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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM
N-8B-2
REGISTRATION STATEMENT OF UNIT INVESTMENT TRUSTS
WHICH ARE CURRENTLY ISSUING SECURITIES
Pursuant to Section 8(b) of the
Investment Company Act of 1940
THE MANUFACTURERS LIFE INSURANCE COMPANY
OF NEW YORK SEPARATE ACCOUNT B
(Formerly, FNAL Variable Life Account I)
Name of Unit Investment Trust
Issuer of periodic payment plan certificates.
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I. ORGANIZATION AND GENERAL INFORMATION
1. (a) Furnish name of the trust and the Internal Revenue Service
Employer Identification Number.
The Manufacturers Life Insurance Company of New York Separate
Account B (herein referred to as the "Separate Account"). The
Separate Account has no Internal Revenue Service Employer
Identification Number.
(b) Furnish title of each class or series of securities issued by the
trust.
Flexible Premium Variable Life Insurance Policies (herein
referred to as the "Policy" or "Policies").
2. Furnish name and principal business address and ZIP Code and the Internal
Revenue Service Employer Identification Number of each
depositor of the trust.
The Manufacturers Life Insurance Company of New York
(herein referred to as "Manulife New York" or the "Company")
Corporate Center at Rye
555 Theodore Fremd Avenue
Rye, New York 10580
Employer's ID No.: 13-3646501
3. Furnish name and principal business address and ZIP Code and the Internal
Revenue Service Employer Identification Number of each custodian or
trustee of the trust indicating for which class or series of securities
each custodian or trustee is acting.
There is no custodian or trustee of the Separate Account.
4. Furnish name and principal business address and ZIP Code and the Internal
Revenue Service Employer Identification Number of each principal
underwriter currently distributing securities of the trust.
There is no principal underwriter currently distributing the
Policies. Manufacturers Securities Services, LLC ("MSS"), a
wholly-owned subsidiary of The Manufacturers Life Insurance Company
of North America, 116 Huntington Avenue, Boston, MA 02116, will be
the principal underwriter of the Policies, and its Internal Revenue
Service Employer Identification Number is 52-2055795.
5. Furnish name of state or other sovereign power, the laws of which govern
with respect to the organization of the trust.
The Separate Account is authorized under the laws of the State of
New York.
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6. (a) Furnish the dates of execution and termination of any indenture or
agreement currently in effect under the terms of which the trust was
organized and issued or proposes to issue securities.
There is no indenture or agreement under the terms of which
the Separate Account was organized or proposes to issue
securities. The Separate Account was organized pursuant to a
resolution of the board of directors of the Company dated May
6, 1997, which resolution will continue in effect indefinitely
unless terminated by the board of directors.
(b) Furnish the dates of execution and termination of any indenture or
agreement currently in effect pursuant to which the proceeds of
payments on securities issued or to be issued by the trust are held
by the custodian or trustee.
Not applicable.
7. Furnish in chronological order the following information with respect to
each change of name of the trust since January 1, 1930. If the name has
never been changed, so state.
Prior to October 1, 1997 the name of the Separate Account was "FNAL
Variable Life Account I."
8. State the date on which the fiscal year of the trust ends.
The fiscal year of the Separate Account ends December 31.
Material Litigation
9. Furnish a description of any pending legal proceedings, material with
respect to the security holders of the trust by reason of the nature of
the claim or the amount thereof, to which the trust, the depositor, or
the principal underwriter is a party or of which the assets of the trust
are the subject, including the substance of the claims involved in such
proceeding and the title of the proceeding. Furnish a similar statement
with respect to any pending administrative proceeding commenced by a
governmental authority or any such proceeding or legal proceeding known
to be contemplated by a governmental authority. Include any proceeding
which, although immaterial itself, is representative of, or one of, a
group which in the aggregate is material.
There are no pending administrative proceedings commenced by, or
known to be contemplated by, a governmental authority and no pending
legal proceedings, material with respect to prospective purchasers
of the Policies, to which the Separate Account, the Company or the
principal underwriter is a party or to which the assets of the
Separate Account will be subject.
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II. GENERAL DESCRIPTION OF THE TRUST AND SECURITIES OF THE TRUST
General Information Concerning the Securities of the Trust and the Rights of
Holders
10. Furnish a brief statement with respect to the following matters for each
class or series of securities issued by the trust:
(a) Whether the securities are of the registered or bearer type.
The Policies are of the registered type.
(b) Whether the securities are of the cumulative or distributive type.
The Policies are of the cumulative type.
(c) The rights of security holders with respect to withdrawal or
redemption.
After a Policy has been in force for one policy year, the
policyowner may make a partial withdrawal of the Net Cash
Surrender Value. The minimum amount that may be withdrawn is
$500. The policyowner should specify the portion of the
withdrawal to be taken from each Investment Account and the
Guaranteed Interest Account. In the absence of instructions
the withdrawal will be allocated among such accounts in the
same proportion as the Policy Value in each account bears to
the Net Policy Value. No more than one partial withdrawal may
be made in any one policy month.
A partial withdrawal made during the Surrender Charge Period
will usually result in the assessment of a portion of the
surrender charges to which the Policy is subject if the
withdrawal is in excess of the Withdrawal Tier Amount. The
Withdrawal Tier Amount is equal to 10% of the Net Cash
Surrender Value determined as of the previous policy
anniversary. The portion of a partial withdrawal that is
considered to be in excess of the Withdrawal Tier Amount
includes all previous partial withdrawals that have occurred
in the current policy year. If the Option 1 death benefit is
in effect under a Policy from which a partial withdrawal is
made, the face amount of the Policy will be reduced.
A Policy may be surrendered for its Net Cash Surrender Value
at any time while the life insured is living. The Net Cash
Surrender Value is equal to the Policy Value less any
surrender charges and outstanding monthly deductions due (the
"Cash Surrender Value") minus the value of the Policy Debt.
The Net Cash Surrender Value will be determined at the end of
the Business Day on which Manulife New York receives the
Policy and a written request for surrender at its Service
Office. After a Policy is surrendered, the insurance coverage
and all other benefits under the Policy will terminate.
Surrender of
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a Policy during the Surrender Charge Period will usually
result in the assessment by Manulife New York of surrender
charges.
(d) The rights of security holders with respect to conversion, transfer,
partial redemption, and similar matters.
A Policy has a Policy Value, a portion of which is available
to the policyowner by making a policy loan or partial
withdrawal or upon surrender of the Policy. The Policy Value
may also affect the amount of the death benefit. The Policy
Value at any time is equal to the sum of the Values in the
Investment Accounts, the Guaranteed Interest Account and the
Loan Account. The portion of the Policy Value based on the
Investment Accounts is not guaranteed and will vary each
Business Day with the investment performance of the underlying
Portfolio.
A policyowner may change the extent to which his or her Policy
Value is based upon any specific sub-account of the Separate
Account or the Company's general account. Such changes are
made by transferring amounts from one or more Investment
Accounts or the Company's general account to other Investment
Accounts or the Company's general account. A policyowner is
permitted to make twelve transfers each policy year free of
charge. Additional transfers in each policy year may be made
at a cost of $25 per transfer. This charge will be assessed
against the Investment Account or the Guaranteed Interest
Account from which the amount is being transferred. For this
purpose all transfer requests received by Manulife New York on
the same Business Day are treated as a single transfer
request. There will be no change in issue age, risk class of
the life insured or face amount as a result of any transfer.
The maximum amount that may be transferred from the Guaranteed
Interest Account in any one policy year is the greater of $500
or 15% of the Guaranteed Interest Account value at the
previous policy anniversary. Any transfer which involves a
transfer out of the Guaranteed Interest Account may not
involve a transfer to the Investment Account for the Money
Market Trust.
Transfer requests must be in a format satisfactory to Manulife
New York and in writing, or by telephone, if a currently valid
telephone transfer authorization form is on file.
While the Policy is in force, the policyowner may transfer the
Policy Value from all the Investment Accounts to the
Guaranteed Interest Account without incurring transfer
charges:
(a) within 18 months after the issue date; or
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(b) within 60 days of the effective date of a material
change in the investment objectives of the sub-accounts.
Or within 60 days of the date of notification of the
change.
Limitations. To the extent that total surrenders, partial
withdrawals and transfers out of a sub-account exceed total
net premium allocations and transfers into that sub-account,
portfolio securities of the underlying Portfolio may have to
be sold. Excessive sales of the investment portfolio
securities in such a situation could be detrimental to that
Portfolio and to policyowners with Policy Values allocated to
sub-accounts investing in that Portfolio. To protect the
interests of all policyowners, Manulife New York reserves the
right to limit transfers when in its opinion processing
transfers would be detrimental to a particular portfolio or to
policyowners who have allocated investments to that portfolio.
(e) If the trust is the issuer of periodic payment plan certificates,
the substance of the provisions of any indenture or agreement with
respect to lapses or defaults by security holders in making
principal payments, and with respect to reinstatement.
Unless the No Lapse Guarantee or Death Benefit Guarantee is in
effect, a Policy will go into default if the Policy's Net Cash
Surrender Value at the beginning of any policy month would go
below zero after deducting the monthly deductions then due.
Manulife New York will notify the policyowner of the default
and will allow a 61-day grace period in which the policyowner
may make a premium payment sufficient to bring the Policy out
of default. The required payment will be equal to the amount
necessary to bring the Net Cash Surrender Value to zero, if it
was less than zero at the date of default, plus the monthly
deductions due at the date of default and at the beginning of
each of the two policy months thereafter, based on the Policy
Value at the date of default. If the required payment is not
received by the end of the grace period, the Policy will
terminate and the Net Cash Surrender Value as of the date of
default less the monthly deductions then due will be paid to
the policyowner. If the life insured should die during the
grace period following a Policy's going into default, the
Policy Value used in the calculation of the death benefit will
be the Policy Value as of the date of default and the
insurance benefit payable will be reduced by any outstanding
monthly deductions due at the time of death.
A policyowner can reinstate a Policy which has terminated
after going into default at any time within 21 days following
the date of termination without furnishing evidence of
insurability, subject to the following conditions:
(a) The life insured's risk class is standard or preferred.
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(b) The life insured's attained age is less than 46.
A policyowner can reinstate a Policy which has terminated
after going into default at any time within the five-year
period following the date of termination subject to the
following conditions:
(a) The Policy must not have been surrendered for its Net
Cash Surrender Value at the request of the policyowner;
(b) Evidence of the life insured's insurability satisfactory
to Manulife New York is furnished to it;
(c) A premium equal to the payment required during the
61-day grace period following default to keep the Policy
in force is paid to Manulife New York; and
(d) An amount equal to any amounts paid by Manulife New York
in connection with the termination of the Policy is
repaid to Manulife New York.
If the reinstatement is approved, the date of reinstatement
will be the later of the date of the policyowner's written
request or the date the required payment is received at the
Manulife New York Service Office.
(f) The substance of the provisions of any indenture or agreement with
respect to voting rights, together with the names of any persons
other than security holders given the right to exercise voting
rights pertaining to the trust's securities or the underlying
securities and the relationship of such persons to the trust.
All of the assets held in the sub-accounts of the Separate
Account will be invested in shares of a particular Portfolio
of Manufacturers Investment Trust. Manulife New York is the
legal owner of those shares and as such has the right to vote
upon matters that are required by the Investment Company Act
of 1940, as amended (the "1940") Act to be approved or
ratified by the shareholders of a mutual fund and to vote upon
any other matters that may be voted upon at a shareholders'
meeting. However, Manulife New York will vote shares held in
the sub-accounts in accordance with instructions received from
policyowners having an interest in such sub-accounts.
Shares held in each sub-account for which no timely
instructions from policyowners are received, including shares
not attributable to Policies, will be voted by Manulife New
York in the same proportion as those shares in that
sub-account for which instructions are received. Should the
applicable Federal securities laws or regulations change so as
to permit Manulife New
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York to vote shares held in the Separate Account in its own
right, it may elect to do so.
The number of shares in each sub-account for which
instructions may be given by a policyowner is determined by
dividing the portion of the Policy Value derived from
participation in that sub-account, if any, by the value of one
share of the corresponding portfolio of Manufacturers
Investment Trust. The number will be determined as of a date
chosen by Manulife New York, but not more than 90 days before
the shareholders' meeting. Fractional votes are counted.
Voting instructions will be solicited in writing at least 14
days prior to the shareholders' meeting.
Manulife New York may, if required by state insurance
officials, disregard voting instructions if such instructions
would require shares to be voted so as to cause a change in
the sub-classification or investment policies of one or more
of the Portfolios, or to approve or disapprove an investment
management contract. In addition, Manulife New York itself may
disregard voting instructions that would require changes in
the investment policies or investment adviser, provided that
Manulife New York reasonably disapproves such changes in
accordance with applicable Federal regulations. If Manulife
New York does disregard voting instructions, it will advise
policyowners of that action and its reasons for such action in
the next communication to policyowners.
(g) Whether security holders must be given notice of any change in:
(1) the composition of the assets of the trust.
Notice of any change in shares of the portfolios of the Trust
held or to be acquired by the Separate Account will be given
to policyowners.
(2) the terms and conditions of the securities issued by the
trust.
No change may be made by the Company in the terms and
conditions of issued Policies without notice to policyowners.
(3) the provisions of any indenture or agreement of the trust.
There is no indenture or agreement relating to the Separate
Account except for the Policies (see response to item 10(g)(2)
above) and the underwriting agreement. (See exhibits A(5) and
A(3)(a).) The underwriting agreement may be changed without
notice to contract owners.
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(4) the identity of the depositor, trustee or custodian.
Policyowners will receive notice of any change in the identity
of the Company. There is no custodian or trustee the Separate
Account.
(h) Whether the consent of security holders is required in order for
action to be taken concerning any change in:
(1) the composition of the assets of the trust.
Consent of policyowners is not required for any change in
shares of the portfolios of the Trust held or to be acquired
by the Separate Account.
(2) the terms and conditions of the securities issued by the
trust.
No adverse change may be made in the terms and conditions of
any issued Policy without the consent of the policyowner,
except as may be required to make it conform to any law or
regulation or ruling issued by a governmental agency.
(3) the provisions of any indenture or agreement, of the trust.
See response to item 10(g)(3); no consent of policyowners is
required for any change in the underwriting agreement.
(4) the identity of the depositor, trustee or custodian.
The identity of the Company cannot be changed. There is no
custodian or trustee of the Separate Account.
(i) Any other principal feature of the securities issued by the trust or
any other principal right, privilege or obligation not covered by
subdivisions (a) to (g) or by any other item in this form.
Premium Limitations
After the payment of the Initial Premium, premiums may be paid
at any time and in any amount during the lifetime of the life
insured subject to certain limitations. After the Initial
Premium, all premiums must be paid to the Manulife New York
Service Office. Unlike traditional insurance, premiums are not
payable at specified intervals or in specified amounts. A
Policy will be issued with a Planned Premium which is based on
the amount of premium the policyowner wishes to pay.
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Manulife New York will send notices to the policyowner setting
forth the Planned Premium at the payment interval selected by
the policyowner, unless payment is being made pursuant to a
pre-authorized payment plan. However, the policyowner is under
no obligation to make the indicated payment.
Manulife New York will not accept any premium payment which is
less than $50, unless the premium is payable pursuant to a
pre-authorized payment plan. In that case the Company will
accept a payment of as little as $10. Manulife New York may
change these minimums on 90 days' written notice. The Policies
also limit the sum of the premiums that may be paid at any
time in order to preserve the qualification of the Policies as
life insurance for Federal tax purposes. These limitations are
set forth in each Policy. Manulife New York reserves the right
to refuse or refund any premium payments that may cause the
Policy to fail to qualify as life insurance under applicable
tax law.
Short-Term Cancellation Right And "Free Look" Provisions
A Policy may be returned for a refund of the premium within 10
days after it is received, within 45 days after the
application for the Policy is signed, or within 10 days after
Manulife New York mails or delivers a notice of right of
withdrawal, whichever is latest. The Policy can be mailed or
delivered to the Manulife New York agent who sold it or to the
Manulife New York Service Office. Immediately on such delivery
or mailing, the Policy shall be deemed void from the
beginning. Within seven days after receipt of the returned
Policy at its Service Office, Manulife New York will refund
any premium paid. Manulife New York reserves the right to
delay the refund of any premium paid by check until the check
has cleared.
If a policyowner requests an increase in face amount which
results in new surrender charges, he or she will have the same
rights as described above to cancel the increase. If canceled,
the Policy Value and the surrender charges will be
recalculated to the amounts they would have been had the
increase not taken place. A policyowner may request a refund
of all or any portion of premiums paid during the free look
period, and the Policy Value and the surrender charges will be
recalculated to the amounts they would have been had the
premiums not been paid.
The Insurance Benefit
If the Policy is in force at the time of the life insured's
death, Manulife New York will pay an insurance benefit based
on the death benefit option selected by the policyowner upon
receipt of due proof of death. The amount payable will be the
death benefit under the selected option, plus any
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amounts payable under any supplementary benefits added to the
Policy, less the value of the Policy Debt at the date of
death. The insurance benefit will be paid in one sum unless
another form of settlement option is agreed to by the
beneficiary and the Company. If the insurance benefit is paid
in one sum, Manulife New York will pay interest from the date
of death to the date of payment. If the life insured should
die after the Company's receipt of a request for surrender, no
insurance benefit will be payable, and Manulife New York will
pay only the Net Cash Surrender Value.
No Lapse Guarantee
On Policies issued with a face amount of at least $250,000
(calculated as described below), the policyowner may elect the
No Lapse Guarantee. If elected, as long as the No Lapse
Guarantee Cumulative Premium Test (see below) is satisfied
during the No Lapse Guarantee Period, as described below,
Manulife New York will guarantee that the Policy will not go
into default, even if a combination of Policy loans, adverse
investment experience and other factors should cause the
Policy's Net Cash Surrender Value to be insufficient to meet
the monthly deductions due at the beginning of a policy month.
For purposes of determining the face amount at issue for the
No Lapse Guarantee, the face amount shall include any amounts
purchased under the supplementary insurance option.
The No Lapse Guarantee Period is the first 5 Policy Years for
life insureds with an issue age up to and including 85. It is
not offered to life insureds whose Issue Age exceeds 85.
While the No Lapse Guarantee is in effect, Manulife New York
will determine at the beginning of each policy month whether
the No Lapse Guarantee Cumulative Premium Test, described
below, has been satisfied. If it has not been satisfied, the
Company will notify the policyowner of that fact and allow a
61-day grace period in which the policyowner may make a
premium payment sufficient to keep the No Lapse Guarantee in
effect. This required payment, as described in the
notification to the policyowner, will be equal to the
outstanding premium requirement as of the date the No Lapse
Guarantee was not satisfied plus the Monthly No Lapse
Guarantee Premium due for the next two policy months. If the
required payment is not received by the end of the grace
period, the No Lapse Guarantee will terminate, and the Policy
subsequently may go into default if the Policy's Net Cash
Surrender Value is insufficient to meet the monthly deductions
due at the beginning of a policy month. A death benefit option
change will also terminate the No Lapse Guarantee if it is in
effect at the time of the change as will a decrease in face
amount below $250,000. The No Lapse Guarantee cannot be
reinstated after it has been terminated.
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No Lapse Guarantee Cumulative Premium Test
The No Lapse Guarantee Cumulative Premium Test is satisfied
if, as of the beginning of the policy month, the sum of all
premiums paid to date less any partial withdrawals and less
any Policy Debt is at least equal to the sum of the Monthly No
Lapse Guarantee Premiums due since the policy date, as
follows:
The Policy will satisfy the No Lapse Guarantee Cumulative
Premium Test if (a) is greater than or equal to (b), where:
(a) is the sum of all premiums paid, less any partial
withdrawals and less any Policy Debt; and
(b) is the sum of the Monthly No Lapse Guarantee Premiums
due since the policy date.
The Monthly No Lapse Guarantee Premium is one-twelfth of the
No Lapse Guarantee Premium. The No Lapse Guarantee Premium is
set forth in the Policy. It is subject to change if the face
amount of the Policy is changed, or if there is any change in
the supplementary benefits added to the Policy or in the risk
class of any life insured.
Death Benefit Guarantee
Policies With Face Amounts Of At Least $250,000. If elected by
the policyowner, on policies issued and maintained with a
minimum face amount of $250,000, and if the Death Benefit
Guarantee Cumulative Premium Test (see below) is satisfied,
Manulife New York will guarantee that the Policy will not go
into default even if a combination of policy loans, adverse
investment experience or other factors should cause the
Policy's Net Cash Surrender Value to be insufficient to meet
the monthly deductions due at the beginning of a policy month.
If elected by the policyowner, on Policies issued and
maintained with a minimum face amount of $250,000, if after
the tenth policy anniversary the Death Benefit Guarantee
Cumulative Premium Test is not satisfied but the Fund Value
Test (see below) is satisfied, Manulife New York will keep the
Death Benefit Guarantee in effect.
This Death Benefit Guarantee will expire at the end of a
policy year specified in the Policy, currently (i) the year in
which the life insured reaches attained age 100 if Death
Benefit Option 1 is maintained throughout the life of the
Policy and (ii) the year in which the life insured reaches
attained age 85 if Death Benefit Option 2 is selected at any
time. While the
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guarantee is in effect, Manulife New York will determine at
the beginning of each policy month whether the Death Benefit
Guarantee Cumulative Premium Test or the Fund Value Test has
been satisfied. If neither has been satisfied, the Company
will notify the policyowner of that fact and allow a 61-day
grace period in which the policyowner may make a premium
payment sufficient to keep the Death Benefit Guarantee in
effect. The required payment will be equal to the outstanding
premium required to meet the Death Benefit Guarantee
Cumulative Premium Test at the date neither test was
satisfied, plus the Monthly Death Benefit Guarantee Premium
due for the next two policy months. If the required payment is
not received by the end of the grace period, the Death Benefit
Guarantee will terminate. Once the Death Benefit Guarantee is
terminated, it cannot be reinstated.
Policies With Face Amounts Under $250,000. On Policies with a
face amount less than $250,000 at issue or after face amount
decrease, if the Death Benefit Guarantee Cumulative Premium
Test is satisfied in the first three years, Manulife New York
will guarantee that the Policy will not go into default even
if a combination of policy loans, adverse investment
experience or other factors should cause the Policy's Net Cash
Surrender Value to be insufficient to meet the monthly
deductions due at the beginning of a policy month. After the
third policy anniversary, there is no Death Benefit Guarantee
on (a) Policies issued with face amounts of less than $250,000
or (b) Policies on which a face amount decrease has resulted
in a face amount of less than $250,000.
Death Benefit Guarantee Cumulative Premium Test. The Policy
provides for a Death Benefit Guarantee Cumulative Premium
Test. The Death Benefit Guarantee Cumulative Premium Test is
satisfied if at the beginning of each policy month the sum of
all premiums paid to date less any partial withdrawals and any
Policy Debt is at least equal to the sum of the Monthly Death
Benefit Guarantee Premiums due since the policy date. The
Death Benefit Guarantee Premium is set forth in the Policy. It
is subject to change if the face amount of the Policy or the
death benefit option is changed or if there is any change in
the supplementary benefits added to the Policy or in the risk
class of the life insured.
Fund Value Test. The Policy provides for a Fund Value Test.
The Fund Value Test is applicable after the tenth anniversary
of the Policy. The Fund Value Test is satisfied if at the
beginning of each policy month the Net Policy Value is greater
than or equal to the Gross Single Premium.
Death Benefit Options
The Policy permits the policyowner to select one of two death
benefit options -- Option 1 and Option 2. Under Option 1 the
death benefit is the
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face amount of the Policy at the date of death or, if greater,
the Policy Value at the date of death multiplied by the
applicable percentage in the table set forth below. Under
Option 2 the death benefit is the face amount of the Policy
plus the Policy Value at the date of death or, if greater, the
Policy Value at the date of death multiplied by the applicable
percentage in the following table:
<TABLE>
<CAPTION>
CORRIDOR CORRIDOR CORRIDOR CORRIDOR
AGE PERCENTAGE AGE PERCENTAGE AGE PERCENTAGE AGE PERCENTAGE
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
40 & below 250% 51 178% 62 126% 73 109%
41 243 52 171 63 124 74 107
42 236 53 164 64 122 75-90 105
43 229 54 157 65 120 91 104
44 222 55 150 66 119 92 103
45 215 56 146 67 118 93 102
46 209 57 142 68 117 94 101
47 203 58 138 69 116 95 & above 100
48 197 59 134 70 115
49 191 60 130 71 113
50 185 61 128 72 111
</TABLE>
Regardless of which death benefit option is in effect, the
relationship of Policy Value to death benefit will change
whenever the "corridor percentages" are used to determine the
amount of the death benefit. This will occur whenever
multiplying the Policy Value by the applicable percentage set
forth in the above table results in a greater death benefit
than would otherwise apply under the selected option.
Death Benefit Option Changes
The death benefit option is selected initially by the
policyowner in the application. After the Policy has been in
force for one year the death benefit option may be changed
effective as of any subsequent policy month. Written request
for a change must be received by Manulife New York at least 30
days prior to the beginning of a policy month in order to
become effective on that date. The Company reserves the right
to limit a request for change if the change would cause the
Policy to fail to qualify as life insurance for tax purposes.
A change in death benefit option will result in a change in
the Policy's face amount in order to avoid any change in the
amount of the death benefit.
If the change in death benefit is from Option 1 to Option 2,
the new face amount will be equal to the face amount prior to
the change minus the
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Policy Value on the effective date of the change. A change to
Option 2 will not be allowed if it would cause the face amount
of the Policy to go below the minimum face amount of $50,000
($100,000 for preferred risk policies). A change of death
benefit option to Option 2 will shorten the death benefit
guarantee period to the year in which the life insured reaches
attained age 85.
If the change in death benefit is from Option 2 to Option 1,
the new face amount will be equal to the face amount prior to
the change plus the Policy Value on the effective date of the
change. The increase in face amount resulting from a change to
Option 1 will not affect the amount of surrender charges to
which a Policy may be subject. The Company has the right to
require satisfactory evidence of insurability before
permitting a change from Option 2 to Option 1. The Company
does not currently require evidence of insurability when
making this change.
Policyowners who wish to have level insurance coverage should
generally select Option 1. Under Option 1, increases in Policy
Value usually will reduce the net amount of risk under a
Policy which will reduce cost of insurance charges. This means
that favorable investment performance should result in a
faster increase in Policy Value than would occur under an
identical Policy with Option 2 in effect. However, the larger
Policy Value which may result under Option 1 will not affect
the amount of the death benefit unless the corridor
percentages are used to determine the death benefit.
Policyowners who want to have the Policy Value reflected in
the death benefit so that any increases in Policy Value will
increase the death benefit should generally select Option 2.
Under Option 2, the net amount at risk will remain level
unless the corridor percentages are used to determine death
benefit, in which case increases in Policy Value will increase
the net amount at risk.
Face Amount Changes
Subject to certain limitations, a policyowner may, upon
written request, increase or decrease the face amount of the
Policy. A change in face amount may affect the Death Benefit
Guarantee Premium, the monthly deductions and surrender
charges. Currently, each increase or decrease (other than a
decrease resulting from a partial withdrawal) in face amount
must be at least $50,000 ($100,000 for increases in preferred
risk policies). Manulife New York reserves the right to
increase or decrease the minimum face amount change on 90
days' written notice to the policyowner. The Company also
reserves the right to limit a change in face amount to the
extent necessary to prevent the Policy from failing to qualify
as life insurance for tax purposes.
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Increases. Increases in face amount are subject to
satisfactory evidence of insurability. Increases may be made
only once per policy year and only after the second policy
anniversary. An increase will become effective at the
beginning of the next policy month following the date Manulife
New York approves the requested increase. The Company reserves
the right to refuse a requested increase if the life insured's
age at the effective date of the increase would be greater
than the maximum issue age for new Policies at that time.
An increase in face amount will usually result in the Policy's
being subject to new surrender charges. The new surrender
charges will be computed as if a new Policy were being
purchased for the increase in face amount. For purposes of
determining the new deferred sales charge, a portion of the
Policy Value at the time of the increase, and a portion of the
premiums paid on or subsequent to the increase, will be deemed
to be premiums attributable to the increase. Any increase in
face amount to a level less than the highest face amount
previously in effect will have no effect on the surrender
charges to which the Policy is subject, since surrender
charges, if applicable, will have been assessed in connection
with the prior decrease in face amount. The insurance coverage
eliminated by the decrease of the oldest face amount will be
deemed to be restored first. As with the purchase of a Policy,
a policyowner will have a free look right with respect to any
increase resulting in new surrender charges.
No additional premium is required for a face amount increase.
However, a premium payment may be necessary to prevent the
Policy from going into default, since new surrender charges
resulting from an increase would automatically reduce the Net
Cash Surrender Value of the Policy. Moreover, a new Death
Benefit Guarantee Premium will be determined.
