Exhibit 1.A.(3)(b)
SELECTED BROKER AGREEMENT
AGREEMENT dated _____________________, by and between Pruco Securities
Corporation (Distributor), a New Jersey corporation and
_________________________ (Broker), a _______________ corporation.
WITNESSETH:
In consideration of the mutual promises contained herein, the parties
hereto agree as follows:
A. Definitions
(1) Contracts - Variable life insurance contracts and/or variable annuity
contracts described in Schedule A attached hereto which may be issued
and issued by any one of Pruco Life Insurance Company, Pruco Life
Insurance Company of New Jersey or The Prudential Insurance Company of
America (hereinafter collectively called the "Company") and for which
Distributor has been appointed the principal underwriter pursuant to
Distribution Agreements, copies of which have been furnished to
Broker.
(2) Accounts - Separate accounts established and maintained by Company
pursuant to the laws of Arizona or New Jersey, as applicable, to fund
the benefits under the Contracts.
(3) The Prudential Series Fund, Inc., or the Fund - An open-end management
investment company registered under the 1940 Act, shares of which are
sold to the Accounts in connection with the sale of the Contracts.
(4) Registration Statement - The registration statements and amendments
thereto relating to the Contracts, the Accounts, and the Fund,
including financial statements and all exhibits.
(5) Prospectus - The prospectuses included within the registration
Statements referred to herein.
(6) 1933 Act - The Securities Act of 1933, as amended.
(7) 1934 Act - The Securities Exchange Act of 1934, as amended.
(8) SEC - The Securities and Exchange Commission.
B. Agreements of Distributor
(1) Pursuant to the authority delegated to it by Company, Distributor
hereby authorizes Broker during the term of this Agreement to solicit
applications for Contracts from eligible persons provided that there
is an effective Registration Statement relating to such Contracts and
provided further that Broker has been notified by Distributor that the
Contracts are qualified for sale under all applicable securities and
insurance laws of the state or jurisdiction in which the application
will be solicited. In connection with the solicitation of applications
for Contracts, Broker is hereby authorized to offer riders that are
available with the Contracts in accordance with instructions furnished
by Distributor or Company.
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(2) Distributor, during the term of this Agreement, will notify Broker of
the issuance by the SEC of any stop order with respect to the
Registration Statement or any amendments thereto or the initiation of
any proceedings for that purpose or for any other purpose relating to
the registration and/or offering of the Contracts and of any other
action or circumstance that may prevent the lawful sale of the
contract in any state or jurisdiction.
(3) During the term of this Agreement, Distributor shall advise Broker of
any amendment to the Registration Statement or any amendment or
supplement to any Prospectus.
C. Agreements of Broker
(1) It is understood and agreed that Broker is a registered broker/dealer
under the 1934 Act and a member of the National Association of
Securities Dealers, Inc. and that the agents or representatives of
Broker who will be soliciting applications for the Contracts also will
be duly registered representatives of Broker.
(2) Commencing at such time as Distributor and Broker shall agree upon,
Broker agrees to use its best efforts to find purchasers for the
contract acceptable to Company. In meeting its obligation to use its
best efforts to solicit applications for Contracts, Broker shall,
during the term of this Agreement, engage in the following activities:
(a) Continuously utilize training, sales and promotional materials
which have been approved by Company;
(b) Establish and implement reasonable procedures for periodic
inspection and supervision of sales practices of its agents or
representatives and submit periodic reports to Distributor as may
be requested on the results of such inspections and the
compliance with such procedures.
(c) Broker shall take reasonable steps to ensure that the various
representatives appointed by it shall not make recommendations to
an applicant to purchase a Contract in the absence of reasonable
grounds to believe that the purchase of the Contract is suitable
for such applicant. While not limited to the following, a
determination of suitability shall be based on information
furnished to a representative after reasonable inquiry of such
applicant concerning the applicant's insurance and investment
objectives, financial situation and needs, and the likelihood
that the applicant will continue to make the premium payments
contemplated by the Contract.
(3) All payments for Contracts collected by agents or representatives of
Broker shall be held at all times in a fiduciary capacity and shall be
remitted promptly in full together with such applications, forms and
other required documentation to an office of the company designated by
Distributor. Checks or money orders in payment of initial premiums
shall be drawn to the order of the applicable one of "Pruco Life
Insurance Company", (for contracts issued by Pruco Life Insurance
Company and/or Pruco Life Insurance Company of New Jersey) or "The
Prudential Insurance Company of America". Broker acknowledges that the
Company retains the ultimate right to control the sale of the
Contracts and that the Distributor or Company shall have the
unconditional right to reject, in whole or part, any application for
the contract. In the event Company or Distributor rejects an
application, Company immediately will return all payments directly to
the purchaser and Broker will be notified of such action. In the event
that any purchaser of a Contract elects to return such Contract
pursuant to Rule 6e-2(b)(13)(viii) of the 1940 Act, the purchaser will
receive a refund of any premium payments, plus or minus any change due
to investment performance in the value of the invested portion of such
premiums; however,
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if applicable state law so requires, the purchaser who exercises his
short-term cancellation right will receive a refund of all payments
made, unadjusted for investment experience prior to the cancellation.
