Distribution Agreement regarding contracts being sold and distributed through Broker or Dealer
What is this form?
This Principal Distribution Agreement outlines the terms under which AFSG Securities Corporation will distribute contracts on behalf of PFL Life Insurance Company. The agreement details the roles, responsibilities, and obligations of both parties regarding the sale and distribution of specific life insurance contracts. It provides a structured legal framework for broker-dealers to operate, distinguishing it from other forms that may not include such comprehensive regulatory agreements.
Key parts of this document
- Appointment as Distributor/Principal Underwriter: Specifies AFSG's exclusive rights and responsibilities as the distributor.
- Prospectus Requirements: Outlines guidelines on how the contracts should be sold based on the official prospectus.
- Commissions and Payments: Details the commission structure and payment responsibilities between PFL and AFSG.
- Indemnification Terms: Covers the indemnity obligations of PFL towards AFSG for actions taken in good faith.
- Termination Conditions: Defines the circumstances under which the agreement can be terminated by either party.
Situations where this form applies
This form is necessary when a broker-dealer, such as AFSG, seeks to legally distribute life insurance contracts for an insurance company like PFL. It is typically used when new insurance products are being launched, or when an agreement is needed to formalize distribution relationships in compliance with regulatory requirements.
Who this form is for
- Broker-dealers seeking to sell insurance contracts on behalf of an insurance company.
- Insurance companies planning to collaborate with broker-dealers for distributing their products.
- Legal professionals involved in drafting or reviewing distribution agreements.
Instructions for completing this form
- Identify the parties involved: Fill in the full legal names of both parties (AFSG Securities Corporation and PFL Life Insurance Company).
- Specify the contract details: Include any specific life insurance products that are to be distributed under this agreement.
- Outline commission structures: State the agreed-upon commission rates and payment terms between the parties.
- Include termination clauses: Clearly articulate the terms under which either party can terminate the agreement.
- Obtain signatures: Ensure that authorized representatives from both companies sign the agreement to make it effective.
Does this document require notarization?
This form usually doesn’t need to be notarized. However, local laws or specific transactions may require it. Our online notarization service, powered by Notarize, lets you complete it remotely through a secure video session, available 24/7.
Mistakes to watch out for
- Failing to clearly define the products being distributed, which can lead to misunderstandings.
- Omitting necessary details about termination conditions, creating potential conflicts later.
- Not having the agreement signed by authorized representatives, making the agreement invalid.
Why use this form online
- Convenience: Easily download and complete the agreement from anywhere, at any time.
- Editability: Modify the document to meet specific needs without hassle.
- Reliability: Access professionally drafted, attorney-reviewed forms that comply with legal standards.
Legal use & context
- This agreement serves to protect both parties by clearly defining the terms of distribution.
- Compliance with federal and state laws ensures that all transactions are legally valid and enforceable.
- Failure to follow the agreement's conditions can lead to legal disputes and financial liabilities.
Quick recap
- The Principal Distribution Agreement is essential for legal distribution of insurance contracts.
- It defines roles, responsibilities, and obligations for both broker-dealers and insurance companies.
- Properly completing and signing the form is critical to enforceability and compliance with state laws.
Form popularity
FAQ
Purpose of the agreement. Tenure of the Agreement. The obligation of the parties, which may include. The procedure of supply and return of goods. Promotion and training. Invoices and the mode of payment. Any restrictions upon the parties. Termination of the dealership.
Agreement and effective dates. Names and relationships of parties. Appointment of reseller. Purchase orders. Accepting, modifying, rejecting, and canceling purchase orders.
Dealers get to deal directly with the retail clients which usually require less capital and focused business format. Distributors are independent selling agents, who sell specific goods mainly as wholesalers. They usually purchase goods directly from the manufacturers at wholesale price and sell it to the dealer.