Exhibit 1.A(3)(i)
SCHEDULE H
COMPENSATION SCHEDULE
TO SELLING AGREEMENT FOR SECURITY LIFE
VARIABLE SURVIVORSHIP UNIVERSAL LIFE
This Schedule is an attachment to the ING America Equities, Inc. ("ING AMERICA
EQUITIES") Selling Agreement by and among the parties pursuant to paragraph 17
of that Selling Agreement, effective as of May 1, 2000, or the date that Selling
Broker-Dealer submits an application for this product, whichever is later. The
provisions of this Schedule shall apply only to Security Life Variable
Survivorship Universal Life policies solicited and issued while this Schedule is
in effect. All compensation payable under this Schedule shall be subject to the
terms and conditions contained herein at the time of issue of the policy by
Security Life of Denver Insurance Company ("SECURITY LIFE").
1. Commission Structure:
RCA TRAIL
------- -------- ---------------------------- ----------------
PCA SCA YEARS 2 - 5 YEARS 6 + YEARS 5 - 20
------- -------- -------------- ------------- ----------------
90% 5% 5% 2% 0.20% net
account value
PCA (PRIMARY COMMISSIONABLE AMOUNT) is equal to the first year
commission target premium (shown on policy schedule pages and
illustrations). Gross premiums paid up to the PCA in any year
are commissioned at the full PCA rate. If the gross premium
paid in year one is less than the PCA, that difference is
carried over to the second year. Premiums received in year two
or later up to this difference, if any, are commissioned at
the full PCA commission rate. A new PCA is generated any time
a new base coverage segment is created. Note that a death
benefit option change does not create a new PCA. Premium
dollars are allocated first to PCA, then to SCA, and then to
RCA.
SCA (SECONDARY COMMISSIONABLE AMOUNT) is equal to the
difference between the gross premiums paid in segment year one
and the PCA.
RCA (RENEWABLE COMMISSIONABLE AMOUNT) equals zero in the first
policy year. In renewal years, the RCA equals the gross
premium paid per segment less the remaining PCA for that year,
but never less than zero.
Premiums received within 15 days prior to policy anniversary will result in the
agent receiving commissions at the same rate as if the premium was paid on the
anniversary date.
Schedule H Page 1 of 3
2. Trail Commissions: for policy years 5 through 20, a trail commission of
0.20% for Variable Survivorship Universal Life on an annualized basis is
calculated at the end of each month based on the policy's net account value
at the end of the prior month.
The trail commission is payable annually at the end of a policy year
provided the policy is in force, and not subject to grace period
provisions, on that date.
3. Riders: Commissionable riders will have a separate target premium which is
set at issue and is level thereafter. The Adjustable Term Insurance Rider
has no target premium associated with it.
4. Commission Calculation: Commissions shall be calculated only on premium
actually received and accepted by SECURITY LIFE. Commissions shall be paid
only on an earned basis. Outstanding loan amounts carried over are not
considered commissionable premium.
5. Premium Allocation: If the Stated Death Benefit has been increased since
the policy date, premiums received are allocated to the coverage segments
in the same proportion that the commission target premium for each segment
bears to the total commission target premium of the policy.
6. Death Benefit Increases: If a premium payment accompanies a request for a
Stated Death Benefit increase or is received while a request is pending,
the payment will be applied to the policy but commissions shall not be
payable until the increase is effective. The commission shall then be
payable based on the premium being allocated among all segments as it would
normally and the new target premium after the increase.
7. Compensation Payments: Compensation on initial premium shall be due to the
SELLING BROKER-DEALER at the time of the issuance of the policy and for all
other premium payments at the time of the receipt and acceptance of premium
by SECURITY LIFE, except that the amount, if any, and the time of payment
of compensation on stated death benefit increases, replacements, reissues,
changes, conversions, exchanges, term renewals, term conversions, premiums
paid in advance, policies issued on a "guaranteed issue" basis, policies
requiring facultative reinsurance arrangements, and other special cases and
programs shall be governed by SECURITY LIFE'S underwriting and
administrative rules then in effect. The Compensation shall be payable to
the SELLING BROKER-DEALER in accordance with the Schedule H in effect at
the time of issue of the policy.
8. Commission Chargeback: In the event that a policy for which a commission
has been paid is lapsed or surrendered by the Policy Owner during the first
six months, or is returned to SECURITY LIFE for refund of premium during
the Free Look Period as described in the policy, SECURITY LIFE and ING
AMERICA EQUITIES shall require reimbursement from SELLING BROKER-DEALER
equal to 100% of the commission paid. If a premium payment for which a
commission has been paid is refunded by SECURITY LIFE, a reimbursement of
the commission paid on the amount refunded will be due from the SELLING
BROKER-DEALER.
Schedule H Page 2 of 3
The reimbursement may be deducted by ING AMERICA EQUITIES from the next, or
any subsequent, commission payment to SELLING BROKER-DEALER.
If the amount to be reimbursed exceeds compensation otherwise due, SELLING
BROKER-DEALER shall promptly reimburse ING AMERICA EQUITIES before the next
commission cycle.
9. Internal Exchanges: Commissions on the exchange of any policy issued by
SECURITY LIFE or any other ING affiliate for Variable Survivorship
Universal Life, if any, will be paid in accordance with the internal
exchange procedures in effect at SECURITY LIFE on the date the exchange is
completed. The commission rates and/or target premiums may be adjusted in
accordance with the rules in effect at the time of the exchange. If the
Representative responsible for the exchange is not the producer of the
original policy, and the original producer is still active with SECURITY
LIFE, no commission will be payable to the Representative or the SELLING
BROKER-DEALER.
Schedule H Page 3 of 3