If a policy is issued, it will be on a claims-made basis

____________________________     _________________________________

Name Of Insurance Company To Which Application is Made:

(herein called the Company)

SECURITIES BROKER/DEALER’S PROFESSIONAL LIABILITY INSURANCE APPLICATION

IF A POLICY IS ISSUED, IT WILL BE ON A CLAIMS-MADE BASIS
NOTICE: THE POLICY PROVIDES THAT THE LIMIT OF LIABILITY AVAILABLE TO PAY JUDGMENTS OR SETTLEMENTS SHALL BE REDUCED BY AMOUNTS INCURRED FOR LEGAL DEFENSE. FURTHER NOTE THAT AMOUNTS INCURRED FOR LEGAL DEFENSE SHALL BE APPLIED AGAINST THE DEDUCTIBLE AMOUNT.
PLEASE ATTACH COPIES OF THE FOLLOWING:
* Securities Broker/Dealer’s latest audited annual report, as well as latest 10-K filed with the SEC (if publicly traded);

* Latest quarterly Focus part II reports as filed with regulatory bodies;

* Copy of the most current BD form filed with the SEC;

* List of approved investment vehicles for sale by Securities Broker/Dealer’s Registered Representatives, including approved life insurance companies and their products, as well as adherence guidelines;

* Securities Broker/Dealer’s “due diligence” guidelines for approving investment vehicles to be sold;

* Comments and recommendations made by the SEC, NASD, state securities regulatory authority, state insurance department or any other regulatory body including any self regulatory organization following its latest exam of the Securities Broker/Dealer. Also, please attach the firm’s response letter.

1. (a) Name and Mailing Address of Securities Broker/Dealer:

     

     

     

(b) State of Incorporation (if applicable):      

(c) Year Securities Broker/Dealer established:      
(d) Number of offices in USA and Canada:      
(e) Number of offices elsewhere:      
(f) Name of Parent(s) (list both immediate and ultimate parents):

     

2. (a) Limit of Liability requested:
$       Each Wrongful Act of series of continuous, repeated of Interrelated Wrongful Acts.

$       In the Aggregate

(b) Deductible requested: $      
3. (a) Has the Securities Broker/Dealer been the subject of any mergers and/or acquisitions during the past three years? Yes  No  (If “Yes”, attach full details)
(b) Has the Securities Broker/Dealer revealed publicly that it is the subject of any pending

merger and/or acquisitions? Yes  No  (If “Yes”, attach full details)

4. Number of Registered Representatives: 
(a) Producers:      
(b) Non-Producing Executive/Management:      
(c) Other (back office):      
(d) Total:      
5. (a) Do all Registered Representatives enter into a standard contract with the Securities

Broker/Dealer? Yes  No 

(b) Does the Securities Broker/Dealer’s contract with its Registered Representatives provide for

indemnification of the Securities Broker/Dealer? Yes  No 

(c) Does the Securities Broker/Dealer’s contract with its Registered Representatives contain an

arbitration clause? Yes  No 

6. State percent of revenues derived from the following service areas:
(a) Full service securities brokerage      

(b) Discount securities brokerage      

(c) Financial Planning      

(d) Market timing services      

(e) Private placements      

(f) Market making/specialist activities      

(g) Underwriting activities      

(h) Other (please describe)      

     

TOTAL 100%
7. Total annual commission revenues for all products, including life insurance and annuities sales

$      

(b) State percent of commission revenues which are derived from the following:
Listed Stocks       Commodities      

Unlisted Stocks       Commodity Futures      

Penny Stocks       Mutual Funds      

(unlisted securities trading

for less than $5)

Proprietary Partnerships       Other Limited or      

Limited Liability Partnerships

Listed Bonds       Variable Annuities      

Unregistered Stocks or Bonds       Other Annuities      
Commercial Paper       Life Insurance      

Option Contracts       Other (please specify)      

TOTAL 100%

(c) Average daily trading volume:      

(d) Total number of securities trades executed:       per month/year (Check one)

(e) Average dollar value per securities trade:      

(f) What percent of all brokerage accounts are margin accounts:      

(g) What percent are discretionary accounts:      

(h) What percent is Individual:       Institutional:      

8. Does the Securities Broker/Dealer clear its own accounts? Yes  No 

If “No”, indicate name of clearing agent used.      