Decreases. A decrease in the face amount may be requested only
once per policy year and only after the Policy has been in
force for one year. A decrease in face amount will become
effective at the beginning of the next policy month following
the receipt of a properly executed request. A decrease will
not be allowed if it would cause the face amount to go below
the minimum face amount of $50,000 ($100,000 for preferred
risk policies).
A decrease in face amount during the Surrender Charge Period
will usually result in surrender charges being deducted from
the Policy Value. For purposes of determining surrender and
cost of insurance charges, a decrease will reduce face amount
in the following order: (a) the face amount provided by the
most recent increase, then (b) the face amounts provided by
the next most recent increases successively, and finally (c)
the initial face amount.
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General Account
The general account of Manulife New York consists of all
assets owned by the Company other than those in its separate
accounts. Subject to applicable law, Manulife New York has
sole discretion over the investment of the assets of the
general account.
A policyowner may elect to allocate net premiums to the
Guaranteed Interest Account or to transfer all or a portion of
the Policy Value to the Guaranteed Interest Account from the
Investment Accounts. Transfers from the Guaranteed Interest
Account to the Investment Accounts are subject to
restrictions. Manulife New York will hold the reserves
required for any portion of the Policy Value allocated to the
Guaranteed Interest Account in its general account. However,
an allocation of Policy Value to the Guaranteed Interest
Account does not entitle the policyowner to share in the
investment experience of the general account. Instead,
Manulife New York guarantees that the Policy Value in the
Guaranteed Interest Account will accrue interest daily at an
effective annual rate of at least 4%, without regard to the
actual investment experience of the general account. The
Company may, at its sole discretion, credit a higher rate of
interest, although it is not obligated to do so. The
policyowner assumes the risk that interest credited may not
exceed the guaranteed minimum rate of 4% per year.
Miscellaneous Policy Provisions
Beneficiary. One or more beneficiaries of the Policy may be
appointed by the policyowner by naming them in the
application. Beneficiaries may be appointed in three classes
-- primary, secondary and final. Thereafter the beneficiary
may be changed by the policyowner during the life insured's
lifetime by giving written notice to Manulife New York in a
form satisfactory to it unless an irrevocable designation has
been elected. If the life insured dies and there is no
surviving beneficiary, the policyowner, or the policyowner's
estate if the policyowner is the life insured, will be the
beneficiary. If a beneficiary dies before the seventh day
after the death of the life insured, the Company will pay the
insurance benefit as if the beneficiary had died before the
life insured.
Incontestability. Manulife New York will not contest the
validity of a Policy after it has been in force during the
life insured's lifetime for two years from the issue date. It
will not contest the validity of an increase in face amount or
the addition of a supplementary benefit after such increase or
addition has been in force during the life insured's lifetime
for two years. If a Policy has been reinstated and been in
force for less than two years from the reinstatement date, the
Company can contest any misrepresentation of a fact material
to the reinstatement.
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Misstatement Of Age Or Sex. If the life insured's stated age
or sex or both in the Policy are incorrect, Manulife New York
will change the face amount of insurance so that the death
benefit will be that which the most recent monthly charge for
the cost of insurance would have bought for the correct age
and sex.
Suicide Exclusion. If the life insured dies by suicide within
two years from the issue date, Manulife New York will pay only
the premiums paid less any partial withdrawals of the Net Cash
Surrender Value and any amount in the Policy Debt. If the life
insured should die by suicide within two years after a face
amount increase, the death benefit for the increase will be
limited to the monthly deduction for the increase.
Assignment. Manulife New York will not be bound by an
assignment until it receives a copy of it at its Service
Office. Manulife New York assumes no responsibility for the
validity or effects of any assignment.
Conversion Privilege. The policyowner may effectively convert
his or her policy at any Policy Anniversary, to a fixed
paid-up benefit, without evidence of insurability. The Policy
Value, other values based thereon, the Investment Account
values and the Death Benefit Guarantee will be determined as
of the Business Day on which the Company receives the written
request for conversion. The basis for determining the Policy
Value will be the Commissioners 1980 Standard Ordinary Smoker
or Non-Smoker Mortality Table and an interest rate of 4% per
year. The Flexible Premium Variable Life coverage cannot be
reinstated after the date of conversion.
Supplementary Benefits. Subject to state approval and certain
requirements, one or more supplementary benefits may be added
to a Policy, including those providing term insurance for
additional insureds, providing supplementary insurance
options, providing accidental death coverage, waiving monthly
deductions upon disability, and, in the case of
corporate-owned Policies, permitting a change of the life
insured. More detailed information concerning supplementary
benefits may be obtained from an authorized agent of the
Company. The cost of any supplementary benefits will be
deducted as part of the monthly deduction.
Payment Of Proceeds. As long as the Policy is in force,
Manulife New York will ordinarily pay any policy loans,
partial withdrawals, Net Cash Surrender Value or any insurance
benefit within seven days after receipt at the Manulife New
York Service Office of all the documents required for such a
payment.
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The Company may delay the payment of any policy loans, partial
withdrawals, Net Cash Surrender Value or the portion of any
insurance benefit that depends on the Guaranteed Interest
Account value for up to six months; otherwise the Company may
delay payment for any period during which (i) the New York
Stock Exchange is closed for trading (except for normal
holiday closings) or trading on the New York Stock Exchange is
otherwise restricted; or (ii) an emergency exists as defined
by the Securities and Exchange Commission ("SEC") or the SEC
requires that trading be restricted; or (iii) the SEC permits
a delay for the protection of policyowners. Also, transfers
may be denied under the circumstances stated in clauses (i),
(ii) and (iii) above and under the circumstances previously
set forth.
11. Describe briefly the kind or type of securities comprising the unit of
specified securities in which security holders have an interest. (If the
unit consists of a single security issued by an investment company, name
such investment company and furnish a description of the type of
securities comprising the portfolio of such investment company.).
The Separate Account will invest in shares of Manufacturers
Investment Trust, a registered open-end management investment
company having a number of separate portfolios.
12. If the trust is the issuer of periodic payment plan certificates and if
any underlying securities were issued by another investment company,
furnish the following information for each such company:
(a) Name of company.
Manufacturers Investment Trust (hereinafter the "Trust")
(b) Name and principal business address of depositor.
There is no depositor for the Trust.
(c) Name and principal business address of trustee or custodian.
State Street Bank and Trust Company, 225 Franklin Street,
Boston, Massachusetts 02110 acts as custodian for the Trust.
(d) Name and principal business address of principal underwriter.
There is no principal underwriter for the Trust.
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<PAGE> 20
(e) The period during which the securities of such company have been the
underlying securities.
To date, no shares of the portfolios of the Trust have been
acquired by the Separate Account.
Information Concerning Loads, Fees, Charges and Expenses
13. (a) Furnish the following information with respect to each load, fee,
expense or charge to which (1) principal payments, (2) underlying
securities, (3) distributions, (4) cumulated or reinvested
distributions or income, and (5) redeemed or liquidated assets of
the trust's securities are subject:
(A) the nature of such load, fee, expense, or charge;
(B) the amount thereof;
(C) the name of the person to whom such amounts are paid and his
relationship to the trust;
(D) the nature of the services performed by such person in
consideration for such load, fee, expense or charge.
(1) Principal Payments
Manulife New York currently makes no deduction of charges from
premium payments for state and local taxes. The maximum amount
of deductions for such charges which may be applicable to
future premium payments is 2.35%. Manulife New York currently
makes no deduction of a charge from premium payments for
Federal taxes. The maximum amount of deduction for such a
charge which may be applicable to future premium payments is
1.25%.
(2) Underlying Securities
Monthly Deductions
Each month a deduction consisting of an administration charge,
a charge for the cost of insurance, a charge for mortality and
expense risks, and charge(s) for any supplementary benefit(s)
is deducted from Policy Value. The monthly deduction will be
allocated among the Investment Accounts and (other than the
mortality and expense risks charge) the Guaranteed Interest
Account in the same proportion as the Policy Value in each
bears to the Net Policy Value. Monthly deductions due prior to
the effective date will be taken on the effective date instead
of the dates they were due. If the Policy is still in force
when the life insured attains age 100, no further monthly
deductions will be taken from the Policy Value.
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Administration Charge. The monthly administration charge is
$35 until the first anniversary and, thereafter, $10 (the
right is reserved to increase the administration charge by an
additional amount up to $.01 per $1,000 of face amount per
month). The charge is designed to cover certain administrative
expenses associated with the Policy, including maintaining
policy records, collecting premiums and processing death
claims, surrender and withdrawal requests and various charges
permitted under a Policy.
Cost Of Insurance Charge. The monthly charge for the cost of
insurance is determined by multiplying the applicable cost of
insurance rate times the net amount at risk at the beginning
of each policy month. The cost of insurance rate is based on
the life insured's issue age, the duration of the coverage,
sex and risk class. The rate is determined separately for the
initial face amount and for each increase in face amount. Cost
of insurance rates will generally increase with the life
insured's age. Any additional ratings as indicated in the
Policy will be added to the cost of insurance rate.
The cost of insurance rates used by Manulife New York reflect
its expectations as to future mortality experience as based on
current experience. The rates may be changed from time to time
on a basis which does not unfairly discriminate within the
class of life insureds. In no event will the cost of insurance
rate exceed the guaranteed rate set forth in the Policy except
to the extent that an extra rate is imposed because of an
additional rating applicable to the life insured. The
guaranteed rates are based on the 1980 Commissioners Standard
Ordinary Smoker/Nonsmoker Mortality Tables.
The net amount at risk to which the cost of insurance rate is
applied is the difference between the death benefit, divided
by 1.0032737 (a factor which reduces the net amount at risk
for cost of insurance charge purposes by taking into account
assumed monthly earnings at an annual rate of 4%), and the
Policy Value. Because different cost of insurance rates may
apply to different levels of insurance coverage, the net
amount at risk will be calculated separately for each level of
insurance coverage. When the Option 1 death benefit is in
effect, for purposes of determining the net amount at risk
applicable to each level of insurance coverage, the Policy
Value is attributed first to the initial face amount and then,
if the Policy Value is greater than the initial face amount,
to each increase in face amount in the order made.
Because the calculation of the net amount at risk is different
under the death benefit options when more than one level of
insurance coverage is in effect, a change in the death benefit
option may result in a different net amount at risk for each
level of insurance coverage than would have occurred had the
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death benefit option not been changed. Since the cost of
insurance is calculated separately for each level of insurance
coverage, any change in the net amount at risk for a level of
insurance coverage resulting from a change in the death
benefit option may affect the amount of the charge for the
cost of insurance. Partial withdrawals and decreases in face
amount will also affect the manner in which the net amount at
risk for each level of insurance coverage is calculated.
Mortality And Expense Risks Charge. Manulife New York deducts
a monthly charge from the Policy Value for the mortality and
expense risks it assumes under the Policies. This charge is
made at the beginning of each policy month at a rate of 0.075%
through the later of the tenth anniversary of the Policy and
the policyowner's attained age of 60 and, thereafter, 0.0375%.
It is assessed against the value of the policyowner's
Investment Accounts by cancellation of units in the same
proportion as the value of each Investment Account bears to
the total value of the Investment Accounts. The mortality risk
assumed is that lives insured may live for a shorter period of
time than the Company estimated. The expense risk assumed is
that expenses incurred in issuing and administering the
Policies will be greater than the Company estimated. Manulife
New York estimates that virtually all of the mortality and
expense risks charge currently relates to expense risks.
Manulife New York will realize a gain from this charge to the
extent it is not needed to provide benefits and pay expenses
under the Policies.
Other Charges
Currently, Manulife New York makes no charge against the
Separate Account for Federal, state or local taxes that may be
attributable to the Separate Account or to the operations of
the Company with respect to the Policies. However, if Manulife
New York incurs any such taxes, it may make a charge therefor.
Charges will be imposed on certain transfers of Policy Values,
including a $25 charge for each transfer in excess of twelve
in a policy year and a $5 charge for each Dollar Cost
Averaging transfer when Policy Value does not exceed $15,000.
Information regarding investment advisory fees paid by the
Trust is set forth on pages 89 through 92 of the prospectus
contained in post-effective amendment No. 38 to the
registration statement of the Trust, File No. 2-94157, which
pages are incorporated herein be reference.
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(3) Distributions
Surrender Charges
Manulife New York will assess surrender charges upon
surrender, a partial withdrawal of Policy Value in excess of
the Withdrawal Tier Amount, a requested decrease in face
amount, or lapse. The charges will usually be assessed if any
of the above transactions occurs within the Surrender Charge
Period unless the charges have been previously deducted. There
are two surrender charges -- a deferred underwriting charge
and a deferred sales charge.
Deferred Underwriting Charge. The deferred underwriting charge
is $4.50 for each $1,000 of face amount of life insurance
coverage initially purchased or added by increase. In effect,
the charge applies only to the first $500,000 of face amount
initially purchased or the first $500,000 of each subsequent
increase in face amount. Thus, the charge made in connection
with any one underwriting will not exceed $2,250. The amount
of the charge remains level for five years. Following the
fifth year after issuance of the Policy or a face amount
increase, the charge applicable to the initial face amount or
increase will decrease each month by varying rates depending
upon the life insured's issue age until the charge has
decreased to zero.
The deferred underwriting charge is designed to cover the
administrative expenses associated with underwriting and
policy issue, including the costs of processing applications,
conducting medical examinations, determining the life
insured's risk class and establishing policy records.
Deferred Sales Charge. The maximum deferred sales charge is
50% of premiums paid up to a maximum number of Target Premiums
that varies (from -- 2.00 to 2.59) according to the issue age
of the life insured, the face amount at issue and the amount
of any increase. This charge compensates the Company for some
of the expenses of selling and distributing the Policies,
including agents' commissions, advertising, agent training and
the printing of prospectuses and sales literature.
The deferred sales charge deducted in any policy year is not
specifically related to sales expenses incurred in that year.
Instead, the Company expects that the major portion of the
sales expenses attributable to a Policy will be incurred
during the first policy year, although the deferred sales
charge might be deducted up to fifteen years later. Manulife
New York anticipates that the aggregate amounts received under
the Policies for sales charges will be insufficient to cover
aggregate sales expenses. To the extent that sales expenses
exceed sales charges, Manulife New York will pay the excess
from
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its other assets or surplus, including amounts derived from
the mortality and expense risks charge described below.
The Target Premium for the initial face amount is specified in
the Policy. A Target Premium will be computed for each
increase in face amount above the highest face amount of
coverage previously in effect, and the policyowner will be
advised of each new Target Premium. Target Premiums depend
upon the face amount of insurance provided at issue or by an
increase and the issue age and sex of the life insured. The
maximum number of Target Premiums subject to the deferred
sales charge varies, based on the issue age of the life
insured, the face amount at issue and the amount of any
increase.
The maximum deferred sales charge will be in effect for at
least the first five years of the Surrender Charge Period.
After that, the portion of the deferred sales charge that
remains in effect will grade down at a rate that also varies
according to the issue age of the life insured until, at the
end of the Surrender Charge Period, there is no deferred sales
charge. The table to be used to reduce the applicable deferred
sales charge during the Surrender Charge Period will be set
forth in each Policy and the policyowner will be informed of
the table to be used in connection with sales charges on
increases in face amount.
In order to determine the deferred sales charge applicable to
a face amount increase, Manulife New York will treat a portion
of the Policy Value on the date of increase as a premium
attributable to the increase. In addition, a portion of each
premium paid on or subsequent to the increase will be
attributed to the increase. In each case, the portion
attributable to the increase will be the ratio of the
"guideline annual premium" for the increase to the sum of the
guideline annual premiums for the initial face amount and all
increases including the requested increase.
Charges On Partial Withdrawals. Whenever a portion of the
surrender charges is deducted as a result of a partial
withdrawal of Policy Value in excess of the Withdrawal Tier
Amount, the Policy's remaining surrender charges will be
reduced by the amount of the charges taken. The surrender
charges not assessed as a result of the 10% free withdrawal
provision remain in effect under the Policy and may be
assessed upon surrender or lapse, other partial withdrawals,
or a requested decrease in face amount. The portion of the
surrender charges assessed will be based on the ratio of the
amount of the withdrawal in excess of the Withdrawal Tier
Amount to the Net Cash Surrender Value of the Policy less the
Withdrawal Tier Amount immediately prior to the withdrawal.
The surrender charges will be deducted from each Investment
Account and the Guaranteed Interest Account in the same
proportion as the amount of the withdrawal taken from such
account bears to the total amount of the withdrawal. If the
amount in the account is
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insufficient to pay the portion of the surrender charges
allocated to that account, then the portion of the withdrawal
allocated to that account will be reduced so that the
withdrawal plus the portion of the surrender charges allocated
to that account equal the value of that account. Units equal
to the amount of the partial withdrawal taken, and surrender
charges deducted, from each Investment Account will be
canceled based on the value of such units determined at the
end of the Business Day on which Manulife New York receives a
written request for withdrawal at its Service Office.
If the Option 1 death benefit is in effect under a Policy from
which a partial withdrawal is made, the face amount of the
Policy will be reduced. If the death benefit is equal to the
face amount at the time of withdrawal, the face amount will be
reduced by the amount of the withdrawal plus the portion of
the surrender charges assessed. If the death benefit is based
upon the Policy Value times the applicable percentage set
forth under "Death Benefit Options" above, the face amount
will be reduced only to the extent that the amount of the
withdrawal plus the portion of the surrender charges assessed
exceeds the difference between the death benefit and the face
amount. Reductions in face amount resulting from partial
withdrawals will not incur any surrender charges above the
surrender charges applicable to the withdrawal. When the face
amount of a Policy is based on one or more increases
subsequent to issuance of the Policy, a reduction resulting
from a partial withdrawal will be applied in the same manner
as a requested decrease in face amount, i.e., against the face
amount provided by the most recent increase, then against the
next most recent increases successively and finally against
the initial face amount.
Charges On Decreases In Face Amount. As with partial
withdrawals, a portion of a Policy's surrender charges will be
deducted upon a decrease, or a cancellation of an increase, in
face amount requested by the policyowner. Since surrender
charges are determined separately for the initial face amount
and each face amount increase, and since a decrease in face
amount will have a different impact on each level of insurance
coverage, the portion of the surrender charges to be deducted
with respect to each level of insurance coverage will be
determined separately. Such portion will be the same as the
ratio of the amount of the reduction in such coverage to the
amount of such coverage prior to the reduction.
Decreases are applied to the most recent increase first and
thereafter to the next most recent increases successively. The
charges will be deducted from the Policy Value, and the amount
so deducted will be allocated among the Investment Accounts
and the Guaranteed Interest Account in the same proportion as
the Policy Value in each bears to the Net Policy Value.
Whenever a portion of the surrender charges is deducted as a
result of a
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decrease in face amount, the Policy's remaining surrender
charges will be reduced by the amount of the charges taken.
Charges Remaining After Face Amount Decreases Or Partial
Withdrawals. Each time a pro-rata deferred underwriting charge
or a pro-rata deferred sales charge for a face amount decrease
or for a partial withdrawal is deducted, the remaining
deferred underwriting charge and deferred sales charge will be
reduced proportionately.
The remaining deferred underwriting charge will be the result
of (a) divided by (b), multiplied by (c), where:
(a) is the grading percentage applicable to the life
insured's issue age and Policy duration;
(b) is the grading percentage applicable to the life
insured's issued age at the time of the last face amount
decrease or partial withdrawal; and
(c) is the remaining deferred sales charge prior to the last
face amount decrease or partial withdrawal less the
deferred underwriting charge deducted for that face
amount decrease or partial withdrawal.
The remaining deferred sales charge will be the result of (a)
divided by (b), multiplied by (c), where:
(a) is the grading percentage applicable to the Policy
duration;
(b) is the grading percentage at the time of the last face
amount decrease or partial withdrawal; and
(c) is the remaining deferred sales charge prior to the last
face amount decrease or partial withdrawal less the
deferred sales charge deducted for that face amount
decrease or partial withdrawal.
Until the sum of premiums paid equals or exceeds the number of
Target Premiums subject to deferred sales charge multiplied by
the Target Premium, subsequent premium payments will increase
the remaining deferred sales charge.
(4) Cumulated or Reinvested Distributions or Income
All income distributions (net of any withholding tax) and all
other distributions received by the Separate Account are
reinvested at net asset value in shares of the portfolios of
the Trust.
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(5) Redeemed or Liquidated Assets
No load, fee, expense or charge is assessed in connection with
a redemption of shares of the portfolios of the Trust. A
charge is assessed in connection with certain Policy
redemptions as described in response to item 13(a)(3) above.
(b) For each installment payment type of periodic payment plan
certificate of the trust, furnish the following information with
respect to sales load and other deductions from principal payments.
See response to item 13(a) above.
(c) State (1) the amount of sales load as a percentage of the net amount
invested, and (2) the amount of total deductions as a percentage of
the net amount invested for each type of security issued by the
trust.
As previously stated, no sales load is deducted from purchase
payments.
(d) Furnish a brief description of any loads, fees, expenses or charges
not covered in Item 13(a) which may be paid by security holders in
connection with the trust or its securities.
None.
(e) State whether the depositor, principal underwriter, custodian or
trustee, or any affiliated person of the foregoing may receive
profits or other benefits not included in answer to Item 13(a) or
13(d) through the sale or purchase of the trust's securities or
interests in such securities, or underlying securities or interests
in underlying securities, and describe fully the nature and extent
of such profits or benefits.
Neither the Company nor the principal underwriter of the
Separate Account nor any affiliated person of the Company will
receive any profits or other benefits not included in answer
to items 13(a) or 13(d) through the sale or purchase of the
Policies or shares of the portfolios of the Trust.
(f) State the percentage that the aggregate annual charges and
deductions for maintenance and other expenses of the trust bear to
the dividend and interest income from the trust property during the
period covered by the financial statements filed herewith.
Not applicable.
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Information Concerning the Operations of the Trust
14. Describe the procedure with respect. to applications (if any) and the
issuance and authentication of the trust's securities, and state the
substance of the provisions of any indenture or agreement pertaining
thereto.
To purchase a Policy, an applicant must submit a completed
application. Manulife New York will issue a Policy only if it has a
face amount of at least $50,000 ($100,000 for preferred risk
policies). A Policy will generally be issued to persons between ages
0 and 90. In certain circumstances the Company may at its sole
discretion issue a Policy to persons above age 90. Before issuing a
Policy, Manulife New York will require evidence of insurability
satisfactory to it. A life insured will have a risk class of
preferred/non-smoker, preferred/smoker, standard/non-smoker or
standard/smoker as determined by underwriting rules. Persons failing
to meet standard underwriting requirements nonetheless may be
eligible to purchase a Policy provided an additional rating is
assigned. Acceptance of an application is subject to the Company's
insurance underwriting rules. Each Policy is issued with a policy
date from which policy years, policy months and policy anniversaries
are all determined. Each Policy also has an effective date which is
the date the Company becomes obligated under the Policy and when the
first monthly deductions are taken. If an application is accompanied
by a check for at least the Initial Premium and the application is
accepted, the policy date will be the date the application and check
were received at the Manulife New York Service Office and the
effective date will be the date Manulife New York's underwriters
approve issuance of the Policy. If an application is accompanied by
a check for at least the Initial Premium, the life insured may be
covered under the terms of a conditional insurance agreement until
the effective date. If an application accepted by the Company is not
accompanied by a check for at least the Initial Premium, the Policy
will be issued with a policy date which is seven days after issuance
of the Policy (the "issue date") and with an effective date which is
the date the Service Office receives at least the Initial Premium.
In certain situations a different policy date may be used. The
Initial Premium must be received within 60 days after the policy
date; however, the Initial Premium may be required within 30 days on
Policies issued with Additional Ratings. If the Initial Premium is
not paid or if the application is rejected, the Policy will be
canceled and any premiums paid will be returned to the applicant.
Under certain circumstances a Policy may be issued with a backdated
policy date. A Policy will not be backdated more than six months
before the date of the application for the Policy. Monthly
deductions will be made for the period the policy date is backdated.
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15. Describe the procedure with respect to the receipt of payments from
purchasers of the trust's securities and the handling of the proceeds
thereof, and state the substance of the provisions of any indenture or
agreement pertaining thereto.
All premiums received prior to the effective date of a Policy will
be credited with interest from the date of receipt at the rate of
return then being earned on amounts allocated to the Money Market
Trust. On the effective date, the premiums paid plus interest
credited, net of deductions for Federal, state and local taxes, will
be allocated among the Investment Accounts or the Guaranteed
Interest Account in accordance with the policyowner's instructions.
All premiums received on or after the effective date of the Policy
will be allocated among the Investment Accounts or the Guaranteed
Interest Account as of the date the premiums were received at the
Manulife New York Service Office. Monthly deductions are due on the
policy date and at the beginning of each policy month thereafter.
However, if due prior to the effective date, they will be taken on
the effective date instead of the dates they were due.
Net Premiums may be allocated to either the Guaranteed Interest
Account for accumulation at a rate of interest equal to at least 4%
or to one or more of the Investment Accounts for investment in the
Portfolio shares held by the corresponding sub-account of the
Separate Account. Allocations among the Investment Accounts and the
Guaranteed Interest Account are made as a percentage of the Net
Premium. The percentage allocation to any account may be any whole
number between zero and 100, provided the total percentage
allocations equal 100. A policyowner may change the way in which Net
Premiums are allocated at any time without charge. The change will
take effect on the date a written or authorized telephonic request
for change, in a format satisfactory to the Company, is received at
the Manulife New York Service Office.
16. Describe the procedure with respect to the acquisition of underlying
securities and the disposition thereof and state the substance of the
provisions of any indenture or agreement pertaining thereto.
In the case of outstanding policies, purchases of shares of the
portfolios of the Trust are made at the net asset value of such
shares net determined after receipt by the Depositor at its service
office of purchase payments. Redemptions of shares of the portfolios
of the Trust are made at the net asset value next determined after
receipt by the Depositor at its service office of a request for
surrender or transfer, or in the case of redemptions made for other
purposes contemplated under the policies, as determined by the
Depositor.
28
<PAGE> 30
17. (a) Describe the procedure with respect to withdrawal or redemption by
security holders.
Any withdrawal or redemption will be in accordance with the
description in response to item 10(c).
(b) Furnish the names of any persons who may redeem or repurchase, or
are required to redeem or repurchase, the trust's securities or
underlying securities from security holders, and the substance of
the provisions of any indenture or agreement pertaining thereto.
The Company is required by the Policies to honor withdrawal or
redemption requests as described in item 10(c).
(c) Indicate whether repurchased or redeemed securities will be canceled
or may be resold.
If a contract is totally surrendered, it will be canceled and
no further purchase payments may be made thereunder.
18. (a) Describe the procedure with respect to the receipt, custody and
disposition of the income and other distributable funds of the trust
and state the substance of the provisions of any indenture or
agreement pertaining thereto.
All distributable funds of the Separate Account (including
income and capital gains distributions) are reinvested in
shares of the portfolios of the Trust at net asset value and
added to the assets of the Separate Account.
(b) Describe the procedure, if any, with respect to the reinvestment of
distributions to security holders and state the substance of the
provisions of any indenture or agreement pertaining thereto.
Not applicable.
(c) If any reserves or special funds are created out of income or
principal, state with respect to each such reserve or fund the
purpose and ultimate disposition thereof, and describe the manner of
handling of same.
Not applicable.
(d) Submit a schedule showing the periodic and special distributions
which have been made to security holders during the three years
covered by the financial statements filed herewith. State for
each such distribution the aggregate amount and amount per share.
If distributions from sources other than current income have been
made identify each such other source and indicate whether such
distribution represents the
29
<PAGE> 31
return of principal payments to security holders. If payments other
than cash were made describe the nature thereof, the account charged
and the basis of determining the amount of such charge.
Not applicable.
19. Describe the procedure with respect to the keeping of records and accounts
of the trust, the making of reports and the furnishing of information to
security holders, and the substance of the provisions of any indenture or
agreement pertaining thereto.
Within 30 days after each policy anniversary, Manulife New York will
send the policyowner a statement showing, among other things, the
amount of the death benefit, the Policy Value and its allocation
among the Investment Accounts, the Guaranteed Interest Account and
the Loan Account, the value of the units in each Investment Account
to which the Policy Value is allocated, any Loan Account balance and
any interest charged since the last statement, the premiums paid and
policy transactions made during the period since the last statement
and any other information required by law.
Within 10 days after any transaction involving purchase, sale, or
transfer of units of Investment Accounts, a confirmation statement
will be sent.
Each policyowner will also be sent an annual and a semi-annual
report for Manufacturers Investment Trust which will include a list
of the securities held in each Portfolio as required by the 1940
Act.
20. State the substance of the provisions of any indenture or agreement
concerning the trust with respect to the following:
(a) Amendments to such indenture or agreement.
Not applicable.
(b) The extension of termination of such indenture or agreement.
Not applicable.
(c) The removal or resignation of the trustee or custodian, or the
failure of the trustee or custodian to performance duties,
obligations and functions.
Not applicable.
30
<PAGE> 32
(d) The appointment of a successor trustee and the procedure if a
successor trustee is not appointed.
