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Exhibit 1(A3)(biv)
SPECIAL AGENT'S CAREER AGREEMENT
This Agreement is effective _______________ by and between Provident Mutual Life
Insurance Company, hereinafter called the Company, and ________________________
hereinafter called the Career Agent.
IN CONSIDERATION OF THE MUTUAL COVENANTS AND AGREEMENTS LISTED BELOW, THE
PARTIES AGREE AS FOLLOWS:
1. OBLIGATION OF THE CAREER AGENT
The Career Agent's Obligations shall be:
(a) To solicit and procure applications on a full time basis for all
types of insurance and annuities issued or marketed by the Company.
All such applications shall be forwarded promptly to the Company,
whether the same are reported upon favorably or otherwise by the
local medical or paramedical examiner.
(b) To solicit and procure applications for insurance policies and
contracts written by subsidiary companies of the Company, provided
the Career Agent is authorized and properly licensed.
(c) To hold all moneys received or collected on behalf of the Company in
trust and immediately remit them to the Company without deduction.
(d) To provide service incidental to maintaining the policies or
contracts of the Company.
(e) To conform to and observe all applicable federal or state statutes
or rules or regulations pertaining to insurance or insurance agents.
(f) To conform to and observe all Company rules, policies and directives
now in effect and as they may be revised from time to time.
2. LIMITATION OF AUTHORITY
The Career Agent is not authorized to do, and agrees not to do nor attempt
to do, any of the following:
(a) Accept risks or contracts of any kind or bind the Company in any
way.
(b) Make, alter, or discharge any insurance or other contract; or extend
the time for paying a premium; or waive forfeitures.
(c) Incur any debt, obligation or liability for which the Company is
responsible.
(d) Initiate or respond to legal proceedings in the Company's name.
(e) Market or solicit policies or contracts, directly or indirectly,
where the Career Agent and the Company are not properly licensed.
(f) Pay any rebate of premium either directly or indirectly, or provide
any other inducement not specified in the policy, to any person as
an inducement to purchase any policy.
(g) Issue or use any sales material or advertisement, of any form
whatsoever, other than those supplied by the Company or with the
Company's written approval.
(h) Violate applicable replacement statutes or regulations.
(i) Be a full time agent, exclusive territorial representative, field
supervisor, manager, or regional manager of any other insurance
company.
(j) Induce or attempt to induce any policyholder to withdraw values from
existing policies or relinquish policies with the Company for the
purpose of entering into any non-Company transaction that will
result in compensation, directly or indirectly, to the Career Agent.
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3. RELATIONSHIP
(a) In performing his or her duties under this Agreement, the Career
Agent shall act as an independent contractor and not as an employee
of the Company.
(b) The Career Agent agrees to be governed in the performance of his or
her duties by the terms and conditions of this Agreement, and by the
rules established by the Company. While an independent contractor,
the Career Agent reserves the right to exercise independent judgment
in marketing the Company's policies, including the choice of time,
place and manner of sale. No other provision of this Agreement nor
any rule of the Company shall be construed to abridge this right or
create the relationship of employer or employee.
4. COMMISSIONS AND FEES
(a) Commissions and fees on premiums covering insurance policies and
annuity contracts produced by the Career Agent and issued by the
Company during the continuance of this Agreement, when and as said
premiums become due and are actually paid in cash to the Company,
shall be paid to the Career Agent in accordance with and subject to
all of the terms and conditions of the commission schedules and
Supplement attached hereto, and as they may be changed from time to
time. It is expressly recognized and agreed that the Company may
unilaterally amend, modify or change the commission schedules and
the Supplement in any manner at any time in the future provided,
however, that any such amendments, modifications or changes in
commissions or fees shall apply only to policies or contracts issued
by the Company after the effective date of such change.
(b) Any commissions or fees which may become payable after the death of
the Career Agent shall be paid to the executors, administrators or
assigns of the Career Agent.
(c) Upon termination of this Agreement, no further commissions or fees
shall be paid except as may be expressly provided herein; however,
if this Agreement is terminated and if immediately following such
termination the Career Agent enters into a new Special Agent's
Career Agreement with the Company, or if the Career Agent shall
become an employee of the Company, then the new career agreement or
employment will be considered a continuation of the career service
period solely for the purpose of determining the commissions and
fees payable under this Agreement.
(d) To the extent permitted by law, the Company may discharge its
obligation under this Agreement to pay compensation due after its
termination by payment of the commuted value, if under $3,000, of
such compensation at any time after the termination of this
Agreement. The commuted value will be equivalent to the sum of
commissions and fees due, or which would become due, calculated by
the Company on the basis of mortality, lapse, and interest rates
deemed appropriate by the Company.
