Pre-Effective Amendment to Registration Statement for a Separate Account (Unit Investment Trust) — Form N-4 Filing Table of Contents
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ex24b8c1-deutsche.htm - Generated by SEC Publisher for SEC Filing
Exhibit 24(b)(8)(c)(1): Form of Participation
Agreement, dated as of April 20, 2015, by and among Voya Insurance and Annuity
Company, Directed Services LLC, Deutsche Variable Series I, Deutsche Variable
Series II, Deutsche Investments VIT Funds, DeAWM Distributors, Inc. and
Deutsche Investment Management Americas Inc.
PARTICIPATION
AGREEMENT
THIS AGREEMENT, dated as of the 20th day of April, 2015 by and
among VOYA INSURANCE AND ANNUITY COMPANY (the "Company"), an Iowa
stock life insurance company, on its own behalf and on behalf of each
segregated asset account of the Company set forth on Schedule A hereto as may
be amended from time to time (each separate account hereinafter referred to as
the "Account"), DIRECTED SERVICES, LLC (the “Company
Distributor”), DEUTSCHE VARIABLE SERIES I, DEUTSCHE VARIABLE SERIES II and DEUTSCHE
INVESTMENTS VIT FUNDS (individually, a "Fund"), each a
Massachusetts business trust created under a Declaration of Trust, as amended, DeAWM
DISTRIBUTORS, INC. (the "Underwriter"), a Delaware corporation,
and DEUTSCHE INVESTMENT MANAGEMENT AMERICAS INC., a Delaware
corporation (the “Adviser”). The parties agree that a single document is being
used for ease of administration and that this Agreement shall be treated as if
it were a separate agreement with respect to each Fund, and each series
thereof, that is a party hereto, severally and not jointly, as if such entity
had entered into a separate agreement naming only itself as a party. Without
limiting the foregoing, no Fund, or series thereof, shall have any liability
under this Agreement for the obligations of any other Fund, or series thereof.
WHEREAS, the Fund engages in business as an open-end
management investment company and is or will be available to act as the
investment vehicle for separate accounts established for variable life
insurance and variable annuity contracts (the "Variable Insurance
Products") to be offered by insurance companies which have entered into
participation agreements with the Fund and Underwriter ("Participating
Insurance Companies");
WHEREAS, the beneficial interest in the Fund is divided into
several series of shares of beneficial interest without par value, and, with
respect to certain series, classes thereof (“Shares”), and additional series of
Shares, and classes thereof, may be established, each such series of Shares designated
a "Portfolio" and representing the interest in a particular managed
portfolio of securities and other assets;
WHEREAS, the Fund has obtained an order from the Securities
and Exchange Commission (the "SEC") granting Participating Insurance
Companies and variable annuity and variable life insurance separate accounts
exemptions from the provisions of sections 9(a), 13(a), 15(a), and 15(b) of the
Investment Company Act of 1940, as amended (the "1940 Act") and Rules
6e-2(b)(15) and 6e-3(T)(b)(15) thereunder, to the extent necessary to permit
Shares of the Fund to be sold to and held by variable annuity and variable life
insurance separate accounts of both affiliated and unaffiliated life insurance
companies (the "Mixed and Shared Funding Exemptive Order");
WHEREAS, the
Fund is registered as an open-end management investment company under the 1940
Act and Shares of the Portfolios are registered under the Securities Act of
1933, as amended (the "1933 Act");
WHEREAS, the Adviser, which serves as
investment adviser to the Fund, is duly registered as an investment adviser under
the Investment Advisers Act of 1940, as amended, and any applicable state
securities laws;
WHEREAS, the Company has issued or will issue certain variable
life insurance and/or variable annuity contracts supported wholly or partially
by the Account (the "Contracts"), and said Contracts are listed in
Schedule A hereto, as it may be amended from time to time by mutual written
agreement;
WHEREAS, the Account is duly established and maintained as a
segregated asset account, established by resolution of the Board of Directors
of the Company, on the date shown for such Account on Schedule A hereto, to set
aside and invest assets attributable to the aforesaid Contracts;
WHEREAS, the Underwriter, which serves as distributor to the
Fund, is registered as a broker dealer with the SEC under the Securities
Exchange Act of 1934, as amended (the "1934 Act"), and is a member in
good standing of the Financial Industry Regulatory Authority (“FINRA”); and
WHEREAS, to the extent permitted by applicable insurance laws
and regulations, the Company intends to purchase shares in the Portfolios, and
classes thereof, listed in Schedule B hereto, as it may be amended from time to
time by mutual written agreement (the "Designated Portfolios") on
behalf of the Account to fund the aforesaid Contracts, and the Underwriter is
authorized to sell such Shares to the Account at net asset value; and
WHEREAS, the Company Distributor distributes the Contracts
supported by the Separate Accounts that may in turn invest in the Shares of the
Funds;
NOW, THEREFORE, in consideration of their mutual promises, the
Company, the Fund, the Adviser and the Underwriter agree as follows:
ARTICLE I. Sale of Fund Shares
1.1. The Fund has granted to the Underwriter exclusive authority to
distribute the Fund's Shares, and has agreed to instruct, and has so
instructed, the Underwriter to make available to the Company for purchase, on
behalf of the Account, Fund Shares of those Designated Portfolios selected by
the Underwriter. Pursuant to such authority and instructions, and subject to
Article X hereof, the Underwriter agrees to make available to the Company for
purchase on behalf of the Account, Shares of those Designated Portfolios listed
on Schedule B to this Agreement, such purchases to be effected at net asset
value in accordance with Section 1.3 of this Agreement. Notwithstanding the
foregoing, (i) Fund series (other than those listed on Schedule B) in existence
now or that may be established in the future will be made available to the
Company only as the Underwriter may so provide, and (ii) the Board of Trustees
of the Fund (the "Board") may refuse to sell shares of any Designated
Portfolio to any person, or suspend or terminate the offering of Fund Shares of
any Designated Portfolio or class thereof, if such action is required by law or
by regulatory authorities having jurisdiction or if, in the sole discretion of
the Board acting in good faith and in
light of its
fiduciary duties under federal and any applicable state laws, suspension or
termination is in the best interests of the shareholders of such Designated
Portfolio.
1.2. The Fund shall redeem, at the Company's request, any full or
fractional Designated Portfolio Shares held by the Company on behalf of the
Account, such redemptions to be effected at net asset value in accordance with
Section 1.3 of this Agreement. Notwithstanding the foregoing, (i) the Company
shall not redeem Fund Shares attributable to Contract owners except in the
circumstances permitted in Section 10.3 of this Agreement, and (ii) the Fund
may suspend the right of redemption or postpone the date of payment or
satisfaction upon redemption of Fund Shares of any Designated Portfolio to the
extent permitted by the 1940 Act, any rules, regulations or orders thereunder.
1.3. Purchase and Redemption
Procedures
(a) The Fund hereby appoints the Company as
an agent of the Fund for the limited purpose of receiving purchase and
redemption requests on behalf of the Account (but not with respect to any Fund
Shares that may be held in the general account of the Company) for Shares of
those Designated Portfolios made available hereunder, based on allocations of
amounts to the Account or subaccounts thereof under the Contracts and other
transactions relating to the Contracts or the Account. Receipt of any such
request (or relevant transactional information therefore) on any day the New
York Stock Exchange is open for trading and on which the Fund calculates its
net asset value pursuant to the rules of the SEC (a "Business Day")
by the Company as such limited agent of the Fund prior to the time that the
Fund calculates its net asset value as described from time to time in the Fund
Prospectus (which as of the date of execution of this Agreement is 4:00 p.m.
Eastern Time) shall constitute receipt by the Fund on that same Business Day,
provided that the Fund receives notice, via Fax, of such request by 9:30 a.m.
Eastern Time on the next following Business Day.
(b) The Company shall pay for Shares of each
Designated Portfolio on the same day that it notifies the Fund of a purchase request
for such Shares. Payment for Designated Portfolio Shares shall be made in
federal funds transmitted to the Fund by wire to be received by the Fund by 4:00
p.m. Eastern Time on the same Business Day the Fund is notified of the purchase
request for Designated Portfolio Shares pursuant to Section 1.3(a) (unless the
Fund determines and so advises the Company that sufficient proceeds are
available from redemption of Shares of other Designated Portfolios effected
pursuant to redemption requests tendered by the Company on behalf of the
Account). If federal funds are not received on time, such funds will be
invested, and Designated Portfolio Shares purchased thereby will be issued, as
soon as practicable and the Company shall promptly, upon the Fund's request,
reimburse the Fund for any charges, costs, fees, interest or other expenses
incurred by the Fund in connection with any advances to, or borrowing or
overdrafts by, the Fund, or any similar expenses incurred by the Fund, as a
result of portfolio transactions effected by the Fund based upon such purchase
request. Upon receipt of federal funds so wired, such funds shall cease to be
the responsibility of the Company and shall become the responsibility of the
Fund.
