EXHIBIT 1.a(3)(b)
AMENDMENT TO THE
BROKER-DEALER SUPERVISORY AND SELLING AGREEMENT
FOR VARIABLE CONTRACTS
This Amendment is made by and among ING Security Life of Denver Insurance
Company ("ING Security Life"), ING America Equities, Inc. ("INGAE") and Selling
Broker-Dealer and Agency, collectively known as the Parties.
WHEREAS, the Parties have executed a Broker-Dealer Supervisory and Selling
Agreement for Variable Contracts ("the Agreement") which provides that Selling
Broker-Dealer and Agency will enable and supervise its registered
representatives to solicit and sell the Contracts issued by ING Security Life
and distributed by INGAE.
WHEREAS, the Agreement also provides for certain compensation to be paid to
Selling Broker-Dealer or Agency for the sales of such Contracts, the Agreement
is modified as follows:
1. The Schedule I, "Compensation Schedule to Selling Agreement for ING Security
Life Corporate Benefits Variable Universal Life" is hereby added.
This Amendment is effective ________________, and shall be deemed to be accepted
by Broker-Dealer and Agency by ING Security Life and INGAE by submission of an
application for the Corporate Benefits Variable Universal Life product by
Selling Broker-Dealer or Agency on or after that date.
SCHEDULE I
COMPENSATION SCHEDULE
TO SELLING AGREEMENT FOR SECURITY LIFE
CORPORATE BENEFITS VARIABLE 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 ________, 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 ING Security Life
Corporate Benefits Variable 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 ING Security Life of Denver Insurance Company ("ING Security
Life").
1. Commission Structure:
Commissions are payable on premiums paid in each year up to the target
premium only. No commissions are paid on premium in excess of the target
premium. Any time a new coverage segment is created, premiums allocated to
that segment will be commissionable up to that segment's target premium. The
commission rates as a percent of target premium are given in a table below.
Policy Year of Coverage Commission Rate
Segment
1 10%
2 - 4 8%
5 - 10 2%
11+ 0
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.
If this product is sold with a maximum ATR coverage, the target premium
could be zero which would result in no commissions payable other than the
annual trail commission described in section 2, below.
2. Trail Commissions: as a percent of the net account value are paid. The trail
commission is calculated monthly based on the net account value at the end
of the prior month. It is paid at the end of the policy year, provided the
policy remains in force at that time and is
not subject to the grace period provisions. The trail commissions will
continue when the insured lives past age 100 and the continuation of
coverage feature is in force. The annual trail commission rates are given
below.
Annual trail commission rates as a percent of the net account value:
Policy Year Trail Commission Rate
1 - 20 0.20%
21+ 0.10%
3. Riders: 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 ING 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 ING 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 ING 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 I 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 or has a reduction of
stated death benefit during the first three policy years, or is returned to
ING Security Life for refund of premium during the Free Look Period as
described in the policy, ING Security Life and
ING America Equities shall require reimbursement from Selling Broker-Dealer
as shown below.
Policy Year Commission Chargeback
1 10% of first year premium up to target
2 6% of second year premium up to target
3 3% of third year premium up to target
4+ 0%
If a premium payment for which a commission has been paid is refunded by ING
Security Life, a reimbursement of the commission paid on the amount refunded
will be due from the Selling Broker-Dealer. 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 ING Security Life
policy for Corporate Benefits Variable Universal Life, if any, will be paid
in accordance with the exchange procedures in effect at ING 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 ING Security Life, no commission will be payable to the
Representative or the Selling Broker-Dealer.