5. COMMISSION AND FEE EXCEPTIONS
(a) Any commissions or fees payable to the Career Agent on premiums on
group insurance policies or group annuity contracts (including
wholesale and franchise coverage) shall be calculated and paid in
accordance with separate written agreements between the Career Agent
and the Company and shall be at such rates and subject to such terms
and conditions as may be fixed by the Company from time to time.
(b) Commissions and fees on any policy for which rates and conditions
are not specified in the applicable commission schedules shall be as
determined by the Company.
(c) No commissions or fees shall be paid to the Career Agent upon any
premium, or portion thereof, payment of which is waived in
accordance with the provisions contained in the policy because of
the disability of the insured or applicant, or the death of the
applicant.
(d) If a policy issued under this Agreement replaces, in whole or in
part, a policy previously issued by this Company or its
subsidiaries, the Company shall have the right to determine what, if
any, commissions or fees shall be allowed.
(e) If a policy is changed to a different kind or amount, or if its date
is changed, the Company shall have the right to determine what, if
any, commissions or fees shall be allowed or recovered.
(f) Commissions and fees, if any, on the conversion of any policy or
coverage shall be as determined by the Company.
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(g) Commissions and fees, if any, on policies issued on a modified
underwriting, guaranteed issue, salary savings basis, for less than
the published minimum amount or greater than the published maximum
age, or where classification is other than standard, shall be as
determined by the Company.
(h) If the Company shall return all, or any portion, of any premiums on
a policy or contract paid for under this or any previous Agreements,
for any reason whatsoever, the Company shall have the right to
deduct all or part of the commissions and fees received by the
Career Agent on such premiums from any commissions and fees
thereafter due and payable to the Career Agent without limitation to
any other rights of the Company, including the right to demand
immediate repayment from the Career Agent. Any amount remaining
unpaid shall be an indebtedness to the Company.
6. INDEBTEDNESS
Any indebtedness due the Company from the Career Agent shall be a first
lien on all commissions and fees payable to the Career Agent under this
Agreement, until the amount of such indebtedness is fully paid, without
limitation to any other rights of the Company both prior to and after
termination of this Agreement to recover such indebtedness.
This provision shall not be construed in any way to limit the amount of any
indebtedness of the Career Agent to the value of the commissions and fees
payable under this Agreement. In addition to a deduction from commissions
and fees the Company may take such other actions to recover or collect such
indebtedness as it deems appropriate. To the extent the Company takes legal
action to recover such indebtedness, it may recover attorney's fees, costs
and expenses from the Career Agent.
7. ASSIGNMENT OF COMMISSIONS
This Agreement is not assignable unless authorized in writing by the
Company.
8. NON-WAIVER OF RIGHTS
Neither failure by the Company to exercise any of its rights under this
Agreement nor its failure to require the Career Agent to meet his or her
obligations hereunder shall be deemed to be a waiver of such right or
obligation and shall not in any way interfere with the ability of the
Company to exercise such right or require compliance with such obligation
either prior to or after termination of this Agreement.
9. ACCOUNTS AND RECORDS
The Company has a proprietary interest in any books, accounts, computer
and/or other records, documents, policy record cards, applications,
vouchers, letters, written correspondence with policyholders and the
Company, and all other items provided by the Company, and relating to or
connected with the business of the Company or a subsidiary Company, and
such accounts and records are the property of the Company. Upon termination
of this Agreement by either party, for any reason, the Career Agent agrees
to return immediately to the Company all accounts and records as defined
above. The Career Agent shall at all times, up to and including the return
of said accounts and records to the Company, preserve and protect the
confidentiality of such accounts, records and other items. The Career
Agent's breach of this confidentiality by releasing any information
contained in said accounts, records and other items to other than the
client, the client's advisors, or persons specifically authorized by the
Company, shall be deemed a violation of this Agreement.
10. CAREER SERVICE PERIOD
"Career Service Period" as used in this Agreement means the aggregate
continuous uninterrupted period during which the Career Agent has been
under this Agreement and any previous Career Agreement or Career Agreements
with the Company or any General Agent's Agreement with the Company or any
Agency Manager's Agreement with the Company.
11. PRIOR AGREEMENTS
All previous or existing Special Agent's Career Agreements, whether oral or
written, between the Career Agent and the Company are hereby terminated. If
immediately prior to the execution of the Agreement the Career Agent was
under an Agreement that conditioned fees or commissions upon the
continuance of such Agreement, this Agreement so long as it shall remain in
force shall be considered a continuation of the former Agreement solely for
the purpose of determining the commissions and fees payable under the
former Agreement.