(c) The Fund will redeem Designated
Portfolio Shares requested on behalf of the Account, and make payment
therefore, in accordance with the provisions of the then current
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registration statement of the Fund. Payment for
Designated Portfolio Shares redeemed by the Account or the Company normally
shall be made in federal funds transmitted by wire to the Company or any other
designated person on the same Business Day that the Fund is properly notified
of the redemption order for such Shares pursuant to Section 1.3(a) (unless
redemption proceeds are to be applied to the purchase of Shares of other
Designated Portfolios in accordance with Section 1.3(b) of this Agreement).
The Fund shall not bear any responsibility whatsoever for the proper
disbursement or crediting of redemption proceeds by the Company, the Company
alone shall be responsible for such action.
(d) Any purchase or redemption request for
Designated Portfolio Shares held or to be held in the Company's general account
shall be effected at the net asset value per share next determined after the
Fund's receipt of such request, provided that, in the case of a purchase
request, payment for Fund Shares so requested is received by the Fund in
federal funds prior to close of business for determination of such value, as
defined from time to time in the Fund Prospectus.
1.4. The Fund shall use its best efforts to make the net asset value
per share for each Designated Portfolio available to the Company by 6:30 p.m.
Eastern Time each Business Day, and in any event, as soon as reasonably
practicable after the net asset value per share for such Designated Portfolio
is calculated, and shall calculate such net asset value in accordance with the
Fund's Prospectus. Any material error in the
calculation or reporting of net asset value per share, dividend or capital gain
information shall be reported to the Company promptly upon discovery by the
Fund. A material error in the calculation of net asset value per share shall
be corrected in accordance with the procedures for correcting net asset value
errors adopted by the Fund’s Board of Trustees and in effect at the time of the
error. The Fund represents and warrants that its procedures for correcting net
asset value errors, including determinations of materiality, currently comply,
and will continue to comply, with the 1940 Act and generally industry-wide
accepted SEC staff interpretations concerning pricing errors in effect at the
time of an error.
1.5. The Fund shall furnish notice (by wire or telephone followed by
written confirmation) to the Company as soon as reasonably practicable of any
income dividends or capital gain distributions payable on any Designated
Portfolio Shares. The Company, on its behalf and on behalf of the Account,
hereby elects to receive all such dividends and distributions as are payable on
any Designated Portfolio Shares in the form of additional Shares of that
Designated Portfolio. The Company reserves the right, on its behalf and on
behalf of the Account, to revoke this election and to receive all such
dividends and capital gain distributions in cash. The Fund shall notify the
Company of the number of Designated Portfolio Shares so issued as payment of
such dividends and distributions.
1.6. Issuance and transfer of Fund Shares shall be by book entry
only. Stock certificates will not be issued to the Company or the Account.
Purchase and redemption orders for Fund Shares shall be recorded in an
appropriate ledger for the Account or the appropriate subaccount of the
Account.
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1.7. The parties hereto acknowledge that the
arrangement contemplated by this Agreement is not exclusive; the Fund's Shares
may be sold to other insurance companies (subject to Section 1.8 hereof) and to
certain qualified retirement plans, and the cash value of the Contracts may be
invested in other investment companies.
1.8. The Underwriter and the Fund shall sell Fund Shares only to
Participating Insurance Companies and their separate accounts and to persons or
plans ("Qualified Persons") that qualify to purchase Shares of the
Fund under Section 817(h) of the Internal Revenue Code of 1986, as amended (the
“Code”), and the regulations thereunder without impairing the ability of the
Account to consider the portfolio investments of the Fund as constituting
investments of the Account for the purpose of satisfying the diversification
requirements of Section 817(h). The Underwriter and the Fund shall not sell
Fund Shares to any insurance company or separate account unless an agreement
complying with Article VI of this Agreement is in effect to govern such sales.
The Company hereby represents and warrants that it and the Account are
Qualified Persons. The Fund reserves the right to cease offering Shares of any
Designated Portfolio in the discretion of the Fund.
ARTICLE II. Representations,
Warranties and Covenants
2.1. The Company represents and warrants that the Contracts (a) are
or, prior to issuance, will be registered under the 1933 Act or, alternatively
(b) are not registered because they are properly exempt from registration under
the 1933 Act or will be offered exclusively in transactions that are properly
exempt from registration under the 1933 Act. The Company further represents
and warrants that the Contracts will be issued and sold in compliance in all
material respects with all applicable federal securities and state securities
and insurance laws and that the sale of the Contracts shall comply in all
material respects with state insurance suitability requirements. The Company
further represents and warrants that it is an insurance company duly organized
and in good standing under applicable law, that it has legally and validly
established the Account prior to any issuance or sale thereof as a segregated
asset account under applicable insurance laws, and that it (a) has registered
or, prior to any issuance or sale of the Contracts, will register the Account
as a unit investment trust in accordance with the provisions of the 1940 Act to
serve as a segregated investment account for the Contracts, or alternatively
(b) has not registered the Account in proper reliance upon an exclusion from
registration under the 1940 Act. The Company shall register and qualify the
Contracts or interests therein as securities in accordance with the laws of the
various states only if and to the extent deemed advisable by the Company.
2.2. The Fund represents and warrants that Fund Shares sold pursuant
to this Agreement shall be registered under the 1933 Act, duly authorized for
issuance and sold in compliance in all material respects with all applicable
federal securities laws and that the Fund is and shall remain registered under
the 1940
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Act. The Fund shall amend the registration
statement for its Shares under the 1933 Act and the 1940 Act from time to time
as required in order to effect the continuous offering of the shares of the
Designated Portfolios. The Fund shall register and qualify such Shares for
sale in accordance with the laws of the various states only if and to the
extent deemed advisable by the Fund or the Underwriter after taking into
consideration any state insurance law requirements that the Company advises the
Fund may be applicable.
2.3.The Fund makes no representations as to whether any aspect of its
operations, including, but not limited to, investment policies, fees and
expenses, complies with the insurance and other applicable laws of the various
states, except that the Fund represents that the investment policies, fees and
expenses of the Designated Portfolios, are and shall at all times remain in
compliance with the insurance laws of the state of organization of the Company
set forth on the first page (the “State”) to the extent required to perform
this Agreement.
The Company will advise the Fund
in writing, through an annual questionnaire sent by the Fund to the Company. as
to any requirements of State insurance law that affect the Designated
Portfolios, and the Fund will be deemed to be in compliance with this Section
2.3 so long as the Fund complies with such advice of the Company.
2.4.The Fund represents that it is a Massachusetts business trust duly
organized and validly existing under the laws of the Commonwealth of
Massachusetts and that the Designated Portfolios do and will comply in all
material respects with all applicable provisions of the 1940 Act.
2.5. The Underwriter represents and warrants that it is a member in
good standing of FINRA and is registered as a broker-dealer with the SEC. The
Underwriter further represents that it will sell and distribute the shares of
the Designated Portfolios in accordance with any applicable state and federal
securities laws.
2.6. The Adviser represents and warrants that it is and shall remain
duly registered as an investment adviser under all applicable federal and state
securities laws and that it shall perform its obligations for the Fund in
compliance in all material respects with any applicable state and federal
securities laws.
2.7. The Fund, the Adviser and the Underwriter represent and warrant
that all of their trustees, directors, officers, employees, investment
advisers, and other individuals or entities dealing with the money and/or
securities of the Fund are and shall continue to be at all times covered by a
blanket fidelity bond or similar coverage for the benefit of the Fund in an
amount not less than the minimum coverage as required currently by Rule 17g-1
of the 1940 Act or such related provisions as may be promulgated from time to
time. The aforesaid bond shall include coverage for larceny and embezzlement
and shall be issued by a reputable bonding company.
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2.8. The Fund represents that it is currently
qualified as a Registered Investment Company under Subchapter M of the Internal
Revenue Code of 1986, as amended and that it will make every effort to maintain
such qualification (under Subchapter M or any successor or similar provision
and that it will notify the Company immediately upon having a reasonable basis
for believing that it has ceased to so qualify or that it might not so qualify
in the future,
2.9. The Company represents and warrants that all of its directors,
officers, employees, investment advisers, and other individuals or entities
employed or controlled by the Company dealing with the money and/or securities
of the Account are covered by a blanket fidelity bond or similar coverage for
the benefit of the Account, in an amount not less than $20 million. The
aforesaid bond includes coverage for larceny and embezzlement and is issued by
a reputable bonding company. The Company agrees to hold for the benefit of the
Fund and to pay to the Fund any amounts lost from larceny, embezzlement or
other events covered by the aforesaid bond to the extent such amounts properly
belong to the Fund pursuant to the terms of this Agreement. The Company agrees
to make all reasonable efforts to see that this bond or another bond containing
these provisions is always in effect, and agrees to notify the Fund and the
Underwriter in the event that such coverage no longer applies.
