EXHIBIT 1.A(3)(A)
MASTER SERVICE AND DISTRIBUTION COMPLIANCE AGREEMENT
MASTER SERVICE AND DISTRIBUTION COMPLIANCE AGREEMENT
THIS AGREEMENT, made this 27th day of October, 1997, by and among
Phoenix Life and Annuity Company ("PLAC"), a Connecticut stock company, on
behalf of itself and the Phoenix Life and Annuity Variable Universal Life
Account (the "Account"), and Phoenix Equity Planning Corporation ("PEPCO"), a
Connecticut corporation.
WITNESSETH:
WHEREAS, PLAC offers for sale variable life policies funded through a
Separate Account of PLAC registered as a unit investment trust under the
Investment Company Act of 1940, as amended ("1940 Act"), and pursuant to a
registration statement filed with the Securities and Exchange Commission under
the Securities Act of 1933, as amended ("Securities Act"), and listed on
Schedule A of this Agreement (the "Policy "), and
WHEREAS, PEPCO is registered as a broker-dealer with the Securities and
Exchange Commission ("SEC") under the Securities Exchange Act of 1934, as
amended ("1934 Act") and is a member of the National Association of Securities
Dealers, Inc. ("NASD"), and
WHEREAS, PLAC desires to engage PEPCO to perform certain services with
respect to the books and records to be maintained in connection with the sale of
the Policy and certain administrative and other functions as set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
I. Services of PEPCO
A. Appointment. PLAC hereby appoints PEPCO, and PEPCO hereby accepts
the appointment, as Master Services and Distributor of the Policy.
B. Duties. PEPCO shall perform those administrative, compliance and
other services with respect to the Policy as described herein. PEPCO agrees to
use its best efforts in performing the activities outlined in paragraphs I. C
and I. F of this Agreement.
C. Written Agreements. PEPCO has and shall enter into written
agreements with broker-dealer firms whose registered representatives have been
or shall be properly licensed to sell registered securities and insurance
products including variable life if required, and appointed as life insurance
agents of PLAC. PLAC shall pay all fees associated with the appointments of such
selected representatives as insurance agents of PLAC. Such agreements with
broker-dealers shall provide that such broker-dealer shall cause applications to
be solicited for the purchase of the Policy. Such agreements shall include such
terms and conditions as PEPCO may determine not materially inconsistent with
this Agreement, provided, however, that any broker-dealer with whom PEPCO has
entered into a written agreement must comply with the following terms which
shall be included in all such agreements:
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The broker-dealer must:
(a) be a registered broker-dealer under the
1934 Act and be a member of the NASD;
and
(b) agree that, in connection with the
solicitation of applications for the
purchase of the Policy, the broker-dealer
will in all respects conform to the
requirements of all state and federal laws
and the Conduct Rules of the NASD relating
to the sale of the Policy and will indemnify
and hold harmless PEPCO, the Account and
PLAC from any damage or expense of any
nature whatsoever on account of the
negligence, misconduct or wrongful act of
such broker-dealer or any employee,
representative or agent of such
broker-dealer.
In obtaining and entering into written agreements with broker-dealers,
PEPCO will in all respects conform to the requirements of all state and federal
law, and the Conduct Rules of the NASD.
D. Recordkeeping. PEPCO shall maintain and preserve, or cause to be
maintained and preserved, such accounts, books, and other documents as are
required of it under this Agreement, the 1934 Act and any other applicable laws
and regulations, including without limitation and to the extent applicable,
Rules 17a-3 and 17a-4 under the 1934 Act. The books, accounts and records of
PEPCO as to services provided hereunder, shall be maintained so as to disclose
clearly and accurately the nature and details of the transactions.
E. Supervision. PEPCO shall select associated persons who are
trained and qualified persons, to solicit applications for purchase of the
Policy in conformance with applicable state and federal laws. Any such persons
shall be registered representatives of PEPCO in accordance with the rules of
the NASD, be licensed to offer the Policy in accordance with the insurance laws
of any jurisdiction in which such person solicits applications, be licensed
with and appointed by PLAC as an insurance agent to solicit applications for
the Policy and have entered into the appropriate Variable Policy Insurance
Commission Agreement with PLAC. PEPCO will train and supervise its registered
representatives to insure that the purchase of a Policy is not recommended to an
applicant in the absence of reasonable grounds to believe that the purchase of
the Policy is suitable for that applicant. PEPCO shall pay the fees to
regulatory authorities in connection with obtaining necessary securities
licenses and authorizations for its registered representatives to solicit
applications for the purchase of the Policy. PEPCO is not responsible for fees
in connection with the appointment of registered representatives as insurance
agents of PLAC.
