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Exhibit 3(b)
SELLING AGREEMENT
THIS AGREEMENT is effective as of this ______ day of _____________, 2001 by
and among The Travelers Insurance Company ("TIC"), The Travelers Life and
Annuity Company ("TLAC") (collectively the "Insurance Companies") Travelers
Distribution LLC. ("Underwriter") and _______________________________________
("Broker/Dealer") together with its affiliated insurance agencies
(collectively the "Selling Entities") as are designated on the signature pages
to this agreement.
This agreement supercedes any previous selling agreements in force among the
parties. In consideration of the mutual promises contained in this agreement,
the parties agree as follows:
Purpose and Background. The Underwriter, the Insurance Companies,
Broker/Dealer and Selling Entities enter into this agreement for the purpose
of authorizing Broker/Dealer, through certain of its life insurance licensed
agents to solicit applications for such life insurance (including variable
life), annuity contracts (including fixed, variable, and modified guaranteed
annuity products), long term care insurance contracts and such other insurance
products as shall be mutually agreed upon (collectively the "Insurance
Contracts") as are listed on the Schedule Pages attached to this agreement as
Exhibit 1 (the "Schedule Pages"). The Schedule Pages may be amended from time
to time to add other Insurance Contracts.
2. Licensing and Appointment. The Insurance Companies have each
respectively appointed Underwriter to serve as the distributor and principal
underwriter of the variable life or variable annuity Insurance Contracts. The
Underwriter is registered with the Securities and Exchange Commission ("SEC"),
the National Association of Securities Dealers, Inc. ("NASD") and all other
appropriate state securities regulatory authorities as a broker/dealer.
Broker/Dealer possesses (or affiliated insurance agencies under its control -
defined as "Selling Entities" in this agreement - possess) all required
insurance licenses necessary to sell the Insurance Contracts.
Accordingly Underwriter hereby appoints Broker/Dealer to distribute the
Variable Insurance Contracts listed on the Schedule Pages through its
Registered Representatives ("Registered Representatives").
3. Securities Licensing/NASD Compliance. Broker/Dealer shall at all times,
when performing its functions under this agreement, be registered as a
securities broker/dealer with the SEC and the NASD and licensed or registered
as a securities broker/dealer in the states and other local jurisdictions that
require such licensing or registration in connection with sales of Variable
Insurance Contracts.
Broker/Dealer and Selling Entities agree to abide by all applicable state and
federal rules and regulations promulgated thereunder. For the purpose of
compliance with any such laws or regulations, Broker/Dealer acknowledges and
agrees that, in performing broker/dealer services covered by this Agreement,
it is acting in the capacity of an independent broker as defined by the
by-laws of the NASD and not as an agent or employee of either Underwriter or
any registered investment company.
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4. Insurance Licensing. Broker/Dealer (and, if appropriate, Selling
Entities) agrees that at all times when performing its functions under this
agreement, the entity on whose behalf agents and Registered Representatives
act when soliciting sales of the Insurance Contracts, will have a valid
insurance agency license in jurisdictions that require such licensing or
registration. If applicable, Broker/Dealer represents that it, or its
insurance agency affiliate, is properly authorized under applicable state law
to receive insurance commissions generated from sales of the Insurance
Contracts.
Broker/Dealer and Selling Entities each represent that they will engage in the
solicitation and sale of Insurance Contracts in accordance with applicable
insurance and securities laws and regulations.
Broker/Dealer represents and warrants that it is authorized and licensed as an
agent under applicable state insurance laws to solicit the Insurance
Contracts. In the event Broker/Dealer is not licensed as such, an insurance
agency affiliated with Broker/Dealer shall be licensed as an agent under
applicable state insurance laws to solicit the contracts of insurance
contemplated hereunder. Such Selling Entity will be designated as a party to
this Agreement.
