EXHIBIT (c)(2)
FORM OF SELLING AGREEMENT
This SELLING AGREEMENT ("Agreement"), dated _____________________, is by and
among FARMERS NEW WORLD LIFE INSURANCE COMPANY ("Insurer"), WM FUNDS
DISTRIBUTOR, INC. ("Distributor") and WM FINANCIAL SERVICES, INC., together with
its duly licensed insurance affiliates indicated on the attached Annex I (the
"Affiliates" and collectively, "Broker/Dealer").
Where permitted by state law, Broker/Dealer is acting as general agent hereunder
and shall be responsible for the duties of broker/dealer and general agent
hereunder. If state law does not permit Broker/Dealer to hold a corporate
insurance license, the appropriate duly licensed insurance affiliate identified
on Annex I shall act as general agent hereunder. Upon execution of Annex I, such
entity or entities agree to be bound by the terms hereof as if it were included
in the definition of Broker/Dealer.
1. Appointment. This Agreement is for the purpose of arranging for the
distribution of certain variable life insurance contracts identified on
Attachment A hereto (the "Contracts"), issued by Insurer and for which
Distributor is a distributor, through sales people who are licensed agents of
Insurer for insurance purposes and are associated with and registered
representatives of Broker/Dealer (each, a "Subagent"). In consideration of the
mutual promises and covenants contained in this Agreement, Insurer for
insurance-law purposes and Distributor for securities-law purposes each appoint
Broker/Dealer and, as provided in Section 3, its Subagents, to solicit and
procure applications for the Contracts. This appointment is not deemed to be
exclusive in any manner and only extends to those jurisdictions with respect to
which Insurer has notified Broker/Dealer that the Contracts have been approved
for sale and in which Insurer and Broker/Dealer are both licensed as required by
prevailing regulatory requirements.
2. Representations and Warranties.
A. Each party hereto represents and warrants to each other party, as
follows:
(i) It is duly organized, validly existing and in good
standing under the laws of the state of its incorporation or other corresponding
applicable law and has all requisite power, corporate or otherwise to carry on
its business as now being conducted and to perform its obligations as
contemplated by this Agreement.
(ii) It has all licenses, approvals, permits and
authorizations of, and registrations with, all authorities and agencies,
including non-governmental self-regulatory agencies, required under all federal,
state, and local laws and regulations to enable it to perform its obligations as
contemplated by this Agreement.
(iii) The execution, delivery and performance of this
Agreement have been duly and validly authorized by all necessary corporate
action, if applicable, and this Agreement constitutes the legal, valid and
binding agreement of such party, enforceable against it in accordance with its
terms, except as the same may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally and general principles of equity.
(iv) It is in compliance in all material respects with all
applicable federal, state and self-regulatory organization laws and regulations,
including without limitation, all laws, rules and regulations listed in Exhibit
2, as it may be amended from time to time by mutual consent of the parties
hereto. It shall carry out its respective obligations under this Agreement in
continued compliance in all material respects with such laws, rules and
regulations. The omission of a reference to law, rule or regulation in this
Agreement shall not be deemed to be an acknowledgement by any party that such
law, rule or regulation does not apply to any party to this Agreement.
B. Broker/Dealer additionally represents and warrants as follows:
(i) It is registered as a broker and dealer under the
Securities Exchange Act of 1934 (the "1934 Act"), and is a member in good
standing of the National Association of Securities Dealers, Inc. ("NASD").
(ii) It will comply with all applicable laws, rules and
regulations of, as well as any and all directives and guidelines issued by any
agency or other regulatory body with authority over Broker/Dealer or over the
premises on which Broker/Dealer and its Subagents are soliciting the sale of
Contracts.
(iii) (a) It is duly licensed as a corporate insurance agent,
where required, or (b) it has identified on Annex I hereto its Affiliates which
hold such licenses and are permitted to do so under applicable laws, and in such
case will comply with the terms and conditions of applicable provisions of
no-action letters, including, but not limited to, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ (sub. nom.
First of America Brokerage Service, Inc.) (avail. Sept. 28, 1995), issued by the
staff of the SEC with respect to the non-registration as a broker/dealer under
the 1934 Act of a corporation licensed as an insurance agent and associated with
a registered broker/dealer. Broker/Dealer shall notify Distributor immediately
in writing if Broker/Dealer fails to comply with any such terms and conditions
and shall take such measures as may be necessary and as promptly as practicable
under the circumstances to cure any such non-compliance.