F. Sales Materials and Other Documents.
1. PEPCO's Responsibilities. PEPCO shall be responsible
for the approval of promotional material by the SEC
and the NASD, where required.
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2. PLAC's Responsibilities. PLAC shall be responsible for:
(a) the design, preparation and printing of all
promotional material to be used in the
distribution of the Policy;
(b) the approval of promotional material by
state and other local insurance regulatory
authorities;
(c) confirming the issuance of the Policy to the
Policy Owner.
3. Right to Approve. Neither party nor any of its agents
or affiliates shall print, publish or distribute any
advertisement, circular or any document relating to the
Policy or relating to the other party unless such
advertisement, circular or document shall have been
approved in writing by the other party. However, nothing
herein shall prohibit any party from advertising
annuities or life insurance in general or on a generic
basis subject to compliance with all applicable laws,
rules and regulations. Each party reserves the right to
require modification of any such material to comply with
applicable laws, rules and regulations and agrees to
provide timely responses regarding material submitted to
it by the other party.
G. Payments to Broker-Dealers. PEPCO shall serve as paying agent for
amounts due broker-dealers for sales commissions. PLAC shall forward to PEPCO
any such amounts due broker-dealers from PLAC and PEPCO shall be responsible to
pay such amounts to the persons entitled thereto as set forth in the applicable
written agreements with such broker-dealers subject to all applicable state
insurance laws and regulations and all applicable federal and/or state
securities laws and NASD rules. PEPCO shall reflect such amounts on its books
and records as required by Paragraph D hereto.
H. Compliance. PEPCO 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 be licensed or registered as a securities
broker-dealer in any jurisdiction where the performance of the duties
contemplated by this Agreement would require such licensing or registration.
PEPCO represents and warrants that it shall otherwise comply with provisions of
federal and state law in performing its duties hereunder.
I. Payment of Expenses by PEPCO. PEPCO shall pay the expenses
incurred in connection with its provision of services hereunder and the
distribution of the Policy.
II. General Provisions
A. Inspection of Books and Records. PEPCO and PLAC agree that all
records relating to services provided hereunder shall be subject to reasonable
periodic, special or other audit or examination by the SEC, NASD, or any state
insurance commissioner or any other regulatory body having jurisdiction. PEPCO
and PLAC agree to cooperate fully in any securities or insurance regulatory or
judicial investigation, inspection, inquiry or proceeding arising in connection
with the services provided under this Agreement, or with respect to
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PEPCO or PLAC or their affiliates, to the extent related to the distribution of
the Policy. PEPCO and PLAC will notify each other promptly of any customer
complaint or notice of regulatory or judicial proceeding, and, in the case of a
customer complaint, will cooperate in arriving at a mutually satisfactory
resolution thereof.
B. Indemnification. PEPCO will indemnify and hold harmless PLAC and
the Account, from any and all expenses, losses, claims, damages or liabilities
(including attorney fees) incurred by reason of any misrepresentation, wrongful
or unauthorized act or omission, negligence of, or failure of PEPCO, including
any employee of PEPCO, to comply with the terms of this Agreement, provided
however, PEPCO shall not be required to indemnify for any such expenses, losses,
claims, damages or liabilities which have resulted from the negligence,
misconduct or wrongful act of the party seeking indemnification. PEPCO shall
also hold harmless and indemnify PLAC and the Account for any and all expenses,
losses, claims, damages, or liability (including attorneys fees) arising from
any misrepresentation, wrongful or unauthorized act or omission, negligence of,
or failure of a broker-dealer or its employees, agents or registered
representatives, to comply with the terms of the written agreement entered into
between PEPCO and such broker-dealer but only to the extent that PEPCO is
indemnified by the broker-dealer under the terms of the written agreement. PLAC
will indemnify and hold harmless PEPCO, for any expenses, losses, claims,
damages or liabilities (including attorneys fees) incurred by reason of any
material misrepresentation or omission in a registration statement or prospectus
for the Policy, or on account of any other misrepresentation, wrongful or
unauthorized act or omission, negligence of, or failure of PLAC, including any
employee of PLAC, to comply with the terms of this Agreement, provided however,
PLAC shall not be required to indemnify for any expenses, losses, claims,
damages or liabilities which have resulted from the negligence, misconduct or
wrongful act of the party seeking indemnification.