Is there a hold harmless clause in the contract with the clearing agent to protect the

Securities Broker/Dealer for improperly executed trades? Yes  No 
9. (a) Do all customers or clients sign a standard contract? Yes  No 

(b) Who approves of modifications to the Securities Broker/Dealer’s standard client contract?

     

(c) What percentage of client agreements contains arbitration clauses?      

(d) Is the arbitration clause mentioned in (c) above ever deleted from the client agreement?

Yes  No 

(If “Yes”, what percentage of agreements is it deleted from?      %)

(e) Does the Securities Broker/Dealer’s compliance department review all client contracts?

Yes  No 

(f) Describe the Securities Broker/Dealer’s procedures for reviewing new accounts:

     

     

10. (a) Give number of notices, letters, and complaints received in the past three years by the Compliance Department:      

(b) How many were unsettled after 60 days?      

(c) Attach full details regarding any cases in the last five years involving monetary settlement or

awards in excess of $5,000.
11. Does the Securities Broker/Dealer or any of its Partners, Directors, Officers, Employees or

Registered Representatives have any knowledge or information of any circumstances or any

allegations or contentions of any incident which might result in a claim against any of them? Yes  No 

(If “Yes”, give full particulars on an attached sheet)

12. It is agreed with respect to question #11 above, that if such knowledge or information exists any claim or action arising therefrom is excluded from proposed coverage.
13. Have any of the Securities Broker/Dealer’s Registered Representatives ever been disciplined,

fined or suspended by the SEC, NASD, state securities regulatory authority, state insurance

department or any other regulatory body, including but not limited to those disclosed within FormU-4, within the last five years? Yes  No 

(If “Yes”, give full particulars on an attached sheet, along with copy of Form U-4)

14. (a) Previous Securities Broker/Dealer Error and Omissions Insurance:

Insurer:       Limits of Liability $      

Policy Term:       to       Premium: $      

(b) Has any insurer refused or cancelled or nonrenewed this type of coverage in the last five

years? Yes  No 

(If “Yes”, give full details on an attached sheet) (Note: Missouri residents do not reply)

15. Have any Professional Liability (E&O) claims (whether or not covered by insurance) been made during the past five years against the Securities Broker/Dealer or any Registered Representative?

Yes  No 

(If “Yes”, give full particulars on an attached sheet)
16. Please provide the following information regarding other insurance carried by the Securities Broker/Dealer:
Current Directors and Officers

Insurance Policy

INSURER LIMIT TERM

     

     

      To      

Current Fidelity Bond

INSURER LIMIT TERM

     

     

      To      

Other similar insurance

(describe)

INSURER LIMIT TERM

     

     