(iv) Broker/Dealer understands, acknowledges and represents
that Contracts and premiums are not intended to be offered or sold in connection
with any so-called "market timing" program, plan, arrangement or service of
Broker/Dealer. Broker/Dealer will not knowingly solicit, offer or sell Contracts
or premiums for use in any so-called "market timing" program of Broker/Dealer.
Broker/Dealer agrees to provide reasonable assistance to Insurer in preventing
the Contracts from being used for market timing activity.
C. Insurer additionally represents and warrants as follows:
(i) A Registration Statement on Form S-6 (the "Registration
Statement") for the Contracts has been filed with the Securities and Exchange
Commission (the "Commission") in the form previously delivered to Broker/Dealer.
(ii) The Registration Statement and any further amendments or
supplements thereto will, when they become effective, and the prospectus
constituting part of the Registration Statement (the "Prospectus") will, at all
times, conform in all material respects to the requirements of the Securities
Act of 1933 (the "1933 Act") and the Investment Company Act of 1940 (the "1940
Act"), and the rules and regulations of the Commission under such Acts, and will
not contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading.
(iii) The Contracts have been duly and validly authorized and,
when issued and delivered against payment therefor as provided in the
Prospectus, will be duly and validly issued and will conform to the description
of such Contracts contained in the Prospectus as in effect at time of issuance
relating thereto and will comply in all material respects with applicable
federal and state law.
3. Subagents. Broker/Dealer is authorized to recommend Subagents to
Insurer for appointment to solicit sales of the Contracts. Broker/Dealer is
solely responsible for investigating the character, work experience and
background of any proposed Subagent prior to recommending appointment by
Insurer. No Subagent shall act on behalf of Insurer until properly appointed by
Insurer. All matters concerning the licensing of any Subagent recommended for
appointment by Broker/Dealer under any applicable state insurance law shall be a
matter directly between Broker/Dealer and such Subagent, and Broker/Dealer shall
furnish Insurer with proof of proper licensing of such individual or other
proof, reasonably acceptable to Insurer, of satisfaction by such individual of
licensing requirements prior to Insurer appointing any such Subagent as an agent
of Insurer. To the extent that Exhibit 1 does not include all Contracts of
Insurer which are registered as securities under the Federal Securities laws,
Broker/Dealer is responsible for ensuring that its Subagents, unless otherwise
agreed to with Insurer in writing, do not offer to sell any other variable
contracts issued by Insurer, other than the Contracts, unless a selling
agreement with respect thereto has been executed by the parties and
Broker/Dealer and Subagents are duly appointed therefor. Broker/Dealer is
responsible for supervising the activities of its Subagents and for ensuring
that Subagents are properly licensed and in compliance with all applicable
federal, state and local laws and regulations and all rules and procedures of
Insurer provided in writing to Broker/Dealer by Insurer. Broker/Dealer shall
notify Insurer promptly, in writing, of the termination of any Subagent. Insurer
reserves the right, in its reasonable discretion and subject to providing prior
notice to Broker/Dealer, to refuse to appoint or renew the appointment of any
proposed Subagent and to terminate any appointment with any Subagent, with or
without cause, at any time. By submitting a Subagent for appointment,
Broker/Dealer warrants that: (1) such Subagent is recommended for appointment;
(2) such Subagent is fully licensed under applicable laws to transact business
with Insurer and is a duly registered representative of Broker/Dealer; and (3)
all background investigations required by state and federal laws have been made
with respect to such Subagent and that it has determined that each Subagent has
the character, work experience and background necessary to qualify for
appointment by Insurer.
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4. Sales Material.
A. Broker/Dealer shall not use any written, electronic or
audiovisual sales material (including prepared scripts for oral presentations)
in connection with the sales of the Contracts or solicitations thereof, unless
such material has been provided by, or approved in writing in advance of such
use by, Insurer and Distributor.
B. In accordance with the requirements of federal and certain
state laws, Broker/Dealer shall, to the extent required by such laws, maintain
complete records indicating the manner and extent of distribution of any such
sales material. This material shall be made available to appropriate federal and
state regulatory agencies as required by law or regulation and to Distributor
and Insurer upon written request.
5. Prospectuses. For any Contract which is a registered security,
Broker/Dealer warrants that solicitation will be made by use of
currently effective Prospectus for the Contract and the underlying
funds; and when and as required by state law, the Statement of
Additional Information for the Contract; that a copy of the Prospectus
will be delivered concurrently with each sales presentation and that no
statements shall be made to a client superseding or controverting or
otherwise inconsistent with any statement made in the Prospectus.