The Separate Account has no trustee.
(e) The removal or resignation of the depositor, or the failure of the
depositor to perform its duties, obligations and functions.
There are no provisions relating to the removal or resignation
of the Company or the failure of the Company to perform its
duties, obligations and functions.
(f) The appointment of a successor depositor and the procedure if a
successor depositor is not appointed.
There are no provisions relating to the appointment of a
successor company or the procedure if a successor company is
not appointed.
21. (a) State the substance of the provisions of any indenture or agreement
with respect to loans to security holders.
While the Policy is in force, the policyowner may borrow
against the Policy Value of his or her Policy. The Policy
serves as the only security for the loan. The minimum amount
of any loan is $500. The maximum loan amount is the amount
which would cause the Modified Policy Debt to equal the loan
value of the Policy on the date of the loan. The loan value is
the Policy's Cash Surrender Value less the monthly deductions
due to the next policy anniversary. The Modified Policy Debt
as of any date is the Policy Debt (the aggregate amount of
policy loans, including borrowed interest, less any loan
repayments) plus the amount of interest to be charged to the
next policy anniversary, all discounted from the next policy
anniversary to such date at an annual rate of 4%. An amount
equal to the Modified Policy Debt is transferred to the Loan
Account to ensure that a sufficient amount will be available
to pay interest on the Policy Debt at the next policy
anniversary.
When a loan is made, Manulife New York will deduct from the
Investment Accounts or the Guaranteed Interest Account, and
transfer to the Loan Account, an amount which will result in
the Loan Account value being equal to the Modified Policy
Debt. The policyowner may designate how the amount to be
transferred to the Loan Account is allocated among the
accounts from which the transfer is to be made. In the absence
of instructions, the amount to be transferred will be
allocated to each account in the same proportion as the value
in each Investment Account and the Guaranteed Interest Account
bears to the Net Policy Value. A transfer from an Investment
Account will result in the cancellation of units of the
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<PAGE> 33
underlying sub-account equal in value to the amount
transferred from the Investment Account. However, since the
Loan Account is part of the Policy Value, transfers made in
connection with a loan will not change the Policy Value.
A policy loan may result in a Policy's failing to satisfy the
No Lapse Guarantee and/or the Death Benefit Guarantee
Cumulative Premium Test, since the Policy Debt is subtracted
from the sum of the premiums paid in determining whether the
Death Benefit Guarantee Cumulative Premium Test is satisfied.
As a result, the Death Benefit Guarantee or No Lapse Guarantee
may terminate. Moreover, if the Death Benefit Guarantee or No
Lapse Guarantee is not in force, a policy loan may cause a
Policy to be more susceptible to going into default, since a
policy loan will be reflected in the Net Cash Surrender Value.
A policy loan will also affect future Policy Values, since
that portion of the Policy Value in the Loan Account will
increase in value at the crediting interest rate rather than
varying with the performance of the underlying Funds selected
by the policyowner or increasing in value at the rate of
interest credited for amounts allocated to the Guaranteed
Interest Account. Policy loans may have tax consequences. A
policyowner considering the use of systematic policy loans as
one element of a comprehensive retirement income plan should
consult his or her personal tax advisor regarding the
potential tax consequences if such loans were to so reduce
Policy Value that the Policy would lapse, absent additional
payments. The premium payment necessary to avert lapse would
increase with the age of the insured. Finally, a policy loan
will affect the amount payable on the death of the life
insured, since the death benefit is reduced by the value of
the Policy Debt at the date of death in arriving at the
insurance benefit.
Interest Charged On Policy Loans. Interest on the Policy Debt
will accrue daily and be payable annually on the policy
anniversary. The rate of interest charged will be fixed at an
effective annual rate of 5.75%. If the interest due on a
policy anniversary is not paid by the policyowner, the
interest will be borrowed against the Policy.
Interest Credited To The Loan Account. Manulife New York will
credit interest to any amount in the Loan Account at an
effective annual rate of at least 4%. The actual rate credited
is:
On amounts up to the Policy's Select Loan Amount, the rate of
interest charged on the policy loan less an interest rate
differential, currently 0%; provided, however, if at some time
in the future it is determined that the current differential
could cause the loan to be treated as a taxable distribution
under any applicable ruling, regulation or court decision,
Manulife New York has the right to increase the differential
on all
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<PAGE> 34
subsequent Select Loan Amounts either (i) to an amount that
may be prescribed in such ruling, regulation or court decision
that would result in the transaction being treated as a loan
under Federal tax law or (ii) if no amount is prescribed, to
an amount that Manulife New York considers to be more likely
to result in the transaction being treated as a loan under
Federal tax law.
On amounts in excess of the Select Loan Amount as described
above, the rate of interest charged on the policy loan less an
interest rate differential, currently 1.75%.
Prior to the later of the tenth policy anniversary and the
anniversary following attained age 55, the amount available as
a Select Loan is zero; after the later of the tenth policy
anniversary and the policy anniversary following attained age
55, the amount available annually as a Select Loan is equal to
12% of the Policy's Net Cash Surrender Value at the previous
policy anniversary. The amount available as a Select Loan
applies to existing and new loans. If, at the time a
policyowner is considering a Select Loan, interest due
currently on his or her outstanding loans equals or exceeds
the Select Loan Amount, the Select Loan feature could not be
used to withdraw additional cash from Policy Value. The total
of all loans, including the Select Loan Amount, cannot exceed
the maximum loan amount as described above.
Loan Account Adjustments. When a loan is first taken out, and
at specified events thereafter, the value of the Loan Account
is adjusted. Whenever the Loan Account is adjusted, the
difference between (i) the Loan Account before any adjustment
and (ii) the Modified Policy Debt at the time of adjustment,
is transferred between the Loan Account and the Investment
Accounts or the Guaranteed Interest Account. The amount
transferred to or from the Loan Account will be such that the
value of the Loan Account is equal to the Modified Policy Debt
after the adjustment.
The specified events which cause an adjustment to the Loan
Account are (i) a policy anniversary, (ii) a partial or full
loan repayment, (iii) a new loan being taken out, or (iv) when
an amount is needed to meet a monthly deduction. A loan
repayment may be implicit in that policy debt is effectively
repaid upon termination (i.e., upon death of the life insured,
surrender or lapse of the policy). In each of these instances,
the Loan Account will be adjusted so that any excess of the
Loan Account over the Modified Policy Debt after the repayment
will be included in the termination proceeds.
Except as noted below in the Loan Repayments section, amounts
transferred from the Loan Account will be allocated to the
Investment Accounts and the
33
<PAGE> 35
Guaranteed Interest Account in the same proportion as the
value in the corresponding "loan sub-account" bears to the
value of the Loan Account. A "loan sub-account" exists for
each Investment Account and for the Guaranteed Interest
Account. Amounts transferred to the Loan Account are allocated
to the appropriate loan sub-account to reflect the account
from which the transfer was made.
Loan Repayments. Policy Debt may be repaid in whole or in part
at any time prior to the death of the life insured provided
the Policy is in force. When a repayment is made, the amount
is credited to the Loan Account and a transfer is made to the
Guaranteed Interest Account or the Investment Accounts so that
the Loan Account at that time equals the Modified Policy Debt.
Loan repayments will first be allocated to the Guaranteed
Interest Account until the associated loan sub-account is
reduced to zero. Loan repayments will then be allocated to
each Investment Account in the same proportion as the value in
the corresponding loan sub-account bears to the value of the
Loan Account. Amounts paid to the Company not specifically
designated in writing as loan repayments will be treated as
premiums.
(b) Furnish a brief description of any procedure or arrangement by which
loans are made available to security holders by the depositor,
principal underwriter, trustee or custodian, or any affiliated
person of the foregoing.
See response to item 21(a) above.
(c) If such loans are made, furnish the aggregate amount of loans
outstanding at the end of the last fiscal year, the amount of
interest collected during the last fiscal year allocated to the
depositor, principal underwriter, trustee or custodian or affiliated
person of the foregoing and the aggregate amount of loans in default
at the end of the last fiscal year covered by financial statements
filed herewith.
Not applicable.
22. State the substance of the provisions of any indenture or agreement with
respect to limitations on the liabilities of the depositor, trustee or
custodian, or any other party to such indenture or agreement.
There is no indenture or agreement which limits the liabilities of
the Company under the Policies.
34
<PAGE> 36
23. Describe any bonding arrangement for officers, directors, partners or
employees of the depositor or principal underwriter of the trust,
including the amount of coverage and the type of bond.
A blanket fidelity bond issued by American Home Assurance Company in
the aggregate amount of $50 million ($25 million for any one claim)
covers all officers and employees of The Manufacturers Life
Insurance Company and its subsidiaries.
24. State the substance of any other material provisions of any indenture or
agreement concerning the trust or its securities and a description of any
other material functions or duties of the depositor, trustee or custodian
not stated in Item 10 or Items 14 to 23 inclusive.
There are no other indentures or agreements concerning the Separate
Account or the Policies and no other material functions or duties of
the Company not stated in item 10 or items 14 to 23 inclusive.
III. ORGANIZATION, PERSONNEL AND AFFILIATED PERSONS OF DEPOSITOR.
Organization and Operations of Depositor
25. State the form of organization of the depositor of the trust, the name of
the state or other sovereign power under the laws of which the depositor
was organized and the date of organization.
The Company is a stock life insurance company organized under the
laws of the State of New York in 1992.
26. (a) Furnish the following information with respect to all fees received
by the depositor of the trust in connection with the exercise of any
functions or duties concerning securities of the trust during the
period covered by the financial statements filed herewith:
Not applicable.
(b) Furnish information with respect to any fee or any participation in
fees received by the depositor from any underlying investment
company or any affiliated person or investment adviser of such
company.
Not applicable.
27. Describe the general character of the business engaged in by the
depositor including a statement as to any business other than that of
depositor of the trust. If the depositor acts or has acted in any
capacity with respect to any investment company or companies other than
the trust, state the name or names of such company or companies, their
relationship, if any,
35
<PAGE> 37
to the trust, and the nature of the depositor's activities therewith. If
the depositor has ceased to act in such named capacity, state the date of
and circumstances surrounding such cessation.
The Company is a stock life insurance company. It has obtained
authority to do business in the State of New York only. The Company
acts as depositor for The Manufacturers Life Insurance Company of
New York Separate Account A, a separate account of the Company used
to fund variable annuity contracts issued by the Company.
Officials and Affiliated Persons of Depositor
28. (a) Furnish as at latest practicable date the following information with
respect to the depositor of the trust, with respect to each officer,
director, or partner of the depositor, and with respect to each
natural person directly or indirectly owning, controlling or holding
with power to vote 5% or more of the outstanding voting securities
of the depositor.
As of December 31, 1997, no officer or director of the Company
or any natural person, directly or indirectly, owned,
controlled or held with the power to vote, any securities of
the Company. The Company is a wholly-owned subsidiary of The
Manufacturers Life Insurance Company of North America
("Manulife North America"). The ultimate parent of the Company
is The Manufacturers Life Insurance Company ("Manulife").
Manulife is a mutual life insurance company. To the knowledge
of the Company, no person or company holds or controls,
directly or indirectly, the power to vote 5% or more of the
votes entitled to be cast by owners of insurance policies
issued by Manulife.
No officer, director or stockholder of the Company owns any
Policies. The officers and directors of the Company are set
forth in response to item 28(b).
(b) Furnish a brief statement of the business experience during the last
five years of each officer, director or partner of the depositor.
The directors and officers of Manulife New York, together with
their principal occupations during the past few years, are as
follows:
36
<PAGE> 38
<TABLE>
<CAPTION>
POSITION WITH THE
NAME, ADDRESS AND AGE COMPANY PRINCIPAL OCCUPATION
- --------------------------------------------------------------------------------------------
<S> <C> <C>
Bruce Avedon Director Consultant (self-employed).
6601 Hitching Post Lane
Cincinnati, OH 45230
Age: 68
John D. DesPrez III Director Senior Vice President,
73 Tremont Street Annuities, Manulife,
Boston, MA 02108 September 1996 to present;
Age: 40 Director and President,
Manulife North America,
September 1996 to present;
Vice President, Mutual Funds,
Manulife, January, 1995 to
September 1996; President and
Chief Executive Officer, North
American Funds, March 1993 to
September 1996; Vice President
and General Counsel, Manulife
North America, January 1991 to
June 1994.
Stephanie Elliman Vice President and Chief Administration
Corporate Center at Rye Chief Administration Officer, Manulife New York,
555 Theodore Fremd Ave. Officer August 1993: Manager,
Rye, NY 10580 Marketing Specialists, WLA,
Age: 50 1991 to August 1993.
Ruth Ann Flemming Director Homemaker.
145 Western Drive
Short Hills, NJ 07078
Age: 39
Bruce Gordon Director Senior Vice President,
200 Bloor Street East North American Group
Toronto, Ontario, Canada Pensions, Manulife.
M4W 1E5
Age: 53
Tracy A. Kane Secretary and Counsel Assistant Vice President
73 Tremont Street and Counsel, Manulife North
Boston, MA 02108 America, April 1993 to
Age: 36 present; Counsel, Fidelity
Investments, prior to April
1993.
</TABLE>
37
<PAGE> 39
<TABLE>
<CAPTION>
POSITION WITH THE
NAME, ADDRESS AND AGE COMPANY PRINCIPAL OCCUPATION
- --------------------------------------------------------------------------------------------
<S> <C> <C>
Theodore Kilkuskie Director Senior Vice President, U.S.
73 Tremont Street Individual Insurance,
Boston, MA 02108 Manulife, June 1995 to
Age: 42 present; Executive Vice
President, Mutual Fund Sales &
Marketing, State Street
Research & Management, March
1994 to May 1995; Vice
President, Mutual Fund Sales &
Marketing, MetLife, prior to
March 1994.
David W. Libbey Treasurer Vice President, Finance,
73 Tremont Street Manulife North America,
Boston, MA 02108 June 1997 to present; Vice
Age: 49 President and Actuary,
Second Vice President and
Actuary, Paul Revere Insurance
Group, June 1970 to March
1997.
Neil M. Merkl, Esq. Director Attorney (self-employed),
35-35 161st Street April 1994 to present;
Flushing, NY 11358 Partner, Wilson Elser,
Age: 66 Etc., 1979 to 1994.
Robert C. Perez, Ph.D. Director Associate Professor, Iona
715 North Avenue College, Hagen Business
New Rochelle, NY 01801 School.
Age: 70
John Richardson Director and Chairman Executive Vice President
200 Bloor Street East of the Board of and General Manager, U.S.
Toronto, Ontario, Canada Directors Operations, Manulife,
M4W 1E5 January 1995 to present;
Age: 59 Senior Vice President and
General Manager, Canadian
Operations, Manulife, June
1992 to January 1995; Senior
Vice President, Financial
Services, Manulife, prior to
June 1992.
James K. Robinson Director Attorney, Assistant
7 Summit Drive Secretary, Eastman Kodak
Rochester, NY 14620 Company.
Age: 70
</TABLE>
38
<PAGE> 40
<TABLE>
<CAPTION>
POSITION WITH THE
NAME, ADDRESS AND AGE COMPANY PRINCIPAL OCCUPATION
- --------------------------------------------------------------------------------------------
<S> <C> <C>
A. Scott Logan Director and Director and President,
1455 East Putnam Avenue President Wood Logan Associates,
Old Greenwich, CT 06870 Inc. Senior Vice President
Age: 59 and National Marketing
Director, Massachusetts
Financial Services.
John G. Vrysen Vice President and Vice President and Chief
73 Tremont Street Chief Actuary Financial Officer, U.S.
Boston, MA 02108 Operations, Manulife,
Age: 42 January 1996 to present;
Vice President and Chief
Actuary, Manulife North
America.
</TABLE>
Companies Owning Securities of Depositor
29. Furnish as at latest practicable date the following information with
respect to each company which directly or indirectly owns, controls or
holds with power to vote 5% or more of the outstanding voting securities
of the depositor.
The Company is a wholly-owned subsidiary of Manulife North America.
Manulife North America is a stock life insurance company organized
under the laws of Delaware in 1979 with its principal office located
at 116 Huntington Avenue, Boston, Massachusetts
02116.
The ultimate parent of the Company is Manulife. Prior to January 1,
1996, Manulife North America was a wholly owned subsidiary of North
American Life Assurance Company ("NAL"), a Canadian mutual life
insurance company. On January 1, 1996 NAL and Manulife merged with
the combined company retaining the Manulife name.
Effective January 1, 1996, immediately following the merger of NAL
and Manulife, Manulife North America experienced a corporate
restructuring which resulted in the formation of a newly organized
holding corporation, Manulife-Wood Logan Holding Co., Inc., formerly
NAWL Holding Co., Inc. ("MWL"). MWL holds all of the outstanding
shares of Manulife North America and Wood Logan Associates, Inc.
("WLA"). MWL is owned 62.5% by The Manufacturers Life Insurance
Company (U.S.A.), 22.5% by MRL Holding, LLC and 15% by the
principals of WLA.
On January 19, 1998, the Board of Directors of Manulife asked the
Management of Manulife to prepare a plan for conversion of Manulife
from a mutual life insurance company to an investor-owned, publicly
traded stock company. Any
39
<PAGE> 41
demutualization plan for Manulife is subject to the approval of the
Manulife Board of Directors and participating policy holders as well
as regulatory approval.
Controlling Persons
30. Furnish as at latest practicable date the following information with
respect to any person, other than those covered by Items 28, 29, and 42
who directly or indirectly controls the depositor.
None.
Compensation of Officers and Directors of Depositor Compensation of Officers
of Depositor
31. Furnish the following information with respect to the remuneration for
services paid by the depositor during the last fiscal year covered by
financial statements filed herewith:
(a) directly to each of the officers or partners of the depositor
directly receiving the three highest amounts of remuneration;
(b) directly to all officers or partners of the depositor as a group
exclusive of persons whose remuneration is included under item
31(a), stating separately the aggregate amount paid by the depositor
itself and the aggregate amount paid by all the subsidiaries;
(c) indirectly or through subsidiaries to each of the officers or
partners of the depositor.
Not applicable.
Compensation of Directors
32. Furnish the following information with respect to the remuneration for
services, exclusive of remuneration reported under Item 31, paid by the
depositor during the last fiscal year covered by financial statements
filed herewith:
(a) the aggregate direct remuneration to directors
(b) indirectly or through subsidiaries to directors
Not applicable.
40
<PAGE> 42
Compensation to Employees
33. (a) Furnish the following information with respect to the aggregate
amount of remuneration for services of all employees of the
depositor (exclusive of persons whose remuneration is reported in
Items 31 and 32) who received remuneration in excess of $10,000
during the last fiscal year covered by financial statements filed
herewith from the depositor and any of its subsidiaries.
Not applicable.
(b) Furnish the following information with respect to the remuneration
for services paid directly during the last fiscal year covered by
financial statements filed herewith to the following classes of
persons (exclusive of those persons covered by Item 33(a)): (1)
Sales managers, branch managers, district managers and other
persons supervising the sale of registrant's securities; (2)
Salesmen, sales agents, canvassers and other persons making
solicitations but not in supervisory capacity; (3) Administrative
and clerical employees; and (4) Others (specify). If a person is
employed in more than one capacity, classify according to
predominant type of work.
Not applicable.
Compensation to Other Persons
34. Furnish the following information with respect to the aggregate amount of
compensation for services paid any person (exclusive of persons whose
remuneration is reported in Items 31, 32 and 33), whose aggregate
compensation in connection with services rendered with respect to the
trust in all capacities exceeded $10,000 during the last fiscal year
covered by financial statements filed herewith from the depositor and any
of its subsidiaries.
Not applicable.
41
<PAGE> 43
IV. DISTRIBUTION AND REDEMPTION OF SECURITIES
Distribution of Securities
35. Furnish the names of the states in which sales of the trust's securities
(A) are currently being made, (B) are presently proposed to be made, and
(C) have been discontinued, indicating by appropriate letter the status
with respect to each state.
No sales of Policies have been made or are currently being made. It
is presently proposed to sell Policies only in the State of New
York.
36. If sales of the trust's securities have at any time since January 1, 1936
been suspended for more than a month describe briefly the reasons for such
suspension.
Not applicable.
37. (a) Furnish the following information with respect to each instance
where subsequent to January 1, 1937, any Federal or state
governmental officer, agency, or regulatory body denied authority to
distribute securities of the trust, excluding a denial which was
merely a procedural step prior to any determination by such officer,
etc. and which denial was subsequently rescinded.
(1) Name of officer, agency or body.
(2) Date of denial.
(3) Brief statement of reason given for denial.
Not applicable.
(b) Furnish the following information with regard to each instance
where, subsequent to January 1, 1937, the authority to distribute
securities of the trust has been revoked by any Federal or state
governmental officer, agency or regulatory body.
(1) Name of officer, agency or body.
(2) Date of revocation.
(3) Brief statement of reason given for revocation.
Not applicable.
38. (a) Furnish a general description of the method of distribution of
securities of the trust.
MSS will act as the principal underwriter of, and continuously
offer, the Policies pursuant to a Distribution Agreement with
the Company. MSS is
42
<PAGE> 44
registered as a broker-dealer under the Securities Exchange
Act of 1934 (the "1934 Act") and is a member of the National
Association of Securities Dealers, Inc. and is duly appointed
and licensed as an insurance agent of Manulife New York. The
Policies will be sold by registered representatives of
broker-dealers having distribution agreements with MSS who are
also licensed by the New York State Insurance Department and
appointed with Manulife New York.
(b) State the substance of any current selling agreement between each
principal underwriter and the trust or the depositor, including a
statement as to the inception and termination dates of the
agreement, any renewal and termination provisions, and any
assignment provisions.
Pursuant to the Distribution Agreement between MSS and the
Company, the Company has appointed MSS as the principal
underwriter of, and its exclusive representative for the
distribution of, the Policies. The agreement provides that MSS
will use its best efforts to arrange for the sale of the
Policies by other broker-dealers registered under the 1934
Act. With the consent of the Company, MSS may execute
agreements with other broker-dealers to offer and sell the
Policies. All commissions payable to authorized persons in
connection with contract sales will be paid by MSS in
accordance with the terms of the applicable agreement with
such persons then in effect. As compensation for the expenses
incurred and services performed by MSS, the Company will pay
to MSS such amounts as are from time to time agreed to in
writing by the parties.
The Company has entered into an agreement with MSS pursuant to
which MSS will pay selling broker dealers maximum commissions
and expense allowance payments pursuant to limitations imposed
by New York insurance law. The Company will prepare and
maintain all books and records required to be prepared and
maintained by MSS with respect to the Policies and such other
policies, and send all confirmations required to be sent by
MSS with respect to the Policies and such other policies. The
Company will pay MSS for all sales commissions paid by the
Company and will pay the Company for expenses incurred and
services performed by MSS under the terms of the agreement in
such amounts and at such times as agreed to by the parties.
Manulife has also entered into a Service Agreement with the
Company pursuant to which Manulife or its designee will
provide to the Company all issue, administrative, general
services and recordkeeping functions on behalf of the Company
with respect to all of its insurance policies including the
Policies.
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<PAGE> 45
(c) State the substance of any current agreements or arrangements of
each principal underwriter with dealers, agents, salesmen, etc.
with respect to commissions and overriding commissions,
territories, franchises, qualifications and revocations. If the
trust is the issuer of periodic payment plan certificates, furnish
schedules of commissions and the bases thereof. In lieu of a
statement concerning schedules of commissions, such schedules of
commissions may be filed as Exhibit A(3)(c).
The gross first year compensation paid by the Company,
consisting of commission, expense allowance and General Agent
override, if applicable, will not exceed 99% of premiums paid
up to the Target Premium and a total of 3% on the excess
thereof. Additionally, the Company may pay renewal
compensation consisting of commission and expense allowance,
totaling 3% of premiums paid in years 2 to 15, and 2%
thereafter, plus 0.15% of the Policy Value per annum after the
third anniversary.
Information Concerning Principal Underwriter
39. (a) State the form of organization of each principal underwriter of
securities of the trust, the name of the state or other sovereign
power under the laws of which each underwriter was organized and the
date of organization.
MSS is a corporation organized under the laws of Massachusetts
on August 27, 1984.
(b) State whether any principal underwriter currently distributing
securities of the trust is a member of the National Association of
Securities Dealers, Inc.
No Policies are currently being distributed. MSS is a member
of the National Association of Securities Dealers, Inc.
40. (a) Furnish information with respect to all fees received by each
principal underwriter of the trust from the sale of securities of
the trust and any other functions in connection therewith exercised
by such underwriter in such capacity or otherwise during the period
covered by the financial statements filed herewith.
Not applicable.
(b) Furnish the following information with respect to any fee or any
participation in fees received by each principal underwriter from
any underlying investment company or any affiliated person or
investment adviser of such company:
(1) The nature of such fee or participation.
(2) The name of the person making payment.
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<PAGE> 46
(3) The nature of the services rendered in consideration
for such fee or participation.
(4) The aggregate amount received during the last fiscal
year covered by the financial statements filed herewith.
Not applicable.
41. (a) Describe the general character of the business engaged in by each
principal underwriter, including a statement as to any business
other than the distribution of securities of the trust. If a
principal underwriter acts or has acted in any capacity with
respect to any investment company or companies other than the
trust, state the name or names of such company or companies, their
relationship, if any, to the trust and the nature of such
activities. If a principal underwriter has ceased to act in such
named capacity, state the date of and the circumstances
surrounding such cessation.
MSS currently acts as investment adviser to Manufacturers
Investment Trust and principal underwriter of variable annuity
contracts issued by the Company and The Manufacturers Life
Insurance Company of North America and of variable life
insurance policies issued by the latter company. Prior to
October 1, 1997, MSS acted as investment adviser of and
principal underwriter for North American Funds, a registered
management investment company. On that date, the investment
advisory and principal underwriting responsibilities for North
American Funds were transferred to unaffiliated entities.
(b) Furnish as at latest practicable date the address of each branch
office of each principal underwriter currently selling securities of
the trust and furnish the name and residence address of the person
in charge of such office.
Not applicable.
(c) Furnish the number of individual salesmen of each principal
underwriter through whom any of the securities of the trust were
distributed for the last fiscal year of the trust covered by the
financial statements filed herewith and furnish the aggregate amount
of compensation received by such salesmen in such year.
Not applicable.
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<PAGE> 47
42. Furnish as at latest practicable date information with respect to each
principal underwriter currently distributing securities of the trust and
with respect to each of the officers, directors or partners of such
underwriter.
Not applicable.
43. Furnish, for the last fiscal year covered by the financial statements
filed herewith, the amount of brokerage commissions received by any
principal underwriter who is a member of a national securities exchange
and who is currently distributing the securities of the trust or effecting
transactions for the trust in the portfolio securities of the trust.
Not applicable.
Offering Price or Acquisition Valuation of Securities of the Trust
44. (a) Furnish the following information with respect to the method of
valuation used by the trust for purpose of determining the offering
price to the public of securities issued by the trust or the
valuation of shares or interests in the underlying securities
acquired by the holder of a periodic payment plan certificate.
(1) The source of quotations used to determine the value of
portfolio securities.
(2) Whether opening, closing, bid, asked or any other price
is used.
(3) Whether price is as of the day of sale or as to any
other time.
(4) A brief description of the methods used by registrant
for determining other assets and liabilities including
accrual for expenses and taxes (including taxes on
unrealized appreciation).
(5) Other items which registrant adds to the net asset value
in computing offering price of its securities.
An Investment Account is established under each Policy for
each sub-account of the Separate Account to which net premiums
or transfer amounts have been allocated. Each Investment
Account under a Policy measures the interest of the Policy in
the corresponding sub-account. The value of the Investment
Account established for a particular sub-account is equal to
the number of units of that sub-account credited to the Policy
times the value of such units.
Units of a particular sub-account are credited to a Policy
when net premiums are allocated to that sub-account or amounts
are transferred to that sub-account. Units of a sub-account
are canceled whenever amounts are deducted, transferred or
withdrawn from the sub-account. The number of units credited
or canceled for a specific transaction is based on the dollar
46
<PAGE> 48
amount of the transaction divided by the value of the unit at
the end of the Business Day on which the transaction occurs.
The number of units credited with respect to a premium payment
will be based on the applicable unit values at the end of the
Business Day on which the premium is received at the Manulife
New York Service Office or other office or entity so
designated by Manulife New York.
Units are valued at the end of each Business Day. A Business
Day is deemed to end at the time of the determination of the
net asset value of the Trust shares. When an order involving
the crediting or canceling of units is received after the end
of a Business Day or on a day which is not a Business Day, the
order will be processed on the basis of unit values determined
at the end of the next Business Day. Similarly, any
determination of Policy Value, Investment Account value or
death benefit to be made on a day which is not a Business Day
will be made at the end of the next Business Day.