5. Appointment of Broker/Dealer. The Insurance Companies hereby authorize
the Broker/Dealer to sell those Insurance Contracts listed on the Schedule
Pages, as such pages may be amended from time to time, including the Variable
Insurance Contracts, through its Registered Representatives. Broker/Dealer and
Selling Entities are also appointed to perform certain administrative services
necessary to facilitate the solicitation and sales of such Insurance
Contracts.
Broker/Dealer or, if applicable, Selling Entities, each are appointed general
agencies of Insurance Companies and each are authorized to sell the Insurance
Contracts listed on the Schedule Pages.
Pursuant to the appointments described in this Section 5, Broker/Dealer and
Selling Entities must comply with the following requirements:
(a) All securities activities provided in connection with the sale
of Variable Insurance Contracts will be through Registered Representatives of
Broker/Dealer;
(b) Unregistered employees of Broker/Dealer will neither engage in
securities activities nor receive any compensation based on transactions in
Variable Insurance Contracts or the provision of securities advice;
(c) Broker/Dealer will maintain all necessary books and records
relating to transactions in Variable Insurance Contracts in accordance with
applicable securities and insurance laws and regulations;
(d) Customers purchasing Insurance Contracts will make their checks
payable to Insurance Companies. Cash, money orders and/or travelers checks are
not acceptable methods of payment. Broker/Dealer will comply with Insurance
Companies' Anti-Money Laundering policies as are communicated from time to
time.
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(e) Broker/Dealer will notify Insurance Company if the writing
agent for any policy changes, or if the writing agent or customer requests
that the writing agent for a policy be changed. Travelers will honor all such
customer requests.
For the purpose of compliance with any applicable state insurance laws or
regulations promulgated under them, Broker/Dealer (and, if applicable, Selling
Entities) acknowledges and agrees that, solely in performing the
insurance-selling functions reflected by this Agreement, it or its Registered
Representative is acting as the agent of the Insurance Companies and, in that
capacity, is authorized only to solicit applications from the public for the
Insurance Contracts.
6. Responsibility for Registered Representatives' Activities. Broker/Dealer
will select and supervise persons whom it will train to solicit applications
for the Insurance Contracts in conformance with applicable state and federal
laws and regulations. Persons engaged in the sale of Variable Insurance
Contracts will be Registered Representatives of Broker/Dealer in accordance
with the rules of the NASD.
The Insurance Companies shall have authority to determine whether to appoint
or terminate each Registered Representative or licensed agent as an insurance
agent of the Insurance Companies. Broker/Dealer agrees to cooperate in
supplying information or making recommendations necessary to complete such
insurance agent appointments.
Unless otherwise agreed upon, in jurisdictions which require that Insurance
Companies perform background investigations of agents prior to appointment,
Broker/Dealer agrees to provide such information as may be necessary to
perform such review, including but not limited to obtaining permission from
each Registered Representative who seeks such appointment.
To the extent agreed upon by the parties to this agreement, Broker/Dealer (and
Selling Entities) will certify as to the fitness of each individual that it
presents for appointment with the Insurance Companies. Such certification will
take the form of a General Letter of Recommendation which will describe the
representations Broker/Dealer will make for each agent. If applicable, a
General Letter of Recommendation will be added to this Agreement and
incorporated hereunder. Insurance Companies will have the right to
periodically request assurances or otherwise audit Broker/Dealer's records to
ensure compliance with the terms of the General Letter of Recommendation. Such
assurances may take the form of a questionnaire requesting updated assurances
about the representations contained in the General Letter of Recommendation
and made for each agent presented to the Insurance Companies for appointment.
Upon request by Insurance Companies, Broker/Dealer and/or Selling Entities
shall furnish such appropriate records and permit such reasonable audit
procedures as may be necessary to establish supervision of its Registered
Representatives in connection with sales of the Insurance Contracts. Upon
Insurance Companies' review of such supervisory materials, Broker/Dealer shall
make such changes to its Registered Representatives' rules of conduct as
Insurance Companies may reasonably request but only to the extent that such
requests relate to sale of the Insurance Contracts.