Insurer and Distributor shall furnish Broker/Dealer, at no cost to such
party, reasonable quantities of currently effective Prospectuses and
approved sales materials. Insurer has the right to recall any such
Prospectuses and sales materials from use at any time by notice to
Distributor and Broker/Dealer. If any such Prospectuses and/or sales
materials are recalled by Insurer, Broker/Dealer must promptly cease to
use such Prospectuses and/or sales materials and destroy any unused
materials.
6. Conduct of Business.
A. In connection with its activities under the Agreement,
Broker/Dealer will fully comply with the requirements of all applicable federal
and state laws, rules and regulations of regulatory authorities (including
self-regulatory organizations) having jurisdiction over the activities of
Broker/Dealer, as well as any reasonable requirements contained in any
compliance manual provided by Insurer.
B. Neither Broker/Dealer nor any Subagent shall solicit an
application from, or recommend the purchase of a Contract to, an applicant
without having reasonable grounds to believe, in accordance with, among other
things, applicable regulations of any state insurance department, the SEC and
the NASD, that such purchase is suitable for the applicant. While not limited to
the following, a determination of suitability shall be based on information
supplied after a reasonable inquiry concerning the applicant's insurance and
investment objectives, a review of existing insurance contracts and, if
applicable, the appropriateness of replacing such contract and applicant's
financial situation and needs. Insurer reserves the unconditional right to
reject, in whole or in part, any application or premium in its sole discretion.
C. Broker/Dealer has or will have established, prior to its
commencement of any solicitation of sales of Contracts pursuant to the terms of
this Agreement, such rules, procedures, supervisory and inspection techniques as
necessary to diligently supervise the activities of its Subagents pursuant to
this Agreement and to ensure compliance with the terms of this Agreement
necessary to establish diligent supervision. Broker/Dealer shall be responsible
for securities and insurance law training, supervision and control of its
Subagents in connection with their solicitation activities with respect to the
Contracts and shall supervise compliance with applicable federal and state
securities laws, NASD requirements and state insurance law in connection with
such solicitation activities. Broker/Dealer will observe, and will comply with,
all requirements of any bank on whose premises Broker/Dealer engages in sales
activities pursuant to this Agreement. Upon request by Insurer or Distributor,
Broker/Dealer will furnish appropriate records as are necessary to establish
diligent supervision.
D. Broker/Dealer will fully comply with the requirements of
applicable state insurance laws and regulations and will maintain all books and
records and file all reports required thereunder to be maintained or filed by a
licensed insurance agent. Broker/Dealer shall comply with the terms and
conditions of applicable provisions of no-action letters, including, but not
limited to, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ (sub. nom. First of America Brokerage Service, Inc.)
(avail. Sept. 28, 1995), issued by the Staff of the SEC with respect to the
non-registration as a broker/dealer under the 1934 Act of a corporation licensed
as an insurance agent and associated with a registered broker/dealer.
Broker/Dealer shall notify Distributor immediately in writing if Broker/Dealer
fails to comply with any such terms and conditions and shall take such measures
as may be necessary to comply with any such terms and conditions.
E. Broker/Dealer shall pay all expenses incurred by it in the
performance of this Agreement unless otherwise specifically provided for in this
Agreement or in a writing signed by Insurer and Distributor. Initial and renewal
state appointment fees for Broker/Dealer and its Subagents will be paid by
Insurer.
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F. Applications shall be taken only on preprinted application
forms supplied by Insurer. The Contract forms and applications are the sole
property of Insurer. No person other than Insurer has the authority to make,
alter or discharge any policy, Contract application, Contract certificate,
supplemental contract or form issued by Insurer. No person other than Insurer
has the right to waive any provision with respect to any Contract or policy. No
person other than Insurer has the authority to enter into any proceeding in a
court of law or before a regulatory agency in the name of or on behalf of
Insurer.
G. Broker/Dealer and Subagent shall accept premiums only in
the form of a check or money order made payable to Insurer. Broker/Dealer shall
ensure that all checks and money orders and applications for the Contracts
received by it or any Subagent are remitted promptly to Insurer, and in any
event within two business days for new applications and by noon on the next
business day for subsequent premium. In the event that any other premiums are
sent to a Subagent or Broker/Dealer rather than to Insurer, they shall promptly
remit such premiums to Insurer, and in any event by noon of the next business
day after receipt. Broker/Dealer acknowledges that if any premium is held at any
time by it, such premium shall be held in a fiduciary capacity on behalf of
Insurer, and Broker/Dealer shall segregate such premium from its own funds and
promptly remit such premium to Insurer, and in any event by noon of the next
business day after receipt. All such premiums, whether by check, money order or
wire, shall at all times be the property of Insurer.