The value of a unit of each sub-account was initially fixed at
$10.00. For each subsequent Business Day the unit value is
determined by multiplying the unit value for the preceding
Business Day by the "net investment factor" for the particular
sub-account for such subsequent Business Day. The net
investment factor for a sub-account for any Business Day is
equal to (a) divided by (b), where:
(a) is the net asset value of the underlying Portfolio
shares held by that sub-account at the end of such
Business Day before any policy transactions are made on
that day; and
(b) is the net asset value of the underlying Portfolio
shares held by that sub-account at the end of the
immediately preceding Business Day after all policy
transactions have been made for that day.
Manulife New York reserves the right to adjust the above
formula for any taxes determined by it to be attributable to
the operations of the sub-account.
Information on the method of determining the net asset value
of shares of the portfolios of the Trust is contained in the
registration statement for the Trust, File No. 2-94157.
(b) Furnish a specimen schedule showing the components of the offering
price of the trust's securities as at the latest practicable date.
No Policies have been offered for sale.
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<PAGE> 49
(c) If there is any variation in the offering price of the trust's
securities to any person or classes of persons other than
underwriters, state the nature and amount of such variation and
indicate the person or classes of persons to whom such offering is
made.
Not applicable.
45. Furnish the following information with respect to any suspension of the
redemption rights of the securities issued by the trust during the three
fiscal years covered by the financial statements filed herewith:
(a) by whose action redemption rights were suspended.
(b) the number of days' notice given to security holders prior
to suspension of redemption rights.
(c) reason for suspension.
(d) period during which suspension was in effect.
Not applicable.
Redemption Valuation of Securities of the Trust
46. (a) Furnish the following information with respect to the method of
determining the redemption or withdrawal valuation of securities
issued by the trust:
(1) The source of quotations used to determine the value of
portfolio securities.
(2) Whether opening, closing, bid, asked or any other price
is used.
(3) Whether price is as of the day of sale or as of any
other time.
(4) A brief description of the methods used by registrant
for determining other assets and liabilities including
accrual for expenses and taxes (including taxes on
unrealized appreciation).
(5) Other items which registrant deducts from the net asset
value in computing redemption value of its securities:
(6) Whether adjustments are made for fractions.
For a description of the method of determining the
surrender value of Policies, see the response to items
10(c) above.
(b) Furnish a specimen schedule showing the components of the redemption
price to the holders of the trust's securities as at the latest
practicable date.
No Policies have been offered for sale.
48
<PAGE> 50
Purchase and Sale of Interests in Underlying Securities from and to Security
Holders
47. Furnish a statement as to the procedure with respect to the maintenance
of a position in the underlying securities or interests in the
underlying securities, the extent and nature thereof and the person who
maintains such a position. Include a description of the procedure with
respect to the purchase of underlying securities or interests in the
underlying securities from security holders who exercise redemption or
withdrawal rights and the sale of such underlying securities and
interests in the underlying securities to other security holders. State
whether the method of valuation of such underlying securities or
interests in underlying securities differs from that set forth in Items
44 and 46. If any item of expenditure included in the determination of
the valuation is not or may not actually be incurred or expended,
explain the nature of such item and who may benefit from the transaction.
The Company will reinvest distributions from the Trust in additional
shares of portfolios of the Trust, will purchase and redeem shares
of the portfolios of the Trust in connection with transfers between
sub-accounts, and will redeem shares of the portfolios of the Trust
at net asset value for the purpose of meeting contract obligations,
assessing charges, adjusting reserves or such other purposes as are
consistent with the Policies. There is no procedure for the purchase
of shares of the portfolios of the Trust from policyowners who
exercise withdrawal or redemption rights.
V. INFORMATION CONCERNING THE TRUSTEE OR CUSTODIAN
48. Furnish the following information as to each trustee or custodian of the
trust.
(a) Name and principal business address.
There is no trustee or custodian of the Separate Account.
(b) Form of organization.
Not applicable.
(c) State or other sovereign power under the laws of which the trustee
or custodian was organized.
Not applicable.
49
<PAGE> 51
(d) Name of governmental supervising or examining authority.
Not applicable.
49. State the basis for payment of fees or expenses of the trustee or
custodian for services rendered with respect to the trust and its
securities, and the aggregate amount thereof for the last fiscal year.
Indicate the person paying such fees or expenses. If any fees or expenses
are prepaid, state the unearned amount.
Not applicable.
50. State whether the trustee or custodian or any other person has or may
create a lien on the assets of the trust, and if so, give full
particulars, outlining the substance of the provisions of any indenture or
agreement with respect thereto.
Pursuant to New York law and the Policies, the assets of the
Separate Account attributable to the Policies are not subject to
liabilities of the Company arising out of any other business the
Company may conduct.
VI. INFORMATION CONCERNING INSURANCE OF HOLDERS OF SECURITIES
51. Furnish the following information with respect to insurance of holders of
securities:
(a) The name and address of the insurance company.
Various insurance benefits are provided under the Policies by
the Company, Manulife New York, Corporate Center at Rye, 555
Theodore Fremd Avenue, Rye, New York 10580.
(b) The types of policies and whether individual or group policies.
The Policies are individual variable life insurance policies.
Information respecting the Policies is provided in response to
items 10 and 13 above.
(c) The types of risks insured and excluded.
See response to paragraph (b) of this item.
50
<PAGE> 52
(d) The coverage of the policies.
See response to paragraph (b) of this item.
(e) The beneficiaries of such policies and the uses to which the
proceeds of policies must be put.
See response to paragraph (b) of this item.
(f) The terms and manner of cancellation and of reinstatement.
See response to paragraph (b) of this item.
(g) The method of determining the amount of premiums to be paid by
holders of securities.
See the response to item 13(a) for information on the method
of assessing the charges provided for in the Policies.
(h) The amount of aggregate premiums paid to the insurance company
during the last fiscal year.
Not applicable.
(i) Whether any person other than the insurance company receives any
part of such premiums, the name of each such person and the amounts
involved, and the nature of the services rendered therefor.
No person other than the Company receives the premiums under
the Policies.
(j) The substance of any other material provisions of any indenture or
agreement of the trust relating to insurance.
None.
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<PAGE> 53
VII. POLICY OF REGISTRANT
52. (a) Furnish the substance of the provisions of any indenture or
agreement with respect to the conditions upon which and the method
of selection by which particular portfolio securities must or may
be eliminated from assets of the trust or must or may be replaced
by other portfolio securities. If an investment adviser or other
person is to be employed in connection with such selection,
elimination or substitution, state the name of such person, the
nature of any affiliation to the depositor, trustee or custodian,
and any principal underwriter, and the amount of remuneration to
be received for such services. If any particular person is not
designated in the indenture or agreement, describe briefly the
method of selection of such person.
Although Manulife New York believes it to be highly unlikely,
it is possible that in the judgment of its management, one or
more of the Portfolios may become unsuitable for investment by
the Separate Account because of a change in investment policy
or a change in the applicable laws or regulations, because the
shares are no longer available for investment, or for some
other reason. In that event, Manulife New York may seek to
substitute the shares of another Portfolio or of an entirely
different mutual fund. Before this can be done, the approval
of the SEC and the New York insurance department may be
required.
Manulife New York also reserves the right to combine other
separate accounts with the Separate Account, to establish
additional sub-accounts within the Separate Account, to
operate the Separate Account as a management investment
company or other form permitted by law, to transfer assets
from this Separate Account to another separate account and
from another separate account to this Separate Account, and to
de-register the Separate Account under the 1940 Act. Any such
change would be made only if permissible under applicable
Federal and New York state law.
The investment objectives of the Separate Account will not be
changed materially without first filing the change with the
Insurance Commissioner of the State of New York. Policyowners
will be advised of any such change at the time it is made.
(b) Furnish information with respect to each transaction involving the
elimination of any underlying security during the period covered by
the financial statements filed herewith.
Not applicable.
52
<PAGE> 54
(c) Describe the policy of the trust with respect to the substitution
and elimination of the underlying securities of the trust with
respect to:
(1) the grounds for elimination and substitution;
(2) the type of securities which may be substituted for
any underlying security;
(3) whether the acquisition of such substituted security or
securities would constitute the concentration of
investment in a particular industry or group of
industries or would conform to a policy of concentration
of investment in a particular industry or group of
industries;
(4) whether such substituted securities may be the
securities of another investment company; and
(5) the substance of the provisions of any indenture or
agreement which authorize or restrict the policy of the
registrant in this regard.
See response to paragraph (a) of this item.
(d) Furnish a description of any policy (exclusive of policies covered
by paragraphs (a) and (b) herein) of the trust which is deemed a
matter of fundamental policy and which is elected to be treated as
such.
None.
Regulated Investment Company
53. (a) State the taxable status of the trust.
The Company is taxed as a life insurance company under the
Internal Revenue Code of 1986, as amended. Since the
operations of the Separate Account are a part of, and are
taxed with, the operations of the Company, the Separate
Account is not separately taxed as a "regulated investment
company" under the Internal Revenue Code of 1986, as amended.
(b) State whether the trust qualified for the last taxable year as a
regulated investment company as defined in Section 851 of the
Internal Revenue Code of 1954, and state its present intention with
respect to such qualifications during the current year.
Not applicable; see response to paragraph (a) of this item.
53
<PAGE> 55
VIII. FINANCIAL AND STATISTICAL INFORMATION
54. If the trust is not the issuer of periodic payment plan certificates
furnish information with respect to each class or series of its
securities.
Not applicable.
55. If the trust is the issuer of periodic payment plan certificates, a
transcript of a hypothetical account shall he filed in approximately the
following form on the basis of the certificate calling for the smallest
amount of payments. The schedule shall cover a certificate of the type
currently being sold assuming that such certificate had been sold at a
date approximately ten years prior to the date of registration or at the
approximate date of organization of the trust.
Not applicable.
56. If the trust is the issuer of periodic payment plan certificates, furnish
by years for the period covered by the financial statements filed herewith
in respect of certificates sold during such period, information for each
fully paid type and each installment payment type of periodic payment plan
certificate currently being issued by the trust.
Not applicable.
57. If the trust is the issuer of periodic payment plan certificates, furnish
by years for the period covered by the financial statements filed herewith
information for each installment payment type of periodic payment plan
certificate currently being issued by the trust.
Not applicable.
58. If the trust is the issuer of periodic payment plan certificates furnish
information for each installment payment type of periodic payment plan
certificate outstanding as at the latest practicable date.
Not applicable.
59. Financial statements:
Financial Statements of the Trust:
None.
54
<PAGE> 56
Financial Statements of the Depositor:
The financial statements of Company will be included in the
registration statement on Form S-6, as amended, filed pursuant to
the Securities Act of 1933.
IX. EXHIBITS
A. Furnish the most recent form of the following as amended to date and
currently in effect:
(1) The indenture or agreement under the terms of which the trust was
organized or issued securities.
Resolutions of Board of Directors of First North American Life
Assurance Company, now known as The Manufacturers Life
Insurance Company of New York, establishing FNAL Variable Life
Account I, now known as The Manufacturers Life Insurance
Company of New York Separate Account B
(2) The indenture or agreement pursuant to which the proceeds of
payments of securities are held by the custodian or trustee, if such
indenture or agreement is not the same as the indenture or agreement
referred to in paragraph (1).
Not applicable.
(3) Distributing contracts:
(a) Agreements between the trust and principal underwriter or
between the depositor and principal underwriter.
Underwriting and Distribution Agreement between The
Manufacturers Life Insurance Company of New York (Depositor)
and Manufacturers Securities Services, LLC (Underwriter)
(b) Specimen of typical agreements between principal underwriter
and dealers, managers, sales supervisors and salesmen.
Selling Agreement between The Manufacturers Life Insurance
Company of New York, Manufactures Securities Services, LLC
(Underwriter), Selling Broker Dealers, and General Agent
55
<PAGE> 57
(c) Schedules of sales commissions referred to in Item 38 (c).
Not applicable.
(4) Any agreement between the depositor, principal underwriter and the
custodian or trustee other than indentures or agreements set forth
in paragraphs (1), (2) and (3) with respect to the trust or its
securities.
Not applicable.
(5) The form of each type of security.
Form of Flexible Premium Variable Life Insurance Policy
(6) The certificate of incorporation or other instrument of organization
and by-laws of the depositor.
(a)(i) Declaration of Intention and Charter of First North
American Life Assurance Company, now known as The
Manufacturers Life Insurance Company of New York
(a)(ii) Certificate of amendment of the Declaration of Intention
and Charter of First North American Life Assurance
Company
(a)(iii) Certificate of amendment of the Declaration of Intention
and Charter of The Manufacturers Life Insurance Company
of New York
(b) By-laws of First North American Life Assurance Company, now
known as The Manufacturers Life Insurance Company of New York
(7) Any insurance policy under a contract between the trust and the
insurance company or between the depositor and the insurance
company, together with the table of insurance premiums.
Not applicable.
56
<PAGE> 58
(8) Any agreement between the trust or the depositor concerning the
trust with the issuer, depositor, principal underwriter or
investment adviser of any underlying investment company or any
affiliated person of such persons.
Form of Reinsurance Agreement between The Manufacturers Life
Insurance Company of New York and The Manufacturers Life Insurance
Company (USA)
B. Furnish copies of each of the following:
(1) Each notice sent to security holders pursuant to Section 19 of the
Act prior to the date of the filing of this form.
Not applicable.
(2) Each annual report sent to security holders covering each fiscal
year ending after January 1, 1937, exclusive of reports, copies of
which have heretofore been filed with the Commission pursuant to the
Act.
Not applicable.
C. Furnish the name and address of each dealer to or through whom any
principal underwriter currently offering securities of the trust,
distributed securities of the trust during the last fiscal year
covered by the financial statements filed herewith.
Not applicable.
D. Other Exhibits:
None.
57
<PAGE> 59
SIGNATURES
Pursuant to the requirements of the Investment Company Act of 1940 the
registrant, THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK SEPARATE
ACCOUNT B has duly caused this registration statement to be signed on its behalf
by the undersigned thereunto duly authorized, and its seal to be hereunto
affixed and attested, all in the city of Boston, and Commonwealth of
Massachusetts, on the 20th day of March, 1998.
THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW
YORK SEPARATE ACCOUNT B
(Registrant)
By: THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW
YORK
(Depositor)
By: /s/ A. SCOTT LOGAN
------------------------------------
A. Scott Logan
President
Attest
/s/ TRACY A. KANE
- ----------------------------
Tracy A. Kane
Secretary
58
<PAGE> 1
Exhibit (A)(1)
FIRST NORTH AMERICAN LIFE ASSURANCE COMPANY
I, KIMBERLY S. CICCARELLI, ASSISTANT SECRETARY of FIRST NORTH AMERICAN LIFE
ASSURANCE COMPANY (the "Company") do hereby certify that the following is a true
and correct copy of the action taken by the Board of Directors of the Company on
May 6 1997, and that the following resolutions are in full force and effect on
the date hereof:
Variable Life Separate Accounts
RESOLVED, that pursuant to Section 4240 of the New York Insurance Laws, and
subject to the approval of the Superintendent of Insurance of New York, the
Company hereby establishes two separate accounts which shall each be
divided into up to thirty five (35) variable sub-accounts for use in
connection with the offer and sale of variable life insurance contracts,
the issuance of which is hereby authorized. Such separate accounts are to
be designated initially as the FNAL Variable Life Account I and the FNAL
Variable Life Account II (hereinafter referred to as "Variable Life
Accounts") and such sub-accounts shall be designated the "Global Equity",
"Blue Chip Growth", "Equity", "Equity-Income", "Growth and Income",
"International Growth and Income", "Strategic Bond", "Global Government
Bond", "Investment Quality Bond", "U.S. Government Securities", "Money
Market", "Aggressive Asset Allocation", "Moderate Asset Allocation",
"Conservative Asset Allocation", "Pacific Rim Emerging Markets", "Growth",
"Science & Technology", "Emerging Growth", "Pilgrim Baxter Growth",
"International Stock", "Worldwide Growth", "Quantitative Equity", "Equity
Index", "Value", "Real Estate Securities", "Balanced", "High Yield",
"Capital Growth Bond", "Conservative Lifestyle", "Moderate Lifestyle",
"Balanced Lifestyle", "Growth Lifestyle", "Aggressive Lifestyle",
"Small/Mid Cap", "International Small Cap", respectively; and it is
FURTHER RESOLVED, that each variable life insurance contract issued by the
Company shall provide that the portion of the assets of the separate
account equal to the reserves and other contract liabilities with respect
to such account shall not be chargeable with liabilities arising out of any
other business the Company may conduct and, consistent with the provisions
of Section 4240 of the New York Insurance Laws, as amended, that income,
gains and losses, realized or unrealized, from assets allocated to the
separate account shall be credited or charged against such account without
regard to other income, gains or losses of the Company; and it is
FURTHER RESOLVED, that the officers of the Company are hereby authorized
and directed to take all such action as may be necessary or appropriate to
cause the separate account to comply with registration requirements of the
Investment Company Act of 1940 ("1940 Act") as it may be amended from time
to time; and it is
FURTHER RESOLVED, that the officers of the Company are hereby authorized
and directed to take all such action as may be necessary or appropriate to
cause the separate account to
<PAGE> 2
comply with the registration requirements of the Securities Act of 1933 as
it may be amended from time to time; and it is
FURTHER RESOLVED, that the officers of the Company are hereby authorized
and directed to perform all such acts and do all things as may, in their
judgment and discretion, be necessary or desirable to give full effect to
these resolutions so as to enable the Company to establish the separate
account and issue variable life insurance contracts, including, without
limitation: (a) the preparation, execution of, or amendment to, the
custodian agreement, underwriting agreements, and such other agreements and
documents respecting such separate account or contracts as they may deem
necessary or desirable; (b) the determination of the terms and conditions
of the variable life insurance contracts herein authorized, and (c) the
determination of all other actions requisite to obtain the qualification,
registration or authorization for the sale of variable life insurance
contracts.
MVA Separate Account
RESOLVED, that pursuant to Section 4223 of the New York Insurance Laws, New
York Regulation 127 and subject to the approval of the Superintendent of
Insurance of New York, the Company hereby establishes a separate account to
be designated initially as the FNAL Fixed Separate Account for use in
connection with the offer and sale of market value adjusted deferred
annuity contracts ("the Contracts"), the issuance of which is hereby
authorized; and it is
FURTHER RESOLVED, that the FNAL Fixed Separate Account shall constitute a
non-unitized, non insulated separate account into which are allocated
amounts paid to or held by the Company under such Contracts and any
dividend accumulations with respect to such Contracts; and it is
FURTHER RESOLVED, that Contracts issued by the Company shall provide that
the assets of the separate account shall be held at market value,
determined using external pricing sources where available, and shall be
chargeable with liabilities arising out of any other business the Company
may conduct; and it is
FURTHER RESOLVED, that the separate account shall be managed in accordance
with the Board approved investment policy for the general account and that
all times, the Company shall maintain in the separate account an aggregate
market value at least equal to the aggregate cash values of the liabilities
adjusted by the market value adjustment formula; and it is
FURTHER RESOLVED, that the officers of the Company are hereby authorized
and directed to take all such action as may be necessary or appropriate to
cause to be filed with the Securities and Exchange Commission in accordance
with the provisions of the Securities Act of 1933, as amended, one or more
registration statements and any amendments thereto relating
<PAGE> 3
to such market value adjusted annuity contracts, and to pay the
registration fees required in connection therewith; and it is
FURTHER RESOLVED, that, if at any time it is determined that the
registration of the separate account is required under the 1940 Act, the
officers of the Company are hereby authorized and directed to take all such
action as may be necessary or appropriate to cause the separate account to
comply with registration requirements of the 1940 Act as it may be amended
from time to time; and it
FURTHER RESOLVED, that the officers of the Company are hereby authorized
and directed to perform all such acts and do all things as may, in their
judgment and discretion, be necessary or desirable to give full effect to
these resolutions so as to enable the Company to establish the separate
account and issue variable life insurance contracts, including, without
limitation: (a) the preparation, execution of, or amendment to, the
custodian agreement, underwriting agreements, and such other agreements and
documents respecting such separate account or contracts as they may deem
necessary or desirable; (b) the determination of the terms and conditions
of the variable life insurance contracts herein authorized, and (c) the
determination of all other actions requisite to obtain the qualification,
registration or authorization for the sale of variable life insurance
contracts.
DATED at Boston, Massachusetts as of December 9, 1997.
/s/ Kimberely S. Ciccarelli
---------------------------
KIMBERLY S. CICCARELLI
ASSISTANT SECRETARY
(CORPORATE SEAL)
<PAGE> 1
Exhibit (A)(3)(a)
UNDERWRITING AND DISTRIBUTION AGREEMENT
AGREEMENT made this 7th day of October, 1997, by and between The
Manufacturers Life Insurance Company of New York ("Manulife New York"), a New
York corporation, and Manufacturers Securities Services, LLC ("LLC"), a Delaware
limited liability company.
WITNESSETH:
WHEREAS, Manulife New York sells certain insurance products listed on
Exhibit A hereto (the "Insurance Contracts"), some of which are regulated as
securities under the federal securities laws (the "Registered Insurance
Products"), and
WHEREAS, Manulife New York has entered into an Underwriting Agreement with
NASL Financial Services, Inc. ("NASL Financial") whereby NASL Financial was
appointed as its principal underwriter and exclusive representative for the
distribution of certain Manulife New York variable insurance products (the
"Prior Agreement"); and
WHEREAS, NASL Financial merged with and into LLC on September 30, 1997; and
WHEREAS, Manulife New York is deemed to be under common control with LLC
for the purposes of the application of Article 15 of the New York Insurance Law;
and
WHEREAS, LLC is registered with the Securities and Exchange Commission
("SEC") as a broker-dealer under the 1934 Act, is a member of the National
Association of Securities Dealers, Inc. ("NASD") and has been duly appointed and
licensed as an insurance agent of Manulife New York; and
<PAGE> 2
WHEREAS, Manulife New York wishes to terminate the Prior Agreement and to
arrange for the underwriting of all Registered Insurance Contracts through LLC
in conformity with the requirements of the Securities Exchange Act of 1934
("1934 Act"); and
WHEREAS, Manulife New York wishes to arrange for the distribution of all of
its Insurance Products through LLC and to authorize LLC to enter into agreements
with selling entities with respect thereto.
NOW, THEREFORE, the parties hereto agree as follows:
1. (a) Manulife New York hereby appoints LLC as the principal
underwriter of, and its exclusive representative for the distribution of, the
Insurance Contracts, and LLC hereby agrees to use its best efforts to arrange
for the sale of the Insurance Contracts by general agents and, in connection
with Registered Insurance Contracts, by other broker-dealer registered under the
1934 Act. LLC agrees to assist such entities and their representatives and
associated persons to the extent that and in such manner as LLC shall deem
appropriate in order to enhance the sale of Insurance Contracts and the payment
of purchase payments thereunder.
(b) The territory to which this Agreement shall apply shall be limited
to the State of New York.
2. (a) With the consent of Manulife New York, LLC may execute agreements
for the sale and distribution of the Insurance Contracts ("Selling Agreements")
with (i) other general agents/broker-dealers duly qualified under applicable
Federal and state laws to offer and sell the Registered Insurance Contracts; and
(ii) general agents to offer and sell Manulife New York insurance products other
than the Registered Insurance Contracts. Manulife New York may, in its sole
discretion, refuse to consent to a Selling Agreement or refuse to appoint a
general agent or sub-agent pursuant thereto.
2
<PAGE> 3
(b) Such Selling Agreements shall contain such terms and conditions as
LLC shall deem appropriate and which are acceptable to Manulife New York. Such
agreements may provide that any confirmation required to be sent in connection
with the issuance of Insurance Contracts or the receipt of purchase payments
thereunder will be sent by Manulife New York. All Selling Agreements shall
provide that no commission shall be paid in excess of the limitations imposed by
Section 4228 of the New York Insurance Law and no expense allowance payment
shall be made in excess of the amount approved for payment by the Company to LLC
pursuant to New York Insurance Department Regulation No. 49.
3. Manulife New York will prepare and maintain all books and records
relating to the Insurance Contracts including such books and records as LLC is
required to maintain under the 1934 Act to the extent such requirements are
applicable to the Registered Insurance Contracts. For purposes of this
Agreement, books and records maintained for LLC shall be deemed to be the
property of LLC and shall be subject at all times to examination by the SEC in
accordance with Section 17(a) of the 1934 Act.
4. LLC will not accept or receive on behalf of Manulife New York any
Registered Insurance Contract purchase payment. LLC will not permit any other
broker-dealer to participate in the distribution of the Registered Insurance
Contracts unless such broker-dealer agrees that (i) it will not accept any
purchase payment other than the first and (ii) it will not accept any first
purchase payment unless made payable to Manulife New York. Such broker-dealer
must also agree to forward promptly to Manulife New York at the service office
designated by it any first purchase payment received by such broker-dealer
together with a completed Registered Insurance Contract application. Manulife
New York reserves the right to reject any application in its sole discretion.
3
<PAGE> 4
5. Manulife New York will furnish to LLC currently effective prospectuses
relating to Registered Insurance Contracts in such numbers as LLC may reasonably
require from time to time. LLC shall be responsible for the preparation at its
own expense of sales materials relative to the Contracts and agrees to use its
best efforts to obtain any approvals or clearances required from the NASD or
other regulatory authorities with respect to such sales materials. Any sales
materials prepared by LLC or its designee, must be approved by Manulife New York
prior to use. LLC is responsible for all other expenses incurred by it in the
performance of this Agreement.
6. As compensation for the expenses incurred and services performed by
LLC hereunder, Manulife New York will pay LLC the commissions and expense
allowances in connection with the Insurance Contracts marketed and distributed
pursuant to this Agreement as set forth on Exhibit B hereto. Such payments shall
be made within one week in which payments upon which such commission and expense
allowance is based are received by Manulife New York. Manulife New York reserves
the right to revise such commissions and allowances upon at least ten (10) days'
prior notice to LLC. Any amendment to said Exhibit shall apply to compensation
due on applications received by Manulife New York after the effective date
thereof.
7. All commissions and expense allowances in connection with Insurance
Contract sales shall be paid by or on behalf of LLC in accordance with the terms
of the applicable Selling Agreement then in effect.
8. LLC shall have no right to incur any indebtedness on behalf of
Manulife New York pursuant to this Agreement. LLC hereby authorizes Manulife New
York to set off LLC's liabilities to Manulife New York against any and all
amounts otherwise payable to LLC pursuant hereto.
4
<PAGE> 5
9. Manulife New York represents that the Prior Agreement will be
terminated as of the effective date hereof.
10. This Agreement shall be construed in accordance with and governed by
the law of the State of New York.
11. This Agreement shall take effect as of the date set forth above and
may be terminated at any time by either party hereto on sixty (60) days' written
notice.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the day and year first above written.
THE MANUFACTURERS LIFE INSURANCE COMPANY OF
NEW YORK
By /s/ Joseph M. Scott
------------------------------------------
Joseph M. Scott, President
Attest: /s/ Kimberely S. Ciccarelli
---------------------------
MANUFACTURERS SECURITIES SERVICES
COMPANY, L.L.C. by its Managing Member The
Manufacturers Life Insurance Company of North
America
By /s/ John D. Desprez, III
------------------------------------------
John D. DesPrez, III, President
Attest: /s/ Kimberely S. Ciccarelli
---------------------------
5
<PAGE> 6
EXHIBIT A
INSURANCE CONTRACTS
(Products which are not Registered Insurance Contracts are identified as such.)
(i) Individual variable annuities or fixed and variable annuities
(ii) Fixed annuities (registered and non-registered)
(iii) Term life insurance (non-registered)
(iv) Universal life insurance (non-registered)
(v) Variable life insurance.
(vi) Variable universal life insurance
(vii) Group annuities (non-registered)
(ix) Such other Insurance Products as are from time to time agreed by the
parties to the foregoing Agreement and added to this Schedule A in
accordance therewith.
6
<PAGE> 1
Exhibit (A)(3)(b)
THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK
HOME OFFICE:
International Corporate Center at Rye
555 Theodore Fremd Avenue, Suite C-209
Rye, New York 10580
SELLING AGREEMENT
AGREEMENT by and between The Manufacturers Life Insurance
Company of New York ("MLNY"), a New York Corporation; Manufacturers Securities
Services, LLC ("MSS"), a Delaware limited liability Company which is a
registered broker-dealer with the Securities and Exchange Commission under the
Securities Act of 1934 (the "1934 Act"), a member of the National Association of
Securities Dealers, Inc. ("NASD") and duly licensed and appointed with MLNY;
(Selling Broker-Dealer), also a registered broker-dealer and member of the NASD;
and (General Agent).
