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EXHIBIT 1-A.3(C)
CONTRACTS AND COMPENSATION SCHEDULE
This schedule is attached to and made a part of the most current executed
Broker-Dealer and General Agent Selling Agreement (the "Agreement") between and
among First Penn-Pacific Life Insurance Company ("First Penn-Pacific"), First
Penn-Pacific Securities, Inc. ("Distributor"), ____________________
("Broker-Dealer") and _______________ ("General Agent").
The compensation for the variable life insurance and annuity products (the
"Contracts") referred to in the Agreement is as follows:
FOR FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE CONTRACTS, written on
Form VL-2020AA, and any variation of this form as may be required by insurance
regulatory authorities:
1. NEW BUSINESS COMMISSION AND EXPENSE REIMBURSEMENT ALLOCATION:
Selling Broker-Dealer shall receive commissions of 6.5% of the initial
Premium and 6.5% of the Premium for any increase in the Specified
Amount, for each Contract for which Broker-Dealer is the
broker-of-record. (1)
However, no compensation shall be paid on Premium received from a Contract owner
when an existing life insurance or annuity contract issued by First Penn-Pacific
on the same life has lapsed, been terminated or surrendered, been continued on a
nonforfeiture option, or been changed, modified or converted in any manner
within six months of the date of the application for the new Contract or twelve
months after the issue date of the new Contract, except to the extent that the
first year's annualized premium for the new Contract exceeds the first year's
annualized premium from the existing contract.
2. RETURN OF COMPENSATION IN SPECIFIED CIRCUMSTANCES
The following rules regarding "chargebacks" shall apply in connection with
the offer and sale of Contracts under this Agreement:
a. In the event that:
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(1) In the future, Distributor may negotiate other commission schedules with a
lower initial commission and/or an asset-based commission. The amount of any
asset-based commission will depend on the amount of the front-end commission
paid. In addition, certain overrides may be paid. This rate is the maximum rate
Distributor intends to pay. Distributor may negotiate commission schedules
containing lower commission rates and/or expense reimbursement allowance rates
than the rate described above.
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i. a Premium is returned because First Penn-Pacific rejects
the application for the Contract under which such Premium has been paid or
because the Premium, or the related application, is not timely received by
First Penn-Pacific as required herein, or a refund is made because a
purchaser exercises his or her free look right under a Contract; or
ii. within the first twelve months after the date on which a
Contract was issued, the purchaser surrenders the Contract, or otherwise
rescinds the Contract, or the Contract lapses;
then, in any such event, Broker-Dealer shall not be entitled to any compensation
with respect to such Contract, and any and all compensation previously received
by Broker-Dealer based on all Premiums paid into the Contract shall be repaid to
Distributor, and Broker-Dealer shall pay any loss incurred as a result of a
Premium being returned which was not timely received or for which an application
was not timely received by First Penn-Pacific.
b. If and to the extent that any loans or partial withdrawals are made
with respect to any Contract during the first year after issuance, the
compensation due to Broker-Dealer shall be recomputed as though the amount of
the loan or partial withdrawal had never been paid as a Premium.
c. If and to the extent that a Contract is exchanged for another
contract during the first policy year of the Contract, the compensation due to
Broker-Dealer shall be recomputed as though the Contract had never been issued.
Distributor shall have the right to collect from Broker-Dealer or to withhold
from future payments of compensation due to Broker-Dealer under this Agreement
an amount equal to any reduction in compensation effected by this Schedule, to
the extent permitted by applicable law; provided, however, that this option on
the part of Distributor shall not prevent both Distributor and Broker-Dealer or
either of them from pursuing any other means or remedies available to them to
recover such compensation. Distributor agrees to notify Broker-Dealer and
General Agent within thirty days after it receives notice from First
Penn-Pacific of any premium refund or commission chargeback. For purposes of
this Schedule, the payment of a death benefit pursuant to the terms of a
Contract shall not be deemed a surrender or rescission by a purchaser.
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