Broker/Dealer shall notify Insurance Companies if any Registered
Representative ceases to be a Registered Representative of Broker/Dealer or
ceases to maintain the proper licensing required
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for the sale of the Insurance Contracts or fails to meet material rules and
standards imposed by either Broker/Dealer or the Selling Entities including
but not limited to continuing education requirements.
If Broker/Dealer agrees to deliver on behalf of Insurance Company policies,
annual reports, policy statements, billing notices, miscellaneous reports of
policy values and other pertinent information, or other materials relating to
the Policy that the Broker/Dealer warrants it will deliver such documents on a
timely basis. Broker/Dealer will be responsible for complying with all
applicable insurance laws concerning the fulfillment of such delivery
obligations.
7. Suitability of Sales of Insurance Contracts. With regard to Variable
Insurance Contracts, Broker/Dealer will review all contract and policy
applications for suitability, completeness and correctness as to form.
Broker/Dealer shall also be responsible for ensuring compliance with NASD
suitability rules and standards applicable to sales of Variable Insurance
Contracts. Broker/Dealer is also responsible for ensuring that all sales are
in compliance with applicable state insurance laws and regulations.
Broker/Dealer will promptly, but in no case later than the end of the business
day that Broker/Dealer receives applications and payment, forward to the
applicable Insurance Company, at addresses provided, all such applications
found suitable and in good form, together with any payments received with such
applications. Broker/Dealer will immediately return to the applicant all
applications deemed by Broker/Dealer to be unsuitable or not complete and
correct as to form together with any payments received. The Insurance
Companies reserve the right to reject any Insurance Policy application and
return any payment made in connection with an application which is rejected.
Insurance Contracts issued will be forwarded to Broker/Dealer or, at the
direction of Broker/Dealer, to the Registered Representative for delivery to
the Contract Owner. Broker/Dealer shall obtain and retain a written receipt
for each Insurance Policy which Broker/Dealer delivers.
The parties acknowledge that sales and solicitations may, where consistent
with state insurance laws and regulations, be conducted either without an
application or on a basis where an application is submitted subsequent to a
sale. If such sales procedures are permitted, Broker/Dealer agrees that it
will continue to be responsible for compliance with applicable laws
concerning, among other things, suitability and policy delivery requirements.
Broker/Dealer agrees to hold Insurance Companies and Underwriter harmless for
any failure to follow such rules or regulations.
8. Solicitation/Representations Concerning the Insurance Contracts.
Broker/Dealer will perform the selling functions required by this Agreement in
accordance with the terms and conditions of any applicable prospectus(es).
Broker/Dealer will make only representations included in the prospectus or in
any authorized supplemental material. No sales solicitations, including the
delivery of supplemental sales literature or other such materials, shall
occur, be delivered to, or used with a prospective purchaser unless
accompanied or preceded by appropriate and then current prospectuses. Neither
Broker/Dealer nor Selling Entities will make representations concerning an
Insurance Contract contrary to the terms of the particular Insurance Contract.
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Any material prepared or used by Broker/Dealer or its Registered
Representatives, which describes in whole or in part or refers by name or form
to any of the Insurance Companies' Insurance Contracts or underlying funds or
uses the name of the Insurance Companies, Underwriter, or Citigroup Inc., or
the logos or service marks of any of them, or the name, logos or service marks
of any "Affiliated Company" of any of them, as that term is defined in Section
2(a)(2) of the Investment Company Act of 1940, other than the Broker/Dealer or
any subsidiary of it, must be approved by Underwriter in writing prior to any
such use.
Broker/Dealer and Selling Entities acknowledge that information pertaining to
Underwriter and Insurance Companies is proprietary in nature. Selling Entities
agree that they will not disclose any information concerning Insurance
Companies or Underwriter's products, services or programs to any person for
consideration or otherwise unless Insurance Companies or Underwriter consent
to such use in writing. Broker/Dealer and Selling Entities agree that,
following the termination of this Agreement for any reason, they will not
enter into any plan, program, scheme or course of action which would
systematically attempt to induce any Contract Owner(s) away from Insurance
Companies, except that Broker/Dealer may always recommend a move to another
company's product if such move would be more suitable than Insurance
Companies' product for a particular client or clients or in the event of a
detrimental change in the financial stability of Insurance Companies which
Broker/Dealer believes would jeopardize its clients.