2.10. The Company represents and warrants that all shares of the
Designated Portfolios purchased by the Company will be purchased on behalf of
one or more unmanaged separate accounts that offer interests therein that are
registered under the 1933 Act and upon which a registration fee has been or
will be paid or that are unregistered because the interests are exempt from
registration under the 1933 Act, and the Company acknowledges that the Fund
intends to rely upon this representation and warranty for purposes of
calculating SEC registration fees payable with respect to such Shares of the
Designated Portfolios pursuant to Form 24F-2 or any similar form or SEC
registration fee calculation procedure that allows the Fund to exclude Shares
so sold for purposes of calculating its SEC registration fee. The Company will
certify the amount of any Shares of the Designated Portfolios purchased by the
Company on behalf of any separate account offering interests not subject to
registration under the 1933 Act. The Company agrees to cooperate with the Fund
on no less than an annual basis to certify as to its continuing compliance with
this representation and warranty.
2.11. The Company represents and warrants as follows:
1. The Company has in place an anti-money
laundering program ("AML program") that does now and will continue
to comply with applicable laws and regulations, including the relevant
provisions of the USA PATRIOT Act (Pub. L. No. 107-56 (2001)) and the
regulations issued thereunder by the U.S. Treasury Department and the rules of FINRA,
as applicable.
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2. The
Company has in place - and has conducted due diligence pursuant to - policies,
procedures and internal controls reasonably designed (a) to verify the identity
of the Contract owners that invest in the Account, and (b) to identify those
Contract owners' sources of funds, and have no reason to believe that any of
the invested funds were derived from illegal activities.
3. The Company has, after
undertaking reasonable inquiry, no information or knowledge that (a) any
Contract owner that invests in the Account, or (b) any person or entity
controlling, controlled by or under common control with such Contract owner is
an individual or entity or in a country or territory that is on an Office of
Foreign Assets Control ("OFAC") list or similar list of sanctioned or
prohibited persons maintained by a U.S. governmental or regulatory body.
The Company further agrees promptly to notify the Fund and
the Underwriter should it become aware of any change in the above
representations and warranties.
The Company agrees to require any broker-dealer/insurance
agency that distributes the Contracts to have an AML Program in substantial
compliance with the foregoing.
In addition, the Underwriter and the Fund hereby provide
notice to the Company that the Underwriter and/or the Fund reserve the right to
make inquiries of and request additional information from the Company regarding
its AML program.
2.12 The Funds have adopted policies designed to prevent frequent
purchases and redemptions of any Fund shares in quantities great enough to
disrupt orderly management of the corresponding Fund’s investment portfolio. The
Company has adopted their own excessive trading policy, which is attached as
Exhibit I (the “Policy”). The Company does not monitor trading in fund shares
on behalf of, or in accordance with disclosed policies of, any fund groups;
however, the Company monitors individual Participant and Contract owner trading
in accordance with its Policy. The Company will use their best efforts, and
shall reasonably cooperate with the Distributor and the Funds, and will execute
any instructions from the Distributor or the Funds to restrict or prohibit
further purchases or exchanges of Fund shares by an individual Participant or
Contract owner who has been identified by the Distributor or the Funds as
having engaged in transactions in Fund shares that violate market timing
policies established by the Funds. The parties shall use their best efforts,
and shall reasonably cooperate with each other to prevent future market timing
and frequent trading. Additionally, the parties entered into a separate shareholder
information agreement, incorporating the terms of the Policy. As provided in
the shareholder information agreement between the parties, the Company agrees
to provide to the Funds certain shareholder identity and transaction
information upon the Fund’s request as provided by the shareholder information
agreement executed by both parties.
2.13 The Company shall comply
with any applicable privacy and notice provisions of 15 U.S.C. §§ 6801-6827 and
any applicable regulations promulgated thereunder (including but not limited to
17 C.F.R. Part 248) as they may be amended.
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2.14. Neither the Fund,
any Designated Portfolio, the Underwriter, nor any of their affiliates shall be
liable for any information provided to the Company pursuant to this Agreement
which information is based on incorrect information supplied by the Company or
any other Participating Insurance Company to the Fund or the Underwriter. The Company agrees that the Fund, the Underwriter and the
Adviser shall bear no responsibility for any act of any unaffiliated fund or
the investment adviser or underwriter thereof.
2.15 Neither the
Company nor any of its affiliates shall be liable for any information provided
to the Fund, any Designated Portfolio, or the Underwriter pursuant to
this Agreement which information is based on incorrect information supplied by
the Fund, any Designated Portfolio, or the Underwriter. The Fund, any
Designated Portfolio, and the Underwriter agrees the Company shall bear no responsibility for any act of any other
Participating Insurance Company to the Fund or the Underwriter.
ARTICLE III. Prospectuses and
Proxy Statements; Voting
3.1. The Underwriter shall provide the Company with a .PDF copy of the
Fund’s current prospectus, in addition to as many copies of the Fund's current
prospectus (describing only the Designated Portfolios listed on Schedule B) as
the Company may reasonably request. If requested by the Company in lieu
thereof, the Fund shall provide such documentation (including a final copy of
the new prospectus on computer diskette or other electronic means at the Fund's
expense) and other assistance as is reasonably necessary in order for the
Company once each year (or more frequently if the prospectus for a Designated
Portfolio is amended) to have the prospectus for the Contracts and the
prospectus for the Designated Portfolios printed together in one document.
Expenses with respect to the foregoing shall be borne as provided under Article
V.
3.2. The Fund's prospectus shall state that the current Statement of
Additional Information ("SAI") for the Fund is available from the Fund
and the Fund shall provide a copy of such SAI to any owner of a Contract who
requests such SAI and to the Company in such quantities as the Company may
reasonably request. Expenses with respect to the foregoing shall be borne as
provided under Article V.
3.3. The Fund shall provide the Company with copies of its proxy
material, reports to shareholders, and other communications to shareholders of
the Designated Portfolios in such quantity as the Company shall reasonably
require for distributing to Contract owners. Expenses with respect to the
foregoing shall be borne as provided under Article V.
3.4. The Company shall:
(i) solicit
voting instructions from Contract owners;
(ii) vote
the shares of each Designated Portfolio in accordance with instructions
received from Contract owners; and
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(iii) vote shares of each Designated Portfolio for
which no instructions have been received in the same proportion as fund shares
of such Designated Portfolio for which instructions have been received, so long
as and to the extent that the SEC continues to interpret the 1940 Act to
require pass-through voting privileges for variable contract owners or to the
extent otherwise required by law. The Company reserves the right to vote
shares of each Designated Portfolio held in any segregated asset account in its
own right, to the extent permitted by law.
3.5. The Fund reserves the right, upon prior written notice to the
Company (given at the earliest practicable time), to take all actions,
including but not limited to, the dissolution, termination, merger and sale of
all assets of the Fund or any Designated Portfolio upon the sole authorization
of the Board, to the extent permitted by the laws of the Commonwealth of
Massachusetts and the 1940 Act.
3.6. Participating Insurance Companies shall be responsible for
assuring that each of their separate accounts participating in a Designated
Portfolio calculates voting privileges as required by the Mixed and Shared
Funding Exemptive Order and consistent with any reasonable standards that the
Fund may adopt and provide in writing.
3.7. It is understood and agreed that, except with respect to
information regarding the Fund, the Underwriter, the Adviser or Designated
Portfolios provided in writing by the Fund, the Underwriter or the Adviser,
none of the Fund, the Underwriter or the Adviser is responsible for the content
of the prospectus or statement of additional information for the Contracts.
ARTICLE IV. Sales Material and
Information
4.1. The Company shall furnish, or shall cause to be furnished, to the
Fund or its designee, each piece of sales literature or other promotional
material that the Company develops or uses and in which the Fund (or a
Designated Portfolio thereof) or the Adviser or the Underwriter is named
(except any material that simply lists the Funds’ names). No such material
shall be used until approved by the Fund or its designee, and the Fund will use
its best efforts for it or its designee to review such sales literature or
promotional material within ten Business Days after receipt of such material.
The Fund or its designee reserves the right to reasonably object to the
continued use of any such sales literature or other promotional material in
which the Fund (or a Designated Portfolio thereof) or the Adviser or the
Underwriter is named, and no such material shall be used if the Fund or its
designee so objects.
4.2. The Company shall not give any information or make any
representations or statements on behalf of the Fund or concerning the Fund in
connection with the sale of the Contracts other than the information or
representations contained in the registration statement or prospectus or SAI
for the Fund Shares, as such registration statement and prospectus or SAI may
be amended or supplemented from time to time, or in reports or proxy statements
for the Fund, or in sales literature or other promotional material approved by
the Fund
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or its designee or by the Underwriter, except
with the permission of the Fund or the Underwriter or the designee of either.