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12. CHANGE IN AGREEMENT
The Company reserves the right to unilaterally amend, modify or change this
Agreement, including any of the applicable commission schedules or the
Supplement, in any manner at any time in the future, provided, however,
that any amendment, modification or change in commissions or fees shall
apply only to policies or contracts issued by the Company after the
effective date of such change.
13. TERMINATION OF AGREEMENT
This Agreement shall terminate:
(a) At any time for any reason whatsoever, with or without cause, by
either the Company or the Career Agent giving to the other party
written notice delivered in person or sent by ordinary mail to the
party's last known address.
(b) Immediately upon the death of the Career Agent.
(c) Immediately and without written notice if the Company determines
that the Career Agent has committed any fraudulent, dishonest or
illegal act or has misappropriated or withheld funds. The date of
such termination shall coincide with the date of the violation or
act giving rise to termination. After such termination, no further
commissions or fees shall be paid to the Career Agent under the
Agreement.
14. MANDATORY TERMINATION
In addition to and without limitation to the Company's and the Career
Agent's rights set forth in paragraph 13(a) above to terminate this
Agreement for any reason at any time, this Agreement shall automatically
terminate without notice at the end of any calendar year during which the
Career Agent fails to meet the earnings requirement described in the then
current Supplement to this Agreement.
In the event that the Career Agent should become totally disabled, as
described below, the earnings requirement set forth in the Supplement will
be reduced by one-twelfth (1/12) for every full month such disability
continues during the calendar year. For purposes of this paragraph, the
Company in its discretion, shall make the sole and final determination of
whether the Career Agent is totally disabled, and when such disability, if
any, begins and ends.
15. PROHIBITED ACTIVITY
For one year after termination of this Agreement, the Career Agent shall
not directly or indirectly advise, induce, or solicit any policyholder of
the Company to lapse, cancel, or replace any policy or contract of the
Company or borrow values from any policy or contract of the Company to pay
any premium on a policy of another Company. In the event the Career Agent
violates this provision, the Career Agent agrees that the Company may
pursue all remedies, legal or equitable, including injunction, to enforce
compliance with this provision and the Career Agent shall be responsible
for the payment of any legal fees.
16. MISCELLANEOUS
The term "Agreement" as used herein, refers to this Special Agent's Career
Agreement, the applicable Supplement and commission schedules.
17. SEVERABILITY
If any provision of the Agreement is found to be illegal or otherwise
unenforceable, the remainder of this Agreement shall not be affected and
shall remain fully enforceable.
18. ACKNOWLEDGEMENT
By executing this Agreement, the Career Agent acknowledges that he or she
has read it in its entirety and is in agreement with the terms and
conditions outlining the rights of the Company and the Career Agent under
this Agreement.
PROVIDENT MUTUAL LIFE INSURANCE COMPANY
By ______________________________ _________________________________
Career Agent
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-A-
PROVIDENT MUTUAL LIFE INSURANCE COMPANY
SUPPLEMENT TO SPECIAL AGENT'S CAREER AGREEMENT
This Supplement is attached and hereby incorporated into the Special Agent's
Career Agreement, hereinafter called the Agreement, and is subject to all of the
terms and conditions contained in the Agreement.
This Supplement may be unilaterally amended, modified or changed by the Company
at any time in the future pursuant to paragraph 12 of the Agreement and will be
reviewed annually; therefore, the current supplement must be consulted for
accurate information.
1. Commissions on Individual Life and Health Insurance Policies and Annuity
Contracts.
Subject to all of the provisions of the Agreement, the Company will pay
to the Career Agent on premiums covering individual life and health
insurance policies and annuity contracts issued during the continuance
of the Agreement, when and as said premiums become due and are actually
paid in cash to the Company, first year commissions and renewal
commissions at the rates set forth in the commission schedules but
subject to the following conditions:
(a) While the Agreement is in effect, commissions will be paid
only for policy years 1 to 10 inclusive.
(b) In the event the Agreement is terminated by reason of the
death of the Career Agent, commissions will be paid only for
policy years 1 to 10 inclusive.
(c) In the event the Agreement is terminated for reasons other
than the death of the Career Agent, commissions will be paid
according to the number of completed years of service by the
Career Agent in the career service period at the time of such
termination, determined as follows:
(i) Less than 5 years of career service after the date of
January 1, 1998 - commissions for the first policy
year only.