I. INTRODUCTION
WHEREAS, MLNY has issued certain insurance and annuity contracts, and some
of these Contracts are registered under the Securities Act of 1933 (the "1933
Act") ("Contracts" or "Contracts" collectively); and
WHEREAS, MLNY has, pursuant to an Underwriting and Distribution Agreement
dated October 7, 1997, appointed MSS as principal underwriter and exclusive
representative for the distribution of the Contracts and has authorized MSS to
enter into agreements, subject to the consent of MLNY, with Selling
Broker-Dealers and General Agents for the distribution of the Contracts; and
WHEREAS, Selling Broker-Dealer and General Agent wish to participate in the
distribution of the Contracts;
NOW THEREFORE, in consideration of the premises and the mutual covenants
hereinafter contained, the parties hereto agree as follows:
<PAGE> 2
II. APPOINTMENT
Subject to the terms and conditions of this Agreement, MLNY and MSS hereby
appoint ____________________________ as Selling-Broker-Dealer and
___________________________ as General Agent for the solicitation of
applications for the purchase of the Contracts, and Selling Broker-Dealer and
General Agent accept such appointment.
III. AUTHORITY AND DUTIES OF GENERAL AGENT
A. LICENSING AND APPOINTMENT OF SUBAGENTS
General Agent is authorized to appoint Sub-agents to solicit sales of the
Contracts. General Agent warrants that all Sub-agents appointed by General Agent
pursuant to this Agreement shall not solicit nor aid, directly or indirectly, in
the solicitation of any application for any Contract until that Sub-agent is
fully licensed under the applicable insurance laws, and, in connection with
securities regulated Contracts, is a fully registered representative of Selling
Broker-Dealer. General Agent shall prepare and transmit the appropriate
licensing and appointment forms to MLNY. General Agent shall pay all fees to
state insurance regulatory authorities in connection with obtaining necessary
licenses and appointments for Sub-agents. All fees payable to such regulatory
authorities in connection with the initial MLNY appointment of Sub-agents who
already possess necessary licenses shall be paid by MLNY. Any renewal license
fees due after the initial appointment shall be paid by General Agent. General
Agent shall periodically provide MLNY with a list of all Sub-agents appointed by
General Agent and the jurisdictions where such Sub-agents are licensed to
solicit sales of the Contracts. MLNY shall periodically provide General Agent
with a list which shows: 1) the jurisdiction where MLNY is authorized to do
business; and 2) any limitations on the availability of the Contracts in any of
such jurisdictions. General Agent agrees to fulfill all requirements set forth
in the General Letter of Recommendation attached as Exhibit A in conjunction
with the submission of licensing and appointment papers for all applicants as
Sub-agents submitted by General Agent.
B. REJECTION OF SUB-AGENT
MSS or MLNY may, by written notice to General Agent, refuse to permit any
Sub-agent the right to solicit applications for the sale of any of the
Contracts, require General Agent to cause any Sub-agent to cease such
solicitations or sales and cancel the appointment of any Sub-agent.
C. SUPERVISION OF SUB-AGENTS
General Agent shall supervise any Sub-agents appointed pursuant to this
Agreement to solicit sales of the Contracts and bear responsibility for all acts
and omissions of each Sub-agent. General Agent shall comply with and exercise
all responsibilities required by applicable federal and state law and
regulations. General Agent shall not be responsible for those supervisory
responsibilities belonging to Selling Broker-Dealer under applicable securities
laws which include, but are not limited to, supervising and training Sub-agents
in their capacity as registered representatives. Nothing contained in this
Agreement or otherwise shall be deemed to make any Sub-agent appointed by
General
<PAGE> 3
Agent an employee or agent of MLNY or MSS. MLNY and MSS shall not have
any responsibility for the training and supervision of any Sub-agent or any
other employee of General Agent. If the act or omission of a Sub-agent or any
other employee General Agent is the proximate cause of any claim, damage or
liability (including reasonable attorneys' fees) to MLNY or MSS, General Agent
shall be responsible and liable therefore.
Before a Sub-agent is permitted to sell the Contracts, General Agent,
Selling Broker-Dealer and Sub-agent shall have entered into a written agreement
pursuant to which: 1) Sub-agent is appointed a Sub-agent of General Agent and a
registered representative of Selling Broker-Dealer 2) Sub-agent agrees that his
or her selling activities relating to securities regulated Contracts shall be
under the supervision and control of Selling Broker-Dealer and his or her
selling activities relating to insurance regulated Contracts shall be under the
supervision and control of General Agent; and 3) that Sub-agent's right to
continue to sell such Contracts is subject to his or her continued compliance
with such agreement and any procedures, rules or regulations implemented by
Selling Broker-Dealer or General Agent.
IV. AUTHORITY AND DUTIES OF SELLING BROKER-DEALER
A. SUPERVISION OF REGISTERED REPRESENTATIVES
Selling Broker-Dealer agrees that it has full responsibility for the
training and supervision of all persons, including Sub-agents of General Agent,
associated with Selling Broker-Dealer who are engaged directly or indirectly in
the offer or sale of securities regulated Contracts. All such persons shall be
subject to the control of Selling Broker-Dealer with respect to their securities
regulated activities. Broker-Dealer shall: 1) train and supervise Sub-agents, in
their capacity as registered representatives, in the sale of securities
regulated Contracts; 2) use its best efforts to cause such Sub-agents to qualify
under applicable federal and state laws to engage in the sale of securities
regulated Contracts; 3) provide MLNY and MSS to their satisfaction, with
evidence of Sub-agents' qualifications to sell securities regulated Contracts;
and 4) notify MLNY if any of such Sub-agents ceases to be a registered
representative of Selling Broker-Dealer. Selling Broker-Dealer agrees that a
Sub-agent must be a registered representative of Selling Broker-Dealer before
engaging in the solicitation of any securities regulated Contracts and have
entered into the written agreement more fully described in Section III,
Paragraph C. MLNY and MSS shall not have any responsibility of the supervision
of any registered representative or any other employee or affiliate of Selling
Broker-Dealer. If the act or omission of a registered representative or any
other employee or affiliate of Selling Broker-Dealer is the proximate cause of
any claim, damage, or liability (including reasonable attorneys' fees) to MLNY
or MSS, Selling Broker-Dealer shall be responsible and liable therefore. Selling
Broker-Dealer shall fully comply with the requirements of the NASD and of the
1934 Act and all other applicable federal or state laws.
Selling Broker-Dealer shall establish such rules and procedures as may be
necessary to cause diligent supervision of the securities activities of the
Sub-agents. Upon request of MSS, Selling Broker-Dealer shall furnish such
records as may be necessary to establish diligent supervision.
<PAGE> 4
V. AUTHORITY AND DUTIES OF GENERAL AGENT AND SELLING
BROKER-DEALER
A. CONTRACTS
The securities and insurance regulated Contracts issued by MLNY to which
the Agreement applies are listed in Schedule I, which may be amended from time
to time by MLNY. MLNY, in its sole discretion with prior or concurrent written
notice to Selling Broker-Dealer and General Agent, may suspend distribution of
any Contracts. MLNY also has the right to amend any Contracts at any time.
B. SECURING APPLICATIONS
Each application for a Contract shall be made on an application form
provided by MLNY, and all payments collected by Selling Broker-Dealer, General
Agent or any registered representative and Sub-agent shall be remitted promptly
in full, together with such application form and any other required
documentation, directly to MLNY at the address indicated on such application or
to such other address as may be designated. Selling Broker-Dealer and General
Agent shall review all such applications for completeness. Check or money order
in payment of such Contracts should be made payable to the order of "The
Manufacturers Life Insurance Company of New York." All applications are subject
to the acceptance or rejection by MLNY in its sole discretion.
C. RECEIPT OF MONEY
All money payable in connection with any of the Contracts whether as
premium, purchase payment or otherwise and whether paid by or on behalf of any
contract owner or anyone else having an interest in the Contracts, is the
property of MLNY and shall be transmitted immediately in accordance with the
administrative procedures of MLNY without any deduction or offset for any reason
including but not limited to, any deduction or offset for compensation claimed
by Selling Broker-Dealer or General Agent, unless there has been a prior
arrangement for net wire transmissions between MLNY and Selling Broker-Dealer or
General Agent.
D. NOTICE OF SUB-AGENT'S NONCOMPLIANCE
Selling Broker-Dealer shall notify MSS and General Agent in the event a
Sub-agent fails or refuses to submit to the supervision of Selling Broker-Dealer
or General Agent in accordance with this Agreement, the agreement between
Selling Broker-Dealer, General Agent and Sub-agent referred to in Section III,
Paragraph C and Section IV, Paragraph A, or otherwise fails to meet the rules
and standards imposed by Selling Broker-Dealer or its registered representatives
or General Agent or its Sub-agents. Selling Broker-Dealer or General Agent shall
also immediately notify such Sub-agent that he or she is no longer authorized to
sell the Contracts, and both Selling Broker-Dealer and General Agent shall take
whatever additional action may be necessary to terminate the sales activities of
such Sub-agent relating to the Contracts.
E. SALES PROMOTION, ADVERTISING AND PROSPECTUSES
No sales promotion materials, circulars, documents or any advertising
relating to any of the Contracts shall be used by Selling Broker-Dealer, General
Agent or any Sub-agents unless the specific item has been approved in writing by
MLNY prior to use. Selling Broker-Dealer shall be provided, without any expense
to Selling
<PAGE> 5
Broker-Dealer, with prospectuses relating to securities regulated Contracts.
Selling Broker-Dealer and General Agent shall be provided with such other
material as MLNY determines necessary or desirable for use in connection with
sales of the Contracts. Nothing in these provisions shall prohibit Selling
Broker-Dealer or General Agent from advertising life insurance and annuities on
a generic basis.
VI. COMPENSATION
A. COMMISSIONS AND FEES
Commissions and fees payable to Selling Broker-Dealer or General Agent in
connection with the securities regulated Contracts shall be paid by MSS to
Selling Broker-Dealer or General Agent, or as otherwise required by law.
Commissions and fees payable to Selling Broker-Dealer, General Agent or
Sub-agent in connection with the insurance regulated Contracts shall be paid by
MSS to Selling Broker-Dealer or General Agent, or as otherwise required by law.
Selling Broker-Dealer or General Agent, as applicable, shall pay Sub-agent. MSS
will provide Selling Broker-Dealer and General Agent with a copy of its current
Contracts, Commissions and Fees Schedule. Unless otherwise provided in the
Contracts, Commissions and Fees Schedule, commissions will be paid as a
percentage of premiums or purchase payments (collectively, Payments) received in
cash or their legal tender and accepted by MLNY on applications obtained by the
various Sub-agents appointed by General Agent hereunder. Upon termination of
this Agreement, all compensation to the Selling Broker-Dealer and General Agent
hereunder shall cease. However, Selling Broker-Dealer and General Agent shall be
entitled to receive compensation for all new and additional premium payments
which are in process at the time of termination, and shall continue to be liable
for any chargebacks pursuant to the provisions of said Contracts, Commissions
and Fees Schedule, or any other amounts advanced by or otherwise due MSS or MLNY
hereunder. No commission shall be paid in excess of the limits of Section 4228
of the New York Insurance Law and no expense allowance payment shall be made in
excess of the amount approved for payment by Manufacturers Life Insurance
Company of New York pursuant to New York Insurance Department Regulation No. 49.
B. TIME OF PAYMENT
MSS will pay any commissions due General Agent or Selling Broker-Dealer
hereunder within fifteen (15) days after the end of the calendar month in which
Payments upon which such commission is based are accepted by MLNY.
C. AMENDMENT OF SCHEDULES
MSS and MLNY may, upon at least ten (10) days' prior written notice to
Selling Broker-Dealer and General Agent, change the Contracts, Commissions and
Fees Schedule by written amendment of such Schedule. Any such change shall apply
to compensation due on applications received by MLNY after the effective date of
such by MLNY after the effective date of such notice.
D. PROHIBITION AGAINST REBATES
MSS or MLNY may terminate this Agreement if Selling Broker-Dealer, General
Agent or any Sub-agent of General Agent rebates, offers to rebate or withholds
any part of any Payments on the Contracts. If Selling Broker-Dealer, General
Agent or any Sub-agent of General Agent shall at any time induce or endeavor to
induce any owner of
<PAGE> 6
any Contract issued hereunder to discontinue payments or to relinquish any such
Contract, except under circumstances where there is reasonable grounds for
believing the Contract is not suitable for such person, anyand all compensation
due Selling Broker-Dealer or General Agent here under shall cease and terminate.
E. INDEBTEDNESS AND RIGHT OF SET OFF
Nothing contained in this Agreement shall be construed as giving Selling
Broker-Dealer or General Agent the right to incur any indebtedness on behalf of
MSS or MLNY. Selling Broker-Dealer and General Agent hereby authorize MSS to set
off liabilities of Selling Broker-Dealer and General Agent to MSS or MLNY
against any and all amounts otherwise payable to Selling Broker-Dealer or
General Agent.
VII. GENERAL PROVISIONS
A. WAIVER
Failure of any party to insist upon strict compliance with any of the
conditions of the Agreement shall not be construed as a waiver of any of the
conditions, but the same shall remain in full force and effect. No waiver of any
of the provisions of this Agreement shall be deemed to be, or shall constitute,
a waiver of any other provisions, whether or not similar, nor shall any waiver
constitute a continuing waiver.
B. LIMITATIONS
No party other than MLNY shall have the authority to 1) make, alter, or
discharge any Contract issued by MLNY; 2) waive any forfeiture or extend the
time of making any Payments; or 3) enter into any proceedings in a court of law
or before a regulatory agency in the name of or on behalf of MLNY. No party
other than MSS and MLNY, respectively, shall have the authority to: 1) alter the
forms which MSS or MLNY prescribe, or substitute other forms in place of those
prescribed by MSS; or 2) enter into any proceeding in a court of law or before a
regulatory agency in the name of or on behalf of MSS.
C. FIDELITY BOND AND OTHER LIABILITY COVERAGE
Selling Broker-Dealer and General Agent hereby assign any proceeds received
from a fidelity bonding company, error and omissions or other liability
coverage, to MLNY or MSS as their interest may appear, to the extent of their
loss due to activities covered by the bond, policy or other liability coverage.
If there is any deficiency amount, whether due to a deductible or otherwise,
Selling Broker-Dealer or General Agent shall promptly pay such amounts on
demand. Selling Broker-Dealer and General Agent hereby indemnify and hold
harmless MLNY and MSS from any deficiency and from the costs of collection
thereof (including reasonable attorneys' fees).
D. BINDING EFFECT
This Agreement shall be binding on and shall insure to the benefit of the
parties to it and their respective successors and assigns provided that neither
Selling Broker-Dealer nor General Agent may assign this Agreement or any rights
or obligations hereunder without prior written consent of MLNY.
E. REGULATIONS
All parties agree to observe and comply with the existing laws and rule or
<PAGE> 7
regulations of applicable local, state or federal regulatory authorities and
with those which may be enacted or adopted during the term of this Agreement
regulating the business contemplated hereby in any jurisdiction in which the
business described herein is to be transacted.
F. INDEMNIFICATION
1) MSS agrees to indemnify and hold harmless Selling Broker-Dealer and
General Agent, their officers, directors and employees, against any and all
losses, claims, damages or liabilities to which they may become subject under
the 1933 Act, the 1934 Act, or other federal or state statutory law or
regulation, at common law or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of a material fact or any
omission or alleged omission to state a material fact required to be stated or
necessary to make the statements made not misleading in the registration
statement for the Contracts or for the shares of Manufacturers Investment Trust
("Trust") filed pursuant to the 1933 Act, or any prospectus included as a part
thereof, as from time to time amended and supplemented. MSS agrees to indemnify
and hold harmless Selling Broker-Dealer and General Agent, their officers,
directors and employees, against any and all losses, claims, damages or
liabilities to which they may become subject under the 1933 Act, the 1934 Act,
or other federal or state statutory law or regulation, at common law or
otherwise insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact or any omission or alleged omission to state
a material fact required to be stated or necessary to make the statements made
not misleading in any advertisement or sales literature approved in writing by
MLNY pursuant to Section V, Paragraph E of this Agreement. 2) Selling
Broker-Dealer and General Agent agree to indemnify and hold harmless MSS and
MLNY, their officers, directors, and employees, against any and all losses,
claims, damages or liabilities to which they may become subject under the 1933
Act, the 1934 Act or other federal or state statutory law or regulation, at
common law or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of liabilities (or actions in respect
thereof) arise out of or are based upon: a) any oral or written
misrepresentations by Selling Broker-Dealer or General Agent or their officers,
directors, employees or agents unless such misrepresentation is contained in the
registration statement for the Contracts or Trust shares, any prospectus
included as a part thereof, as from time to time amended and supplemented, or
any advertisement or sales literature approved in writing by MLNY pursuant to
Section V, Paragraph E, of this Agreement, or b) the failure of Selling
Broker-Dealer or General Agent or their officers, directors, employees or agents
to comply with any applicable provisions of this Agreement.
G. NOTICES
All notices or communications shall be sent to the address shown in this
Agreement, or to such other address as the party may request, by giving written
notice to the other parties.
H. GOVERNING LAW
This Agreement shall be construed in accordance with and governed by the
laws of the State of New York.
<PAGE> 8
I. AMENDMENT OF AGREEMENT
MLNY reserves the right to amend this Agreement in writing at any time. The
submission of an application for the Contracts by Selling Broker-Dealer or
General Agent five or more business days after notice of any such amendment has
been sent to the other parties shall constitute agreement to such amendment.
J. GENERAL AGENT AS BROKER-DEALER
If Selling Broker-Dealer and General Agent are the same person or legal
entity, such person or legal entity shall have the rights and obligations
hereunder of both Selling Broker-Dealer and General Agent and this Agreement
shall be binding and enforceable in both capacities.
K. COMPLAINTS AND INVESTIGATIONS
General Agent, Selling Broker- Dealer and MSS agree to cooperate fully in
the event of any regulatory investigation, inquiry or proceedings, judicial
proceedings or customer complaint involving the Contracts. In furtherance of the
foregoing: 1) each party will notify all other parties of any such
investigation, inquiry, proceedings or complaint involving the Contracts or
affecting the ability of a party to perform pursuant to this Agreement within 10
days of obtaining knowledge of the same; and 2) in the case of a customer
complaint the involved parties will consult with each other prior to sending any
written response with respect to such complaint.
L. TERMINATION
This Agreement may be terminated without cause, by any party upon thirty
(30) days' prior written notice; and may be terminated, for cause, by any party
immediately; and shall be terminated as respects securities regulated Contracts
if MSS or Selling Broker-Dealer shall cease to be a registered broker-dealer
under the Securities Exchange 1934 Act and a member of the NASD.
ADDRESS FOR NOTICES
For The Manufacturers Life Insurance Company of New York:
International Corporate Center at Rye
555 Theodore Fremd Avenue
Suite C-209
Rye, NY 10580
<PAGE> 9
For Manufacturers Security Services, LLC: ------------------------------------
------------------------------------
73 Tremont Street
Boston, MA 02108
For General Agent:
------------------------------------
For Selling Broker-Dealer: ------------------------------------
- --------------------------------------- ------------------------------------
- --------------------------------------- ------------------------------------
This Agreement shall be effective upon execution by General Agent and Selling
Broker-Dealer, and delivery of the Agreement to MSS.
Manufacturers Securities Services, LLC by
The Manufacturers Life Insurance
Company of North America, Managing
Member, By: Dated:
------------------------------
/s/ Richard Hirtle
- --------------------------------------- ------------------------------------
Richard Hirtle, VP Treasurer & CFO (General Agent)
By:
---------------------------------
(Name and Title)
The Manufacturers Life Insurance Company ------------------------------------
of New York, By: (Selling Broker-Dealer)
/s/ Joseph M. Scott By:
- --------------------------------------- ------------------------------------
Joseph M. Scott, President (Name and Title)
<PAGE> 10
EXHIBIT A
GENERAL LETTER OF RECOMMENDATION
General Agent hereby certifies to MLNY that all of the following
requirements will be fulfilled in conjunction with the submission of
licensing/appointment papers for all applicants as Sub-agents submitted by
General Agent. General Agent will, upon request, forward proof of compliance
with same to MLNY in a timely manner.
1. We have made a thorough and diligent inquiry and investigation relative
to each applicant's identity, residence and business reputation and declare that
each applicant is personally known to us, has been examined by us, is known to
be of good moral character, has a good business reputation, is reliable, is
financially responsible and is worthy of a license. Each individual is
trustworthy, competent and qualified to act as an agent for MLNY to hold himself
or herself out in good faith to the general public. We vouch for each applicant.
2. We have on file a B-300, B-301 or U-4 form which was completed by each
applicant. We have fulfilled all the necessary investigative requirements for
the registration of each applicant as a registered representative through our
NASD member firm, and each applicant is presently registered as an NASD
registered representative. The above information in our files indicates no fact
or condition which would disqualify the applicant from receiving a license and
all the findings of all investigative information is favorable.
3. We certify that all educational requirements have been met for the
specific state in which each applicant is requesting a license, and that all
such persons have fulfilled the appropriate examination, education and training
requirements.
4. If the applicant is required to submit his or her picture, signature,
and securities registration in the state in which he or she is applying for a
license, we certify that those items forwarded to MLNY are those of the
applicant and the securities registration is a true copy of the original.
5. We hereby warrant that the applicant is not applying for a license with
MLNY in order to place insurance chiefly and solely on his or her life or
property, lives or property of his or her relatives, or property or liability of
his or her associates.
6. We certify that each applicant will receive close and adequate
supervision, and that we will make inspection when needed of all or any risks
written by these applicants, to the end that the insurance interest of the
public will be properly protected.
7. We will not permit any applicant to transact insurance as an agent until
duly licensed therefore. No applicants have been given a contract or furnished
supplies, nor have any applicants been permitted to write, solicit business, or
act as an agent in any capacity, and they will not be so permitted until the
certificate of authority or license applied for is received.
8. We certify that the General Agent, Selling Broker-Dealer and applicant
shall have entered into a written agreement pursuant to which: a) applicant is
appointed a Sub-agent of General Agent and a registered representative fee
Selling Broker-Dealer; b) applicant agrees that his or her selling activities
relating to securities regulated Contracts shall be under the supervision and
control of Selling Broker-Dealer and his or her selling activities relating to
insurance regulated Contracts shall be under the supervision and control of
General Agent; and c) that applicant's right to continue to sell such Contracts
is subject to this or her continued compliance with such agreement and any
procedures, rules or regulations implemented by Selling Broker-Dealer or General
Agent.
<PAGE> 1
Exhibit (A)(6)(a)(i)
DECLARATION OF INTENTION
AND
CHARTER OF
FIRST NORTH AMERICAN LIFE ASSURANCE COMPANY
We, the undersigned, all being natural persons of the age of eighteen
years or over, and at least a majority of us being citizens and residents of the
United States, and at least three of us being residents of the State of New
York, do hereby declare our intention to form a stock life insurance corporation
for the purpose of doing the kinds of insurance business authorized by
Paragraphs 1, 2 and 3 of Subsection (a) of Section 1113 of the Insurance Law of
the State of New York, and for that purpose do adopt the following charter:
<PAGE> 2
CHARTER
OF
FIRST NORTH AMERICAN LIFE ASSURANCE COMPANY
FIRST: The name of the corporation shall be First North
American Life Assurance Company (hereinafter referred to as the "Corporation").
SECOND: The principal office of the Corporation shall be located
in the County of Westchester, State of New York.
THIRD: The kinds of insurance to be transacted by the
Corporation shall be those defined in Paragraphs 1, 2 and 3 of Subsection (a) of
Section 1113 of the Insurance Law of the State of New York as follows:
(1) "Life insurance," means every insurance upon the
lives of human beings and every insurance appertaining thereto,
including the granting of endowment benefits, additional
benefits in the event of death by accident, additional benefits
to safeguard the contract from lapse, or provide a special
surrender value, upon total and permanent disability of the
insured, and optional modes of settlement of proceeds. Amounts
paid the insurer for life insurance and proceeds applied under
optional modes of settlement or under dividend options may be
allocated by the insurer to one or more separate accounts
pursuant to section four thousand two hundred forty of this
chapter.
(2) "Annuities," means all agreements to make
periodical payments for a period certain or where the making or
continuance of all or of some of a series of such payments, or
the amount of any such payment, depends upon the continuance of
human life, except payments made under the authority of
paragraph on hereof. Amounts paid the
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<PAGE> 3
insurer to provide annuities and proceeds applied under
optional modes of settlement or under dividend options may be
allocated by the insurer to one or more separate accounts
pursuant to section four thousand two hundred forty of this
chapter.
(3) "Accident and health insurance," means (I)
insurance against death or personal injury by accident or by
any specified kind or kinds of accident and insurance against
sickness, ailment or bodily injury, including insurance
providing disability benefits pursuant to article nine of the
workers' compensation law, except as specified in item (ii)
hereof; and (ii) non-cancelable disability insurance, meaning
insurance against disability resulting from sickness, ailment
or bodily injury (but excluding insurance solely against
accidental injury) under any contract which does not give the
insurer the option to cancel or otherwise terminate the
contract at or after one year from its effective date or
renewal date.
and such other kind or kinds of insurance or other business or businesses as a
stock life insurance company now is or hereafter may be permitted to transact
under the Insurance Law of the State of New York.
FOURTH: The manner in which the corporate powers of the
Corporation shall be exercised are through a Board of Directors and through such
committees, officers and agents as the Board of Directors shall empower.
FIFTH: The Board of Directors of the Corporation shall consist
of the number of directors as may from time to time be determined in accordance
with the By-Laws of the Corporation, but shall not be less than thirteen nor
more than eighteen in number. However, the initial number of directors shall be
thirteen. In
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<PAGE> 4
the event the number of directors duly elected and serving shall be less than
thirteen, the Corporation shall not for that reason be dissolved, but the
vacancy or vacancies shall be filled as provided in paragraph Sixth.
SIXTH: (a) The directors of the Corporation shall be elected at
each annual meeting of shareholders which shall be held on the second Friday in
March of each year, commencing in the year 1991, by the majority vote of those
present and voting, a quorum being present. At each annual meeting of
shareholders, each shareholder of record on the books of the Corporation on the
date of record fixed by the Board of Directors in accordance with the By-Laws of
the Corporation shall be entitled to one vote, in person or by proxy, for each
share of stock so registered in his name. The holders of a majority of the
shares of stock entitled to vote at such meeting shall constitute a quorum at
such meeting. Each director so elected shall hold office until the next annual
meeting of shareholders and until a successor is duly elected and qualified. If
any vacancy shall occur in the Board of Directors by reason of death,
resignation, removal or otherwise, the remaining member of the Board of
Directors at a meeting called for that purpose on such notice as may be provided
for in the By-Laws of the Corporation, or at any regular meeting thereof, may
elect a director so elected shall hold office until the next annual meeting of
shareholders and until a successor is duly elected and qualified.
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<PAGE> 5
(b) The officers of the Corporation shall be President, a
Secretary and a Treasurer, and shall be appointed or elected by the Board of
Directors, in addition to such other officers as may be appointed or elected by
the Board of Directors in accordance with the By-Laws of the Corporation, as
soon as practicable after the annual election of directors. Each officer so
elected shall hold office until a successor is duly appointed or elected and
qualified. If any vacancy shall occur in any office or the Corporation by reason
of death, resignation, removal or otherwise, the Board of Directors at a meeting
called for that purpose on such notice as may be provided for in the By-Laws of
the Corporation, or at any regular meeting thereof, may appoint or elect an
officer or officers to fill the vacancy or vacancies, and each officer so
appointed or elected shall hold office for the term for which he has been
appointed or elected and until a successor is duly appointed or elected and has
qualified.
(C) Each director shall be at least eighteen years of age,
and at all times a majority of the directors shall be citizens and residents of
the United States, and not less than three of the directors shall be residents
of the State of New York. A director shall not be required to hold any shares of
stock of the Corporation.
SEVENTH: The names and post office residence addresses of the
directors who shall serve until the first annual meeting of the shareholders of
the Corporation are:
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<PAGE> 6
Name Address
---- -------
William Joseph Atherton 8 Hastings Lane
Medford, Massachusetts
Bruce Avedon 6601 Hitching Post Lane
Cincinnati, Ohio
Kenneth Henry Conrad 40 Pond Circle
Jamaica Plain, Massachusetts
John David DesPrez 23 Bristol Road
Wellesley, Massachusetts
Ruth Ann Fleming 145 Western Drive
Short Hills, New Jersey
Robert C. Jones Angel Hill Road
Chatham, New York
Richard Charles Hirtle 156 Pleasant Street
Whitman, Massachusetts
Peter Seaton Hutchison 63 Rumsey Road
Toronto, Ontario
Canada
Brian Leslie Moore 28 Heathview Avenue
Willowdale, Ontario
Canada
Robert C. Perez 50 West 70th Street
New York, New York
James K. Robinson 7 Summit Drive
Rochester, New York
John Gysbertus Vrysen 19 Sweetland Farm Road
Norfolk, Massachusetts
Howell Douglas Wood 218 Sleepy Hollow Road
New Canaan, Connecticut
EIGHTH: The duration of the corporate existence of the
Corporation shall be perpetual.
NINTH: The amount of the capital of the Corporation shall be
two million dollars ($2,000,000), and shall consist of
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<PAGE> 7
two million (2,000,000) shares of capital stock having a par value of one dollar
($1.00) per share.