4.3. The Fund and the Underwriter, or their designee, shall furnish,
or shall cause to be, furnished, to the Company, each piece of sales literature
or other promotional material that it develops or uses and in which the
Company, and/or its Account, is named. No such material shall be used until
approved by the Company, and the Company will use its best efforts to review
such sales literature or promotional material within ten Business Days after
receipt of such material. The Company reserves the right to reasonably object
to the continued use of any such sales literature or other promotional material
in which the Company and/or its Account is named, and no such material shall be
used if the Company so objects.
4.4. The Fund and the Underwriter shall not give any information or
make any representations on behalf of the Company or concerning the Company,
the Account, or the Contracts other than the information or representations
contained in a registration statement, prospectus (which shall include an
offering memorandum, if any, if the Contracts issued by the Company or
interests therein are not registered under the 1933 Act), or SAI for the
Contracts, as such registration statement, prospectus, or SAI may be amended or
supplemented from time to time, or in published reports for the Account which
are in the public domain or approved by the Company for distribution to
Contract owners, or in sales literature or other promotional material approved
by the Company or its designee, except with the permission of the Company.
4.5. The Fund will provide to the Company at
least one complete copy of any prospectuses and SAIs, and all amendments to
any of the above, that relate to the Designated Portfolio(s) reasonably
promptly after the filing of such document(s) with the SEC or NASD or other
regulatory authorities. Upon request, the Fund will provide to the Company
copies of SEC exemptive orders and no-action letters and sales literature and
other promotional material that relate to the Designated Portfolios and to the
performance of this Agreement by the parties.
4.6. The Company will provide to the Fund at least one complete
copy of any prospectuses (which shall include an offering memorandum, if any,
if the Contracts issued by the Company or interests therein are not registered
under the 1933 Act) and SAIs, and all amendments to any of the above, that
relate to the Contracts or the Account reasonably promptly after the filing of
such document(s) with the SEC or NASD or other regulatory authorities. Upon
request, the Company will provide to the Fund copies of SEC exemptive orders
and no-action letters, solicitations of voting instructions and sales
literature and other promotional material that relate to the Contracts or the
Account and the performance of this Agreement by the parties. The Company shall
provide to the Fund and the Underwriter any complaints received from the
Contract owners pertaining to the Fund or the Designated Portfolios.
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4.7. The Fund will provide the Company with
as much notice as is reasonably practicable of any proxy solicitation for any
Designated Portfolio, and of any material change in the Fund's registration
statement, particularly any change resulting in a change to the registration
statement or prospectus for any Account. The Fund will work with the Company
so as to enable the Company to solicit proxies from Contract owners, or to make
changes to its prospectus or registration statement, in an orderly manner. The
Fund will make reasonable efforts to attempt to have changes affecting Contract
prospectuses become effective simultaneously with the annual updates for such
prospectuses.
4.8. For purposes of this Article IV, the phrase "sales
literature and other promotional materials" includes, but is not limited
to, any of the following that refer to the Fund or any affiliate of the Fund:
advertisements (such as material published, or designed for use in, a
newspaper, magazine, or other periodical, radio, television, internet website
(or other electronic media), telephone or tape recording, videotape display,
signs or billboards, motion pictures, or other public media), sales literature
(i.e., any written communication distributed or made generally available
to customers or the public, including brochures, circulars, reports, market
letters, form letters, seminar texts, reprints or excerpts of any other
advertisement, sales literature, or published article), educational or training
materials or other communications distributed or made generally available to
some or all agents or employees, and registration statements, prospectuses,
SAIs, shareholder reports, proxy materials, and any other communications
distributed or made generally available with regard to the Fund.
ARTICLE V. Fees and Expenses
5.1. Except as specifically provided in Section 5.4 of this Agreement
related to Class B or Class B2 shares, the Fund, the Adviser and the
Underwriter shall pay no fee or other compensation to the Company under this
Agreement, although the parties hereto will bear certain expenses in accordance
with Schedule C and other provisions of this Agreement.
5.2. All expenses incident to performance by the Fund under this
Agreement shall be paid by the Fund, except and as further provided in Schedule
C. The cost of setting the Fund’s prospectus in type, setting in type and
printing the Fund’s proxy materials and reports to shareholders (including the
costs of printing a prospectus that constitutes an annual report), the
preparation of all statements and notices relating to the Fund required by any
federal or state law, and all taxes on the issuance or transfer of the Fund's
Shares shall be borne by the parties hereto as set forth in Schedule C.
5.3. The expenses of distributing the Fund's prospectus to new and
existing owners of Contracts issued by the Company and of distributing the
Fund's proxy materials and reports to Contract owners shall be borne by the
parties hereto as set forth in Schedule C.
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5.4. The
provisions of this Section 5.4 apply to Class B Shares and, if applicable,
Class B2 Shares. The Company agrees to provide distribution services
(“Distribution Services”) for the Class B Shares and, if applicable, Class B2
Shares of the Designated Portfolios including the following types of services:
(1) Printing and mailing (including postage) of
Fund prospectuses, statements of additional information, any supplements
thereto, any Annual Reports, any Semi-Annual Reports, and any other shareholder
reports for prospective Contract owners.
(2) Developing, preparing, printing and mailing
of Fund advertisements, sales literature and other promotional materials
describing and/or relating to the Fund and including materials intended for use
within the Company, or for broker-dealer only use or retail use.
(3) Holding seminars and sales meetings designed
to promote the distribution of Fund Shares.
(4) Obtaining
information and providing explanations to Contract owners regarding Fund
investment objectives and policies and other information about the Fund and its
Portfolios, including the performance of the Portfolios.
(5) Training sales personnel regarding the Fund.
(6) Compensating sales personnel and financial
services firms in connection with the allocation of cash values and premiums of
the Contracts to the Fund.
(7) Personal service with respect to Fund Shares
attributable to Contract accounts.
In consideration of the Company performing the Distribution
Services and subject to the conditions and limitations provided below, the
Underwriter will make quarterly payments to the Company pursuant to the Fund’s
Master Distribution Plan for Class B Shares and, if applicable, for
Class B2 Shares, as amended from time to time, at the
annual rate of 0.25% of the average daily net asset value of the Class B Shares
and, if applicable, of the Class B2 Shares of each
Designated Portfolio held by the Company pursuant to this Agreement. The
payments to the Company under the Master Distribution Plan for Class B or Class
B2 Shares, as applicable, pursuant to the foregoing may be reduced or
eliminated by action of the Board of Trustees of the Fund, effective upon
notice to the Company of such action. If for any reason the Company does
not receive such fees, then the Company shall promptly notify the Underwriter.
Any fees that remain outstanding for 12 months shall be void and the obligation
represented thereby shall be extinguished, unless written notice is given to
the Underwriter by the Company prior to the end of such 12 month period.
The Company shall perform all
record keeping services (the "Record Keeping Services") with respect
to the Contracts, including, without limitation, the following:
(a) Maintaining separate records for each
Contract owner, which shall reflect the Designated Portfolio shares purchased
and redeemed and Designated Portfolio share balances of such Contract owners.
The Company will maintain omnibus accounts with each Designated Portfolio on
behalf of Contract owners, and such accounts shall be in the name of the
Company (or its nominee) as the record owner of shares owned by such Contract
owners.
(b) Disbursing or crediting to Contract owners all
proceeds of redemptions of shares of the Designated Portfolios and processing all
dividends and other distributions reinvested in shares of the Designated
Portfolios.
(c) Preparing and transmitting to Contract
owners , as required by law, periodic statements showing the total number of
shares owned, purchases and redemptions of Designated Portfolio shares and
dividends and other distributions paid, and such other information as may be
required, from time to time, by Contract owners.
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(d) Maintaining
and preserving all records required by law to be maintained and preserved in connection
with providing the foregoing services for Contract owners.
(e) Generating written confirmations to Contract
owners, to the extent required by law.
(f) Administering the distribution to existing
Contract owners of Fund prospectuses, proxy materials, periodic reports to
shareholders and other materials that the Designated Portfolios provide to
their shareholders (the printing and distribution expense to be borne as set
forth on Schedule C).
(g) Aggregating and
transmitting purchase and redemption orders to the Designated Portfolios on
behalf of the Contract owners.
In consideration of the Company performing the Record Keeping
Services and subject to the conditions and limitations provided below, the Fund
agrees to pay the Company, quarterly, a record keeping fee at the annual rate
of 0.15% of the average daily net assets of the Class B Shares and, if
applicable, of the Class B2 Shares of each Designated
Portfolio held by the Company pursuant to this Agreement. The Company
represents and agrees that no charge imposed by it on Contract owners is
specifically intended or designed to compensate the Company for the Record
Keeping Services. Only the following classes and series of DEUTSCHE
INVESTMENTS VIT FUNDS pay a record keeping fee: the
Class B-2 shares of DEUTSCHE Equity 500 Index VIP. The payments to the Company
for Record Keeping Services pursuant to the foregoing may be reduced or
eliminated by action of the Board of Trustees of the Fund, effective upon
notice to the Company of such action. If for any reason the Company does
not receive such fees, then the Company shall promptly notify the Fund. Any
fees that remain outstanding for 12 months shall be void and the obligation
represented thereby shall be extinguished, unless written notice is given to
the Fund by the Company prior to the end of such 12 month period.
