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Exhibit 1(A3)(bvi)
CORPORATE AGENT'S AGREEMENT
This Agreement is effective , by and between
Provident Mutual Life Insurance Company of Philadelphia, (hereinafter
called the Company), and , (hereinafter called the
Corporate Agent). In consideration of the mutual covenants and
agreements listed below, the parties agree as follows:
1. Obligations of the Corporate Agent
The Corporate Agent's Obligations shall be:
(a) To employ a Subagent to solicit and procure
applications on behalf of the Corporate Agent for all
types of insurance and annuities issued or marketed
by the Company. Such Subagent must be a stockholder
of the Corporate Agent and must be under the
Company's Special Agent's Career Agreement and a
Corporate Agent Assignment and Amendment must have
been executed. All such applications shall be
submitted in the Corporate name but identifying the
Subagent who solicited or procured the application on
its behalf and 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 through such Subagent
applications for insurance policies and contracts
written by subsidiary companies of the Company,
provided the Corporate Agent and Subagent are
authorized and properly licensed.
(c) To hold all moneys received or collected on behalf of
the Company by it or its Subagent 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.
(g) To notify the Company of the death of the Subagent or
any reason for termination under 13(b) or (c).
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2. Limitation of Authority
The Corporate Agent itself or through its Subagent 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 Corporate Agent, it's Subagent
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 Corporate Agent or Subagent.
3. Relationship
(a) In performing these duties under this Agreement, the
Corporate Agent and its Subagent are independent
contractors and not employees of the Company.
(b) The Corporate Agent and its Subagent agree to be
governed in the performance of their duties by the
terms and conditions of this Agreement, and by the
rules established by the Company. The Corporate Agent
and its Subagent reserve 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 and employee between the Company and the
Corporate Agent and its Subagent.
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4. Commissions and Fees
(a) Commissions and fees on premiums covering insurance
policies and annuity contracts produced by the
Subagent on behalf of the Corporate Agent and issued
by the Company during the continuance of this Agree-
ment, when and as said premiums become due and are
actually paid in cash to the Company, shall be paid
to the Corporate Agent in accordance with and
subject to all of the terms and conditions of the
commission schedules and the Supplement to Corporate
Agent's Agreement (hereinafter called the 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 amendment, modification or change.
(b) 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 term-
ination the Corporate Agent enters into a new
Corporate Agent's Agreement with the Company, or if
the Subagent shall become an employee of the Company,
then the new Corporate Agreement or employment will
be considered a continuation of the Service Period
solely for the purpose of determining the commissions
and fees payable under this Agreement.
(c) 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 Corporate
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 Corporate 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 Corporate
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.
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(d) If a policy issued under this Agreement replaces, in
whole or in part, a policy previously issued by this
Company, 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.
(g) Commissions and fees, if any, on policies issued on a
modified underwriting, guaranteed issue, salary
savings basis, for less than published minimum 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 Corporate Agent on such premiums from
any commissions and fees thereafter due and payable
to the Corporate Agent without limitation to any
other rights of the Company, including the right to
demand immediate repayment from the Corporate Agent.
Any amount remaining unpaid shall be an indebtedness
to the Company.
6. Indebtedness
Any indebtedness due the Company from the Corporate Agent
shall be a first lien on all commissions and fees payable to
the Corporate Agent, its successors or assigns 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 Corporate Agent, its
successors or assigns, 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 Corporate Agent,
its successors or assigns.
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 Corporate
Agent to meet its
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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, writer, 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 Corporate
Agent agrees to return immediately to the Company all accounts
and records as defined above. The Corporate Agent and its
Subagent 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 Corporate Agent's or its Subagent'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. Service Period
"Service Period" as used in this Agreement means the aggregate
continuous uninterrupted period during which the Subagent has
been under any previous Special Agent's Career Agreement or
the Subagent has been a Subagent of the Corporate Agent under
this Agreement and any previous Corporate Agent's Agreement or
any General Agent of the Company or any Agency Manager's
Agreements but such period shall terminate on the first of the
following to occur; (a) the death of the Subagent, (b)
termination of the Subagent's employment as a Subagent of the
Corporate Agent, or (c) termination of this Agreement.