H. Upon issuance of a Contract by Insurer, Insurer shall
promptly deliver such Contract to purchasers. For purposes of this provision,
"promptly" shall be deemed to mean not later than five calendar days, or such
shorter period as is reasonable under the circumstances.
I. Unless required by a determination of suitability, during
the term of this Agreement and for 5 years after termination hereof,
Broker/Dealer covenants on behalf of itself and, for so long as any such
Subagent remains employed by Broker/Dealer, any Subagent appointed hereunder,
that they shall not solicit, induce or attempt to solicit or induce purchasers
of Contracts to terminate, surrender, cancel, replace or exchange such Contract
without the prior written consent of Insurer. Insurer covenants that, during the
term of this Agreement and following its termination, it shall not solicit,
induce or attempt to solicit or induce purchasers of Contracts to purchase any
products other than the Contracts without the prior written consent of
Broker/Dealer. Broker/Dealer and Insurer both acknowledge and agree that the
provisions contained in this Section 6(I) may be enforced by an action for an
injunction, as well as or in addition to any action for damages.
j. Broker/Dealer shall have no authority to advertise for or
on behalf of the Distributor or Insurer without prior written approval from the
Distributor and Insurer.
7. Commission Payments.
A. Broker/Dealer shall be entitled to receive from Distributor
a commission based upon premiums received and accepted by Insurer for Contracts
issued pursuant to this Agreement, based on the applicable rate of commission
set forth in the Commission Schedule attached hereto as Exhibit 1 which is
incorporated herein by reference. Insurer may, in its sole discretion, by
written notice to Distributor and Broker/Dealer, amend Exhibit 1 with respect to
commissions to be paid in respect of any premium payments received after receipt
of such notice by Distributor and Broker/Dealer. Broker/Dealer shall be solely
responsible for the payment of any commission or consideration of any kind to
Subagents.
B. In no event shall Insurer be liable for the payment of any
commissions with respect to any solicitation made, in whole or in part, by any
person not appropriately licensed and, if required, appointed by Insurer prior
to the commencement of such solicitation.
C. If a Contract is returned to Insurer pursuant to the "Free
Look" provision or any other right to examine provision of the Contract, the
full commission paid by Insurer will be unearned and shall be returned to
Insurer upon demand or, in the absence of such demand, charged back to the
recipient of the commission.
D. In no event shall Insurer incur obligations under this
Agreement to issue any Contracts or pay any commission in connection therewith
if the Contract owner is over the maximum issue age with respect to that product
when the Contract application was accepted. With respect to such Contracts, the
full commission paid by Insurer will be unearned and shall be returned to
Insurer upon demand or, in the absence of such demand, charged back to the
recipient of the commission.
E. With respect to any Contract that is rescinded, as
determined by Insurer in its reasonable discretion (other than a rescission with
respect to which a surrender charge applies), or if Insurer otherwise determines
that a commission has not been earned (but such determination may not contravene
any other
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provision of this Agreement), 100% of such unearned commission will be returned
to Insurer upon demand or, in the absence of such demand, charged back to the
recipient of the commission.
F. Compensation for the sale of any Contract sold pursuant to
this Agreement that is renewed, changed, exchanged, replaced or otherwise
converted from any other contract issued by Insurer shall be paid and/or charged
back according to Insurer's guidelines and practices, a copy of which shall have
been provided in writing to Distributor and Broker/Dealer.
G. With respect to any Contract, or group of Contracts that
Insurer in its sole discretion deems to be a single case, and with respect to
which at the time of application submission the initial purchase payment is
greater than $1,500,000, Insurer may establish an alternate commission for such
Contract or Contracts with the consent of Distributor.
H. A Contract issued on monthly electronic funds transfer
("EFT") billing will generate initial commission on premium applied at issue
plus advanced commission on the balance of an "annualized" premium based on
planned premium at issue. Upon termination of the Contract (other than by death)
or change from monthly EFT to monthly direct during the first 12 months, all
unearned advance commission previously paid shall be returned to the Insurer
upon demand or charged back to the recipient of the commission. Commissions are
not re-advanced if the Contract is reinstated to monthly EFT billing.