ARTICLE VI. Diversification and
Qualification
6.1. The Fund will invest the assets of each Designated Portfolio in
such a manner as to ensure that the Contracts will be treated as annuity or
life insurance contracts, whichever is appropriate, under the Code and the
regulations issued thereunder (or any successor provisions). Without limiting
the scope of the foregoing, the Fund will, with respect to each Designated
Portfolio, comply with Section 817(h) of the Code and Treasury Regulation
§1.817-5, and any Treasury interpretations thereof, relating to the diversification
requirements for variable annuity, endowment, or life insurance contracts, and
any amendments or other
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modifications or successor
provisions to such Section or Regulations. In the event of a breach of this
Article VI by the Fund, it will take all reasonable steps (a) to notify the
Company of such breach and (b) to adequately diversify the affected Designated
Portfolio so as to achieve compliance within the grace period afforded by
Treasury Regulation §1.817-5.
6.2. The Fund represents that each Designated Portfolio is or will be
qualified as a Regulated Investment Company under Subchapter M of the Code, and
that it will make every effort to maintain such qualification (under Subchapter
M or any successor or similar provisions) and that it will notify the Company
immediately upon having a reasonable basis for believing that a Designated
Portfolio has ceased to so qualify or that it might not so qualify in the
future.
6.3. The Company represents that the Contracts are currently, and at
the time of issuance shall be, treated as life insurance or annuity insurance
contracts, under applicable provisions of the Code, and that it will make every
effort to maintain such treatment, and that it will notify the Fund and the
Underwriter immediately upon having a reasonable basis for believing the
Contracts have ceased to be so treated or that they might not be so treated in
the future. The Company agrees that any prospectus offering a contract that is
a "modified endowment contract" as that term is defined in Section
7702A of the Code (or any successor or similar provision), shall identify such
contract as a modified endowment contract.
ARTICLE VII . Potential
Conflicts
7.1. The Board will monitor the Fund for the existence of any material
irreconcilable conflict among the interests of the Contract owners of all
separate accounts investing in the Fund. An irreconcilable material conflict
may arise for a variety of reasons, including: (a) an action by any state
insurance regulatory authority; (b) a change in applicable insurance laws or
regulations; (c) a tax ruling or provision of the Internal Revenue Code or the
regulations thereunder; (d) any other development relating to the tax treatment
of insurers, Contract or policy owners or beneficiaries of variable annuity
contracts or variable life insurance policies; (e) the manner in which the
investments of any Designated Portfolio are being managed; (f) a difference in
voting instructions given by variable annuity contract holders, on the one
hand, and variable life insurance policy owners, on the other hand, or by the
contract holders or policy owners of different Participating Insurance
Companies; or (g) a decision by a Participating Insurance Company to disregard
the voting instructions of its Contract owners. The Board shall promptly
inform the Company by written notice if it determines that an irreconcilable
material conflict exists and the implications thereof.
7.2. The Company and the Adviser will report any potential or existing
conflicts of which it is aware to the Board. The Company will assist the Board
in carrying out its responsibilities under the Mixed and Shared Funding
Exemptive Order, by providing the Board with all information reasonably
necessary for the Board to consider any issues raised. This includes, but is not
limited to, an
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obligation by the Company to inform the
Board whenever Contract owner voting instructions are disregarded. At least
annually, and more frequently if deemed appropriate by the Board, the Company
shall submit to the Adviser, and the Adviser shall at least annually submit to
the Board, such reports, materials and data as the Board may reasonably request
so that the Board may fully carry out the obligations imposed upon it by the
conditions contained in the Mixed and Shared Funding Exemptive Order; and said
reports, materials and data shall be submitted more frequently if deemed
appropriate by the Board. The responsibility to report such information and
conflicts to the Board will be carried out with a view only to the interests of
the Contract owners.
7.3. If it is determined by a majority of the Board, or a majority of
its disinterested members, that a material irreconcilable conflict exists, the
Company and other Participating Insurance Companies shall, at their expense and
to the extent reasonably practicable (as determined by a majority of the
disinterested Board members), take whatever steps are necessary to remedy or
eliminate the irreconcilable material conflict, up to and including: (1)
withdrawing the assets allocable to some or all of the separate accounts from
the Fund or any Designated Portfolio and reinvesting such assets in a different
investment medium, including (but not limited to) another Designated Portfolio
of the Fund, or submitting the question whether such segregation should be
implemented to a vote of all affected contract owners and, as appropriate,
segregating the assets of any appropriate group (i.e., annuity contract
owners, life insurance contract owners, or variable contract owners of one or
more Participating Insurance Companies) that votes in favor of such
segregation, or offering to the affected contract owners the option of making
such a change; and (2) establishing a new registered management investment
company or managed separate account.
7.4. If a material irreconcilable conflict arises because of a
decision by the Company to disregard Contract owner voting instructions and
that decision represents a minority position or would preclude a majority vote,
the Company may be required, at the Fund's election, to withdraw the affected
Account's investment in any Designated Portfolio and terminate this Agreement
with respect to such Account; provided, however, that such withdrawal and
termination shall be limited to the extent required by the foregoing material
irreconcilable conflict as determined by a majority of the disinterested
members of the Board. The Company will bear the cost of any remedial action,
including such withdrawal and termination. Any such withdrawal and termination
must take place within six (6) months after the Fund gives written notice that
this provision is being implemented, and until the end of that six month period
the Fund shall continue to accept and implement orders by the Company for the
purchase (and redemption) of shares of such Designated Portfolio.
7.5. If a material irreconcilable conflict arises because a particular
state insurance regulator's decision applicable to the Company conflicts with
the majority of other state regulators, then the Company will withdraw the
affected Account's investment in the Fund and terminate this Agreement with
respect to such Account within six months after the Board informs the Company
in writing
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that it has determined that such decision
has created an irreconcilable material conflict; provided, however, that such withdrawal
and termination shall be limited to the extent required by the foregoing
material irreconcilable conflict as determined by a majority of the
disinterested members of the Board. Until the end of the foregoing six month
period, the Fund shall continue to accept and implement orders by the Company
for the purchase (and redemption) of shares of such Designated Portfolios.
7.6. For purposes of Sections 7.3 through 7.6 of this Agreement, a
majority of the disinterested members of the Board shall determine whether any
proposed action adequately remedies any irreconcilable material conflict, but
in no event will the Fund be required to establish a new funding medium for the
Contracts. The Company shall not be required by Section 7.3 to establish a new
funding medium for the Contract if an offer to do so has been declined by vote
of a majority of Contract owners materially adversely affected by the
irreconcilable material conflict. In the event that the Board determines that
any proposed action does not adequately remedy any irreconcilable material
conflict, then the Company will withdraw an Account's investment in any
Designated Portfolio and terminate this Agreement within six (6) months after
the Board informs the Company in writing of the foregoing determination;
provided, however, that such withdrawal and termination shall be limited to the
extent required by any such material irreconcilable conflict as determined by a
majority of the disinterested members of the Board.
7.7. If and to the extent the Mixed and Shared Funding Exemption Order
or any amendment thereto contains terms and conditions different from Sections
3.4, 3.6, 7.1, 7.2, 7.3, 7.4, and 7.5 of this Agreement, then the Fund and/or
the Participating Insurance Companies, as appropriate, shall take such steps as
may be necessary to comply with the Mixed and Shared Funding Exemptive Order,
and Sections 3.4, 3.6, 7.1, 7.2, 7.3, 7.4 and 7.5 of this Agreement shall
continue in effect only to the extent that terms and conditions substantially
identical to such Sections are contained in the Mixed and Shared Funding
Exemptive Order or any amendment thereto. If and to the extent that Rule 6e-2
and Rule 6e-3(T) are amended, or Rule 6e-3 or any similar rule is adopted, to
provide exemptive relief from any provision of the 1940 Act or the rules
promulgated thereunder with respect to mixed or shared funding (as defined in
the Mixed and Shared Funding Exemptive Order) on terms and conditions
materially different from those contained in the Mixed and Shared Funding Exemptive
Order, then (a) the Fund and/or the Participating Insurance Companies, as
appropriate, shall take such steps as may be necessary to comply with Rules
6e-2 and 6e-3(T), as amended, and Rule 6e-3 or any similar rule, as adopted, to
the extent such rules are applicable; and (b) Sections 3.4, 3.6, 7.1.,
7.2, 7.3, 7.4, and 7.5 of this Agreement shall continue in effect only to the
extent that terms and conditions substantially identical to such Sections are
contained in such Rule(s) as so amended or adopted.