      To      

THE UNDERSIGNED AUTHORIZED OFFICERS OF THE SECURITIES BROKER/DEALER DECLARE THAT THE STATEMENTS SET FORTH HEREIN ARE TRUE. THE UNDERSIGNED AUTHORIZED OFFICERS AGREE THAT IF THE INFORMATION SUPPLIED ON THIS APPLICATION CHANGES BETWEEN THE DATE OF THIS APPLICATION AND THE EFFECTIVE DATE OF THE INSURANCE, THEY (UNDERSIGNED) WILL IMMEDIATELY NOTIFY THE COMPANY OF SUCH CHANGES, AND THE COMPANY MAY WITHDRAW OR MODIFY ANY OUTSTANDING QUOTATIONS AND/OR AUTHORIZATION OR AGREEMENT TO BIND THE INSURANCE.
SIGNING OF THIS APPLICATION DOES NOT BIND THE COMPANY TO ISSUE OR THE APPLICANT TO BUY THE INSURANCE, BUT IT IS AGREED THAT THIS FORM SHALL BE THE BASIS OF THE CONTRACT SHOULD A POLICY BE ISSUED AND IT WILL BE ATTACHED TO AND MADE A PART OF THE POLICY.
NOTICE TO APPLICANTS: ANY PERSON WHO KNOWINGLY AND WITH INTENT TO DEFRAUD ANY INSURANCE COMPANY OR OTHER PERSON FILES AN APPLICATION FOR INSURANCE OR STATEMENT OF CLAIM CONTAINING ANY MATERIALLY FALSE INFORMATION OR, CONCEALS, FOR THE PURPOSE OF MISLEADING, INFORMATION CONCERNING ANY FACT MATERIAL THERETO, COMMITS A FRAUDULENT ACT, WHICH IS A CRIME AND MAY SUBJECT SUCH PERSON TO CRIMINAL AND CIVIL PENALTIES.
NOTICE TO ARKANSAS, NEW MEXICO AND WEST VIRGINIA APPLICANTS: ANY PERSON WHO KNOWINGLY PRESENTS A FALSE OR FRAUDULENT CLAIM FOR PAYMENT OF A LOSS OR BENEFIT, OR KNOWINGLY PRESENTS FALSE INFORMATION IN AN APPLICATION FOR INSURANCE IS GUILTY OF A CRIME AND MAY BE SUBJECT TO FINES AND CONFINEMENT IN PRISON.
NOTICE TO COLORADO APPLICANTS: IT IS UNLAWFUL TO KNOWINGLY PROVIDE FALSE, INCOMPLETE, OR MISLEADING FACTS OR INFORMATION TO AN INSURANCE COMPANY FOR THE PURPOSE OF DEFRAUDING OR ATTEMPTING TO DEFRAUD THE COMPANY. PENALTIES MAY INCLUDE IMPRISONMENT, FINES, DENIAL OF INSURANCE, AND CIVIL DAMAGES. ANY INSURANCE COMPANY OR AGENT OF AN INSURANCE COMPANY WHO KNOWINGLY PROVIDES FALSE, INCOMPLETE, OR MISLEADING FACTS OR INFORMATION TO A POLICYHOLDER OR CLAIMANT FOR THE PURPOSE OF DEFRAUDING OR ATTEMPTING TO DEFRAUD THE POLICYHOLDER OR CLAIMANT WITH REGARD TO A SETTLEMENT OR AWARD PAYABLE FROM INSURANCE PROCEEDS SHALL BE REPORTED TO THE COLORADO DIVISION OF INSURANCE WITHIN THE DEPARTMENT OF REGULATORY AUTHORITIES.
NOTICE TO DISTRICT OF COLUMBIA APPLICANTS: WARNING: IT IS A CRIME TO PROVIDE FALSE OR MISLEADING INFORMATION TO AN INSURER FOR THE PURPOSE OF DEFRAUDING THE INSURER OR ANY OTHER PERSON. PENALTIES INCLUDE IMPRISONMENT AND/OR FINES. IN ADDITION, AN INSURER MAY DENY INSURANCE BENEFITS IF FALSE INFORMATION MATERIALLY RELATED TO A CLAIM WAS PROVIDED BY THE APPLICANT.
NOTICE TO FLORIDA APPLICANTS: ANY PERSON WHO KNOWINGLY AND WITH INTENT TO INJURE, DEFRAUD, OR DECEIVE ANY INSURER FILES A STATEMENT OF CLAIM OR AN APPLICATION CONTAINING ANY FALSE, INCOMPLETE OR MISLEADING INFORMATION IS GUILTY OF A FELONY IN THE THIRD DEGREE.