(ii) 5 years of career service after the date of January
1, 1998 but less than 15 years of career service --
commissions for policy years 1 to 10 inclusive will
be at the rate in the commission schedules, except
that in the case of OptionsPlus and Survivor
OptionsPlus commissions for policy years 2 to 10
inclusive on Target Premiums and Asset Based
Commissions will be at the Level B rates.
(iii) 15 or more years of career service - commissions for
policy years 1 to 10 inclusive at the rate in the
commission schedules.
2. Fees on Individual Life Insurance Policies
(a) Formula Fees Applicable to the Fourth through Tenth Years.
Subject to all of the provisions of the Agreement, the Company
will pay to the Career Agent formula fees at the rates and in
the manner set forth in this section 2(a).
Definitions - for the purpose of computing and paying the fees
in this section 2(a), the following definitions will apply.
"Policies" means all individual life insurance policies
(exclusive of all annuity contracts) issued while the
Agreement is in effect except single premium and flexible
premium variable life policies and policies in the employee
benefit series issued on a one-year term plan.
"Block of policies" means all "policies" with policy dates
which occur in the same calendar year.
"Formula fee rate" means the rate at which formula fees will
be computed on each "block of policies."
"Formula fee" means the amount to be paid on each "block of
policies" for the calendar quarter.
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Computation of the Formula Fee Rate
The Company will compute a formula fee rate applicable to each block of policies
as follows:
(1) Determine on an annual premium basis the amount of first year
commissions applicable to all policies in such block. For purposes of
this determination, first year commissions on actual premiums paid
during the first policy year up to the target premium for flexible
premium variable life policies will be included.
(2) Determine a 25 month persistency rate for all policies in such block by
dividing the amount of first year commissions determined in accordance
with (1) above into that portion of such amount of first year
commissions that is represented by policies with respect to which
premiums have been paid for the full first 25 policy months. Flexible
premium variable life policies will not be included in determining the
persistency rate.
(3) From Table A below, determine the Quantity Factor applicable to the
amount of first year commissions determined in accordance with (1)
above. The amounts listed in Table A below are applicable for policies
with policy dates which occur in 1998. The Table A amounts will be
revised on an annual basis.
(4) From Table B below, determine the Persistency Factor applicable to the
25 month persistency rate determined in accordance with (2) above.
(5) Multiply the Quantity Factor determined in accordance with (3) above by
the Persistency Factor determined in accordance with (4) above; the
product is the formula fee rate for such block of policies.
Table A
First Year Commissions on
an Annual Premium Basis Quantity Factor
Less than $24,000........................................................ 0%
$24,000 to $38,999................................. {FYC minus $24,000} x 4%
-------------------
{ $15,000 }
$39,000 to $77,999........................ 4% + {FYC minus $39,000 x 6%}
------------------
{ $39,000 }
$78,000 and over........................................................ 10%
Table B
25 Month Persistency Rate Persistency Factor
.92 and over............................................................ 100%
.89 but less than .92................................................... 80%
.86 but less than .89................................................... 60%
.82 but less than .86................................................... 40%
.80 but less than .82................................................... 10%
Below .80............................................................... 0%
The formula fee rate that is computed for each block of policies will remain
constant with respect to the computation of the formula fees to be paid
thereafter on such block of policies.
Computation of Formula Fees
A formula fee will be computed for each block of policies with respect to
premiums due during the fourth through the tenth policy years. Once each
calendar quarter, the Company will compute the formula fee for each block of
policies by multiplying the annual premium for all policies in such block in
force at the end of the preceding calendar quarter by the formula fee rate for
such block of policies. The total amount of formula fees to be paid for each
calendar quarter will be one-fourth (1/4) of the sum of the fees computed as
described herein for each block of policies for the preceding calendar quarter.
Premiums on flexible premium variable life policies will not be included in the
computation of formula fees.
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Payment of Formula Fees
The Company will pay quarterly formula fees as computed above
to the Career Agent. Formula fee payments shall cease with the
last payment preceding the termination of the Agreement,
except that
(i) If the Agreement at the end of the career service
period is terminated by reason of the death of the
Career Agent, formula fee payments will be continued
only if the Career Agent has at least 20 years of
continuous service during the career service period,
and
(ii) If the Agreement at the end of the career service
period is terminated for any reason other than the
death of the Career Agent and if the Career Agent has
attained age 55, has at least 10 years of continuous
service during the career service period and the sum
of the Career Agent's attained age plus years of
service during the career service period equals or
exceeds 75, formula fee payments will be continued to
the Career Agent during the Career Agent's remaining
lifetime as calculated in paragraph 2(a), such
payments ceasing with the last payment preceding the
death of the Career Agent.
(b) Uniform Fees Applicable to the Eleventh and Subsequent Policy
Years.
