract Owner
level. Files same with required regulatory
agencies.
|
- Prepares
and files annual audited financial statements with required regulatory
agencies.
|
|
- Prepares
and files form N-SAR for the Separate Account.
|
|
K.
|
PREMIUM
TAXES
|
|
NATIONWIDE
|
NISC
|
|
- Collects,
pays and accounts for premium taxes as appropriate.
|
|
|
- Prepares
and maintains all premium tax records by state.
|
|
|
- Maintains
liabilities in General Account ledger for accrual of premium tax
collected.
|
|
|
- Integrates
all company premium taxes due and performs related
accounting.
|
|
L.
|
FINANCIAL
AND MANAGEMENT REPORTS
|
|
NATIONWIDE
|
NISC
|
|
- Provides
periodic reports in accordance with the Schedule of Reports to be
prepared
jointly by Nationwide and NISC. (See EXHIBIT C)
|
- Provides
periodic reports in accordance with the Schedule of Reports to be
prepared
jointly by Nationwide and NISC. (See EXHIBIT
C)
|
|
M.
|
AGENT
LICENSE RECORDKEEPING
|
|
NATIONWIDE
|
NISC
|
|
- Receives,
establishes, processes, and maintains Agent appointment
records.
|
- Maintains
securities registrations and assumes supervisory responsibility for
representatives of affiliated sales and marketing companies involved
in
the wholesale distribution of Nationwide variable contract
products.
|
|
- Maintains
training, supervisory, and other required records for and on behalf
of
registered representatives of NISC.
|
EXHIBIT
B
ADVERTISING
AND SALES PROMOTION MATERIAL GUIDELINES
FOR
APPROVAL BY NATIONWIDE AND NISC
In
order
to assure compliance with state and federal regulatory requirements and to
maintain control over the distribution of promotional materials dealing with
the
Products, Nationwide and NISC require that all variable contract
promotional materials be reviewed and approved by both Nationwide
and NISC prior to their use. These guidelines are intended to
provide appropriate regulatory and distribution controls.
|
1.
|
Sufficient
lead time must be allowed in the submission of all promotional
material. Nationwide and NISC shall approve in writing all
promotional material. Such approval shall not be unreasonably
withheld, and shall be given promptly, normally within five (5)
days.
|
|
2.
|
All
promotional material will be submitted in "draft" form to permit
any
changes or corrections to be made prior to the
printing.
|
|
3.
|
Nationwide
and NISC will provide each other with details as to each and every
use of
all promotional material submitted. Approval for one use will
not constitute approval for any other use. Different standards
of review may apply when the same advertising material is intended
for
different uses. The following information will be provided for
each item of promotional material:
|
|
|
a.
|
In
what jurisdiction(s) the material will be
used.
|
|
|
b.
|
Whether
distribution will be to broker/dealer, entity, participant,
etc.
|
|
|
c.
|
How
the material will be used (e.g., brochure, mailing, web site,
etc.)
|
|
|
d.
|
The
projected date of initial use.
|
|
4.
|
Each
party will advise the other of the date it discontinues the use of
any
material.
|
|
5.
|
Any
changes to previously approved promotional material must be resubmitted,
following these procedures. When approved material is to be put
to a different use, request for approval of the material for the
new use
must be submitted.
|
|
6.
|
Nationwide
will assign a form number to each item of advertising and sales
promotional material. This number will appear on each piece of
advertising and sales promotional material. It will be used to
aid in necessary filings, and to maintain appropriate
controls.
|
|
7.
|
Nationwide
and NISC will provide written approval for all material to be
used.
|
|
8.
|
Nationwide
will be responsible to effect necessary state
filings.
|
|
9
|
NISC
will coordinate SEC/NASD filings of sales and promotional
material.
|
|
10.
|
All
telephone communication and written correspondence regarding promotional
materials should be directed to Office of Product and Market Compliance,
Nationwide Life Insurance Company, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇
|
EXHIBIT
C
PRODUCTION
REPORTS TO BE PROVIDED
Nationwide
agrees to provide the following reports to NISC:
|
|
1.
|
Daily
Receipt Report:
|
Indicates
which Agents are generating sales
|
|
|
2.
|
Daily
Approval Report:
|
Indicates
which applications have been
approved
|
|
|
3.
|
Daily
Activity Summary:
|
Indicates
top firms’ sales and liquidation by month, year-to-date as well as total
assets by firm.
|
|
|
4.
|
Dealer
Activity
|
Indicates
top firms’ sales and
|
|
Summary
by Territory
|
liquidation
by month, year-to-date
|
|
|
5.
|
Summary
of Sales by
|
Indicates
sales by territory/dealer/branch,
including
|
|
Territory
and Dealer:
|
non-commissionable
amounts and actual commission
|
|
|
payments,
as well as chargebacks (Internal use
only)
|
|
|
6.
|
Commission
Report:
|
Indicates
commission paid and chargebacks, matched
to
|
|
|
Commission
checks.
|
In
addition, Nationwide will provide reports detailing current appointments and
other information, as reasonably requested by NISC.