9. Use of Confidential Information. The parties to this Agreement agree to
safeguard customer information provided during the application and
underwriting process by Contract Owners. Specifically, the parties understand
that the Insurance Companies provide a "Privacy Notice" substantially in the
form provided to Broker/Dealer from time to time as may be required by
applicable law. The parties agree to cooperate with each other to comply with
the terms of this Privacy Notice. The Companies and Underwriter represent that
they shall not use consumers' or customers' non-public personal information in
any way not anticipated under this Agreement, or in any way not permitted
under applicable statutes or regulations.
10. Compensation. Compensation payable to Broker/Dealer on sales of the
Insurance Contracts sold by Registered Representatives will be paid to
Broker/Dealer or, as necessary to meet any legal requirements, to Selling
Entities in accordance with the Compensation Schedule(s) set forth on the
Schedule Pages. Such Schedule Pages may be amended from time to time and
compensation will be paid in accordance with the Compensation Schedule in
effect at the time the premium payments are received by the applicable
Insurance Company (in the case of annuities) or at the time the applications
are received (in the case of life insurance). The Insurance Companies reserve
the privilege of amending the Compensation Schedules set forth in the Schedule
Pages at any time with prior written notice to Broker/Dealer. Submission of
applications for Insurance Contracts following receipt of such notice shall
operate to ratify acceptance of such amendment.
11. Assignment of Agreement. This Agreement may not be assigned except by
mutual consent and will continue, subject to the termination by any party on
written notice to the other party except that, in the event Broker/Dealer
ceases to be a registered Broker/Dealer or a member of the NASD, this
Agreement will immediately terminate. Underwriter reserves the right to
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designate, at its sole discretion, an alternative Principal Underwriter for
the distribution of the Contracts covered by this Agreement with prior written
notice to Broker/Dealer except in the event that TIC and/or TLAC replaces
Underwriter as discussed below.
The parties understand that, should TIC and/or TLAC replace Underwriter, any
such substituted party will automatically assume all of Underwriter's rights
and duties under this Agreement. TIC and or TLAC may assume such functions
itself, or assign these to affiliated, properly licensed broker-dealers. TIC
and/or TLAC will notify Broker/Dealer if any such substitution occurs.
12. Indemnification. Each party shall hold harmless defend, exonerate and
indemnify each other party to this Agreement for any loss or expense the other
party suffered that results from the indemnifying party's breach of this
Agreement or violation of applicable law with respect to its services required
under this Agreement. Such indemnification extends to the employees, officers,
directors, affiliates and agents of each of the parties to this Agreement.
13. Fund Transfer Requests. Broker/Dealer is responsible and will supervise
the activities of its Registered Representatives with regard to requests for
investment option transfers requested on behalf of Contract Owners.
Broker/Dealer will not permit its Registered Representatives to request
investment option transfers unless such authority has been granted in writing
to the Registered Representative by a Contract Owner and proof of such
authority has been provided to and acknowledged by the Insurance Companies.
Broker/Dealer agrees that it will cause its Registered Representatives to use
such forms as may be reasonably required by Insurance Companies.
Broker/Dealer represents that it will indemnify Insurance Companies, their
employees, agents and affiliated parties from any loss occasioned by any
claimed or actual improper or unauthorized investment option transfer or
surrender request made by Broker/Dealer or its Registered Representative on
behalf of a Contract Owner.
14. Notices. All notices to the Insurance Companies or Underwriter
relating to this Agreement should be sent to the attention of:
Travelers Life & Annuity
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: General Counsel
All notices to Broker/Dealer will be duly given if mailed or faxed to the
address provided to Insurance Companies by Broker/Dealer from time to time.