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ARTICLE
VIII. Indemnification
8.1. Indemnification By the Company
(a) The Company agrees to indemnify and hold
harmless the Fund, the Adviser and the Underwriter and each of its trustees,
directors and officers, and each person, if any, who controls the Fund, the Adviser
or Underwriter within the meaning of Section 15 of the 1933 Act or who is under
common control with the Underwriter (collectively, the "Indemnified
Parties" for purposes of this Section 8.1) against any and all losses,
claims, damages, liabilities (including amounts paid in settlement with the
written consent of the Company) or litigation (including legal and other
expenses), to which the Indemnified Parties may become subject under any
statute or regulation, at common law or otherwise, insofar as such losses,
claims, damages, liabilities or expenses (or actions in respect thereof) or
settlements are related to the sale or acquisition of the Shares of the
Designated Portfolios or the Contracts; and:
(i) arise out of or are
based upon any untrue statement or alleged untrue statements of any material
fact contained in the registration statement, prospectus (which shall include
an offering memorandum, if any), or SAI for the Contracts or contained in the
Contracts or sales literature for the Contracts (or any amendment or supplement
to any of the foregoing), or arise out of or are based upon the omission or the
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, provided that this
agreement to indemnify shall not apply as to any Indemnified Party if such
statement or omission or such alleged statement or omission was made in
reliance upon and in conformity with information furnished in writing to the
Company by or on behalf of the Fund for use in the registration statement,
prospectus or SAI for the Contracts or in the Contracts or sales literature (or
any amendment or supplement) or otherwise for use in connection with the sale
of the Contracts or Fund Shares; or
(ii) arise out of or are
based upon any untrue statement or alleged untrue statements of any material
fact contained in the registration statement, prospectus (which shall include
an offering memorandum, if any), or SAI covering insurance products sold by the
Company or any insurance company which is an affiliate thereof, or any
amendments or supplements thereto, or arise out of or are based upon the
omission or the alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
provided that this agreement to indemnify shall not apply as to any Indemnified
Party if such statement or omission or such alleged statement or omission was
made in reliance upon and in conformity with information furnished in writing
to the Company by or on behalf of the Fund for use in the registration
statement, prospectus or SAI covering insurance products sold by the Company or
any insurance company which is an affiliate thereof, or any amendments or
supplements thereto; or
(iii) arise out of or as a
result of statements or representations (other than statements or
representations contained in the registration statement, prospectus, SAI, or
sales literature of the Fund not supplied by the Company or persons under its
control) or wrongful conduct of the Company or its agents or persons under the
Company's authorization or control, or any affiliate thereof, with respect to
the sale or distribution of the Contracts or Fund Shares; or
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(iv) arise
out of any untrue statement or alleged untrue statement of a material fact
contained in a registration statement, prospectus, SAI, or sales literature of
the Fund or any amendment thereof or supplement thereto or the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading if such a statement
or omission was made in reliance upon information furnished to the Fund by or
on behalf of the Company; or
(v)
arise out of or result from any material breach of any representation, warranty
or agreement made by the Company in this Agreement (including a failure,
whether unintentional or in good faith or otherwise, to comply with the
qualification requirements specified in Article VI of this Agreement);
as limited by and in accordance with the provisions of
Sections 8.1(b), 8.1(c) and 8.1(d) hereof.
(b) The Company shall not be liable under
this indemnification provision with respect to any losses, claims, damages,
liabilities or litigation to which an Indemnified Party would otherwise be
subject by reason of such Indemnified Party's willful misfeasance, bad faith,
or gross negligence in the performance of such Indemnified Party's duties, or
by reason of such Indemnified Party's reckless disregard of its obligations or
duties either under this Agreement or to the Company, the Fund, the Adviser,
the Underwriter or the Account, whichever is applicable.
(c) The Company shall not be liable under
this indemnification provision with respect to any claim made against an Indemnified
Party unless such Indemnified Party shall have notified the Company in writing
within a reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice
of such service on any designated agent), but failure to notify the Company of
any such claim shall not relieve the Company from any liability that it may
have to the Indemnified Party against whom such action is brought otherwise
than on account of this indemnification provision, except to the extent that
the Company has been materially prejudiced by such failure to give notice. In
case any such action is brought against an Indemnified Party, the Company shall
be entitled to participate, at its own expense, in the defense of such action.
The Company also shall be entitled to assume the defense thereof, with counsel
satisfactory to the party named in the action and to settle the claim at its own
expense; provided, however, that no such settlement shall, without the
Indemnified Parties’ written consent, include any factual stipulation referring
to the Indemnified Parties or their conduct. After notice from the Company to
such party of the Company's election to assume the defense thereof, the
Indemnified Party shall bear the fees and expenses of any additional counsel
retained by it, and the Company will not be liable to such party under this
Agreement for any legal or other expenses subsequently incurred by such party
independently in connection with the defense thereof other than reasonable
costs of investigation, but, in case the Company does not elect to assume the
defense of any such suit, the Company will reimburse the Indemnified Parties in
such suit, for the reasonable fees and expenses of any counsel retained by
them.
(d) The Indemnified Parties will promptly
notify the Company of the commencement of any litigation or proceedings against
them in connection with the issuance or sale of the Fund Shares or the
Contracts or the operation of the Fund.
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8.2. Indemnification by the Underwriter
(a) The Underwriter agrees to indemnify and
hold harmless the Company and each of its directors and officers and each
person, if any, who controls the Company within the meaning of Section 15 of
the 1933 Act (collectively, the "Indemnified Parties" for purposes of
this Section 8.2) against any and all losses, claims, damages, liabilities
(including amounts paid in settlement with the written consent of the Underwriter)
or litigation (including legal and other expenses) to which the Indemnified
Parties may become subject under any statute or regulation, at common law or
otherwise, insofar as such losses, claims, damages, liabilities or expenses (or
actions in respect thereof) or settlements are related to the sale or
acquisition of Shares of the Designated Portfolios or the Contracts; and:
(i) arise out of or are
based upon any untrue statement or alleged untrue statement of any material
fact contained in the registration statement or prospectus or SAI or sales
literature of the Fund (or any amendment or supplement to any of the
foregoing), or arise out of or are based upon the omission or the alleged
omission to state therein a material fact required to be stated therein or necessary
to make the statements therein not misleading, provided that this agreement to
indemnify shall not apply as to any Indemnified Party if such statement or
omission or such alleged statement or omission was made in reliance upon and in
conformity with information furnished to the Underwriter or Fund by or on
behalf of the Company for use in the registration statement, prospectus or SAI
for the Fund or in sales literature (or any amendment or supplement) or
otherwise for use in connection with the sale of the Contracts or Fund Shares;
or
(ii) arise out of or as a
result of statements or representations (other than statements or
representations contained in the registration statement, prospectus, SAI or
sales literature for the Contracts not supplied by the Underwriter or persons
under its control) or wrongful conduct of the Fund or Underwriter or persons
under their control, with respect to the sale or distribution of the Contracts
or Fund Shares; or
(iii) arise out of any
untrue statement or alleged untrue statement of a material fact contained in a
registration statement, prospectus, SAI or sales literature covering the
Contracts, or any amendment thereof or supplement thereto, or the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statement or statements therein not misleading, if
such statement or omission was made in reliance upon information furnished to
the Company by or on behalf of the Fund or the Underwriter; or
(iv) arise out of or result
from any material breach of any representation, warranty or agreement made by
the Underwriter, the Adviser or the Fund in this Agreement (including a failure
of the Fund, whether unintentional or in good faith or otherwise, to comply
with the diversification and other qualification requirements specified in
Article VI of this Agreement);
as limited by and in accordance with the provisions of
Sections 8.2(b), 8.2(c) and 8.2(d) hereof.
(b) The Underwriter shall not be liable
under this indemnification provision with respect to any losses, claims,
damages, liabilities or litigation to which an Indemnified Party
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would otherwise be subject by reason of such Indemnified
Party's willful misfeasance, bad faith, or gross negligence in the performance
of such Indemnified Party's duties, or by reason of such Indemnified Party's
reckless disregard of obligations and duties either under this Agreement or to
the Company, the Fund, the Adviser, the Underwriter or the Account, whichever
is applicable.