11. Prior Agreements
All previous or existing commission Agreements, whether oral
or written, between the Corporate Agent and the Company are
hereby terminated. If immediately prior to the execution of
this Agreement the Corporate Agent was under a commission
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.
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
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only to policies or contracts issued by the Company after the
effective date of such amendment, modification or 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 Corporate
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 dissolution of the Corporate
Agent.
(c) Immediately if anyone (other than a Subagent, his or
her spouse, children or grandchildren or any trust
established for the benefit of any of said
individuals) become stockholders of the Corporate
Agent.
(d) Immediately and without written notice if the Company
determines that the Corporate Agent or its Subagent
has committed any fraudulent, dishonest or illegal
act or has misappropriated or withheld funds and 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 Corporate Agent under the
Agreement.
14. Mandatory Termination
In addition to and without limitation to the Company's and the
Corporate 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 full calendar year during which the Corporate Agent
on account of business solicited on its behalf by the Subagent
fails to meet the earnings requirement described in the then
current Supplement to the then current Special Agent's Career
Agreement of the Company.
In the event that the Subagent of the Corporate Agent should
become totally disabled, as described below, the earnings
requirement set forth in the then current Supplement to the
then current Special Agent's Career Agreement of the Company
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
Subagent is totally disabled, and when such disability, if
any, begins and ends.
15. Payment in Lieu of Pension Plan Benefits
The Corporate Agent, its Subagents or employees shall not be
eligible for participation in any retirement plan of the
Company.
Subject to all of the provisions of this Agreement, the
Company will pay to the Corporate Agent during the period
while this Agreement is in effect and
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the Subagent is a Subagent of the Corporate Agent, as
additional compensation, no later than April 15 of each
year, an amount equal to the amount paid or credited by the
Corporate Agent on behalf of the Subagent for the previous
calendar year to a retirement plan qualified under section
401(a) of the Internal Revenue Code maintained by the
Corporate Agent, subject to the following conditions:
(a) No payment will be made by the Company unless the
Company has received a written statement executed by
the Corporate Agent and the Subagent that such a
contribution has been paid or credited to such a
qualified plan.
(b) The maximum amount paid to the Corporate Agent in a
given year shall be the amount that would have been
contributed by the Company to its Pension Plan for
Agents for the previous calendar year (i) if the
Subagent had been or is, for variable life only,
under the Company's Special Agent's Career Agreement;
and (ii) if the commissions and fees paid to the
Corporate Agent in that previous year on account of
policies solicited by the Subagent had been or were
paid to the Subagent.
(c) No payment will be made by the Company for any period
after the Subagent's service period has terminated
according to the provisions of section 10.
16. Miscellaneous
The term Agreement as used herein, refers to this Corporate
Agent's Agreement, the applicable Supplement and commission
schedules.
17. Severability
If any 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 Corporate Agent acknowledges
that it has read this in its entirety and is in agreement with
the terms and conditions outlining the rights of the Company
and the Corporate Agent, under this Agreement.
PROVIDENT MUTUAL LIFE INSURANCE COMPANY _______________________________
OF PHILADELPHIA CORPORATE AGENT
By______________________________________ By_________________________________
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PROVIDENT MUTUAL LIFE INSURANCE COMPANY OF PHILADELPHIA
SUPPLEMENT TO CORPORATE AGENT'S AGREEMENT
This Supplements attached and hereby incorporated into the Corporate
Agent's 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 this Agreement, the
Company will pay to the Corporate Agent on premiums covering
individual life and health insurance policies and annuity
contracts solicited by the Subagent of the Corporate Agent and
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 Subagent of the Corporate Agent,
commissions will be paid only for policy years 1 to
10 inclusive.
(c) In the event the Agreement is terminated for any
reason other than the death of the Subagent of the
Corporate Agent, commissions will be paid according
to the number of completed years of service by the
Subagent in the Subagent's Service Period at the time
of such termination, determined as follows:
(i) Less than 5 years of Service Period -
commissions for the first policy year only.
(ii) 5 years but less than 10 years of Service
Period - commissions for the first policy
year and commissions for policy years 2 to 3
inclusive, at a rate which is 2 percent less
than the rate in the commission schedules.