NOTICE TO KENTUCKY APPLICANTS: ANY PERSON WHO KNOWINGLY AND WITH INTENT TO DEFRAUD ANY INSURANCE COMPANY OR OTHER PERSON FILES AN APPLICATION FOR INSURANCE CONTAINING ANY MATERIALLY FALSE INFORMATION, OR CONCEALS FOR THE PURPOSE OF MISLEADING, INFORMATION CONCERNING ANY FACT MATERIAL THERETO, COMMITS A FRAUDULENT INSURANCE ACT, WHICH IS A CRIME.
NOTICE TO LOUISIANA APPLICANTS: ANY PERSON WHO KNOWINGLY PRESENTS A FALSE OR FRAUDULENT CLAIM FOR PAYMENT OF A LOSS OR BENEFIT OR KNOWINGLY PRESENTS FALSE INFORMATION IN AN APPLICATION FOR INSURANCE IS GUILTY OF A CRIME AND MAY BE SUBJECT TO FINES AND CONFINEMENT IN PRISON.
NOTICE TO MAINE APPLICANTS: IT IS A CRIME TO KNOWINGLY PROVIDE FALSE, INCOMPLETE OR MISLEADING INFORMATION TO AN INSURANCE COMPANY FOR THE PURPOSE OF DEFRAUDING THE COMPANY. PENALTIES MAY INCLUDE IMPRISONMENT, FINES OR A DENIAL OF INSURANCE BENEFITS.
NOTICE TO MARYLAND APPLICANTS: ANY PERSON WHO KNOWINGLY AND WILLFULLY PRESENTS A FALSE OR FRAUDULENT CLAIM FOR PAYMENT OF A LOSS OR BENEFIT OR WHO KNOWINGLY AND WILLFULLY PRESENTS FALSE INFORMATION IN AN APPLICATION FOR INSURANCE IS GUILTY OF A CRIME AND MAY BE SUBJECT TO FINES AND CONFINEMENT IN PRISON.
NOTICE TO MINNESOTA APPLICANTS: A PERSON WHO FILES A CLAIM WITH INTENT TO DEFRAUD OR HELPS COMMIT A FRAUD AGAINST AN INSURER IS GUILTY OF A CRIME.
NOTICE TO NEW JERSEY APPLICANTS: ANY PERSON WHO INCLUDES ANY FALSE OR MISLEADING INFORMATION ON AN APPLICATION FOR AN INSURANCE POLICY IS SUBJECT TO CRIMINAL AND CIVIL PENALTIES.
NOTICE TO NEW YORK APPLICANTS: ANY PERSON WHO KNOWINGLY AND WITH INTENT TO DEFRAUD ANY INSURANCE COMPANY OR OTHER PERSON FILES AN APPLICATION FOR INSURANCE OR STATEMENT OF CLAIM CONTAINING ANY MATERIALLY FALSE INFORMATION, OR CONCEALS FOR THE PURPOSE OF MISLEADING, INFORMATION CONCERNING ANY FACT MATERIAL THERETO, COMMITS A FRAUDULENT INSURANCE ACT, WHICH IS A CRIME, AND SHALL ALSO BE SUBJECT TO A CIVIL PENALTY NOT TO EXCEED FIVE THOUSAND DOLLARS AND THE STATED VALUE OF THE CLAIM FOR EACH SUCH VIOLATION.
NOTICE TO OHIO APPLICANTS: ANY PERSON WHO, WITH INTENT TO DEFRAUD OR KNOWING THAT HE IS FACILITATING A FRAUD AGAINST AN INSURER, SUBMITS AN APPLICATION OR FILES A CLAIM CONTAINING A FALSE OR DECEPTIVE STATEMENT IS GUILTY OF INSURANCE FRAUD.
NOTICE TO OKLAHOMA APPLICANTS: WARNING: ANY PERSON WHO KNOWINGLY, AND WITH INTENT TO INJURE, DEFRAUD OR DECEIVE ANY INSURER, MAKES ANY CLAIM FOR THE PROCEEDS OF AN INSURANCE POLICY CONTAINING ANY FALSE, INCOMPLETE OR MISLEADING INFORMATION IS GUILTY OF A FELONY (365:15-1-10, 36 §3613.1).