The uniform fees described in this section 2(b) are payable
in addition to any formula fees that may be payable as
provided in section 2(a). Once each calendar year, the
Company will determine the premiums covering policy year 11
and all subsequent policy years expected to be paid during the
next calendar year on individual life insurance policies
(exclusive of all annuity contracts) issued during the career
service period. At quarterly intervals during the Agreement,
the Company will pay to the Career Agent a sum equal to 3/4 of
1% of the aggregate premiums so determined, such payments
ceasing with the last payment preceding the termination of the
Agreement.
(c) General Provisions Applicable to the Formula Fees described in
section 2(a) above and to the Uniform Fees described in
section 2(b) above.
All computations, determinations, estimates and the bases
thereof used in computing the rates and amounts of all fees
and the manner of all payments and dates on which all payments
shall be made, shall be determined from time to time by the
Company in its sole discretion, which determination shall be
final. No fees will be paid following the termination of the
Agreement except as herein expressly provided.
3 Career Agent Earnings Requirement
(a) In order to maintain the Career Agreement, the Career Agent
must receive in each full calendar year at least $20,000 in
compensation on policies, contracts or other products produced
by the Career Agent in the Company or in any of its subsidiary
companies as are specifically authorized by the Company, in
accordance with the following limitations:
(i) The Career Agent must receive at least $17,000 in
supervisory compensation or first year cash
commissions on Provident Mutual Life Insurance
Company individual life policies.
(ii) For purposes of the earnings requirement only,
one-eighth of the first year compensation the Career
Agent receives on the sale of Provident Mutual Life
Insurance Company annuity contracts, Providentmutual
Life and Annuity Company of America policies or
contracts and/or products offered by 1717 Capital
Management Company, up to a maximum of $24,000 of
compensation per year, may be counted. Such
compensation is not counted for any other purpose,
including but not limited to eligibility for group
insurance.
(iii) If the Career Agent is contracted prior to June 1,
the earnings requirement will be pro-rated;
pro-rating is calculated on a semi-monthly basis. If
the Career Agent is contracted on or after June 1,
the Career Agent will not be subject to an earnings
requirement during the year of contracting, and
commissions received during that year will not count
toward the following year's earning requirement.
Notwithstanding the foregoing, a Career Agent who
previously had a Career Agreement with the Company
will be subject to a pro-rated earnings requirement
during the year of recontracting, regardless of the
date of recontracting.
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(b) This earnings requirement shall not apply in any calendar year
in which the Career Agent has completed at least 10 years of
continuous service during the career service period and the
sum of the Career Agent's attained age plus years of service
during the career service period equals or exceeds 75.
(c) The Career Agent may maintain the Career Agreement without
meeting the earnings requirement if:
(i) The Career Agent has completed at least five years of
continuous service during the career service period;
and
(ii) The Career Agent has met the earnings requirement in
each of the last four years; and
(iii) The Career Agent has received in the current year
sufficient first year cash commissions on Provident
Mutual Life Insurance Company individual life
policies to satisfy at least fifty percent of the
current year's earnings requirement; and
(iv) One-fifth of the aggregate first year cash
commissions on Provident Mutual Life Insurance
Company individual life policies received by the
Career Agent in the current year and four prior years
equals or exceeds the current year's earnings
requirement.
Career Agents who maintain the Career Agreement in this
fashion must pay the full cost of group insurance coverage in
the following year.
4. The Company rules, policies and directives to which the Career Agent is
required to conform pursuant to Paragraph 1(f) of the Special Agent's
Career Agreement hereafter also include the Principles of Ethical
Market Conduct, as adopted by the Insurance Marketplace Standards
Association (IMSA). The Company and its subsidiaries subscribe to the
Principles of Ethical Market Conduct and the Code of Ethical Market
Conduct in all matters affecting the sale of individually-sold life
insurance and annuity products. Currently, these Principles of Ethical
Market Conduct are:
(1) To conduct business according to high standards of honesty and
fairness, and to render that service to its customers which,
in the same circumstances, it would apply to or demand for
itself.
(2) To provide competent and customer-focused sales and service.
(3) To engage in active and fair competition.
(4) To provide advertising and sales materials that are clear as
to purpose, and honest and fair as to content.
(5) To provide for fair and expeditious handling of customer
complaints and disputes.
(6) To maintain a system of supervision and review that is
reasonably designed to achieve compliance with these
Principles of Ethical Market Conduct.
Effective Date: December 16, 1997
PROVIDENT MUTUAL LIFE
INSURANCE COMPANY
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------
President and
Chief Operating Officer