C. Compensation. PLAC shall compensate PEPCO for the services PEPCO
performs hereunder as the parties shall agree from time to time and as listed on
Schedule A of this Agreement. PEPCO agrees to return promptly to PLAC all
compensation received for any Policy returned within the "free look" period as
specified in the Policy.
D. Termination. This Agreement shall become effective on the date of
this Agreement and shall continue to be in effect, except that:
1. Any party hereto may terminate this Agreement on any
date by giving the other party at least thirty (30)
days' prior written notice of such termination
specifying the date fixed therefor.
2. This Agreement may not be assigned by PEPCO without the
consent of PLAC.
E. Registration. PLAC and the Account agree to use their best
efforts to effect and maintain the registration of the Policy under the
Securities Act and the Account under the 1940 Act, and to qualify the Policy
under the state securities and insurance laws as applicable, and to qualify the
Policy as life insurance under the Internal Revenue Code. PLAC will pay or cause
to be paid expenses (including the fees and disbursements of its own counsel) of
the
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registration and maintenance of the Policies under the Securities Act and of
the Account under the 1940 Act, and to qualify the Policy under the state
securities and insurance laws.
F. Authority. PEPCO shall have authority hereunder only as expressly
granted in this Agreement.
G. Miscellaneous. PLAC agrees to advise PEPCO immediately in the
case of an issuance by the SEC of any stop order suspending the effectiveness
of the Prospectus for the Policies, of all actions of the SEC with respect to
any amendments to the registration statement(s) which may from time to time be
filed with the SEC and of any material event which makes untrue any statement
made in the registration statement for the Policy, or which requires the making
of a change in the registration statement in order to make the statement therein
not misleading. PLAC agrees to advise PEPCO in the event that formal
administrative proceedings are instituted against PLAC by the SEC, or any state
securities or insurance department or any other regulatory body regarding PLAC's
duties under this Agreement, unless PLAC determines in its sole judgment,
exercised in good faith, that any such administrative proceeding will not have a
material adverse effect upon its ability to perform its obligations under this
Agreement. PEPCO agrees to advise PLAC in the event that formal administrative
proceedings are instituted against PEPCO by the SEC, NASD, or any state
securities or insurance department or any other regulatory body regarding
PEPCO's duties under this Agreement, unless PEPCO determines in its sole
judgment exercised in good faith, that any such administrative proceedings will
not have a material adverse effect upon its ability to perform its obligations
under this Agreement.
H. Independent Contractor. PEPCO shall undertake and discharge its
obligations hereunder as an independent contractor or and nothing herein shall
be construed as establishing: (i) an employer-employee relation between the
parties hereto; or (2) a joint venture.
I. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Connecticut.
IN WITNESS WHEREOF, the parties have hereunto set their hands on the
date first above written.
PHOENIX LIFE AND ANNUITY COMPANY
For itself and PHOENIX LIFE AND ANNUITY VARIABLE
UNIVERSAL LIFE ACCOUNT
By: /s/Simon Y. Tan
Title: Senior Vice President
PHOENIX EQUITY PLANNING CORPORATION
By: /s/Philip L. McLoughlin
Title: President
Schedule A
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PEPCO has been appointed by PLAC to perform certain administrative, compliance
and other services with respect to the following variable life policy ("Policy")
issued by Phoenix Life and Annuity Company:
Flex Edge Success - Variable Universal Life Insurance Policies
issued by the Phoenix Life and Annuity Variable Universal Life
Account of PLAC. PEPCO shall receive payment for services
performed under this agreement equal to up to 50% of premium
payments made under the Policies up to the commissionable
premium amount, and up to 5% of such payments after the
commissionable premium has been paid in the first Policy Year.