8. Indemnification.
A. Broker/Dealer shall indemnify, defend and hold harmless
Insurer and each person who controls or is associated with Insurer within the
meaning of the federal securities laws and any director, officer, corporate
agent, employee, attorney and any representative thereof, from and against all
losses, expenses, claims, damages and liabilities (including any costs of
investigation and legal expenses and any amounts paid in settlement of any
action, suit or proceeding of any claim asserted) which result from, arise out
of or are based upon:
(i) any breach by Broker/Dealer or its Affiliates of
any representation, warranty or other provision of this Agreement,
including any acts or omissions of Broker/Dealer, Affiliates, Subagents
and other associated persons; or
(ii) any violation by Broker/Dealer, any Affiliate or
any Subagent of any federal or state securities law or regulation,
insurance law or regulation or any rule or requirement of the NASD or
any breach of an obligation owed by Broker/Dealer or Subagent to any
Contract owner;
(iii) the use by Broker/Dealer, any Affiliate or any
Subagent of any sales or promotional material which has not received
specific written approval of Insurer and Distributor as provided in
Section 4 of this Agreement, any oral or written misrepresentations or
any unlawful sales practices concerning the Contracts by Broker/Dealer,
any Affiliate or any Subagent;
(iv) Claims by Subagents or other agents or
representatives of Broker/Dealer for commissions or other compensation
or remuneration of any type;
(v) any failure on the part of Broker/Dealer, or a
Subagent to submit the full premiums it receives in connection with
Contracts to Insurer on a timely basis and in accordance with this
Agreement, subject to applicable law; or
(vi) any failure on the part of Broker/Dealer or a
Subagent to deliver Contracts to purchasers thereof on a timely basis
and in accordance with the applicable law.
B. Insurer shall indemnify, defend and hold harmless
Broker/Dealer and each person who controls or is associated with Broker/Dealer
within the meaning of the federal securities laws and any director, officer,
corporate agent, employee, attorney and any representative thereof, from and
against all losses, expenses, claims, damages and liabilities (including any
costs of investigation and legal expenses and any amounts paid in settlement of
any action, suit or proceeding of any claim asserted) which result from, arise
out of or are based upon:
(i) any breach by Insurer of any representation,
warranty or other provision of this Agreement;
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(ii) any violation by Insurer of any insurance law or
regulation;
(iii) any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement,
Prospectus or Statement of Additional Information or any other written
sales material relating to the Contracts prepared by Insurer which is
utilized by the Broker/Dealer in connection with the sale of Contracts
or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein (in the
case of the Registration Statement, Prospectus and Statement of
Additional Information), or in the case of such other sales material,
necessary to make the statements therein not misleading in light of the
circumstances under which they were made; or
(iv) any breach of an obligation owed under the
Contract by Insurer to any Contract owner.
C. Promptly after receipt by a party entitled to
indemnification ("indemnified person") under this Section 8 of notice of the
commencement of any action as to which a claim will be made against any person
obligated to provide indemnification under this Section 8 ("indemnifying
party"), such indemnified person shall notify the indemnifying party in writing
of the commencement thereof as soon as practicable thereafter, but failure to so
notify the indemnifying party shall not relieve the indemnifying party from any
liability which it may have to the indemnified person otherwise than on account
of this Section 8. The indemnifying party will be entitled to participate in the
defense of the indemnified person but such participation will not relieve such
indemnifying party of the obligation to reimburse the indemnified person for
reasonable legal and other expenses incurred by such indemnified person in
defending himself or itself.
D. The indemnification provided for in this Section 8 shall
survive termination of this Agreement.
9. Fidelity Bond. Broker/Dealer represents that all directors,
officers, employees, representatives and/or Subagents who are appointed
pursuant to this Agreement or who have access to funds of Insurer are
and will continue to be covered by a blanket fidelity bond including
coverage for larceny, embezzlement or any other defalcation, issued by
a reputable bonding company. This bond shall be maintained at
Broker/Dealer's expense. Such bond shall be at least equivalent to the
minimal coverage required under the NASD's Conduct Rule 3020, endorsed
to extend coverage to life insurance and annuity transactions.
Broker/Dealer acknowledges that Insurer may require evidence that such
coverage is in force and Broker/Dealer shall promptly give notice to
Insurer of any notice of cancellation or change of coverage.