15. Independent Contractors. Underwriter and Insurance Companies are
independent contractors with respect to Broker/Dealer, Selling Entities, and
Registered Representatives.
16. Governing Law. This Agreement shall be construed in accordance with and
governed by the laws of the state of Connecticut.
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17. Amendment of Agreement. Insurance Companies reserve the right to amend
this Agreement at any time, and the submission of an application by
Broker/Dealer after notice of any such amendment has been received by the
other parties shall constitute the other parties' agreement to any such
amendment. Following provision of notice of a change in compensation
schedules, submission of additional business shall operate to ratify
acceptance of such schedules.
18. Termination. This Agreement may be terminated, without cause, by any
party upon thirty (30) days' prior written notice, and may be terminated, for
failure to perform satisfactorily or other cause, by any party immediately and
shall be terminated if Broker/Dealer shall cease to be a registered
broker/dealer under the Securities Exchange Act of 1934, as amended, or a
Member of the NASD. Notwithstanding, the following sections shall survive any
such termination: Sections 3, 4, 6, 8, 10, 12, 14, 16, 19, 20, 21 and 24.
19. Waiver Upon Termination. Failure of any party to terminate this
Agreement for any of the causes set forth in this Agreement will not
constitute a waiver of the right to terminate this Agreement at a later time
for any of these causes.
20. Books and Records. Broker/Dealer shall maintain all books and records
required by applicable laws and regulations in connection with the offer and
sale of the Insurance Contracts. The books, accounts and records of
Broker/Dealer relating to the sale of the Insurance Contracts shall be
maintained so as to clearly and accurately disclose the nature and details of
all transactions. Underwriter and Insurance Companies reserve the right to
request reasonable periodic inspection of such books and records as relate to
the sale and solicitation of the Insurance Contracts.
21. Cooperation with Regulatory Investigations. Broker/Dealer, Selling
Entities, Insurance Companies and Underwriter agree to cooperate fully in any
insurance, securities or other regulatory investigation, inquiry, inspection,
or proceeding or in any judicial proceeding arising in connection with the
Insurance Contracts. Broker/Dealer and Insurance Companies shall cooperate
with each other to resolve any customer complaint and each agrees to promptly
notify the other, upon receipt of notice, of any investigation, claim or
proceeding involving the Insurance Contracts or any situation which would
materially affect the respective party's ability to perform its obligations
hereunder. Each of the parties to this Agreement agrees that it will promptly
notify the other parties of any material claim of which it becomes aware
involving the sale or solicitation of the Insurance Contracts.
22. Fidelity Bond and Errors and Omissions Coverage. Broker/Dealer
represents that all of its directors, officers, employees and Registered
Representatives are and shall be continuously covered by a blanket fidelity
bond covering for larceny and embezzlement and issued by a reputable bonding
company. This bond shall be maintained at Broker/Dealer's expense and shall be
at least of the form, type and amount required under the NASD Conduct Rules.
Broker/Dealer and Selling Entities represent that its agents are covered by
Errors and Omissions insurance.
23. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed in all respects an original.
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24. Arbitration. The parties to this Agreement agree to refer any dispute
arising under this Selling Agreement to arbitration. Such arbitration
proceeding will be held in Hartford, Connecticut (or such other location as
may be mutually agreed upon) and will be governed by the Code of Arbitration
Procedures of the National Association of Securities Dealers.
In reliance on the representations set forth and in consideration of the
undertakings described herein, the parties represented below do hereby
contract and agree. IN WITNESS WHEREOF, the parties have signed this agreement
as indicated above.