TENTH: No director of the Corporation shall be personally
liable to the Corporation or any of its shareholders for damages for any breach
of duty as a director; provided, however, that the foregoing provision shall not
eliminate or limit (i) the liability of a director if a judgment or other final
adjudication adverse to such director establishes that his or her such acts or
omissions were acts or omissions (a) which he or she knew or reasonably should
have known violated the New York Insurance Law or (b) which violated a specific
standard of care imposed on directors directly, and not by reference, by a
provision of the New York Insurance Law (or any regulations promulgated
thereunder) or (c) which constituted a knowing violation of any other law, or
establishes that the director personally gained in fact a financial profit or
other advantage to which the director for any act or omission prior to the
adoption of this Article by the shareholders of the Corporation. Any repeal or
modification of this Article by the shareholders of the Corporation shall be
prospective only, and shall not adversely affect any limitation on the personal
liability of a director of the Corporation existing at the time of such repeal
or modification.
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<PAGE> 8
IN WITNESS WHEREOF, the undersigned have hereunto subscribed
their names as of this 30th day of January, 1992.
/s/ Richard C. Hirtle
------------------------------------
Richard C. Hirtle
/s/ Kenneth H. Conrad
------------------------------------
Kenneth H. Conrad
/s/ John G. Vrysen
------------------------------------
John G. Vrysen
/s/ William J. Atherton
------------------------------------
William J. Atherton
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<PAGE> 9
STATE OF MASSACHUSETTS )
: SS.:
COUNTY OF SUFFOLK )
On this 30th day of January , 1992, before me personally came
RICHARD HIRTLE to me personally known and known to me to be one of the persons
who executed the foregoing instrument, and he duly acknowledged to me that he
executed the same.
/s/ Valerie Lapaglia
------------------------------------
Notary Public
STATE OF MASSACHUSETTS )
: SS.:
COUNTY OF SUFFOLK )
On this 30th day of January , 1992, before me personally came
KENNETH CONRAD to me personally known and known to me to be one of the persons
who executed the foregoing instrument, and he duly acknowledged to me that he
executed the same.
/s/ Valerie Lapaglia
------------------------------------
Notary Public
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<PAGE> 10
STATE OF MASSACHUSETTS )
: SS.:
COUNTY OF SUFFOLK )
On this 30th day of January , 1992, before me personally came
JOHN G. VRYSEN to me personally known and known to me to be one of the persons
who executed the foregoing instrument, and he duly acknowledged to me that he
executed the same.
/s/ Valerie Lapaglia
------------------------------------
Notary Public
STATE OF MASSACHUSETTS )
: SS.:
COUNTY OF SUFFOLK )
On this 30th day of January , 1992, before me personally came
WILLIAM ATHERTON to me personally known and known to me to be one of the persons
who executed the foregoing instrument, and he duly acknowledged to me that he
executed the same.
/s/ Valerie Lapaglia
------------------------------------
Notary Public
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<PAGE> 11
IN WITNESS WHEREOF, the undersigned have hereunto subscribed
their names as of this 30th day of January, 1992.
------------------------------------
/s/ Carlos B. Barbosa
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Carlos B. Barbosa
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<PAGE> 12
PROVINCE OF ONTARIO )
: SS.:
CITY OF NORTH YORK )
On this 28th day of January , 1992, before me personally came
CARLOS BARBOSA to me personally known and known to me to be one of the persons
who executed the foregoing instrument, and he duly acknowledged to me that he
executed the same.
/s/
------------------------------------
Notary Public
STATE OF ____________ )
: SS.:
COUNTY OF____________ )
On this ____ day of ___________, 19 __ , before me personally
came _______________to me personally known and known to me to be one of the
persons who executed the foregoing instrument, and he duly acknowledged to me
that he executed the same.
------------------------------------
Notary Public
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<PAGE> 13
IN WITNESS WHEREOF, the undersigned have hereunto subscribed
their names as of this 27th day of January, 1992.
/s/ Lynn Silberman
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Lynn Silberman
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<PAGE> 14
STATE OF NEW YORK )
: SS.:
COUNTY OF RICHMOND )
On this 27th day of January , 1992, before me personally came
LYNN SILBERMAN to me personally known and known to me to be one of the persons
who executed the foregoing instrument, and he duly acknowledged to me that he
executed the same.
/s/ Kathy Slaven
------------------------------------
Notary Public
STATE OF ____________)
: SS.:
COUNTY OF ___________)
On this ____ day of ______________, 19__, before me personally
came ______________ to me personally known and known to me to be one of the
persons who executed the foregoing instrument, and he duly acknowledged to me
that he executed the same.
------------------------------------
Notary Public
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<PAGE> 15
IN WITNESS WHEREOF, the undersigned have hereunto subscribed
their names as of this 30th day of January, 1992.
/s/ Ruth Ann Fleming
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Ruth Ann Fleming
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<PAGE> 16
STATE OF MASSACHUSETTS )
: SS.:
COUNTY OF SUFFOLK )
On this 30th day of January , 1992, before me personally came
RUTH ANN FLEMING to me personally known and known to me to be one of the persons
who executed the foregoing instrument, and he duly acknowledged to me that he
executed the same.
/s/ Valerie Lapaglia
------------------------------------
Notary Public
STATE OF ________________)
: SS.:
COUNTY OF _______________)
On this _____ day of ___________, 19 __, before me personally
came ________________________ to me personally known and known to me to be one
of the persons who executed the foregoing instrument, and he duly acknowledged
to me that he executed the same.
------------------------------------
Notary Public
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<PAGE> 17
IN WITNESS WHEREOF, the undersigned have hereunto subscribed
their names as of this 30th day of January, 1992.
/s/ Brian L. Moore
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Brian L. Moore
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<PAGE> 18
CITY OF NORTH YORK )
: SS.:
PROVINCE OF ONTARIO )
On this 30th day of January , 1992, before me personally came
BRIAN L. MOORE to me personally known and known to me to be one of the persons
who executed the foregoing instrument, and he duly acknowledged to me that he
executed the same.
/s/
------------------------------------
Notary Public
STATE OF ________________)
: SS.:
COUNTY OF _______________)
On this _____ day of ___________, 19 __, before me personally
came ________________________ to me personally known and known to me to be one
of the persons who executed the foregoing instrument, and he duly acknowledged
to me that he executed the same.
------------------------------------
Notary Public
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<PAGE> 19
IN WITNESS WHEREOF, the undersigned have hereunto subscribed
their names as of this 30th day of January, 1992.
/s/ Donald D. Gabay
------------------------------------
Donald D. Gabay
/s/ Stewart H. Walker
------------------------------------
Stewart H. Walker
/s/ David M. Kaston
------------------------------------
David M. Kaston
/s/ Charles S. Berlin
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Charles S. Berlin
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<PAGE> 20
STATE OF NEW YORK )
: SS.:
COUNTY OF NEW YORK )
On this 30th day of January , 1992, before me personally came
DONALD D. GABAY to me personally known and known to me to be one of the persons
who executed the foregoing instrument, and he duly acknowledged to me that he
executed the same.
/s/ Deborah T. Cassarino
------------------------------------
Notary Public
STATE OF NEW YORK )
: SS.:
COUNTY OF NEW YORK )
On this 30th day of January , 1992, before me personally came
STEWART H. WALKER to me personally known and known to me to be one of the
persons who executed the foregoing instrument, and he duly acknowledged to me
that he executed the same.
/s/ Deborah T. Cassarino
------------------------------------
Notary Public
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<PAGE> 21
STATE OF NEW YORK )
: SS.:
COUNTY OF NEW YORK )
On this 30th day of January , 1992, before me personally came
DAVID KASTON to me personally known and known to me to be one of the persons who
executed the foregoing instrument, and he duly acknowledged to me that he
executed the same.
/s/ Deborah T. Cassarino
------------------------------------
Notary Public
STATE OF NEW YORK )
: SS.:
COUNTY OF NEW YORK )
On this 30th day of January , 1992, before me personally came
CHARLES S. BERLIN to me personally known and known to me to be one of the
persons who executed the foregoing instrument, and he duly acknowledged to me
that he executed the same.
/s/ Deborah T. Cassarino
------------------------------------
Notary Public
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<PAGE> 22
STATE OF NEW YORK )
: SS.:
COUNTY OF NASSAU )
On this 24th day of January , 1992, before me personally came
ILANA HANAU to me personally known and known to me to be one of the persons who
executed the foregoing instrument, and he duly acknowledged to me that he
executed the same.
/s/ Merril C. Schapiro
------------------------------------
Notary Public
STATE OF ________________)
: SS.:
COUNTY OF _______________)
On this _____ day of ___________, 19 __, before me personally
came ________________________ to me personally known and known to me to be one
of the persons who executed the foregoing instrument, and he duly acknowledged
to me that he executed the same.
------------------------------------
Notary Public
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<PAGE> 1
Exhibit (A)(6)(a)(ii)
NORTH AMERICAN SECURITY LIFE INSURANCE COMPANY
SECRETARY' S CERTIFICATE
I, John D. DesPrez Ill, Secretary of North American Security Life Insurance
Company (the "Company") do hereby certify that the following is a true and
correct copy of resolutions passed by the Board of Directors of the Company on
the 4th day of March 1992, and that the said resolutions are in full force and
effect on the date hereof:
Pursuant to the authority of Section 141(f) of the General Corporation Law
of the State of Delaware, the undersigned, being all of the directors of the
Corporation, do take and adopt the following action by their written consent:
WHEREAS, North American Security Life Insurance Company (the "Company")
desires to establish a subsidiary to be known as First North American
Life Assurance Company; it is
RESOLVED, that the Company be and it is hereby authorized to establish a
subsidiary to be known as First North American Life Assurance Company;
and it is
FURTHER RESOLVED, that the proper officers of the Company be, and they
hereby are, authorized and directed to do all things and execute all
instruments and documents necessary or desirable to effect the
foregoing.
DATED at Boston, Massachusetts as of the 6th day of March, 1992
/s/ John D. DesPrez III
--------------------------------
John D. DesPrez
Secretary
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<PAGE> 2
FIRST NORTH AMERICAN LIFE ASSURANCE COMPANY
SECRETARY'S CERTIFICATE
I, Christina M. Perrino, Secretary of First North Amerian Life
Assurance company ("the Company") do hereby certify that the following is a true
and correct copy of a resolution passed by the Board of Directors of the Company
on the 4th day of March, 1992, and that the said resolutions are in full force
and effect on the date hereof:
RESOLVED, That the Company give to the Superintendent of Financial
Institutions in Canada ("the Superintendent") the Undertaking required by the
Superintendent; and that the Undertaking shall be as set forth below; and that
the proper officers of the Company be, and they hereby are, authorized and
directed to do all thing and take all actions necessary to execute and deliver
the Undertaking to the Superintendent.
UNDERTAKING
FIRST NORTH AMERICAN LIFE ASSURANCE COMPANY
First North American Life Assurance Company ("First North American")hereby
undertakes that while North American Security Life Insurance Company ("Security
Life") holds an investment in the shares of First North American, First North
American will
1. Provide the Superintendent with copies of its financial statement, a
copy of the annual report that it is required to file with its
supervisory authority, and such other information concerning its
financial condition and affairs as he may from time to time request;
2. Limit its activities to the transaction of the business of life
insurance, personal accident and sickness insurance, together with such
other activities as may be necessarily incidental to the transaction of
such business.
3. Not make any investment that North American Life Assurance Company of
Canada is prohibited from making by section 52 of the Canadian and
British Insurance Companies Act;
4. Not acquire or hold, except with the approval of the Superintendent,
shares of any corporation incorporated to undertake contracts of life
insurance;
5. Not acquire or hold except with the approval of the Superintendent, more
than thirty percent of the common shares of any corporation except a
real estate corporation
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<PAGE> 3
DATED at Boston, Massachusetts as of the 6th day of March, 1992.
/s/Christina M. Perrino
-----------------------------------
Secretary
-26-
<PAGE> 4
UNDERTAKING
FIRST NORTH AMERICAN LIFE ASSURANCE COMPANY
First North American Life
First North American Life Assurance Company ("First North American") hereby
undertakes that while North American Security Life Insurance Company ("Security
Life") holds an investment in the shares of First North American, First North
American will
1. Provide the Superintendent with copies of its financial statements, a
copy of the annual report that it is required to file with its
supervisory authority, and such other information concerning its
financial condition and affairs as he may from time to time request;
2. Limit its activities to the transaction of the business of life
insurance, personal accident and sickness insurance, together with such
other activities as may be necessarily incidental to the transaction of
such business;
3. Not make any investment that North American Life Assurance Company of
Canada is prohibited from making by section 52 of the Canadian and
British Insurance Companies Act;
4. Not acquire or hold, except with the approval of the Superintendent,
shares of any corporation incorporated to undertake contracts of life
insurance; and
5. Not acquire or hold, except with the approval of the Superintendent,
more than thirty percent of the common shares of any corporation except
a real estate corporation.
DATED at Boston, Massachusetts as of the 6th day of, 1992.
FIRST NORTH AMERICAN LIFE
ASSURANCE COMPANY
/s/ John D. DesPrez III
----------------------------------
By: John D. DesPrez III
Executive Vice President
----------------------------------
Title
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<PAGE> 5
FIRST NORTH AMERICAN LIFE ASSURANCE COMPANY
DIRECTORS AND OFFICERS
William J. Atherton Director; President
Bruce Avedon Director
Kenneth H. Conrad Director; Vice President
Administration
James R. Crysdale Associate Treasurer
John D. DePrez III Director; Executive Vice President
Ruth Ann Fleming Director
R. Courtney Jones Director
Richard S. Hirtle Director; Vice President
& Treasurer
Peter S. Hutchinson Director
Brian L. Moore Chairman of the Board
Sarah A. Murphy Chief Administrative Officer
Morton Patrontasch Associate Treasurer
Christina M. Perrino Secretary & Counsel
Robert C. Perez Director
James K. Robinson Director
John G. Vrysen Director; Vice President & Actuary
H. Douglas Wood Director
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<PAGE> 6
CERTIFICATE OF AMENDMENT
of the
DECLARATION OF INTENTION AND CHARTER
of
FIRST NORTH AMERICAN LIFE ASSURANCE COMPANY
Under
Section 805 Of The Business Corporation Law and Section 1206 of the Insurance
Law
The undersigned officers of First North American Life Assurance Company
(the "Corporation"), duly organized and existing under the Laws of the State of
New York, do hereby certify that:
1. That the name of the Corporation is First North American Life
Assurance Company.
2. That the Declaration of Intention and Charter (the "Charter")
was filed on February 10, 1992 with the Superintendent of Insurance.
3. That the Charter of the Corporation is hereby amended to change
the name of the Corporation by deleting paragraph FIRST in its entirety and
inserting the following in lieu thereof:
FIRST: The name of the Corporation shall be The Manufacturers
Life Insurance Company of New York (hereinafter referred to as
the "Corporation").
4. That the foregoing amendment has been duly authorized by the
Board of Directors at their regularly scheduled meeting held May 6, 1997 and by
the Sole Stockholder of the Corporation at a Special Meeting held May 6, 1997,
in accordance with the provisions of Section 803(a) of the Business Corporation
Law of the State of New York.
5. That the foregoing amendment shall be effective at 12:01 a.m.
Eastern Standard Time on October 1, 1997.
<PAGE> 7
IN WITNESS WHEREOF, First North American Life Assurance Company has
caused this Certificate to be executed by Joseph Scott, President and Tracy
Kane, Secretary.
FIRST NORTH AMERICAN LIFE ASSURANCE COMPANY
By /s/ Joseph Scott
----------------------------------------
Joseph Scott, President
By /s/ Tracy Kane
----------------------------------------
Tracy Kane, Secretary
Commonwealth of Massachusetts )
)
County of Suffolk )
On this 9th day of September, 1997, before me personally came Joseph
Scott, President and Tracy Kane, Secretary of First North American Life
Assurance Company, the Corporation described in the above executed instrument,
and that he/she signed his/her name thereto by order of the Directors of said
Corporation.
/s/ Kimberly S. Ciccarelli
----------------------------------------
Notary Public
Commission Expires November 13, 2003
<PAGE> 1
Exhibit (A)(6)(a)(iii)
CERTIFICATE OF AMENDMENT
OF THE
DECLARATION OF INTENTION AND CHARTER
OF
THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK
UNDER
SECTION 805 OF THE BUSINESS CORPORATION LAW AND SECTION 1206 OF THE
INSURANCE LAW
The undersigned officers of The Manufacturers Life Insurance Company of
New York (the "Corporation"), duly organized and existing under the Laws of the
State of New York, do hereby certify that:
1. That the name of the Corporation is The Manufacturers Life Insurance
Company of New York, originally formed as First North American Life Assurance
Company.
2. That the Declaration of Intention and Charter (the "Charter") was
filed on February 10, 1992 with the Superintendent of Insurance and amended on
October 1,1997 to change the name of the Corporation.
3. That the Charter of the Corporation is hereby amended to decrease the
number of Directors of the Corporation by deleting paragraph FIFTH in its
entirety and inserting the following in lieu thereof:
FIFTH: The Board of Directors of the Corporation shall consist of the
number of Directors as may from time to time be determined in
accordance with the By-Laws of the Corporation, but shall not be less
than nine nor more than eighteen in number, of which four, but not
less than one-third, must not be officers or employees of the
Corporation or any entity controlling, controlled by, or under common
control with the Corporation and who are not beneficial owners of a
controlling interest in the voting stock of the Corporation or any
such entity. The number of Directors shall be increased to not less
than thirteen within one year following the end of the calendar year
in which the Corporation exceeded one and one-half billion dollars in
admitted assets. In the event the number of Directors duly elected and
serving shall be less than nine, the Corporation shall not for that
reason be dissolved, but the vacancy or vacancies shall be filled as
provided in paragraph Sixth.
<PAGE> 2
4. That the foregoing amendment has been duly authorized by the Board of
Directors at their regularly scheduled meeting held August 20, 1997, and by the
Sole Stockholder of the Corporation at a Special Meeting held August 20, 1997,
in accordance with the provisions of Section 803(a) of the Business Corporation
Law of the State of New York.
IN WITNESS WHEREOF, The Manufacturers Life Insurance Company of New York
has caused this Certificate to be executed by Joseph Scott, President and Tracy
Kane, Secretary.
THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK
By /s/ Joseph Scott
-----------------------------------------------
Joseph Scott, President
By /s/ Tracy Kane
-----------------------------------------------
Tracy Kane, Secretary
STATE of Massachusetts )
)
County of Suffolk )
On this 17th day of October, 1997, before me personally came Joseph Scott,
President and Tracy Kane, Secretary of The Manufacturers Life Insurance Company
of New York, the Corporation described in the above executed instrument, and
that he/she signed his/her name thereto by order of the Directors of said
Corporation.
/s/ Kimberly S. Ciccarelli
--------------------------
Notary Public
Commission Expires November 13, 2003
<PAGE> 1
Exhibit (A)(6)(b)
BY-LAWS
OF
THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK
ARTICLE I
CHARTER
-------
SECTION I.1. CHARTER. The name and purpose of the Corporation
shall be as set forth in the Charter. These By-Laws, the powers of the
Corporation and of its directors and shareholders, and all matters concerning
the conduct and regulation of the business and affairs of the Corporation shall
be subject to such provisions in regard thereto, if any, as are set forth in the
Charter. All references in these By-Laws to the Charter shall mean the Charter
as from time to time amended.
ARTICLE II
OFFICES
-------
SECTION II.1. OFFICES. The principal office of the Corporation
shall be located in the County of Westchester, State of New York. The
Corporation, in addition to its principal office, may also establish and
maintain such other offices and places of business, within or without the State
of New York, as the Board of Directors may from time to time determine.
ARTICLE III
SHAREHOLDERS
------------
SECTION III.1. ANNUAL MEETING. The annual meeting of the
shareholders of the Corporation for the election of directors and for the
transaction of such other business as may properly come before the meeting shall
be held on the second Friday in March of each year, at 10:00 a.m., or on such
other date or at such other time as may be fixed by the Board of Directors and
stated in the notice of the meeting. The place of the meeting shall be the
principal office of
<PAGE> 2
the Corporation, or such other place, within or without the State of New York,
as may be fixed by the Board of Directors and stated in the notice of the
meeting.
SECTION III.2. SPECIAL MEETINGS. A special meeting of the
shareholders may be called at any time by the President or the Board of
Directors, and shall be called by the President upon the written request of
one-third of the shareholders of record entitled to vote, such written request
to state the purpose or purposes of the meeting and to be delivered to the
President. All special meetings shall be held at the principal office of the
Corporation, or at such other place, within or without the State of New York, as
may be designated by the President, at a date and time to be fixed by the
President, which date shall not be later than thirty days from the date of the
receipt of such written request.
SECTION III.3. NOTICE OF MEETINGS AND WAIVER. Except as
otherwise required by law, a written notice of each meeting of shareholders,
whether annual or special, stating the place, date and hour of the meeting,
shall be given not less than ten or more than fifty days before the meeting to
each shareholder of record entitled to vote at such meeting. No notice of any
meeting of shareholders need be given to a shareholder if a written waiver of
notice, executed before, during or after the meeting by such shareholder or his
attorney thereunto duly authorized, is filed with the records of the meeting, or
to any shareholder who shall attend such meeting in person or by proxy otherwise
than for the express purpose of objecting, prior to the conclusion of the
meeting, to the transaction of any business because the meeting is not lawfully
called or convened, or to any shareholder with whom communication is at the time
unlawful.
SECTION III.4. QUORUM AND ADJOURNMENT. Except as otherwise
required by law, the Charter or these By-Laws, at all meetings of shareholders,
the holders of a majority of the shares entitled to vote at such meeting,
present in person or represented by proxy, shall constitute a quorum for the
transaction of business. In the absence of a quorum, any officer entitled to
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preside over or act as secretary of such meeting may adjourn the meeting from
time to time, without notice other than announcement at the meeting, until a
quorum be present. At any such adjourned meeting at which a quorum may be
present, any business may be transacted which might have been transacted at the
meeting as originally notified. If the adjournment is for more than thirty days
or a new record date is fixed, notice of adjournment of a meeting of
shareholders to another time or place shall be given to each shareholder of
record entitled to vote at such meeting.
SECTION III.5. VOTING. Shareholders entitled to vote shall
have one vote for each share of stock, and a proportionate vote for a fractional
share of stock, entitled to vote held by them of record according to the records
of the Corporation. The Corporation shall not, directly or indirectly, vote any
share of its own stock. The vote upon any question shall be by ballot whenever
requested by any person entitled to vote but, unless such a request is made,
voting may be conducted in any way approved by the meeting. In the absence of a
higher standard required by law, the Charter or these By-Laws, any matter
properly before a meeting of shareholders shall be decided by a majority of the
votes cast hereon.
SECTION III.6. PROXIES. Shareholders entitled to vote at a
meeting or to express consent or dissent without a meeting may vote either in
person or by proxy in writing dated not more than six months before the meeting
named therein, which proxy shall be filed with the Secretary or other person
responsible to record the proceedings of the meeting before being voted. Unless
otherwise specifically limited by their terms, such proxies shall entitle the
holders thereof to vote at any adjournment of such meeting but shall not be
valid after eleven months from its date, unless the proxy provides for a longer
period. The Secretary shall determine the validity of any proxy submitted for
use at any meeting.
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SECTION III.7. WAIVER OF IRREGULARITIES. Unless otherwise
provided by law, all informalities and irregularities in calls, notices of
meetings and in the manner of voting, form of proxy, credentials and methods of
ascertaining those present, shall be deemed waived if no objection is made
thereto at the meeting.
SECTION III.8. ACTION BY WRITTEN CONSENT. So far as permitted
by law, any action required or permitted to be taken at any meeting of
shareholders may be taken without meeting if a written consent setting forth
such action is signed by all the shareholders entitled to vote thereon and such
written consent is filed with the records of the Corporation. Written consent
thus given shall have the same effect as a unanimous vote of shareholders.
ARTICLE IV
BOARD OF DIRECTORS
------------------
SECTION IV.1. POWER OF BOARD AND QUALIFICATION OF DIRECTORS.
The business of the Corporation shall be managed by its Board of Directors,
which may exercise all such powers of the Corporation and do all such lawful
acts and things as are not by law, the Charter or these By-Laws directed or
required to be exercised or done by the shareholders.
Each director shall be at least eighteen years of age. Not
less than three of the directors shall be residents of the State of New York,
and a majority of the directors shall be citizens and residents of the United
States. At least four of the directors shall be persons who are not officers or
employees of the Corporation or of any entity controlling, controlled by, or
under common control with the Corporation and who are not beneficial owners of a
controlling interest in the voting stock of the Corporation or any such entity.
A director meeting the qualifications of the immediately preceding sentence is
hereinafter referred to as a "Non-Affiliated Director." No director need be a
shareholder.
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SECTION IV.2. NUMBER, ELECTION AND TERM OF OFFICE. The Board
of Directors shall consist of not less than nine nor more than eighteen
directors. The number of directors shall be fixed by majority vote of the entire
Board; provided that no decrease in the number of directors shall shorten the
term of any incumbent director. Subject to the provisions of Section 4.8 hereof,
the directors shall be elected annually by the shareholders entitled to vote at
the annual meeting of shareholders, by a majority of votes at such election.
Each director, whether elected at an annual meeting or pursuant to Section 4.8
hereof, shall continue in office until the annual meeting of shareholders held
next after his or her election and until his or her successor shall have been
elected and qualified or until his or her earlier death, resignation or removal
in the manner hereinafter provided. No election of directors shall be valid
unless a notice of the election shall have been filed with the Superintendent of
Insurance of the State of New York at least ten days before the election.
SECTION IV.3. REGULAR MEETINGS. A regular meeting of the Board
of Directors for the election of officers and for the transaction of such other
business as may properly come before the meeting shall be held without notice at
the place where the annual meeting of shareholders is held, immediately
following such meeting. The Board of Directors by resolution shall provide for
the holding of three additional regular meetings, with or without notice, and
shall fix the times and places, within or without the State of New York, at
which such meetings shall be held. One regular meeting shall be held in each
calendar quarter.
SECTION IV.4. SPECIAL MEETINGS, NOTICE AND WAIVER. Special
meetings of the Board of Directors may be called by the President, and shall be
called by the President upon receipt of a written request of not less than three
directors. All special meetings shall be held at a date, time and place to be
fixed by the President, and the President shall direct the Secretary to give
notice of each special meeting to each director by mail at least five days
before such meeting
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is to be held or in person or by telephone or telegraph at least two days before
such meeting. Such notice shall state the date, time, place and purposes of such
meeting. Notice of a meeting need not be given to any director if a written
waiver of notice, executed by him or her before, during or after the meeting, is
filed with the records of the meeting.
SECTION IV.5. QUORUM AND CONFERENCE CALL MEETINGS. A majority
of the entire Board of Directors, at least one of whom shall be a Non-Affiliated
Director, shall constitute a quorum for the transaction of business. When a
quorum is present at any meeting, a majority of the directors present may take
any action except as otherwise expressly required by law, the Charter or these
By-Laws. In the absence of a quorum, a majority of the directors present at the
time and place of any meeting, may adjourn such meeting from time to time until
a quorum be present. If by reason of one or more vacancies there is less than
the minimum number of directors, the Board of Directors shall have the power to
function legally prior to the filling of the vacancy; provided, however, that
there shall always be a quorum. Any one or more directors may participate in a
regular or special meeting of the Board by means of a conference telephone or
similar communications equipment by means of which all persons participating in
the meeting can hear each other, and participation in a meeting by such means
shall constitute presence in person at such meeting. Notwithstanding the
foregoing, with respect to at least one of the regular meetings in each calendar
year, which meeting shall be designated by the Board of Directors, the quorum
requirements set forth in this Section may be met only if the requisite number
and category of directors are physically present at the place at which the
meeting is held.
SECTION IV.6. CHAIRMAN. The Board of Directors may elect, from
among its members, a Chairman. The Chairman of the Board, if one is elected,
shall preside at all meetings of the Board of Directors and shall have such
other powers and duties as may be granted or assigned to him or her from time to
time by the Board of Directors. If a Chairman of the Board is
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<PAGE> 7
elected but is absent or unable to preside at meetings of the Board of
Directors, or if no Chairman is elected, the President shall preside at such
meetings.
SECTION IV.7. RESIGNATION AND REMOVAL. Any director may resign
at any time by giving written notice of such resignation to either the Board of
Directors, the President or the Secretary. Unless otherwise specified therein,
such resignation shall take effect upon receipt thereof by the Board of
Directors or by the President or Secretary. Any director may be removed either
with or without cause at any time by the affirmative vote of the shareholders of
record holding a majority of the outstanding shares of the Corporation entitled
to vote for the election of directors, given at a meeting of the shareholders
called for that purpose, or by the holders of a majority of the outstanding
shares entitled to vote for the election of directors without holding a meeting
or notice but by merely presenting their majority to the Secretary of the
Corporation in writing for the removal of a director or directors without cause.