Broker/Dealer assigns any proceeds received from the fidelity bond
company to Insurer to the extent of Insurer's loss due to activities
under this Agreement covered by the bond. If there is any deficiency,
Broker/Dealer will promptly pay Insurer that amount on demand, and
Broker/Dealer shall indemnify and hold harmless Insurer from any
deficiency and from the cost of collection.
10. Termination.
A. Normal Termination. This Agreement shall continue for an
indefinite term, subject to the termination by either party upon written notice
to the other parties hereto, which shall be effective sixty (60) days following
receipt thereof.
B. Automatic Termination for Cause. This Agreement shall
automatically terminate upon: (1) a material breach of this Agreement by any
party, including without limitation any failure to comply with the laws or
regulations of any state or other governmental agency or body having
jurisdiction over the sale of the Contracts, unless such party shall, within
five business days of receipt of notice of such breach from another party to
this Agreement, cure such breach to the reasonable satisfaction of each other
party to this Agreement; or (2) the suspension, revocation or non-renewal of any
then required insurance or securities license of Broker/Dealer or Insurer or any
of their Affiliates, or the deregistration of the Broker/Dealer or its
termination of membership with the NASD.
C. Rights and Obligations. Upon termination of this Agreement,
except as otherwise provided herein, all authorizations, rights and obligations
shall cease. Except to the extent prohibited by applicable law, Broker/Dealer's
right to receive compensation shall continue in respect of any Contracts sold
prior to the termination of this Agreement (including any additional investments
under such Contracts).
11. General Provisions.
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A. Waiver. Waiver by any of the parties to promptly insist
upon strict compliance with any of the obligations of any other party under this
Agreement will not be deemed to constitute a waiver of the right to enforce
strict compliance.
B. Independent Contractor. Broker/Dealer and its Subagents who
are appointed as insurance agents of Insurer are independent contractors and not
employees, agents or representatives of Insurer or Distributor.
C. Independent Assignment. No assignment of this Agreement or
of commissions or other payments under this Agreement shall be valid without the
prior written consent of Insurer and Distributor.
D. Indebtedness and Right of Setoff. Except in connection with
an indemnification obligation under Section 8 of this Agreement, nothing
contained herein shall be construed as giving Broker/Dealer or Subagents the
right to incur any indebtedness on behalf of Insurer or Distributor.
Broker-Dealer hereby authorizes Insurer and Distributor to set off liabilities
of Broker-Dealer to Insurer and Distributor against any and all amounts
otherwise payable to Broker-Dealer.
E. Notice. Each notice required by this Agreement may be given
by telephone or telefax and confirmed in writing.Notices shall be delivered as
follows:
if to Farmers or the Separate Account:
Farmers New World Life Insurance Company
▇▇▇▇ - ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: C. ▇▇▇▇ ▇▇▇▇▇▇, President
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇. ▇▇▇▇▇▇▇ Close
Vice President and General Counsel
Farmers New World Life Insurance Company
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
and
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.,
Senior Corporate Counsel
Farmers New World Life Insurance Company
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
if to Distributor:
WM Funds Distributor, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
(Mailstop: 9002FDCA)
▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Washington Mutual Legal Department
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇.
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile (▇▇▇) ▇▇▇-▇▇▇▇
And if to Broker/Dealer:
▇▇▇▇ ▇▇▇▇▇▇▇▇
WM Financial Services
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▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile (▇▇▇) ▇▇▇-▇▇▇▇
F. Severability. To the extent this Agreement may be in
conflict with any applicable law or regulation, this Agreement shall be
construed in a manner not inconsistent with such law or regulation. The
invalidity or illegality of any provision of this Agreement shall not be deemed
to affect the validity or legality of any other provision of this Agreement.
G. Headings. The headings in this Agreement are included for
convenience of reference only and in no way define or delineate any of the
provisions hereof or otherwise affect their construction or effect.
H. Counterparts. This Agreement may be executed in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
I. Amendment. This Agreement, along with any Attachments,
Annexes and Exhibits may be amended from time to time by mutual consent of the
parties. No Amendment to this Agreement shall be effective unless in writing and
signed by all the parties hereto.
▇. ▇▇▇▇▇▇▇▇▇▇ Law. This Agreement shall be construed in
accordance with the laws of the State of Washington.
K. Effectiveness. This Agreement shall be effective as of the
date set forth above.