(c) The Underwriter shall not be liable
under this indemnification provision with respect to any claim made against an
Indemnified Party unless such Indemnified Party shall have notified the
Underwriter in writing within a reasonable time after the summons or other
first legal process giving information of the nature of the claim shall have
been served upon such Indemnified Party (or after such Indemnified Party shall
have received notice of such service on any designated agent), but failure to
notify the Underwriter of any such claim shall not relieve the Underwriter from
any liability which it may have to the Indemnified Party against whom such
action is brought otherwise than on account of this indemnification provision,
except to the extent that the Underwriter has been prejudiced by such failure
to give notice. In case any such action is brought against the Indemnified
Party, the Underwriter will be entitled to participate, at its own expense, in
the defense thereof. The Underwriter also shall be entitled to assume the
defense thereof, with counsel satisfactory to the party named in the action and
to settle the claim at its own expense; provided, however, that no such
settlement shall, without the Indemnified Parties’ written consent, include any
factual stipulation to the Indemnified Parties or their conduct. After notice
from the Underwriter to such party of the Underwriter's election to assume the
defense thereof, the Indemnified Party shall bear the fees and expenses of any
additional counsel retained by it, and the Underwriter will not be liable to
such party under this Agreement for any legal or other expenses subsequently
incurred by such party independently in connection with the defense thereof
other than reasonable costs of investigation, but, in case the Underwriter does
not elect to assume the defense of any such suit, the Underwriter will
reimburse the Indemnified Parties in such suit, for the reasonable fees and
expenses of any counsel retained by them.
(d) The Indemnified Parties agree promptly to
notify the Underwriter of the commencement of any litigation or proceedings
against them in connection with the issuance or sale of the Contracts or the
operation of the Account.
8.3. Indemnification By the Fund
(a) The Fund agrees to indemnify and hold
harmless the Company and each of its directors and officers and each person, if
any, who controls the Company within the meaning of Section 15 of the 1933 Act
(collectively, the "Indemnified Parties" for purposes of this Section
8.3) against any and all losses, claims, expenses, damages, liabilities
(including amounts paid in settlement with the written consent of the Fund) or
litigation (including legal and other expenses) to which the Indemnified
Parties may be required to pay or may become subject under any statute or
regulation, at common law or otherwise, insofar as such losses, claims,
expenses, damages, liabilities or expenses (or actions in respect thereof) or
settlements, are related to the operations of the Fund and arise out of or
result from any material breach of any representation, warranty or agreement
made by the Fund in this Agreement (including a failure, whether unintentional
or in good faith or otherwise, to comply with the diversification and other
qualification requirements specified in Article VI of this Agreement);
as limited by and in accordance with the provisions
of Sections 8.3(b), 8.3(c) and 8.3(d) hereof.
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(b) The Fund shall
not be liable under this indemnification provision with respect to any losses,
claims, damages, liabilities or litigation to which an Indemnified Party would
otherwise be subject by reason of such Indemnified Party's willful misfeasance,
bad faith, or gross negligence in the performance of such Indemnified Party's
duties, or by reason of such Indemnified Party's reckless disregard of
obligations and duties either under this Agreement or to the Company, the Fund,
the Adviser, the Underwriter or the Account, whichever is applicable.
(c) The Fund shall not be liable under this
indemnification provision with respect to any claim made against an Indemnified
Party unless such Indemnified Party shall have notified the Fund in writing
within a reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice
of such service on any designated agent), but failure to notify the Fund of any
such claim shall not relieve the Fund from any liability which it may have to
the Indemnified Party against whom such action is brought otherwise than on
account of this indemnification provision, except to the extent the Fund has
been prejudiced by such failure to give notice. In case any such action is
brought against the Indemnified Parties, the Fund will be entitled to
participate, at its own expense, in the defense thereof. The Fund also shall
be entitled to assume the defense thereof, with counsel satisfactory to the
party named in the action and to settle the claim at its own expense; provided,
however, that no such settlement shall, without the Indemnified Parties’
written consent include any factual stipulation referring to the Indemnified
Parties or their conduct. After notice from the Fund to such party of the
Fund's election to assume the defense thereof, the Indemnified Party shall bear
the fees and expenses of any additional counsel retained by it, and the Fund
will not be liable to such party under this Agreement for any legal or other
expenses subsequently incurred by such party independently in connection with
the defense thereof other than reasonable costs of investigation, but, in case
the Fund does not elect to assume the defense of any such suit, the Fund will
reimburse the Indemnified Parties in such suit, for the reasonable fees and
expenses of any counsel retained by them.
(d) The Indemnified Parties agree promptly to
notify the Fund of the commencement of any litigation or proceeding against it
or any of its respective officers or trustees in connection with the Agreement,
the issuance or sale of the Contracts, the operation of any Account, or the
sale or acquisition of Shares of the Fund.
ARTICLE IX. Applicable Law
9.1. This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the Commonwealth of
Massachusetts.
9.2. This Agreement shall be subject to the applicable provisions of
the 1933, 1934 and 1940 Acts, and the rules and regulations and rulings
thereunder, including such exemptions from those statutes, rules and
regulations as the SEC may grant (including, but not limited to, any Mixed and
Shared Funding Exemptive Order) and the terms hereof shall be interpreted and
construed in accordance therewith. If, in the future, the Mixed and Shared
Funding Exemptive Order should no longer be necessary under applicable law,
then Article VII shall no longer apply.
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ARTICLE X.
Termination
10.1. This Agreement shall continue in
full force and effect until the first to occur of:
(a) termination by any party, for any reason
with respect to some or all Designated Portfolios, by three (3) months advance
written notice delivered to the other parties; or
(b) termination by the Company by written
notice to the Fund, the Adviser and the Underwriter based upon the Company's
reasonable and good faith determination that Shares of any Designated Portfolio
are not reasonably available to meet the requirements of the Contracts; or
(c) termination by the Company by written
notice to the Fund, the Adviser and the Underwriter in the event any of the
Designated Portfolio's Shares are not registered, issued or sold in accordance
with applicable state and/or federal securities laws or such law precludes the
use of such Shares as the underlying investment media of the Contracts issued
or to be issued by the Company; or
(d) termination by the Fund, the Adviser or
Underwriter in the event that formal administrative proceedings are instituted
against the Company or any affiliate by FINRA, the SEC, the Insurance
Commissioner or like official of any state or any other regulatory body
regarding the Company's duties under this Agreement or related to the sale of
the Contracts, the operation of any Account, or the purchase of the Fund's
Shares; provided, however, that the Fund, the Adviser or Underwriter determines
in its sole judgment exercised in good faith, that any such administrative
proceedings will have a material adverse effect upon the ability of the Company
to perform its obligations under this Agreement; or
(e) termination by the Company in the event
that formal administrative proceedings are instituted against the Fund, the
Adviser or Underwriter by FINRA, the SEC, or any state securities or insurance
department or any other regulatory body; provided, however, that the Company
determines in its sole judgment exercised in good faith, that any such
administrative proceedings will have a material adverse effect upon the ability
of the Fund or Underwriter to perform its obligations under this Agreement; or
(f) termination by the Company by written
notice to the Fund, the Adviser and the Underwriter with respect to any
Designated Portfolio in the event that such Portfolio ceases to qualify as a
Regulated Investment Company under Subchapter M or fails to comply with the
Section 817(h) diversification requirements specified in Article VI hereof, or
if the Company reasonably believes that such Designated Portfolio may fail to
so qualify or comply; or
(g) termination by the Fund, the Adviser or
Underwriter by written notice to the Company in the event that the Contracts
fail to meet the qualifications specified in Article VI hereof; or
(h) termination by any of the Fund, the
Adviser or the Underwriter by written notice to the Company, if any of the
Fund, the Adviser or the Underwriter respectively, shall determine, in their
sole judgment exercised in good faith, that the Company has suffered a
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material adverse change in its business, operations,
financial condition, insurance company rating or prospects since the date of
this Agreement or is the subject of material adverse publicity; and that
material adverse change or publicity will have a material effect on the
Company’s ability to perform its obligation under this Agreement; or
(i) termination by the Company by written
notice to the Fund, the Adviser and the Underwriter, if the Company shall
determine, in its sole judgment exercised in good faith, that the Fund, the
Adviser or the Underwriter has suffered a material adverse change in its
business, operations, financial condition or prospects since the date of this
Agreement or is the subject of material adverse publicity, and that material
adverse change or publicity will have a material effect on the Fund’s or the
Underwriter’s ability to perform its obligation under this Agreement; or
(j) termination by the Company upon any
substitution of the Shares of another investment company or series thereof for
Shares of a Designated Portfolio of the Fund in accordance with the terms of
the Contracts, provided that the Company has given at least 45 days prior
written notice to the Fund and Underwriter of the date of substitution; or
(k) termination by any party in the event
that the Fund's Board of Trustees determines that a material irreconcilable
conflict exists as provided in Article VII; or
(l) at the option of the Company, as one
party, or the Fund, the Adviser and the Underwriter, as one party, upon the
other party’s material breach of any provision of this Agreement upon 30 days’
written notice and the opportunity to cure within such notice period; or
(m) at the option of the Fund or the Adviser
in the event the Contracts are not treated as life insurance or annuity
contracts under applicable provisions of the Code.