(iii) 10 years but less than 15 years of Service
Period - commissions for the first policy
year and commissions for policy years 2 to 6
inclusive, at a rate which is 2 percent less
than the rate in the commission schedules.
(iv) 15 or more years of Service Period -
commissions for policy years 1 to 10
inclusive.
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2. Fees on Individual Life Insurance Policies
(a) Formula Fees Applicable to the Fourth Through Tenth Years.
Subject to all the provisions of the Agreement, the Company
will pay to the Corporate Agent during the Subagent's Service
Period 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) solicited by the Subagent
of the Corporate Agent and issued while the Agreement is in
effect except single premium policies and policies in the
employee benefit series issued on a one-year term plan.
"Block of policies" means all "policies" with policy issue
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.
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.
(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.
(3) From Table A below determine the Quantity Factor
applicable to the amount of first year commissions
determined in accordance with (1) above.
(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 and the product is the
formula fee rate for such block of policies.
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TABLE A
First Year Commissions on Quantity Factor
an Annual Premium Basis (FYC)
Less than $20,000 .................................... 0%
$20,000 to $39,000 ............... FYC minus $20,000 x 4%
(-----------------)
$20,000
$40,000 to $67,999 ........... 4% + FYC minus $40,000 x 6%
(------------------)
$28,000
S68,000 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
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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 a quarter will be one-fourth of the sum of the fees computed as
described herein for each block of policies for the preceding calendar quarter.
Payment of Formula Fees
The Company will pay quarterly formula fees as computed above to the
Corporate Agent during the Subagent's Service Period. Formula fee
payments shall cease with the last payment preceding the termination of
the soliciting Subagent's Service Period, except that:
(i) If the Subagent's Service Period is terminated by reason of
the death of the Subagent, formula fee payments will be
continued only if the Subagent has at least 20 years of
continuous service during the Subagents' Service Period, and
(ii) If the Subagent's Service Period is terminated for any reason
other than the death of the Subagent and if the Subagent has
attained age 55, has at least 10 years of continuous service
during the Subagents' Service Period and the sum of the
Subagent's attained age plus years of service during the
Service Period equals or exceeds 75, formula fee payments will
be continued to the Corporate Agent during the Subagent's
remaining lifetime as calculated in paragraph 2(a), such
payments ceasing with the last payment preceding the death of
the Subagent.
(b) Uniform Fees Applicable to the Eleventh and Subsequent Policy Years.
The uniform fees described in this section 2(b) are payable in addi-
tion 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) solicited by the Subagent
on behalf of the Corporate Agent and issued during the Subagent's
Service Period. At quarterly intervals during the Subagent's Service
Period, the Company will pay the Corporate 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 Subagent's Service
Period.
(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 Subagent's Service Period except as herein expressly
provided.
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▇. Fees on Individual Health Insurance Policies
If the Subagent has attained age 55, has at least 10 years of
continuous service during the Subagent's Service Period and the sum of
the Subagent's attained age plus years of service during the Subagent's
Service Period equals or exceeds 75, the Company will pay to the
Corporate Agent during the Subagent's remaining lifetime on premiums on
individual health insurance policies solicited by the Subagent on
behalf of the Corporate Agent and issued during the period while this
Agreement is in effect and the Subagent is a Subagent of the Corporate
Agent, covering policy year 11 and all subsequent policy years, when
and as said paid premiums become due and are actually paid in cash to
the Company, a fee at the specified percentage rate of the premiums so
paid, a fee at the rate of 1% of the premiums so paid. Said fee
payments shall cease with the last payment preceding the death of the
Subagent.
4. Earnings Requirement
The Corporate Agent must receive in each full calendar year at least
$15,000 in supervisory compensation and/or first year cash commissions
solicited on its behalf by the Subagent on policies in the Company or
in any of its subsidiary companies as are specifically authorized by
the Company; provided, however, that this earnings requirement shall
not apply in any calendar year in which the Subagent has completed at
least 10 years of continuous service during the Service Period and the
sum of the Subagent's attained age plus years of service during the
Service Period equals or exceeds 75.
Effective Date:
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PROVIDENT MUTUAL LIFE INSURANCE
COMPANY OF PHILADELPHIA
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Executive Vice President
Chief Marketing Officer