L. Binding Effect. This Agreement shall be binding on and
shall inure to the benefit of the respective successors and assigns of the
parties hereto provided that neither party shall assign this Agreement or any
rights or obligations hereunder without the prior written consent of the other
party.
M. Rights, Remedies, and Obligations are Cumulative. The
rights, remedies and obligations contained in this Agreement are cumulative and
are in addition to any and all rights, remedies and obligations, at law or in
equity, which the parties hereto are entitled to under state and federal laws.
N. Interpretation; Jurisdiction. This Agreement constitutes
the whole agreement between the parties hereto with respect to the subject
matter hereof, and supersedes all prior oral or written understandings,
agreements or negotiations between the parties with respect to such subject
matter. No prior writings by or between the parties with respect to the subject
matter hereof shall be used by either party in connection with the
interpretation of any provision of this Agreement.
O. Confidentiality. "Confidential Information" of a party
shall mean all confidential or proprietary information, including trade secrets
of such party and any documentation of such, the terms of this Agreement and any
"non-public personal information" related to "customers" or "consumers" as those
terms are defined by the ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act of 1999 (Public Law 106-102, 113
Stat. 1138), as it may be amended from time to time (the "GLB Act"), the
regulations promulgated thereunder or other applicable law. All Confidential
Information relating to a party shall be held in confidence by the other party
to the same extent and in at least the same manner as such party protects its
own confidential or proprietary information. Neither party shall disclose,
publish, release, transfer or otherwise make available Confidential Information
of the other party in any form to, or for the use or benefit of, any person or
entity without the other party's prior written consent. Notwithstanding the
foregoing sentence, each party shall be permitted to disclose relevant aspects
of the other party's Confidential Information to its officers, affiliates,
agents, subcontractors and employees solely to the extent that such disclosure
is reasonably necessary for the performance of its duties and obligations under
this Agreement and such disclosure is not prohibited by the GLB Act, the
regulations thereunder or other applicable law; provided, however, that such
party shall take all reasonable measures to ensure that Confidential Information
of the other party is not disclosed or duplicated in contravention of the
provisions of this Agreement by such officers, affiliates, agents,
subcontractors and employees. The obligations in this section shall not restrict
any disclosure by either party pursuant to any applicable law, or by order of
any court or government agency or self-regulatory organization of which a party
is a member (provided that the disclosing party shall give prompt notice to the
non-disclosing party of such order) and shall not apply with respect to
information which (1) is developed by the other party without violating the
disclosing party's proprietary rights, (2) is or becomes publicly known (other
than through unauthorized disclosure), (3) is disclosed by the owner of such
information to a third party free of any obligation of confidentiality, (4) is
already known by such party without an obligation of confidentiality other than
pursuant to this Agreement or any confidentiality agreements entered into before
the effective date between the parties hereto or (5) is rightfully received by a
party free of any obligation of confidentiality. If the GLB Act, the regulations
promulgated thereunder
8
or other applicable law now or hereafter in effect imposes a higher standard of
confidentiality to the Confidential Information, such standard shall prevail
over the provisions of this section.
Each party shall implement those safeguards necessary for the
protection of consumers and customer records and information in
accordance with the GLB Act, the regulations promulgated thereunder,
and any applicable interpretive guidance or other applicable law. In
addition, each party shall restrict access to customer information to
those persons who need to know such information to discharge the duties
and obligations set forth in this Agreement or as otherwise permissible
by law or regulation.
Insurer agrees it shall not make use of any information relating to
purchasers of Contracts, including, without limitation, any
solicitation of the Purchasers of Contracts to purchase any other
product or service, without the prior written consent of Broker/Dealer
or Distributor.
P. Arbitration. Any controversy or claim arising out of or
relating to this Agreement, or the breach hereof, shall be settled by
arbitration in a forum mutually agreed to by Distributor, Broker/Dealer and
Insurer in accordance with the Commercial Arbitration Rules of the American
Arbitration Association, and judgment upon the award rendered by the arbitrators
may be entered in any court having jurisdiction thereof.
Q. Audit of Records. To the extent not otherwise provided
herein, a senior officer of each party hereto (the "Requesting Party") or his or
her designee shall have the right, upon reasonable notice to any other party
hereto (the "Other Party"), during regular business hours, to audit all the
records and practices of the Other Party relating to the business contemplated
hereunder in order to determine whether such Other Party is complying with the
terms of this Agreement, including the payment of commissions and fees, but such
audits shall, under normal business circumstances, be conducted no more
frequently than once per year. Distributor and Broker-Dealer shall use best
efforts to conduct any audit of Insurer's third party administrator in
conjunction with Insurer's scheduled audit of such third party administrator.