10.2. Notwithstanding any termination of this Agreement, the Fund and
the Underwriter shall, at the option of the Company, continue, for a one year
period from the date of termination and from year to year thereafter if deemed
appropriate by the Fund and the Adviser, to make available additional Shares of
a Designated Portfolio pursuant to the terms and conditions of this Agreement,
for all Contracts in effect on the effective date of termination of this Agreement
(hereinafter referred to as "Existing Contracts"), unless the
Underwriter elects to compel a substitution of other securities for the Shares
of the Designated Portfolios. Specifically, the owners of the Existing
Contracts may be permitted to reallocate investments in the Designated
Portfolios, redeem investments in the Designated Portfolios and/or invest in
the Designated Portfolios upon the making of additional purchase payments under
the Existing Contracts (subject to any such election by the Underwriter). The
parties agree that this Section 10.2 shall not apply to any terminations under
Article VII and the effect of such Article VII terminations shall be governed
by Article VII of this Agreement. The parties further agree that this Section
10.2 shall not apply to any terminations under Section 10.1(d),(g) or (m) of
this Agreement.
10.3. The Company shall not redeem Fund Shares attributable to the
Contracts (as opposed to Fund Shares attributable to the Company's assets held
in the Account) except (i) as necessary to implement Contract owner initiated
or
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approved transactions, (ii) as required by state
and/or federal laws or regulations or judicial or other legal precedent of
general application (hereinafter referred to as a "Legally Required
Redemption"), (iii) as permitted by an order of the SEC pursuant to
Section 26(c) of the 1940 Act, but only if a substitution of other securities
for the Shares of the Designated Portfolios is consistent with the terms of the
Contracts, or (iv) as permitted under the terms of the Contract. Upon request,
the Company will promptly furnish to the Fund and the Underwriter reasonable
assurance that any redemption pursuant to clause (ii) above is a Legally
Required Redemption. Furthermore, except in cases where permitted under the
terms of the Contacts, the Company shall not prevent Contract owners from
allocating payments to a Designated Portfolio that is otherwise available under
the Contracts without first giving the Fund or the Underwriter 45 days notice
of its intention to do so.
10.4. In the
event of termination of this Agreement, (i) so long as Shares of the Fund are
made available to Existing Contracts pursuant to Section 10.2, the provisions
of this Agreement shall continue as to Existing Contracts; and (ii) each
party's obligations under Article VIII related to indemnification and under
Section 12.1 of Article XII related to confidentiality shall survive
termination regardless of whether Shares continue to be offered to Existing
Contracts.
ARTICLE XI. Notices
Any notice shall be sufficiently
given when sent by registered or certified mail or overnight mail through a
nationally-recognized delivery service to the other party at the address of
such party set forth below or at such other address as such party may from time
to time specify in writing to the other party.
If to the Fund:
Deutsche Variable
Series I
Deutsche Variable
Series II
Deutsche Investments VIT Funds
One Beacon Street Boston, MA02108
Attention: Secretary
One Beacon Street Boston, MA02108
Attention: Secretary
If to the Adviser:
Deutsche Investment Management
Americas Inc.
One Beacon Street Boston, MA02108
Attention: Secretary
ARTICLE XII. Miscellaneous
12.1. Subject to the requirements of legal process and regulatory
authority, each party hereto shall treat as confidential the names and
addresses of the owners of the Contracts and all information reasonably
identified as confidential in writing by any other party hereto and, except as
permitted by this Agreement, shall not disclose, disseminate or utilize such
names and addresses and other confidential information without the express
written consent of the affected party until such time as such information has
come into the public domain.
12.2. The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions hereof
or otherwise affect their construction or effect.
12.3. This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
12.4. This Agreement incorporates the entire understanding and agreement
among the parties hereto, and supersedes any and all prior understandings and
agreements between the parties hereto with respect to the subject matter
hereof.
12.5. If any provision of this Agreement shall be held or made invalid
by a court decision, statute, rule or otherwise, the remainder of the Agreement
shall not be affected thereby.
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12.6. Each party hereto shall cooperate with
each other party and all appropriate governmental authorities (including
without limitation the SEC, FINRA, and state insurance regulators) and shall
permit such authorities reasonable access to its books and records in
connection with any investigation or inquiry relating to this Agreement or the
transactions contemplated hereby. Notwithstanding the generality of the
foregoing, each party hereto further agrees to furnish the State Insurance
Commissioner with any information or reports in connection with services
provided under this Agreement which such Commissioner may request in order to
ascertain whether the variable annuity operations of the Company are being
conducted in a manner consistent with the State variable annuity laws and
regulations and any other applicable law or regulations.
12.7. The rights, remedies and obligations contained in this Agreement
are cumulative and are in addition to any and all rights, remedies, and
obligations, at law or in equity, which the parties hereto are entitled to
under state and federal laws.
12.8. This Agreement or any of the rights and obligations hereunder may
not be assigned by any party without the prior written consent of all parties
hereto.
12.9. The Company shall furnish, or shall cause to be furnished, to the
Fund or its designee upon request copies of the following reports:
(a) the Company's annual statement (prepared
under statutory accounting principles) and annual report (prepared under
generally accepted accounting principles) filed with any state or federal
regulatory body or otherwise made available to the public, as soon as
practicable and in any event within 90 days after the end of each fiscal year;
and
(b) any registration statement (without
exhibits) and financial reports of the Company filed with the Securities and
Exchange Commission or any state insurance regulatory, as soon as practicable
after the filing thereof.
12.10. All persons are expressly put on notice of the Fund’s Agreement and
Declaration of Trust and all amendments thereto, all of which are on file with
the Secretary of the Commonwealth of Massachusetts, and the limitation of
shareholder and trustee liability contained therein. This Agreement has been
executed by and on behalf of the Fund by its representatives as such
representatives and not individually, and the obligations of the Fund with
respect to a Designated Portfolio hereunder are not binding upon any of the
trustees, officers or shareholders of the Fund individually, but are binding
upon only the assets and property of such Designated Portfolio. All parties
dealing with the Fund with respect to a Designated Portfolio shall look solely
to the assets of such Designated Portfolio for the enforcement of any claims
against the Fund hereunder.
12.11. The Company is expressly put on notice that prospectus disclosure
regarding the potential risks of mixed and shared funding may be appropriate.
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IN WITNESS WHEREOF, each of the
parties hereto has caused this Agreement to be executed in its name and on its
behalf by its duly authorized representative and its seal to be hereunder
affixed hereto as of the date first above written.
COMPANY: VOYA
INSURANCE AND ANNUITY COMPANY
By:
Title:
COMPANY
DISTRIBUTOR: DIRECTED SERVICES, LLC
By:
Title:
FUND: DEUTSCHE
VARIABLE SERIES I
By:
Title:
DEUTSCHE
VARIABLE SERIES II
By:
Title:
DEUTSCHE
INVESTMENTS VIT FUNDS
By:
Title:
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UNDERWRITER: DeAWM
DISTRIBUTORS, INC.
By:
Title:
By:
Title:
ADVISER: DEUTSCHE
INVESTMENT MANAGEMENT AMERICAS INC.
By:
Title:
By:
Title:
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SCHEDULE
A
Name of Separate Account and Date Established by Board
of Directors
All Separate Accounts of Voya Insurance and Annuity Company
Contracts Funded by Separate Account
All products issued by Voya Insurance and Annuity Company
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SCHEDULE B
DESIGNATED PORTFOLIOS
AND CLASSES THEREOF
Designated Portfolios.
A. Deutsche Variable Series I
None
B. Deutsche Variable Series II
Deutsche Alternative Asset Allocation VIP B
Deutsche High Income VIP B
C. Deutsche Investments VIT Funds
None
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SCHEDULE
C
EXPENSES
ITEM
FUNCTION
PARTY
RESPONSIBLE FOR EXPENSE
FUND
PROSPECTUS
Update
Typesetting
Fund
New Sales:
Printing
Distribution
Postage
Company
Company
Company
Existing Owners:
Printing
Distribution
Postage
Fund
Fund
Fund
STATEMENTS
OF ADDITIONAL INFORMATION
Same as Prospectus
PROXY
MATERIALS OF THE FUND
Typesetting
Printing
Distribution
Fund
Fund
Fund
ANNUAL
REPORTS AND OTHER COMMUNICATIONS WITH SHAREHOLDERS OF THE FUND
All operations and related
expenses, including the cost of registration and qualification of the Fund's
shares, preparation and filing of the Fund's prospectus and registration
statement, proxy materials and reports, the preparation of all statements and
notices required by any federal or state law and all taxes on the issuance of
the Fund's shares, and all costs of management of the business affairs of the
Fund.
Fund
[1]Solely
as it relates to the contracts listed on Schedule A, as it is attached to
the same Agreement as this Schedule C.
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Exhibit I
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Dates Referenced Herein and Documents Incorporated by Reference