Any director may be removed with cause by a majority of the total number of
directors constituting the entire Board of Directors at a meeting of the Board
of Directors.
SECTION IV.8. VACANCIES. A vacancy in the Board of Directors
arising by reason of death, resignation, removal (with or without cause),
increase in the number of directors, or otherwise, which may occur between
annual meetings of the shareholders of the Corporation may be filled by a
majority vote of the remaining directors, though less than a quorum. Any such
vacancy may also be filled by the shareholders entitled to vote for the election
of directors at any meeting held during the existence of such vacancy.
SECTION IV.9. COMPENSATION. The Board of Directors may
authorize payment of a retainer fee to one or more of the directors in instances
where, in the discretion of the Board, such payment is deemed appropriate. Other
than such payments, if any, directors, as such, shall not be compensated for
their services but by resolution of the Board of Directors may be paid a fee for
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<PAGE> 8
attendance at each meeting of the Board of Directors or a committee thereof;
provided, however, that no director shall be paid a fee, whether by retainer,
for attendance, or otherwise, if such director is also a salaried officer of the
Corporation. Nothing in these by-laws contained shall prevent any director from
serving the Corporation in any other capacity or receiving compensation
therefor.
SECTION IV.10. ACTION BY WRITTEN CONSENT. So far as permitted
by law, any action required or permitted to be taken at any meeting of the Board
of Directors may be taken without a meeting if a written consent setting forth
such action is signed by all the directors entitled to vote thereon and such
written consent is filed with the records of the Corporation. Written consent
thus given shall have the same effect as a unanimous vote of directors.
ARTICLE V
COMMITTEES OF DIRECTORS
-----------------------
SECTION V.1. COMMITTEES. The Board of Directors, by the
affirmative vote of the majority of the entire Board, shall appoint from among
its members an Audit, Nominating and Evaluation Committee, which shall be
comprised solely of Non-Affiliated Directors, an Executive Committee, an
Investment Committee and such other committees as it may deem necessary. Each
member of each such committee shall continue in office during the pleasure of
the Board or until he or she shall cease to be a director.
Except to the extent a greater proportion is required by the
provisions of this Article V, not less than one-third of the members of each
such committee shall consist of Non-Affiliated Directors, at least one of whom
shall be present to constitute a quorum for the transaction of business. The
presence, at any meeting of a committee, of a majority of its members then in
office, at lease one of whom is a Non-Affiliated Director, shall constitute a
quorum for the transaction of business. A majority of such quorum may decide any
questions that
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may come before such meeting. Any one or more members of a committee may
participate in a meeting of such committee by means of a conference telephone or
similar communications equipment by means of which all persons participating in
the meeting can hear each other, and participation in a meeting by such means
shall constitute presence in person at such meeting. So far as permitted by law,
any action required or permitted to be taken at any meeting of any committee
appointed and established by the Board of Directors may be taken without a
meeting if a written consent setting forth such action is signed by all of the
members of such committee entitled to vote thereon and such written consent is
filed with the records of the Corporation.
SECTION V.2. EXECUTIVE COMMITTEE. The Board of Directors shall
appoint an Executive Committee consisting of not less than five directors, and
may designate as Chairman of the Executive Committee one of the members so
appointed. The Chairman of the Executive Committee shall preside at all meetings
of the Executive Committee at which he is present. The Executive Committee shall
keep a record of its proceedings and shall adopt its own rules of procedure. The
Executive Committee shall submit a written report of its activities to the Board
of Directors at the next meeting of the Board of Directors. Each director may
inspect and review, at any time during normal business hours, the minutes of the
meetings of the Executive Committee, and said minutes shall be retained by the
Secretary of the Corporation and made available to the Board of Directors at
each of its meetings.
Except as otherwise provided by law, the Charter or these
By-Laws, all the powers of the Board of Directors when not in session, may be
vested, to the extent from time to time determined by the Board of Directors, in
the Executive Committee. To the extent appropriate to carry out this provision,
references in these By-Laws to the Board of Directors shall be read to mean the
Executive Committee. The Executive
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Committee may authorize one or more officers, employees or agents of the
Corporation to carry out the exercise of its powers. The Executive Committee
shall have the power and authority to declare dividends and to authorize the
issuance of common stock. The Executive Committee shall not have and may not
exercise the following powers:
(1) To submit to the shareholders any action which by any
applicable statute requires shareholders' approval;
(2) To fill any vacancy in the Board of Directors or in any
committee thereof;
(3) To fix the compensation of any director for serving on
the Board or any committee thereof;
(4) To amend or repeal these By-Laws, or to adopt new
By-Laws;
(5) To amend, alter or repeal any resolution of the Board
of Directors which by its terms provides that it shall not be amended or
repealed.
SECTION V.3. AUDIT, NOMINATING AND EVALUATION COMMITTEE. The
Board of Directors shall appoint an Audit, Nominating and Evaluation Committee
consisting of not less than five directors, and may designate as Chairman of the
Audit, Nominating and Evaluation Committee one of the members so appointed. The
Audit, Nominating and Evaluation Committee shall consist solely of
Non-Affiliated Directors. The Chairman of the Audit, Nominating and Evaluation
Committee shall preside at all meetings of the Audit, Nominating and Evaluation
Committee at which he or she is present. The Audit, Nominating and Evaluation
Committee shall keep a record of its proceedings and shall adopt its own rules
of procedure. The Audit, Nominating and Evaluation Committee shall submit a
report of its activities to the Board of Directors at the next meeting of the
Board of Directors. The Audit, Nominating and Evaluation Committee shall have
responsibility for: (1) recommending the selection of independent certified
public accountants; (2) reviewing the Corporation's financial condition, the
scope and results of
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the independent audit and any internal audit; (3) nominating candidates for
director for election by shareholders; and (4) evaluating the performance of
officers who, pursuant to Section 6.1 of Article VI of these By-Laws, are
principal officers of the Corporation and recommending to the Board of Directors
the selection and compensation of such principal officers.
The Audit, Nominating and Evaluation Committee shall, to the
extent empowered by the Board, have and possess all of the rights and powers of
the Board of Directors, between meetings of the Board of Directors, to: (1) meet
and discuss with the representative of any firm of certified public accountants,
for reviewing the Corporation's financial condition, the scope and results of
the independent audit and any internal audit; (2) to nominate candidates for
director for election by shareholders; and (3) to evaluate the performance of
officers who, pursuant to Section 6.1 of Article VI of these By-Laws, are
principal officers of the Corporation and to recommend to the Board of Directors
the selection and compensation of such principal officers. The Audit, Nominating
and Evaluation Committee shall, to the extent empowered by the Board, have and
possess all of the rights and powers of the Board of Directors, between meetings
of the Board of Directors, to meet and discuss with the representatives of any
firm of certified public accountants retained by the Corporation, at any time
and from time to time, whether before and/or after the preparation of the
year-end financial statements of the Corporation, the scope of the audit of such
firm with respect to any year, and to question such representatives with respect
thereto. In addition, the Audit, Nominating and Evaluation Committee shall have
the authority to meet with and question officers and employees of the
Corporation with respect to financial matters pertaining to the Corporation. The
Audit, Nominating and Evaluation Committee shall not have and may not exercise
any of the powers referred to in clauses (1) through (5), inclusive, of Section
5.2 hereof.
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SECTION V.4. INVESTMENT COMMITTEE. The Board of Directors
shall appoint an Investment Committee consisting of not less than five
directors, and may designate as Chairman of the Investment Committee one of the
members so appointed. The Chairman of the Investment Committee shall preside at
all meetings of the Investment Committee at which he or she is present. The
Investment Committee shall keep a record of its proceedings and shall adopt its
own rules of procedure. The Investment Committee shall submit a report of its
activities to the Board of Directors at the next meeting of the Board of
Directors.
The Investment Committee shall have the power to invest the
funds of the Corporation in deposits with banks and insurance companies, the
purchase and acquisition of stocks, bonds and other securities, in the name and
in behalf of the Corporation and to withdraw any such deposits and to sell and
dispose of the stocks, bonds and other securities owned by the Corporation, at
such times and upon such terms as it may deem wise and advantageous to the
Corporation; provided, however, that in any case where the investment of such
funds in stocks, bonds or other securities involves the active participation of
the Corporation in the management of the business represented by any such
securities, the Investment Committee shall not have the power to make any
investments or otherwise deal with such securities without the approval of the
Board of Directors. All actions of the Investment Committee shall be subject to
revision or alteration by the Board of Directors; provided, however, that rights
or acts of third parties shall not be affected by any such revision or
alteration.
ARTICLE VI
OFFICERS
--------
SECTION VI.1. NUMBER AND PRINCIPAL OFFICERS. The officers of
the Corporation shall be a President, a Secretary, a Treasurer, and such other
officers as may be appointed in accordance with the provisions of Section 6.3
hereof. So far as permitted by applicable law, any
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two or more offices may be held by the same person, except that the President
and the Secretary shall not be the same person. The President, any
Vice-Presidents appointed or elected by the Board of Directors, the Secretary
and the Treasurer shall be principal officers of the Corporation for purposes of
Section 5.3 of Article V of these By-Laws.
SECTION VI.2. ELECTION, TERM OF OFFICE AND QUALIFICATION. The
President, the Treasurer and the Secretary shall be elected annually by the
directors at their first meeting following the annual meeting of shareholders,
by vote of a majority of the directors present and voting, and other officers,
if any, may be elected or appointed by the directors at said meeting or at any
other time. The President shall be and remain a director. No other officer need
be a director.
Except as otherwise provided by law or by the Charter or by
these By-Laws, the President, the Treasurer and the Secretary shall hold office
until the first meeting of the directors following the next annual meeting of
shareholders and until their respective successors are chosen and qualified, or,
in each case, until he or she sooner dies, resigns or is removed, unless a
shorter period shall have been specified by the terms of his or her election or
appointment. Each agent, if any, shall retain his or her authority at the
pleasure of the directors.
SECTION VI.3. OTHER OFFICERS. The Board of Directors from time
to time may appoint other officers or agents, including but not limited to one
or more Vice-Presidents, one or more assistant treasurers and one or more
assistant secretaries, each of whom shall hold office for such period, have such
authority and perform such duties as are provided in these By-Laws or as the
Board of Directors from time to time may determine. The Board of Directors may
delegate to any officer or committee the power to appoint any such other
officers or agents and to prescribe their respective authorities and duties.
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SECTION VI.4. PRESIDENT. The President shall, subject to the
control of the Board of Directors, have general charge of the business, affairs
and property of the Corporation, and control over its several officers. The
President shall do and perform such other duties and may exercise such other
powers as from time to time may be assigned to him or her by these By-Laws or by
the Board of Directors.
SECTION VI.5. TREASURER. Subject to the order of the Board of
Directors, the Treasurer shall have supervision over the funds, securities,
receipts and disbursements of the Corporation and shall be the chief accounting
officer of the Corporation. He or she shall cause all monies and other valuable
effects to be deposited in the name and to the credit of the Corporation, in
such banks or trust companies or with such bankers or other depositories as
shall be selected by the Board of Directors or which he or she shall select
pursuant to authority conferred upon him or her by the Board of Directors. He or
she shall cause the funds of the Corporation to be disbursed by checks or drafts
upon the authorized depositories of the Corporation and shall cause to be taken
and preserved proper vouchers for all monies disbursed. He or she shall cause to
be kept correct books of account of the business and transactions of the
Corporation and shall render to the President, the Board of Directors or the
Executive Committee, whenever requested, an account of the financial condition
of the Corporation and of his or her transactions as Treasurer. He or she shall
be responsible for keeping and maintaining the stock books and stock transfer
books of the Corporation. He or she shall be empowered, from time to time, to
require of the officers or agents of the Corporation reports or statements
giving such information as he or she may desire with respect to any and all
financial transactions of the Corporation, and shall have such other powers and
duties as from time to time may be assigned to him or her by these By-laws or by
the Board of Directors or by the President. If required by the Board of
Directors, he or she shall give the Corporation a bond in such sum with
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such surety or sureties as shall be satisfactory to the Board for the faithful
performance of his or her duties.
SECTION VI.6. SECRETARY. The Secretary shall keep and record
all the minutes of the meetings of shareholders and the Board of Directors in
books to be maintained for that purpose, and shall perform like duties for
committees of the Board of Directors when required. He or she shall give notice
to the shareholders and the Board of Directors in accordance with the provisions
of these By-Laws or as required by statute. Except for those records for which
the Treasurer is responsible, the Secretary shall be responsible for the records
of the Corporation and the Board of Directors. He or she shall keep in safe
custody the seal of the Corporation and shall see that the seal is affixed to
all documents the execution of which, on behalf of the Corporation under its
seal, shall have been duly authorized. He or she shall see that all lists,
books, reports, statements and certificates and other documents and records
required by law to be kept or filed are properly kept or filed. He or she shall
perform all duties and shall have all powers incident to the office of the
Secretary and shall perform such other duties and have such other powers as from
time to time may be assigned to him or her by these By-Laws or by the Board of
Directors or the President.
SECTION VI.7. VICE-PRESIDENTS. The Vice-Presidents, if any, in
the order designated by the Board of Directors or, lacking such designation, by
the President, shall in the absence or disability of the President perform the
duties and exercise the powers of the President and shall perform such other
duties as the Board of Directors shall prescribe.
SECTION VI.8. RESIGNATION AND REMOVAL. Any officer may resign
at any time by giving written notice of such resignation to the Board of
Directors or to the President or the Secretary. Unless otherwise specified
therein, such resignation shall take effect upon receipt thereof by the Board of
Directors, the President or the Secretary. Any officer may be removed,
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either with or without cause, by vote of a majority of the total number of
directors constituting the entire Board of Directors, at a special meeting of
the Board of Directors called for that purpose.
SECTION VI.9. VACANCIES. A vacancy in any office because of
death, resignation, removal or any other cause shall be filled for the unexpired
portion of the term in the manner prescribed by these By-laws for the regular
election or appointment to such office.
SECTION VI.10. SALARIES. Subject to the provisions of Article
V of these By-Laws, the salaries or other compensation of the officers shall be
fixed from time to time by the Board of Directors and no officer shall be
prevented from receiving such salary or other compensation by reason of the fact
that he or she is also a director of the Corporation; provided, however, that no
director shall be paid a fee, whether by retainer, for attendance, or otherwise,
if such director is also a salaried officer of the Corporation.
ARTICLE VII
INDEMNIFICATION OF DIRECTORS AND OFFICERS
-----------------------------------------
SECTION VII.1. INDEMNIFICATION OF DIRECTORS AND OFFICERS. The
Corporation may indemnify any person made, or threatened to be made, a party to
an action by or in the right of the corporation to procure a judgment in its
favor by reason of the fact that he or she, his or her testator, testatrix or
intestate, is or was a director or officer of the Corporation, or is or was
serving at the request of the Corporation as a director or officer of any other
corporation of any type or kind, domestic or foreign, of any partnership, joint
venture, trust, employee benefit plan or other enterprise, against amounts paid
in settlement and reasonable expenses, including attorneys' fees, actually and
necessarily incurred by him or her in connection with the defense or settlement
of such action, or in connection with an appeal therein, if such director or
officer acted, in good faith, for a purpose which he or she reasonably believed
to be in, or, in the case of service for any
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other corporation or any partnership, joint venture, trust, employee benefit
plan or other enterprise, not opposed to, the best interests of the Corporation,
except that no indemnification under this Section shall be made in respect of
(1) a threatened action, or a pending action which is settled or is otherwise
disposed of, or (2) any claim issue or matter as to which such person shall have
been adjudged to be liable to the Corporation, unless and only to the extent
that the court in which the action was brought, or, if no action was brought,
any court of competent jurisdiction, determines upon application that, in view
of all the circumstances of the case, the person is fairly and reasonably
entitled to indemnity for such portion of the settlement amount and expenses as
the court deems proper.
The Corporation may indemnify any person made, or threatened
to be made, a party to an action or proceeding (other than one by or in the
right of the Corporation to procure a judgment in its favor), whether civil or
criminal, including an action by or in the right or any other corporation of any
type or kind, domestic or foreign, or any partnership, joint venture, trust,
employee benefit plan or other enterprise, which any director or officer of the
Corporation served in any capacity at the request of the Corporation, but reason
of the fact that he or she, his or her testator, testatrix or intestate, was a
director or officer of the Corporation, or served such other corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise in
any capacity, against judgments, fines, amounts paid in settlement and
reasonable expenses, including attorneys' fees actually and necessarily incurred
as a result of such action or proceeding, or any appeal therein, if such
director or officer acted, in good faith, for a purpose which he or she
reasonably believed to be in, or, in the case of service for any other
corporation or any partnership, joint venture, trust, employee benefit plan or
other enterprise, not opposed to, the best interests of the Corporation and, in
criminal actions or proceedings, in addition, had no reasonable cause to believe
that his or her conduct was unlawful.
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<PAGE> 18
The termination of any such civil or criminal action or
proceeding by judgment, settlement, conviction or upon a plea of nolo
contendere, or its equivalent, shall not in itself create a presumption that any
such director or officer did not act, in good faith, for a purpose which he or
she reasonably believed to be in, or, in the case of service for any other
corporation or any partnership, joint venture, trust, employee benefit plan or
other enterprise, not opposed to, the best interest of the Corporation or that
he or she had reasonable cause to believe that his or her conduct was unlawful.
A person who has been successful, on the merits or otherwise,
in the defense of a civil or criminal action or proceeding of the character
described in the first two paragraphs of this Article VII, shall be entitled to
indemnification as authorized in such paragraphs. Except as provided in the
preceding sentence and unless ordered by a court, any indemnification under such
paragraphs shall be made by the Corporation, only if authorized in the specific
case:
(1) By the Board of Directors acting by a quorum consisting of
directors which are not parties to such action or proceeding upon a
finding that the director, officer or employee has met the standard of
conduct set forth in the first two paragraphs of this Article VII, as
the case may be or
(2) If such a quorum is not obtainable with due diligence or,
even if obtainable, a quorum of disinterested directors so directs,
(a) By the Board of Directors upon the opinion in
writing of independent legal counsel that indemnification is proper in
the circumstances because the applicable standard of conduct set forth
in the first two paragraphs of this Article VII has been met by such
director, officer or employee, or
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<PAGE> 19
(b) By the shareholders upon a finding that the
director, officer or employee has met the applicable standard of
conduct set forth in such paragraphs.
Expenses, including attorneys' fees, incurred in defending a
civil or criminal action or a proceeding may be paid by the Corporation in
advance of the final disposition of such action or proceeding, if authorized in
accordance with the preceding paragraph, subject to repayment to the Corporation
in case the person receiving such advancement is ultimately found, under the
procedure set forth in this Article VII, not to be entitled to indemnification
or, where indemnification is granted, to the extent the expenses so advanced by
the Corporation exceed the indemnification to which he or she is entitled.
Nothing herein shall affect the right of any person to be
awarded indemnification or, during the pendency of litigation, an allowance of
expenses, including attorneys' fees, by a court in accordance with law.
If any expenses or other amounts are paid by way of
indemnification, otherwise than by court order or action by the shareholders,
the Corporation shall, not later than the next annual meeting of shareholders
unless such meeting is held within three months from the date of such payment,
and in any event, within fifteen months from the date of such payment, mail to
its shareholders of record at the time entitled to vote for the election of
directors a statement specifying the persons paid, the amounts paid, and the
nature and status at the time of such payment of the litigation or threatened
litigation.
The Corporation shall have the power, in furtherance of the
provisions of this Article VII, to apply for, purchase and maintain insurance of
the type and in such amounts as is or may hereafter be permitted by Section 726
of the Business Corporation Laws.
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<PAGE> 20
No payment of indemnification, advancement or allowance under
Sections 721 or 726, inclusive, or the Business Corporation Law shall be made
unless a notice has been filed with the Superintendent of Insurance of the State
of New York, not less than thirty days prior to such payment, specifying the
persons to be paid, the amounts to be paid, the manner in which such payment is
authorized and the nature and status, at the time of such notice, of the
litigation or threatened litigation.
ARTICLE VIII
CONFLICT OF INTEREST
--------------------
SECTION VIII.1. CONFLICT OF INTEREST. No director, officer or
employee of the Corporation shall have any position with or a substantial
interest in any other business enterprise operated for profit, the existence of
which would conflict or might reasonably be supposed to conflict with the proper
performance of his or her Corporation duties or responsibilities, or which might
tend to affect his or her independence of judgment with respect to transactions
between the Corporation and such other business enterprise, without full and
complete disclosure thereof to the Board of Directors. Each director, officer or
employee who has such a conflicting or possibly conflicting interest with
respect to any transactions which he or she knows is under consideration by the
Board, is required to make timely disclosure thereof so that it may be part of
the directors' consideration of the transaction.
The holding of any office or position in any corporation
affiliated with the Corporation or any corporation owning a majority of the
stock of the Corporation and carrying out the duties of any such office or
position shall not be deemed to be a conflicting interest; nor shall this
Article VIII be construed to prevent the receipt of any salaries or other
benefits from any corporation affiliated with the Corporation or from any
corporation owning the majority of the stock of the Corporation. The ownership
of one percent or more of the issued and outstanding
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<PAGE> 21
stock of any corporation doing business with the Corporation or competing with
the Corporation shall be considered to be a "substantial interest in any other
business enterprise operated for profit"; provided, however, that ownership of
the stock or other securities of any corporation affiliated with the Corporation
or of any corporation owning a majority of the stock of the Corporation shall
not be considered to be a conflicting interest.
SECTION VIII.2. GIFTS. None of the directors, officers and
employees shall accept gifts, gratuities or favors of any kind from any person,
firm or corporation doing business or seeking to do business with the
Corporation under circumstances from which it could reasonably be inferred that
the purpose of the gift, gratuity or favor could be to influence the said
director, officer or employee in the conduct of Corporation transactions with
the donor or the interest the donor is representing. Nothing in this Section 8.2
shall be construed to prohibit either the giving or the receiving of normal
hospitality or a social nature or normal practice of gift exchange on a
reciprocal basis between person having close personal relationships unrelated to
business.
ARTICLE IX
EXECUTION OF INSTRUMENTS AND SEAL
---------------------------------
SECTION IX.1. EXECUTION OF INSTRUMENTS. Except as the Board of
Directors may generally or in particular cases authorize the execution thereof
in some other manner, all documents, instruments or writings of any nature made,
accepted or endorsed by the Corporation shall be signed, executed, verified,
acknowledged and delivered by the President, any Vice- President, or the
Secretary.
SECTION IX.2. CORPORATION SEAL. The corporate seal shall be in
the form of a circle and shall bear the name of the Corporation and shall
indicate its formation under the laws of the State of New York; provided, that
the form of such seal shall be subject to alteration from time to time by the
Board of Directors.
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<PAGE> 22
ARTICLE X
CAPITAL STOCK
-------------
SECTION X.1. NUMBER OF SHARES AND PAR VALUE. The total number
of shares and the par value of all stock which the Corporation is authorized to
issue shall be as stated in the Charter.
SECTION X.2. CERTIFICATES OF SHARES. Each shareholder shall be
entitled to a certificate, signed by the President and the Treasurer or
Secretary certifying the number and class of the shares owned by him or her in
the Corporation. Such signatures may be facsimiles if the certificates are
countersigned by a transfer agent or registered by a registrar other than the
Corporation or its employees. Certificates for shares of the stock of the
Corporation shall be in such form as shall be approved by the Board of
Directors, and the seal of the Corporation shall be affixed thereto. There shall
be entered upon the stock books of the Corporation the number of each
certificate issued, the name of the person owning the shares represented
thereby, the number of shares and the date thereof.
SECTION X.3. LOST, STOLEN OR DESTROYED CERTIFICATES. The Board
of Directors may direct a new certificate or certificates to be issued in place
of any certificate or certificates therefore issued by the Corporation alleged
to have been lost, stolen or destroyed, upon the making of an affidavit of the
fact by the owner claiming the certificate or certificates to be lost, stolen or
destroyed. When authorizing such issue of a new certificate or certificates, the
Board of Directors may, in its discretion as a condition precedent to the
issuance thereof, require the owner of such lost, stolen or destroyed
certificate or certificates, or his or her legal representative, the advertise
the same in such manner as it shall require and/or to give the Corporation a
bond in such sum as it may direct as indemnity against any claim that may be
made against the Corporation with respect to the certificate or certificates
alleged to have been lost, stolen or destroyed.
22
<PAGE> 23
SECTION X.4. RECORD DATE. In order that the Corporation may
determine the shareholders entitled to notice of or to vote at any meeting of
shareholders or any adjournment thereof, or to express consent to a corporate
action in writing without a meeting, or entitled to receive payment of any
dividend or other distribution or allotment of any rights, or entitled to
exercise any rights in respect of any change, conversion or exchange of stock or
for the purpose of any other lawful action, the Board of Directors may fix, in
advance, a record date, which shall not be more than fifty days nor less than
ten days before the date of such meeting, nor more than fifty days prior to any
other action. A determination of shareholders of record entitled to notice of or
to vote at a meeting of shareholders shall apply to any adjournment of the
meeting; provided, however, that the Board of Directors may fix a new record
date for the adjourned meeting. Absent Board of Directors action, the record
date shall be ten days before the date of such meeting.
SECTION X.5. STOCK TRANSFERS. Transfers of stock shall be made
only upon the books of the Corporation, and only upon surrender to the
Corporation or the transfer agent of the Corporation of a certificate for shares
duly endorsed or accompanied by proper evidence of succession, assignment or
authority to transfer.
ARTICLE XI
DIVIDENDS
---------
SECTION XI.1. DIVIDENDS. Dividends upon the capital stock of
the Corporation may be declared by the Board of Directors at any regular or
special meeting; provided, however, that the Corporation shall not distribute
any dividend to its shareholders unless a notice of intention to declare such
dividend has been filed with the Superintendent of Insurance of the State of New
York not less than thirty days after such filing gives written notice to the
Corporation of
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<PAGE> 24
his or her disapproval of such distribution, on the ground that he or she finds
that the financial condition of the Corporation does not warrant the
distribution of such dividend.
ARTICLE XII
APPLICATIONS, POLICIES AND PREMIUMS
-----------------------------------
SECTION XII.1. APPLICATIONS, POLICIES AND PREMIUMS. The
President, or a duly authorized Vice-President, shall prescribe and approve all
forms of policies issued by the Corporation, including all riders and provisions
included in or attached to such policies, and the forms of applications
therefor. The President, or a duly authorized Vice-President, shall fix all
rates of premiums
ARTICLE XIII
FISCAL YEAR
-----------
SECTION XIII.1. FISCAL YEAR. The fiscal year of the Corporation
shall end on the last day of December annually.
ARTICLE XIV
NOTICES
-------
SECTION XIV.1. NOTICES. Whenever, under the provisions of law,
the Charter or these By-Laws, notice is required to be given to any director or
shareholder, it shall not be construed to mean personal notice unless
specifically allowed, but such notice may be given in writing, by certified or
registered mail, return receipt requested, addressed to such director or
shareholder, at his or her address as it appears on the records of the
Corporation, with postage there prepaid, and such notice shall be deemed to be
given at the time when the same shall be deposited in the United States mail.
ARTICLE XV
AMENDMENTS
----------
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<PAGE> 25
SECTION XV.1. AMENDMENTS. These By-Laws may be amended,
changed or repealed by the Board of Directors, except that the Board may take no
action which, by law or the Charter, is required to be taken by the
shareholders, or which excludes or limits the right of a shareholder to vote on
a matter. Any By-Law so amended, changed or repealed by the directors may be
further altered or amended or reinstated by the shareholders in the manner
provided below.
These By-Laws may be amended, changed or repealed by a
majority vote of the shareholders present at any annual meeting or at a special
meeting called for that purpose, provided that the notice of any such annual or
special meeting shall specify the subject matter of the proposed amendment,
change or repeal shall have been submitted in writing and filed with the
Secretary at least five days prior to such meeting.
25
<PAGE> 1
EXHIBIT (A)(8)
REINSURANCE
AGREEMENT
Between
THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK
of
Rye, New York
and
THE MANUFACTURERS LIFE INSURANCE COMPANY (USA)
of
Bloomfield Hills, Michigan
YRT of VUL
<PAGE> 2
TABLE OF CONTENTS
Page
----
A. REINSURANCE COVERAGE 1
B. PAYMENTS BY CEDING COMPANY 2
C. PAYMENTS BY REINSURER 2
D. REPORTS AND ACCOUNTING FOR REINSURANCE 2
E. TERMS OF REINSURANCE 3
F. MATERIAL CHANGES 5
G. ARBITRATION 5
H. INSOLVENCY 6
I. REPRESENTATIONS 7
J. TERMINATION 7
K. PAYMENTS AND ACCOUNTING UPON 7
TERMINATION OF AGREEMENT
L. OFFSET 8
M. MISCELLANEOUS 8
N. EXECUTION 10
DEFINITION OF TERMS 11
<PAGE> 3
TABLE OF CONTENTS (CONTINUED)
Page
SCHEDULE I
QUOTA SHARE AND POLICIES SUBJECT 13
TO REINSURANCE
SCHEDULE II, PART A
SUMMARY OF MONETARY TRANSACTIONS 14
SCHEDULE II, PART B
SUMMARY OF MONETARY TRANSACTIONS 15
SCHEDULE III
ANNUAL REPORT 16
SCHEDULE IV
ALLOWANCES 17
SCHEDULE V
ARBITRATION SCHEDULE 18
<PAGE> 4
YEARLY RENEWABLE TERM REINSURANCE AGREEMENT
between
THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK
of
Rye, New York
referred to as the "CEDING COMPANY"
and
THE MANUFACTURERS LIFE INSURANCE COMPANY (USA)
of
Bloomfield Hills, Michigan
referred to as the "REINSURER."