NOTICE TO OREGON APPLICANTS: ANY PERSON WHO KNOWINGLY AND WITH INTENT TO DEFRAUD ANY INSURANCE COMPANY OR OTHER PERSON FILES AN APPLICATION FOR INSURANCE OR STATEMENT OF CLAIM CONTAINING ANY MATERIALLY FALSE INFORMATION OR, CONCEALS, FOR THE PURPOSE OF MISLEADING, INFORMATION CONCERNING ANY FACT MATERIAL THERETO, COMMITS A FRAUDULENT ACT, WHICH MAY BE A CRIME AND MAY SUBJECT SUCH PERSON TO CRIMINAL AND CIVIL PENALTIES.
NOTICE TO PENNSYLVANIA APPLICANTS: ANY PERSON WHO KNOWINGLY AND WITH INTENT TO DEFRAUD ANY INSURANCE COMPANY OR OTHER PERSON FILES AN APPLICATION FOR INSURANCE OR STATEMENT OF CLAIM CONTAINING ANY MATERIALLY FALSE INFORMATION OR CONCEALS FOR THE PURPOSE OF MISLEADING, INFORMATION CONCERNING ANY FACT MATERIAL THERETO COMMITS A FRAUDULENT INSURANCE ACT, WHICH IS A CRIME AND SUBJECTS SUCH PERSON TO CRIMINAL AND CIVIL PENALTIES.
NOTICE TO TENNESSEE, VIRGINIA AND WASHINGTON APPLICANTS: IT IS A CRIME TO KNOWINGLY PROVIDE FALSE, INCOMPLETE OR MISLEADING INFORMATION TO AN INSURANCE COMPANY FOR THE PURPOSE OF DEFRAUDING THE COMPANY. PENALTIES INCLUDE IMPRISONMENT, FINES AND DENIAL OF INSURANCE BENEFITS.
NOTICE TO VERMONT APPLICANTS: ANY PERSON WHO KNOWINGLY AND WITH INTENT TO DEFRAUD ANY INSURANCE COMPANY OR OTHER PERSON FILES AN APPLICATION FOR INSURANCE OR STATEMENT OF CLAIM CONTAINING ANY MATERIALLY FALSE INFORMATION OR, CONCEALS, FOR THE PURPOSE OF MISLEADING, INFORMATION CONCERNING ANY FACT MATERIAL THERETO, COMMITS A FRAUDULENT ACT, WHICH MAY BE A CRIME AND MAY SUBJECT SUCH PERSON TO CRIMINAL AND CIVIL PENALTIES.

Signed:

Date:      

Title:      

(Must be Signed By the President, if a Corporation, a General Partner if a Partnership)
Signed:
Date:      

Title:      

(Must be Signed by the Chief Compliance Officer)
Insurance Broker:      

Address:

     

     

IF A POLICY IS ISSUED THE APPLICATION IS ATTACHED TO AND MADE A PART OF THE POLICY SO IT IS NECESSARY THAT ALL QUESTIONS BE ANSWERED IN DETAIL.

PLEASE READ THE FOLLOWING STATEMENT CAREFULLY AND SIGN BELOW WHERE INDICATED. IF A POLICY IS ISSUED, THIS SIGNED STATEMENT WILL BE ATTACHED TO THE POLICY.
The insured hereby acknowledges that he/she/it is aware that the limit of liability contained in this policy shall be reduced, and may be completely exhausted, by the costs of legal defense and, in such event, the Company shall not be liable for the costs of legal defense or for the amount of any judgment or settlement to the extent that such exceeds the limit of liability of this policy.
The insured hereby further acknowledges that he/she/it is aware that legal defense costs that are incurred shall be applied against the retention amount.
Signed:
Date:      

Title:      

(Must be Signed By the President, if a Corporation, a General

Partner if a Partnership)

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