The Broker will be notified of any such action.
(4) Broker shall act as an independent contractor, and nothing herein
contained shall constitute Broker, its agents or representatives, or
any employees thereof as employees of Company or Distributor in
connection with the solicitation of applications for Contracts.
Broker, its agents or representatives, and its employees shall not
hold themselves out to be employees of Company or Distributor in this
connection or in any dealings with the public.
(5) Broker agrees that any material it develops, approves or uses for
sales, training, explanatory or other purposes in connection with the
solicitation of applications for Contracts hereunder (other than
generic advertising materials which do not make specific reference to
the Contracts) will not be used without the prior written consent of
Distributor and, where appropriate, the endorsement of Company to be
obtained by Distributor.
(6) Solicitation and other activities by Broker shall be undertaken only
in accordance with applicable laws and regulations. No agent or
representative of Broker shall solicit applications for the Contracts
until duly licensed and appointed by Company as a life insurance and
variable contract broker or agent of Company in the appropriate states
or other jurisdictions. Broker shall ensure that such agents or
representatives fulfill any training requirements necessary to be
licensed. Broker understands and acknowledges that neither it nor its
agents or representatives is authorized by Distributor or Company to
give any information or make any representation in connection with
this Agreement or the offering of the Contracts other than those
contained in the Prospectus or other solicitation material authorized
in writing by Distributor or Company.
(7) Broker shall not have authority on behalf of Distributor or Company
to: make, alter or discharge any Contract or other form; waive any
forfeiture, extend the time of paying any premium; receive any monies
or premiums due, or to become due, to Company, except as set forth in
Section C(3) of this Agreement. Broker shall not expend, nor contract
for the expenditure of the funds of Distributor, nor shall Broker
possess or exercise any authority on behalf of Broker by this
Agreement.
(8) Broker shall have the responsibility for maintaining the records of
its representatives licensed, registered and otherwise qualified to
sell the Contracts. Broker shall maintain such other records as are
required of it by applicable laws and regulations. The books, accounts
and records of Company, the Account, Distributor and Broker relating
to the sale of the Contracts shall be maintained so as to clearly and
accurately disclose the nature and details of the transactions. All
records maintained by the Broker in connection with this Agreement
shall be the property of the Company and shall be returned to the
Company upon termination of rights by the Broker. Nothing in this
Section C(8) shall be interpreted to prevent the Broker from retaining
copies of any such records which the Broker, in its discretion, deems
necessary or desirable to keep. The Broker shall keep confidential any
information obtained pursuant to this Agreement and shall disclose
such information, only if the Company has authorized such disclosure,
or if such disclosure is expressly required by applicable federal or
state regulatory authorities.
D. Compensation
(1) Pursuant to the Distribution Agreement between Distributor and
Company, Distributor shall cause Company to arrange for the payment of
commissions to Broker as compensation for
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the sale of each contract sold by an agent or representative of
Broker. The amount of such compensation shall be based on a schedule
to be determined by agreement of Company, Distributor and Broker.
Company shall identify to Broker with each such payment the name of
the agent or representative of Broker who solicited each Contract
covered by the payment.
(2) Neither Broker nor any of its agents or representatives shall have any
right to withhold or deduct any part of any premium it shall receive
for purposes of payment of commission or otherwise. Neither Broker nor
any of its agents or representatives shall have an interest in any
compensation paid by Company to Distributor, now or hereafter, in
connection with the sale of any Contracts hereunder.
E. Use of Insurance Agency Affiliate of Broker
It is understood and agreed that the registered representatives of
Broker engaged in the offer and sale of the Contracts
may be employed by
(________________), an affiliate of Broker which is licensed as an
insurance agency (hereinafter referred to as "Insurance Agency Affiliate"),
and whose shareholders, officers, and employees are "associated persons" of
Broker within the meaning of Section 3(a)(18) of the 1934 Act. It is
further understood and agreed that records relating to sales of Contracts
by such employees may be maintained by Insurance Company Affiliate. It is
further understood and agreed that commissions payable under this agreement
shall, if broker so directs, be paid to Insurance Agency Affiliate. Broker
agrees that, if the Contracts are sold through Insurance Agency affiliate:
(1) Broker will retain full responsibility for compliance with the
requirements of the 1933 Act and the 1934 Act, and will continue to
perform all obligations set forth in Section C above.