A. REINSURANCE COVERAGE
1. The CEDING COMPANY shall cede, and the REINSURER shall accept, reinsurance
of a Quota Share (as defined in the Definition of Terms) of the net amount
at risk on each Policy (as defined in the Definition of Terms) on a yearly
renewable term (YRT) basis. The Quota Share for a Policy is determined as
defined in Schedule I.
2. The liability of the REINSURER shall begin simultaneously with that of the
CEDING COMPANY, but in no event prior to the Effective Date or until this
Agreement has been executed by both the CEDING COMPANY and the REINSURER.
3. The Effective Date of this Agreement is __________, 1998.
4. Reinsurance of a Policy shall be maintained in force without reduction so
long as the liability of the CEDING COMPANY under such Policy remains in
force without reduction, unless reinsurance is terminated or reduced as
provided herein.
5. In no event shall reinsurance be in force under this Agreement for a Policy
unless the Policy's issue and delivery complies with the laws of all
applicable jurisdictions and the CEDING COMPANY's corporate charter.
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<PAGE> 5
6. As provided in section E. paragraph 5. below, the REINSURER shall
maintain a letter of credit in favor of the CEDING COMPANY in accordance
with the terms of New York State Insurance Department Regulation 133 to
allow the CEDING COMPANY to take credit for the reserves ceded.
B. PAYMENTS BY CEDING COMPANY
1. The CEDING COMPANY shall pay the REINSURER ongoing reinsurance premiums
according to Schedule IV.
C. PAYMENTS BY REINSURER
1. The REINSURER shall reimburse the CEDING COMPANY for its Quota Shares of
the following amounts on the Policies incurred by the CEDING COMPANY during
the Accounting Period:
a) Death Benefits
b) Unusual Expenses
2. The REINSURER shall pay commission allowances as specified in Schedule IV.
D. REPORTS AND ACCOUNTING FOR REINSURANCE
1. The CEDING COMPANY shall summarize all monetary transactions under this
Agreement by submitting a written report within forty (40) days following
the end of each month. The report shall be formatted as set forth in
Schedule II, parts A and B. Any net amounts shown in such reports as due
from the CEDING COMPANY shall be due and payable by the CEDING COMPANY when
submitting the reports to the REINSURER. If a report shows a net amount due
from the REINSURER, the net amount shall be due and payable by the
REINSURER within thirty (30) days of its receipt of such report. Payments
made after that time frame shall be subject to interest charges for the
late period using the 90 day Treasury rate of the Wall Street Journal on
the date payment was due as an annual interest rate.
2. The CEDING COMPANY shall provide the REINSURER with information which the
REINSURER may need to prepare its tax, statutory and GAAP financial
statements with respect to the Policies reinsured under this Agreement,
including but not limited to information described in Schedule II and III.
Such information shall be
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<PAGE> 6
submitted at the end of each calendar year. A preliminary report shall be
provided within twenty-five (25) days following the end of each calendar
year and a final report shall be provided within forty (40) days following
the end of the calendar year.
3. If the parties determine the summary of monetary transactions for an
Accounting Period as required in this section did not accurately reflect
the actual experience of the Policies during the Accounting Period, the
CEDING COMPANY shall promptly submit a revised summary to the REINSURER.
Any amount shown by the revised summary as owed by either the CEDING
COMPANY or the REINSURER to the other shall be paid within 30 days.
4. The REINSURER may change the information required in Schedule II and III in
order to obtain the data it reasonably needs to properly administer this
Agreement or to prepare its financial statements. Such schedule change
shall become effective only upon sixty (60) days prior written notice to
the CEDING COMPANY.
E. TERMS OF REINSURANCE
1. All monetary amounts expressed in this Agreement are expressed in United
States dollars and all amounts payable pursuant to this Agreement are
payable in United States dollars.
2. This is an Agreement for indemnity reinsurance solely between the CEDING
COMPANY and the REINSURER. The acceptance of reinsurance hereunder shall
not create any right or legal relation whatever between the REINSURER and
any person other than the CEDING COMPANY.
3. The REINSURER shall not participate in capital gains and losses of the
CEDING COMPANY.
4. The REINSURER shall provide a Letter of Credit (as defined in section A.
paragraph 6) to the CEDING COMPANY until the REINSURER becomes properly
licensed to conduct business in the state of domicile of the CEDING
COMPANY or becomes an accredited reinsurer therein.
(a) Such Letter of Credit will be issued in conformity with
Regulation 133 of the New York State Insurance Department and may be drawn
upon at any time, notwithstanding any other provisions herein, and be
utilized by the CEDING COMPANY or any successor by operation of law of the
CEDING COMPANY, including, without limitation, any liquidator,
rehabilitator, receiver or conservator of such insurer for the following
purposes: (i) to reimburse the CEDING COMPANY for
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<PAGE> 7
the REINSURER'S share of premiums returned to the owners of Policies
reinsured under this Agreement on account of cancellations of such
policies; (ii) to reimburse the CEDING COMPANY for the REINSURER'S share
of surrenders and benefits or losses paid by the CEDING COMPANY under the
terms and provisions of the Policies reinsured hereunder; (iii) to fund an
account with the CEDING COMPANY in an amount at least equal to the
deduction, for reinsurance ceded, from the CEDING COMPANY'S liabilities
for Policies ceded under this Agreement. Such amount shall include, but
not be limited to, amounts for Policy reserves, reserves for claims and
losses incurred, (including losses incurred but not reported), loss
adjustment expenses and unearned premiums; and (iv) to pay any other
amounts the CEDING COMPANY claims are due under this Agreement.
(b) All of the foregoing shall be applied without diminution
because of insolvency on the part of the CEDING COMPANY or the REINSURER.
(c) Notwithstanding the above, the CEDING COMPANY shall be
required to return any amounts drawn on the Letter of Credit in excess of
the amounts required for subparagraphs (a)(i), (ii) and (iii) of this
section, or in the case of subparagraph (a)(iv), any amounts that are
subsequently determined not to be due.
5. The CEDING COMPANY may, at its sole option, recapture some or all of the
business ceded under this Agreement from the REINSURER if the CEDING
COMPANY increases its retention limit. The amount recaptured shall be that
which causes the CEDING COMPANY to hold its full retention limit. The
CEDING COMPANY shall pay to the REINSURER a fair price for the present
value of future profits on the business recaptured, as the two companies
shall reasonably agree. The terms and conditions of any such recapture
shall be subject to review by the New York Insurance Department pursuant
to Section 1505 of the New York Insurance Law.
6. If a policy lapses for nonpayment of premiums or other reason and is
reinstated under the CEDING COMPANY'S terms and rules, the reinsurance
will be reinstated by the REINSURER.
THE CEDING COMPANY SHALL PAY THE BALANCE OF ARREARS OF PREMIUMS DUE UNDER
A REINSTATED CESSION.
7. The CEDING COMPANY and the REINSURER agree to the DAC Tax Election
pursuant to Section 1.848-2(g)(8) of the Income Tax Regulation under
Section 848 of the Internal Revenue code of 1986, as amended, whereby:
(a) the party with the net positive consideration for this Agreement for
each taxable year will capitalize specified policy acquisition
expenses with respect to this Agreement without regard to the
general deductions limitation of Section 848(c)(1); and
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<PAGE> 8
(b) both parties agree to exchange information pertaining to the amount
of net consideration under this Agreement each year to ensure
consistency.
The term "net consideration" will refer to either net consideration as
defined in Regulation Section 1.848-2(f) or gross amount of premiums and
other consideration as defined in Regulation Section 1.848-3(b), as
appropriate.
This DAC Tax Election shall be effective for all years for which this
Agreement remains in effect.
The CEDING COMPANY and the REINSURER represent and warrant that they are
subject to U.S. taxation under either the provisions of subchapter L of
Chapter 1 or the provisions of subpart F of subchapter N of Chapter 1 of
the Internal Revenue Code of 1986, as amended.
F. MATERIAL CHANGES
1. The CEDING COMPANY shall promptly notify the REINSURER of any proposed
Material Change in the terms of the Policies.
2. Following a Material Change, other than that which is required by statute,
regulation or insurance department action, the REINSURER may in its sole
discretion (a) continue to reinsure the Policies under current terms, or
(b) renegotiate the agreement. Any amendment to this Agreement which
results from such negotiation shall be subject to review by the New York
Insurance Department pursuant to Section 1505 of the New York Insurance
Law.
G. ARBITRATION
1. If the CEDING COMPANY and the REINSURER cannot mutually resolve a dispute
regarding the interpretation or operation of this Agreement, the dispute
shall be decided through arbitration as set forth in Schedule V. The
arbitrators shall base their decision on the terms and conditions of this
Agreement. However, if the terms and conditions of this Agreement do not
explicitly dispose of an issue in dispute between the parties, the
arbitrators may base their decision on the customs and practices of the
insurance and reinsurance industry rather than solely on an interpretation
of applicable law. The arbitrators' decision shall take into account the
right to offset mutual debts and credits as provided in this Agreement.
There shall be no appeal from the arbitrators' decision. Any court having
jurisdiction over the subject matter and over the parties may reduce the
arbitrators' decision to judgment.
2. The parties intend this section to be enforceable in accordance with the
Federal Arbitration Act (9 U.S.C., Section 1) including any amendments to
that Act which are
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<PAGE> 9
subsequently adopted. In the event that either party refuses to submit to
arbitration as required by paragraph 1, the other party may request a
United States Federal District Court to compel arbitration in accordance
with the Federal Arbitration Act. Both parties consent to the jurisdiction
of such court to enforce this section and to confirm and enforce the
performance of any award of the arbitrators.
H. INSOLVENCY
1. For the purpose of this Agreement, the CEDING COMPANY or the REINSURER
shall be deemed "insolvent" as determined by laws of its domiciliary state.
2. In the event of the insolvency of the CEDING COMPANY, all reinsurance made,
ceded, renewed or otherwise becoming effective under this Agreement shall
be payable by the REINSURER directly to the CEDING COMPANY or to its
liquidator, receiver or statutory successor on the basis of the liability
of the CEDING COMPANY under the Policies reinsured without diminution
because of the insolvency of the CEDING COMPANY.
3. The CEDING COMPANY'S receiver, liquidator, or statutory successor shall
give the REINSURER written notice of the pendency of a claim against the
CEDING COMPANY on the Policy reinsured within a reasonable time after such
claim is filed in the insolvency proceeding. During the pendency of such
claim, the REINSURER may interpose, at its own expense, in the proceeding
where such claim is to be adjudicated, any defense or defenses which the
REINSURER may deem available to the CEDING COMPANY, or its receiver,
liquidator or statutory successor.
4. Any expense incurred by the REINSURER pursuant to Section H paragraph 3,
above, shall be payable subject to court approval out of the estate of the
CEDING COMPANY as part of the expense of liquidation to the extent of a
proportionate share of the benefit which may accrue to the CEDING COMPANY
in liquidation, solely as a result of the defense undertaken by the
REINSURER. Where two or more reinsurers are participating in the same claim
and a majority in interest elect to interpose defense to such claim, the
expense shall be apportioned in accordance with the terms of this Agreement
as though such expense had been incurred by the CEDING COMPANY.
5. In the event of the insolvency of the REINSURER, the CEDING COMPANY may, at
its option, recapture all reinsurance in force under this Agreement
pursuant to section E paragraph 7, or may cancel this Agreement with
respect to new business by promptly providing the REINSURER, its
rehabilitator, receiver, liquidator or statutory successor with written
notice of the cancellation effective the date on which the REINSURER'S
insolvency is established by the authority responsible for such
determination. Any requirement for a notification period prior to the
cancellation of the Agreement would not apply under such circumstances.
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<PAGE> 10
I. REPRESENTATIONS
1. The CEDING COMPANY and the REINSURER each acknowledges its responsibility
for independently forming its own conclusions regarding:
(a) the compliance of this Agreement with the laws and regulations of
any particular state or jurisdiction;
(b) the statutory or other accounting impact of this Agreement on the
CEDING COMPANY'S and the REINSURER'S financial statements, and
(c) the tax impact of this Agreement on the CEDING COMPANY and the
REINSURER.
2. Unless otherwise explicitly provided for herein, the CEDING COMPANY and
the REINSURER shall each be solely responsible for determining and
discharging any state or federal income tax liability resulting from this
Agreement, including any tax liability resulting from the initial monetary
transactions.
J. TERMINATION
1. Except as otherwise provided in this section, this Agreement shall be
unlimited in duration.
2. Upon 90 days' notice, either party may terminate this Agreement with
respect to new business not yet issued at the end of the 90 day
notification period.
3. If none of the Policies are in force as of the end of the any Accounting
Period, this Agreement shall automatically terminate as of the day the
last Policy terminated.
4. The termination of this Agreement or of any reinsurance hereunder shall
not affect any rights or obligations or either party applicable to the
period prior to the effective date of termination.
K. PAYMENTS AND ACCOUNTING UPON TERMINATION OF AGREEMENT
1. If this Agreement is terminated, the CEDING COMPANY shall summarize all
monetary transactions for the Terminal Accounting Period and report its
summary to the REINSURER within forty (40) days of the later of the
effective date of
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<PAGE> 11
termination or of notice of termination. The report shall be in the form
of Schedule II, Parts A and B.
2. The CEDING COMPANY shall provide the REINSURER with information the
REINSURER may need to prepare its tax, statutory and GAAP financial
statements for the Terminal Accounting Period as required by section D.
3. If the CEDING COMPANY ever becomes aware that its summary of monetary
transactions for the Terminal Accounting Period as required in this
section did not accurately reflect the actual experience of the Policies
during the Terminal Accounting Period, it shall promptly submit a revised
summary to the REINSURER, and the terminal payment shall be recalculated.
Any amount shown by the revised summary as owed by either the CEDING
COMPANY or the REINSURER to the other shall be paid promptly.
L. OFFSET
Any debts or credits, matured or unmatured, liquidated or unliquidated,
regardless of when they arose or were incurred, in favor of or against either
the CEDING COMPANY or the REINSURER with respect to this Agreement are deemed to
be mutual debts and credits and shall be set off, and only the balance shall be
allowed or paid.
M. MISCELLANEOUS
1. Certain terms used in this Agreement are defined in the Definitions of
Terms schedule and are to be interpreted in accordance with such
definitions. In the absence of a specific definition, a term used in this
Agreement is to be interpreted in accordance with customary insurance and
reinsurance industry practices.
2. Any Error made by either the CEDING COMPANY or the REINSURER in the
administration of reinsurance under this Agreement shall be corrected by
the submission of revised reports and restoring both the CEDING COMPANY
and the REINSURER to the positions they would have occupied had no Error
occurred.
3. The REINSURER may audit, at any reasonable time and at its own expense,
all records and procedures relating to reinsurance under this Agreement.
The CEDING COMPANY shall cooperate in the audit, including providing any
information requested by the REINSURER in advance of the audit. Further,
the CEDING COMPANY agrees to complete, at the request of the REINSURER and
in a manner acceptable to the REINSURER, a process which confirms the
existence of the Policies.
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<PAGE> 12
4. Neither the CEDING COMPANY nor the REINSURER may assign any of the rights
and obligations under this Agreement, nor may either party sell,
assumption reinsure or transfer the Policies without the prior written
consent of the other party. Consent will not be withheld if the
assignment, sale, assumption reinsurance or transfer does not have a
material effect on the risks transferred or the expected economic results
to the party requested to consent. This provision shall not prohibit the
REINSURER from reinsuring the Policies on an indemnity basis.
5. This Agreement represents the entire agreement between the CEDING COMPANY
and the REINSURER and supersedes, with respect to its subject matter, any
prior oral or written agreements between the parties. Any amendments to
this Agreement shall be set forth in writing and signed by all required
parties.
6. No modification or waiver of any provision of this Agreement shall be
effective unless set forth in a written amendment to this Agreement which
is executed by both parties. A waiver shall constitute a waiver only with
respect to the particular circumstance for which it is given and not a
waiver of any future circumstance.
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<PAGE> 13
N. EXECUTION
IN WITNESS WHEREOF,
THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK
of Rye, New York
and
THE MANUFACTURERS LIFE INSURANCE COMPANY (USA)
of Bloomfield Hills, Michigan
have by their respective officers executed this Agreement in duplicate on the
dates shown below.
THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK
Signed at __________________
By _________________________ By ________________________
Title _______________________ Title _____________________
Date ________________________ Date ______________________
THE MANUFACTURERS LIFE INSURANCE COMPANY (USA)
Signed at ______________________
By _________________________ By ________________________
Title _________________________ Title _____________________
Date _________________________ Date ______________________
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<PAGE> 14
DEFINITION OF TERMS
ACCOUNTING PERIOD - for the month in which this Agreement becomes effective, the
period beginning on the Effective Date and ending on the Last Day of The Current
Accounting Period. Thereafter, the period beginning on the day following the
Last Day Of The Preceding Accounting Period and ending on the Last Day Of The
Current Accounting Period.
AGREEMENT - this document and all schedules and amendments to it.
BENEFITS - the death benefits provided by the CEDING COMPANY pursuant to the
Policies.
CONTINUATION POLICY - a new Policy changing or replacing a Policy made or issued
both (1) not in compliance with the terms of the Policy and (2) without the same
new underwriting information that the CEDING COMPANY would obtain in the absence
of the Policy, without a suicide exclusion period or contestable period as long
as those contained in new issues of the CEDING COMPANY, or without the payment
of the same commissions in the first year that the CEDING COMPANY would have
paid in the absence of the Policy. For purposes of Section F, "MATERIAL
CHANGES," a creation of a continuation policy shall constitute a material
change.
EFFECTIVE DATE - the date set forth in Section A, paragraph 3.
ERROR - any isolated, inadvertent deviation from the terms of this Agreement
resulting from the act or omission of an employee of either the CEDING COMPANY
or the REINSURER whose principal function is administrative in nature.
EXECUTION DATE - the date this Agreement is signed by the last of the parties to
sign it.
LAST DAY OF THE CURRENT ACCOUNTING PERIOD - shall refer to the last day of the
month for which the calculation is being made.
LAST DAY OF THE PRECEDING ACCOUNTING PERIOD - shall refer to the last day of the
preceding month.
MATERIAL CHANGE - a change that a prudent insurance executive would consider as
likely to have a material impact on the REINSURER'S experience under this
Agreement.
NET AMOUNT AT RISK - the excess of the Death Benefit over the Account Value on
the Policy.
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<PAGE> 15
DEFINITION OF TERMS (CONTINUED)
POLICY(IES) - the insurance policy(ies) identified in Schedule I which are
reinsured pursuant to this Agreement.
QUOTA SHARE - the percentage of the Net Amount at Risk (as determined according
to Schedule I) which is ceded by the CEDING COMPANY to the REINSURER pursuant to
this Agreement.
TERMINAL ACCOUNTING PERIOD - the period commencing on the day following the Last
Day Of The Preceding Accounting Period and ending on the effective date of
termination pursuant to any notice of termination given under this Agreement or
such other date as shall be mutually agreed to in writing.
UNUSUAL EXPENSES - non-routine charges incurred by the CEDING COMPANY in
defending or investigating a claim for policyholder benefits or in rescinding a
Policy, including penalties, attorney's fees, and interest imposed automatically
by statute against the CEDING COMPANY and arising solely out of a judgment
rendered against the CEDING COMPANY in a suit for policyholder benefits,
provided that the following categories of expenses or liabilities shall not be
considered "Unusual Expenses:"
(a) routine investigative or administrative expenses;
(b) expenses incurred in connection with a dispute or contest arising
out of conflicting claims of entitlement to policyholder benefits
which the CEDING COMPANY admits are payable;
(c) expenses, fees, settlements, or judgments arising out of or in
connection with claims against the CEDING COMPANY for punitive or
exemplary damages; and
(d) expenses, fees, settlements, or judgments arising out of or in
connection with claims made against the CEDING COMPANY and based on
alleged or actual bad faith, failure to exercise good faith, or
tortious conduct.
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<PAGE> 16
SCHEDULE I
QUOTA SHARE AND POLICIES SUBJECT TO REINSURANCE
The Quota Share of a Policy issued by the CEDING COMPANY that is reinsured is
the ratio of the Policy's Face Amount at issue in excess of $100,000 (or the
CEDING COMPANY'S retention on the Policy if less than $100,000 because other
insurance is already in force on the insured), if any, divided by the Policy's
Face Amount at issue.
ACCIDENTAL DEATH BENEFIT RIDERS SHALL BE QUOTA SHARE REINSURED.
The Policies to be ceded are those issued after the effective date on the
following policy forms:
Policy Form Number
N.0644.ny
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<PAGE> 17
SCHEDULE II, PART A
SUMMARY OF MONETARY TRANSACTIONS
for the period from ________________ to __________________
with respect to the Quota Shares of the Policies
1. Reinsurance premiums at the Quota Shares
2. Death Benefits at the Quota Shares
3. Other Reimbursements at the Quota Shares
(a) unusual expenses
(b) commission allowances specified in Schedule IV
4. Number of, and Face Amount of, Policies in Force at End of Period at the
Quota Shares
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<PAGE> 18
SCHEDULE II, PART B
SUMMARY OF MONETARY TRANSACTIONS
for the period from _____________ to _____________
A. Due REINSURER at Quota Shares
1. Reinsurance premiums at the Quota Shares
2. Total due REINSURER
B. Due CEDING COMPANY
1. Death Benefits at Quota Shares
2. Other Reimbursements at Quota Shares
Unusual Expenses
Commission allowances
3. Total Due CEDING COMPANY
C. Amount Due REINSURER (if positive) or Due CEDING COMPANY (if negative) (A
less B)
D. Amounts Previously Paid for Accounting Period
E. Net Amount Due (C less D)
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<PAGE> 19
SCHEDULE III
ANNUAL REPORT
The annual report shall provide the following information for both General and
Separate Accounts:
- - Exhibits 1, 8 and 11 from the NAIC - prescribed annual statement
- - "Analysis of Increase in Reserves" from the NAIC - prescribed annual
statement
- - "Exhibit of Life Insurance" from the NAIC - prescribed annual statement
- - documentation of the calculation of the reported reserves
- - tax reserves and required interest
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<PAGE> 20
SCHEDULE IV
ALLOWANCES
Commission Allowances
On the Net Amount at Risk corresponding to the first $100,000 Face Amount
ceded at issue on a Policy ("Basic Quota Share"), 100% of the reinsurance
premium ceded in the first policy year, plus 6.25% of the reinsurance
premium ceded in the second and later policy years.
On the Net Amount at Risk corresponding to the excess of the full Quota
Share over the Basic Quota Share, (that is to ceded amounts beyond the
first $100,000 Face Amount ceded at issue on a Policy), 50% of the
reinsurance premium ceded in the first policy year, plus 3.125% of the
reinsurance premium ceded in the second and later policy years.
For cases with aggregate coverage in excess of $30 million, these allowances are
subject to individual facultative underwriting adjustment.
Premium Rates
1. For the Net Amount at Risk reinsured in a year (that is, the Quota Share of
the Net Amount at Risk), the reinsurance premium (before commission
allowances) is 96% of Table III, subject to any necessary rate increase.
Premiums are to be paid annually.
2. The reinsurance premium rates are not guaranteed for more than one year at
a time. If actual death claims are expected to exceed the reinsurance
premiums, the REINSURER may increase the reinsurance premium rates, but not
beyond the appropriate one year term premiums calculated on the 1980 C.S.O.
smoker/non-smoker mortality table at 4.5% interest.
3. Each month the new amount at risk will be calculated on the current fund
and will be compared to the net amount at risk used to calculate the
premium. Whenever there is a fluctuation that is greater than $50,000, the
system will recalculate the reinsurance net amount at risk from that month
forward to the next policy anniversary and will adjust the premiums
accordingly.
4. REINSURANCE PREMIUM RATES FOR THE ACCIDENTAL DEATH BENEFIT RIDER SHALL BE
THE SAME AS THE RATES CHARGED BY THE CEDING COMPANY.
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<PAGE> 21
SCHEDULE V
ARBITRATION SCHEDULE
To initiate arbitration, either the CEDING COMPANY or the REINSURER shall notify
the other party in writing of its desire to arbitrate, stating the nature of its
dispute and the remedy sought. The party to which the notice is sent shall
respond to the notification in writing within ten (10) days of its receipt.
The arbitration hearing shall be before a panel of three arbitrators, each of
whom must be a present or former officer of a life insurance company. An
arbitrator may not be a present or former officer, attorney, or consultant of
the CEDING COMPANY or the REINSURER or either's affiliates.
The CEDING COMPANY and the REINSURER shall each name five (5) candidates to
serve as an arbitrator. The CEDING COMPANY and the REINSURER shall each choose
one candidate from the other party's list, and these two candidates shall serve
as the first two arbitrators. If one or more candidates so chosen shall decline
to serve as an arbitrator, the party which named such candidate shall add an
additional candidate to its list, and the other party shall again choose one
candidate from the list. This process shall continue until two arbitrators have
been chosen and have accepted. The CEDING COMPANY and the REINSURER shall each
present their initial lists of five (5) candidates by written notification to
the other party within twenty-five (25) days of the date of the mailing of the
notification initiating the arbitration. Any subsequent additions to the list
which are required shall be presented within ten (10) days of the date the
naming party receives notice that a candidate that has been chosen declines to
serve.
The two arbitrators shall then select the third arbitrator from the eight (8)
candidates remaining on the lists of the CEDING COMPANY and the REINSURER within
fourteen (14) days of the acceptance of their positions as arbitrators. If the
two arbitrators cannot agree on the choice of a third, then this choice shall be
referred back to the CEDING COMPANY and the REINSURER. The CEDING COMPANY and
the REINSURER shall take turns striking the name of one of the remaining
candidates from the initial eight (8) candidates until only one candidate
remains. If the candidate so chosen shall decline to serve as the third
arbitrator, the candidate whose name was stricken last shall be nominated as the
third arbitrator. This process shall continue until a candidate has been chosen
and has accepted. This candidate shall serve as the third arbitrator. The first
turn at striking the name of a candidate shall belong to the party that is
responding to the other party's initiation of the arbitration. Once chosen, the
arbitrators are empowered to decide all substantive and procedural issues by a
majority of votes.
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<PAGE> 22
SCHEDULE V (CONTINUED)
It is agreed that each of the three arbitrators should be impartial regarding
the dispute and should resolve the dispute on the basis described in the
"ARBITRATION" section. Therefore, at no time will either the CEDING COMPANY or
the REINSURER contact or otherwise communicate with any person who is to be or
has been designated as a candidate to serve as an arbitrator concerning the
dispute, except upon the basis of jointly drafted communications (which may
include independently prepared statements) provided by both the CEDING COMPANY
and the REINSURER to inform those candidates actually chosen as arbitrators of
the nature and facts of the dispute. Likewise, any written or oral arguments
provided to the arbitrators concerning the dispute shall be coordinated with the
other party or shall take place in the presence of the other party. Further, at
no time shall any arbitrator be informed that the arbitrator has been named or
chosen by one party or the other.
The arbitration hearing shall be held on the date fixed by the arbitrators. In
no event shall this date be later than six (6) months after the appointment of
the third arbitrator. The arbitration hearing shall be held in the city where
the administrative home office of the party responding to the arbitration is
located. IN ANY EVENT, THE ARBITRATION SHALL TAKE PLACE IN THE STATE OF NEW
YORK. As soon as possible, the arbitrators shall establish prearbitration
procedures as warranted by the facts and issues of the particular case. At least
ten (10) days prior to the arbitration hearing, each party shall provide the
other party and the arbitrators with a detailed statement of the facts and
arguments it will present at the arbitration hearing. The arbitrators may
consider any relevant evidence; they shall give the evidence such weight as they
deem it entitled to after consideration of any objections raised concerning it.
The party initiating the arbitration shall have the burden of proving its case
by a preponderance of the evidence. Each party may examine any witnesses who
testify at the arbitration hearing. Within twenty (20) days following the end of
the arbitration hearing, the arbitrators shall issue a written decision which
shall set forth their decision and the factual basis for their decision. In
their written decision the arbitrators shall demonstrate that they have offset
mutual debts and credits as provided in this Agreement. In no event, however,
may the arbitrators award punitive or exemplary damages. In their decision, the
arbitrators shall also apportion the costs of arbitration, which shall include,
but not be limited to, their own fees and expenses.
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