The Travelers Insurance Company The Travelers Life & Annuity
Company
By: By:
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Name: Name:
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Title: Title:
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Date: Date:
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Travelers Distribution LLC ----------------------------
Broker Dealer
By: By:
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Name: Name:
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Title: Title:
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Date: Date:
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------------------------------------ ----------------------------
Insurance Agency Insurance Agency
By: By:
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Name: Name:
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Title: Title:
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Date: Date:
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------------------------------------ ----------------------------
Insurance Agency Insurance Agency
By: By:
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Name: Name:
---------------------------- -----------------------
Title: Title:
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Date: Date:
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EXHIBIT 1
Selling Agreement Schedule Page
Broker/Dealer and Selling Entities are authorized to solicit applications for
the life insurance policies, annuity contracts, long-term care contracts, and
the other insurance products listed below
1. Corporate Variable Life Insurance
Travelers Corporate Variable Life
Travelers Corporate Variable Life 2000
Travelers Corporate Variable Life 2000 Enhanced
All products described herein are subject to state availability. Compensation
Schedules for each product described above are listed on the following pages.
Consistent with the terms of the Selling Agreement, Compensation Schedules may
be changed at any time.
Payment of compensation for any product is subject to the following conditions
and limitations, in addition to any applicable provision of the Selling
Agreement.
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1. Chargebacks of Commissions.
Chargeback of commissions for all Travelers Corporate Variable Life
Insurance Products:
A. If the Insurance Companies return all or a portion of a premium
paid with respect to an Insurance Product. Broker Dealer shall be
obligated to refund to Insurance Companies applicable commissions
on the amount of such premium only where:
(i) consistent with the Selling Agreement, the Insurance
Product solicited is returned as not taken under the
policy "free look" provisions;
(ii) premiums are refunded due to overpayments. errors in
billing or in the timing of automatic premium collection
deductions, or errors resulting in policy reissue;
(iii) the check delivered in payment of any contract premium
does not clear and the premium collection deductions, or
errors resulting in policy reissue;
(iv) the Insurance policy on which commission payments were
made is terminated or premium is refunded because the
Registered Representative(s) or Broker-Dealer who sold the
Insurance Policy committed an act, error or omission which
materially contributed to the termination of the Insurance
Policy or the need to return premium;
(v) the issuing Insurance Company rejects the application;
(vi) a judicial or regulatory authority directs the issuing
Insurance Company to return premium payments without
assessment of a surrender charge;
(vii) the applicant's initial premium on a 1035 exchange is
returned because the expected rollover amount from another
policy or contract is not transferred due to the exchange
not meeting the legal requirements to qualify for a
tax-free exchange;
(viii) the issuing Insurance Company returns unearned premium on
a life insurance contract as required by the provisions of
the policy;
(ix) the issuing Insurance Company determines that it has a
legal liability to return premiums on a life insurance
contract within the first year after the Insurance Product
is issued; or
(x) the issuing Insurance Company and Broker/Dealer mutually
agree to return all or a portion of a premium with respect
to a particular contract or policy.
(xi) the Insurance Policy is surrendered within 90 days from
the date of issuance. In any case. Broker Dealer and/or
Insurance Companies may offset amounts paid in commission
on surrendered policies from future sales.
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B1 The chargeback schedule for Travelers Corporate Variable Life is as
follows:
If the policy is surrendered after 90 days, but within the first
two policy years and the policy belonged to a case, the
Broker/Dealer shall be obligated to refund to the underwriter the
following amounts:
(i) If the surrender is within the first policy year, 6% of
first year premium up to target premium plus 2% on all
first year premium in excess of target premium, plus any
bonus amount associated with the policy.
(ii) If the surrender is after the first policy year. but
before completion of the second, 3% of first year premium
up to target premium plus 1% on all first year premium in
excess of target premium, plus 50% of any bonus associated
with the policy.
If the policy is surrendered within the first five policy years
and the policy does not belong to a case, the Broker/Dealer shall
be obligated to refund to the underwriter the following amounts:
Year of Surrender % of First Year Compensation Refunded
----------------- -------------------------------------
1 100
2 80
3 60
4 40
5 20
B2. The chargeback schedule for Travelers Corporate Variable Life 2000
is as follows:
If the policy is surrendered after 90 days, but within the first
three policy years and the policy belonged to a case, the
Broker/Dealer shall be obligated to refund to the underwriter the
following amounts:
(i) If the surrender is within the first policy year, 15% of
first year premium up to target premium plus 3.5% on all
first year premium in excess of target premium.