(2) Any books and records maintained by Insurance Agency Affiliate will be
deemed, for purposes of the 1934 Act, to be books and records of
Broker and will conform to the requirements of Section 17(a) of the
1934 Act and the rules thereunder. The manner in which the books and
records of Broker and Insurance Agency Affiliate are made and
maintained will permit supervisory personnel of Broker as well as
authorized examiners of the SEC or of another appropriate governmental
agency or self-regulatory organization to review data concerning
transactions in the Contracts effected through Insurance Agency
Affiliate to the same extent as if such transactions had been effected
through Broker itself. This may be accomplished either through
maintaining one set of books and records for Broker and Insurance
Agency Affiliate or by maintaining separate sets of books and records
with adequate integration, through cross-referencing or otherwise,
between records maintained by Broker and those maintained by Insurance
Agency Affiliate.
(3) Any receipt by Insurance Agency Affiliate of commissions for the sale
of the Contracts, and any payment by Insurance Agency Affiliate of
commissions for the sale of the Contracts to its sales personnel, will
be reflected in the FOCUS reports filed by Broker pursuant to Section
17(a) of the 1934 Act and the rules thereunder and in its fee
assessment reports filed with the National Association of Securities
Dealers, Inc.
(4) All premiums derived from the sale of the Contract through Insurance
Agency Affiliate will be sent directly to the Company by Insurance
Agency Affiliate customers or will be sent by them to Broker for
forwarding to the Company. Insurance Agency Affiliate will not receive
or accumulate customer funds nor will it receive or maintain custody
of customer securities.
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F. Complaints and Investigations
(1) Broker and Distributor jointly agree to cooperate fully in any
insurance regulatory investigation or proceeding or judicial
proceeding arising in connection with the Contracts marketed under
this Agreement. Broker and Distributor further agree to cooperate
fully in any securities regulatory investigation or proceeding or
judicial proceeding with respect to Broker, Distributor, their
affiliates and their agents or representatives to the extent that such
investigation or proceeding is in connection with Contract marketed
under this Agreement. Broker shall furnish applicable federal and
state regulatory authorities with any information or reports in
connection with its services under this Agreement which such
authorities may request in order to ascertain whether the Company's
operations are being conducted in a manner consistent with any
applicable law or regulation.
G. Term of Agreement
(1) This Agreement shall continue in force for one year from its effective
date and thereafter shall automatically be renewed every year for a
further one year period; provided that either party may unilaterally
terminate this Agreement upon thirty (30) days' written notice to the
other party of its intention to do so.
(2) Upon termination of this Agreement, all authorizations, rights and
obligations shall cease except (a) the agreements contained in Section
F hereof; (b) the indemnity set forth in Section H hereof; and (c) the
obligation to settle accounts hereunder, including commission payments
on premiums subsequently received for Contracts in effect at the time
of termination or issued pursuant to applications received by Broker
prior to termination.
H. Indemnity
(1) Broker shall be held to the exercise of reasonable care in carrying
out the provision of this Agreement.
(2) Distributor agrees to indemnify and hold harmless Broker and each
officer or director of Broker against any losses, claims, damages or
liabilities, joint or several, to which Broker or such officer or
director become subject, under the 1933 Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of material fact, required to be stated
therein or necessary to make the statements therein not misleading,
contained in any Registration Statement or any post-effective
amendment thereof or in the Prospectus or any amendment or supplement
to the Prospectus, or any sales literature provided by the Company or
by the Distributor.
(3) Broker agrees to indemnify and hold harmless Company and Distributor
and each of their current and former directors and officers and each
person, if any, who controls or has controlled Company or Distributor
within the meaning of the 1933 Act or the 1934 Act, against any
losses, claims, damages or liabilities to which Company or Distributor
and any such director or officer or controlling person may become
subject, under the 1933 Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon:
(a) Any unauthorized use of sales materials or any verbal or written
misrepresentations or any unlawful sales practices concerning the
Contracts by Brokers; or
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(b) Claims by agents or representatives or employees of Broker for
commissions, service fees, development allowances or other
compensation or renumeration of any type;
(c) The failure of Broker, its officers, employees, or agents to
comply with the provisions of this Agreement; and Broker will
reimburse Company and Distributor and any director or officer or
controlling person of either for any legal or other expenses
reasonably incurred by Company, Distributor, or such director,
officer of controlling person in connection with investigating or
defending any such loss, claims, damage, liability or action.
This indemnity agreement will be in addition to any liability
which Broker may otherwise have.
I. Assignability
This Agreement shall not be assigned by either party without the written
consent of the other.
J. Governing Law
This Agreement shall be governed by and Construed in accordance with the
laws of the State of New Jersey.
In Witness Whereof, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
PRUCO SECURITIES CORPORATION
(Distributor)
By:_______________________________
President
__________________________________
(Broker)
By: ______________________________
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SELECTED BROKER AGREEMENT
SCHEDULE A
The following policies are the Contracts as defined in the Agreement made
and effective ________________, 19__, between Pruco Securities Corporation and
_____________________.
THE PRUDENTIAL LIFE INSURANCE COMPANY OF AMERICA
VARIABLE UNIVERSAL LIFE
(Flexible Premium Variable Life Policy)
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