The Requesting Party shall have the right to copy any of such records at its
expense. At its option, such audit may be conducted by the Requesting Party's
own personnel or by a qualified independent auditor selected by it. The
Requesting Party shall use best efforts to conduct each such audit in a manner
that avoids any material disruption of the Other Party's business.
R. Regulatory Examinations. Insurer, Broker/Dealer and
Distributor shall each consult and cooperate fully with the other in connection
with any state or federal regulatory examination, including any securities
regulatory investigation, or proceeding or judicial proceeding arising in
connection with the Contracts marketed under this Agreement. In the case of a
written customer complaint, Insurer, Broker/Dealer and Distributor will each
consult with the other in connection with investigating such complaint and any
response by a party to this Agreement to such complaint will be sent to the
other parties to this Agreement for approval not less than two business days
prior to its being sent to the customer or regulatory authority, except that if
a more prompt response is required, the proposed response shall be communicated
by telephone or facsimile. Without limiting the foregoing, each party shall
notify the other parties of any written customer complaint or notice of any
regulatory investigation or proceeding or judicial proceeding received by such
party with respect to any other party, or in connection with any Contract
marketed under this Agreement or any activity in connection with any such
Contract, within five business days of receipt of such complaint or notice.
9
IN WITNESS WHEREOF, this Agreement has been executed by duly authorized
representatives of the parties to this Agreement as of the date set forth above.
"INSURER":
FARMERS NEW WORLD LIFE INSURANCE COMPANY
By: __________________________________
________________________________________
Printed Name & Title
"DISTRIBUTOR":
WM FUNDS DISTRIBUTOR, INC.
By: ________________________________________
________________________________________
Printed Name & Title
"BROKER/DEALER":
WM FINANCIAL SERVICES, INC.
By: ________________________________________
________________________________________
Printed Name & Title
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Attachment A
Insurance Contracts
1. Farmers Accumulator VUL, a Flexible Premium Variable Life Insurance Policy
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ANNEX I
This Annex I appends that certain Selling Agreement dated _____________________
(the "Agreement") between Farmers New World Life Insurance Company, WM Funds
Distributor, Inc. and WM Financial Services, Inc. ("Broker/Dealer"). Each of the
undersigned is affiliated with Broker/Dealer and represents that it holds the
necessary corporate insurance license to act as general agent in connection with
the sale of Contracts, as defined in the Agreement, in those states so
identified next to its name. By executing this Annex I each of the undersigned
agrees to be bound by the terms and conditions of the Agreement as if it were a
party thereto.
COMPANY STATE(S) TAX I.D. NO.
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COMPANY STATE(S) TAX I.D. NO.
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EXHIBIT 1
Commission Schedule
Effective _____ __, 2003
This Commission Schedule is hereby incorporated in and made a part of the
Selling Agreement dated as of ___________ ___, 2003 ("Agreement") by and between
Farmers New World Life Insurance Company ("Insurer"), WM Funds Distributor, Inc.
and WM Financial Services, Inc., together with its duly licensed insurance
affiliates indicated on Annex I to the Agreement (collectively,
"Broker/Dealer").
The following commission rates shall apply to Contracts issued by Insurer.
Commissions are paid in respect of the aggregate purchase payments received and
accepted by Insurer with complete application information and documentation as
required by Insurer or as a subsequent purchase payment under a Contract after
the Contract is in force. In addition, if an annual trail commission is
applicable, it will be payable in monthly installments. The trail commission
installment for each calendar month will be calculated based on contract value
as of the end of such month. Trail commissions are not payable on any Contract
that has been surrendered or under which a death benefit has been paid.
Farmers Accumulator (VUL II)
GDC Compensation
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PRODUCT YEAR UP TO TARGET ABOVE TARGET
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VUL Accumulator 1 80% 3.2%
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VUL Accumulator 2-10 4% 4%
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* GDC% for Year 11+ is 2% for all plans, all premiums
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EXHIBIT 2
Applicable Laws and Regulations
Effective ________________
1. Securities Act of 1933
2. Securities Exchange Act of 1934
3. Investment Company Act of 1940
4. USA PATRIOT Act
5. Federal Violent Crime Control and Law Enforcement Act of 1994
6. Economic sanctions programs administered by the U.S. Treasury
Department's Office of Foreign Asset Control ("OFAC")
15