(ii) If the surrender is after the first policy year, hut
before completion of the second, 7% of cumulative target
premiums plus 3.5% on cumulative premium in excess of
cumulative target premium.
(iii) If the surrender is after the second policy year, but
before completion of the third policy year, 3.5% of
cumulative target premiums plus 2.5% on cumulative
premiums in excess of cumulative target premiums.
Chargeback for a policy that does not belong to a case will be the
same as that for Travelers Corporate Variable Life.
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B3. The chargeback schedule for Travelers Corporate Variable Life 2000
enhancements is as follows:
If the policy is surrendered after 90 days. but within the first
three policy years and the policy belonged to a case, the
Broker/Dealer shall be obligated to refund to the underwriter the
following amounts:
(i) If the surrender is within the first policy year, 18% of
first year premium up to target premium plus 3.5% on all
first year premium in excess of target premium.
(ii) If the surrender is after the first policy year, but
before completion of the second, 10% of cumulative target
premiums plus 3.5% on cumulative premium in excess of
cumulative target premium.
(iii) If the surrender is after the second policy year, but
before completion of the third policy year, 4% of
cumulative target premiums plus 3.5% on cumulative
premiums in excess of cumulative target premiums.
Chargeback for a policy that does not belong to a case or that is
surrendered will be the same as that for Travelers Corporate Variable
Life.
C. The Insurance Company may offset amounts paid in commission on
surrendered policies from future sales.
A case is defined as a group of policies sold together to a
corporation for purposes of funding non-qualified benefits, etc.
2. Free Look Provision. If any Contract is redeemed at any time or if
within the applicable free look period after confirmation by the
Insurance Companies of any premium payments credited to a Contract,
that Contract is tendered for full or partial surrender, or the life
at risk thereunder dies, then, at the option of the Insurance
Companies, no commission will be payable with respect to such premium
payments and any commission previously paid for said premium payments
must be refunded to the applicable Insurance Company. Insurance
Companies agree to notify Broker/Dealer within ten (10) business days
after the request for repurchase or redemption or notification of
death of the life at risk is received by the applicable Insurance
Company.
3. Rebating. If Broker/Dealer or Selling Entity or any Registered
Representative or agent of Broker/Dealer or Selling Entity rebates or
offers to rebate all or any part of a premium on an Insurance Contract
issued by the Insurance Companies in violation of applicable state
insurance laws or regulations, or if Broker Dealer or any Registered
Representative of Broker/Dealer shall withhold any premium on an
Insurance Contract issued by the Insurance Companies, the same may be
grounds for termination of this Selling Agreement by Insurance
Companies.
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4. Churning. If Broker/Dealer induces or attempts to induce any Contract
Owner to relinquish an Insurance Contract except tinder circumstances
where there is reasonable grounds for believing the contract or
certificate is not suitable for such person, Broker-Dealer's right to
receive any compensation under this Agreement shall cease and
terminate.
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COMMISSION SCHEDULES FOR
CORPORATE LIFE INSURANCE PRODUCTS
A2
This Schedule is attached to and is made a part of the Agreement. It
is subject to the terms and conditions contained in the Agreement.
The compensation arrangements described below shall govern commission
payouts. Commissions based on premium will be calculated only on
premiums actually received in good order by the Insurance Companies.
Commissions will be paid only on an as-earned basis. Commissions will
be paid to Broker/Dealer unless state insurance laws require that
commission payments be made to an insurance agency.
1. Insurance Companies will pay commissions and allowances on premiums
paid for additional benefits or increases in benefits of any kind at
the same rate as is being allowed at the time of addition, or increase
for the premiums of the contracts to which they are added. Insurance
Companies will not pay compensation: on premiums for a policy which is
a conversion of employee Special Protection Plan, Employee Life
Insurance-Plan 1 Or group life insurance; on extra premiums for a
policy which are charged due to temporary flat substandard rating
because of physical impairments; or on premiums of a policy which are
waived under any provision of such policy.
2. If a Life Insurance Contract is converted to a different Contract,
Insurance Companies will pay compensation in accordance with our rules
applying to such contracts at the time of conversion.
3. Where, in Insurance Companies' judgment, a policy replaces a policy
previously issued by Insurance Companies on the same policyholder
(other than as a term conversion), the commission payable for the
first year of insurance on the new policy will be adjusted in
accordance with Insurance Companies' procedures in effect at the time
of such replacement.
4. Compensation on all universal life and variable universal Life
policies which would otherwise be payable. will not be paid on
remittances received for contracts following a partial withdrawal
until the sum of such remittances equals the amount of the withdrawal
at which time Insurance Companies will pay compensation on subsequent
remittances.
5. While recognizing the opportunity for flexibility in policyholder
service options inherent to universal life forms of insurance,
evidence of manipulation by any Registered Representative of universal
life contracts, contributions, loans, surrenders or replacements, not
deemed by Insurance Companies to be in the best interest of the then
policyholder will result in chargeback of commission and/or
termination of this Agreement.
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6. Initial compensation payable under this Schedule will be payable at
the time of the receipt and acceptance of premium by the Insurance
Companies. The amount, if any, and the time of payment of compensation
on replacements, changes, exchanges, term renewals, premium payments
paid in advance, or similar policy issuance situations shall be
governed by the Insurance Companies' underwriting and administrative
rules then in effect.
7. As used in the attached compensation schedules, the following
definitions apply:
"TARGET PREMIUM" means the premium paid to Travelers Corporate
Variable Universal Life that receives new commission rates in the
first year and renewal commission rates in the renewal years.
"RENEWAL PREMIUM" is the premium credited to a Flexible premium
policy in all years following the first policy year with the
exception of that portion of the Renewal premium designated by the
Insurance Companies in their sole discretion as an increase.
"▇▇▇▇▇ PREMIUM" means the paid premium level in any year above which
will receive a reduced excess commission rate for Travelers Corporate
Variable Universal Life.
"EXCESS PREMIUM" means the premium paid to Travelers Corporate
Variable Universal Life that is above the target premium in any year.
"PRODUCTION LEVEL" is measured by the amount of premiums paid to a
maximum of the 7-Pay premium associated with the full initial death
benefit.
16
Compensation payable for sales of Travelers Corporate Variable Life will be as
follows:
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Excess Up To Excess Above Commission on
New Target Renewal Years Renewal Years ▇▇▇▇▇ Premium ▇▇▇▇▇ Premium Assets
Premium 2-4 5-7 Years 1-7 Years 1-7 Years 8-20
--------------------------------------------------------------------------------------------
15% 10% 4.5% 3.5% 2% 0.20%
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Commission paid on all premiums years 8+: 0%
Compensation payable for sales of Travelers Corporate Variable Life 2000 and
Corporate Variable Life 2000 Enhanced will be as follows:
----------------------------------------------------------------------------------------------
Excess Commission Commission Commission
Renewal Renewal Premium on Assets on Assets on Assets
New Target Premium Yrs 2-4 Yrs 5-7 Yrs 1-7 Yrs. 8-15 Yrs 16-25 Yrs 26 +
----------------------------------------------------------------------------------------------
18% 10% 4.5% 3.5% 0.20% 0.10% 0.05%
----------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------
Bonus Production Level
----------------------------------------------------------------------------------------------
0-9,999,999 0%
----------------------------------------------------------------------------------------------
10,000,000+ 0%
----------------------------------------------------------------------------------------------
Bonus commission will be retroactive to the first dollar of paid target
premium only. Production levels will be measured on a calendar year for the
purpose of qualifying for the bonus. Commission will be paid consistent with
applicable law.
The Travelers Insurance Company
▇▇▇▇ ▇. ▇▇▇▇▇▇, FSA, MAAA Date
Vice President