Strategic Partner Program
Securian sells variable, fixed, and equity-indexed life and annuity products for a number of different insurance companies. These insurance companies include Securian’s affiliate, Minnesota Life Insurance Company (“Minnesota Life”) and Minnesota Life’s subsidiary, Securian Life Insurance Company (“Securian Life”). For Minnesota Life, Securian sells variable and equity-indexed life and annuity products. For Securian Life, Securian sells fixed life and fixed annuity products. Securian also sells mutual funds for various mutual funds companies.
Through our Strategic Partner Program (“Program”), Securian seeks to establish additional relationships with various participating insurance and mutual fund companies (“Strategic Partners”). In addition to customary sales commissions, Securian receives marketing support payments from such Strategic Partners whose annuities and mutual funds Securian sells. Marketing support payments may also be called “revenue sharing.” These payments may be used by Securian as general financial support to offset the costs of product management support and compliance. For annuities and mutual funds, the payments are usually calculated as a percentage of annuity or mutual fund sales and/or the total assets held in annuities or mutual funds sold by Securian. For life insurance, the payments are usually calculated as a percentage of premium. The actual amount received by Securian is negotiated in each case and varies by Strategic Partner. In return for marketing support payments, Strategic Partners receive visibility on Securian’s internal web site for representatives and assistance with coordinating access to and educational opportunities for Securian representatives. In addition, Securian and the Strategic Partners agree to provide each other periodic reports. Securian’s receipt of marketing support payments creates a potential conflict of interest in the form of an additional financial benefit to Securian in connection with the sale of products from these Strategic Partners.
Marketing support payments are not made directly by you. For mutual funds, marketing support payments are paid by the Strategic Partner or by an affiliate of the Strategic Partner. For annuities and other insurance products, marketing support payments are also paid by the Strategic Partner or its affiliates.
Marketing support payments are not passed on to Securian’s representatives as commissions or other cash compensation. Since Securian’s representatives will not directly receive a portion of any of these marketing support payments, Securian believes these financial arrangements do not create any incentives that will influence the advice your representative offers you.
Annuity Strategic Partners
In the case of variable and equity-index annuities issued by unaffiliated insurance companies, marketing support payments based on sales can range as high as 0.25 percent of your total purchase amount. If, for example, you invested $10,000 in an annuity contract through Securian, Securian could be paid up to $25 for marketing support. In addition, for invested assets that continue to be held in your annuity a year later, Securian can receive an additional payment of up to 0.10 percent annually of the dollar value. For example, on a $10,000 holding, that would be an additional $10 per year.
The current annuity issuers who are Strategic Partners and the amount of marketing support payments paid to Securian by that Strategic Partner during the previous calendar year are listed in the table at the bottom of this page.
Life Insurance Strategic Partners
Marketing support payments on sales of life insurance policies are calculated as a percentage of the premium, and the percentage varies depending upon the type of product purchased (permanent versus term products) and how long the policy has been in force (first year versus renewal premiums). The current life insurers who are Strategic Partners and the amount of marketing support payments paid to Securian by that Strategic Partner are listed in the table appearing at the bottom of this page.
Mutual Fund Strategic Partners
Strategic Partners pay marketing support payments to Securian for sales of mutual funds by Securian and its affiliate, CRI Securities, LLC (“CRI”). Marketing support payments are in addition to the sales charges, 12b-1 fees, and other fees and expenses charged by the mutual fund. A mutual fund’s sales charges and 12b-1 fees are disclosed in the fund’s prospectus fee table, as are all other charges and expenses borne by the fund and its shareholders. For additional information about these charges and expenses you should refer to the mutual fund’s prospectus or statement of additional information, each of which is available on request from the mutual fund company or your representative.
The following Strategic Partners are currently participating in the Program relating to mutual funds:
Ivy Funds
Securian receives marketing support payments in connection with the sale and retention of Ivy Funds’ mutual funds from Ivy Funds Distributor, Inc. (“IFD”) or its affiliates. In addition, Securian may be paid an annual amount equal to 0.05% of the average daily value of Ivy Funds assets attributable to Securian and CRI. Securian and/or its affiliated companies are also paid annual incentive compensation of between 0.05% and 0.15% depending on the level of Ivy Funds assets held in Securian and CRI clients’ accounts. The amount of marketing support payments paid to Securian by Ivy Funds during the previous calendar year is shown on the table appearing at the bottom of this page.
Lord Abbett
Securian receives marketing support payments in connection with the sale and retention of Lord Abbett mutual funds from Lord Abbett Distributor LLC (“Lord Abbett”), the principal underwriter for various investment companies and series thereof that are registered with the Securities and Exchange Commission under the Investment Company Act of 1940, as amended (the “Lord Abbett Funds”). Each quarter Lord Abbett pays Securian a sum that varies but does not exceed 0.05% of the previous quarter’s Lord Abbett Funds sales by Securian and CRI and 0.02% of Lord Abbett Funds assets attributable to Securian and CRI.
Marketing Support Payments Earned
The following companies are Strategic Partners and Securian earned marketing support payments from these Strategic Partners during the preceding calendar year as listed below:
| Insurance Company | Total earned during 2010 ($)*** |
| Nationwide (Annuity) | $120,481 |
| Pacific Life (Annuity & Life)* | $11,204 |
| Prudential (Annuity) | $118,721 |
| Securian Life (Life) | $2,083 |
| Sun Life (Annuity) | $37,066 |
| Jackson National (Annuity) | None** |
| Mutual Fund Company | Total earned during 2010 ($)*** |
| Ivy Funds | $252,217 |
| Lord Abbett | None** |
* Pacific Life includes marketing support payments from both Pacific Life & Annuity Company and Pacific Life Insurance Company.
** Under Securian’s agreement with the Strategic Partner, no payments were earned during 2010.
*** The amounts earned have been reported on the accrual basis in accordance with GAAP.
Securian’s Financial Relationships with Minnesota Life
Minnesota Life does not make any payments to Securian under the Program, nor does Securian receive any direct compensation from Minnesota Life when Securian sells a Minnesota Life product. Securian is reimbursed by Minnesota Life, however, for that portion of Securian’s compliance-related costs attributable to Securian’s sale of Minnesota Life products. In addition, Minnesota Life pays commissions in connection with such sales directly to Securian’s representatives as agent for Securian. In addition to commission payments to Securian’s representatives, Minnesota Life and Securian also jointly sponsor a field recognition program that provides other non-cash benefits to Securian’s qualifying representatives based on sales of variable insurance products issued by both Minnesota Life and other unaffiliated life insurance companies, including paid travel and accommodations at training conferences and recognition conventions. In accordance with rules of the Financial Industry Regulatory Authority (FINRA), non-cash benefits under the program are based on the total production of each representative with respect to all variable insurance products sold through Securian, and the credit received by a representative for each variable insurance product sold is equally weighted, regardless of the issuing life insurance company. In addition, Minnesota Life provides retirement, medical and other employee benefits to qualifying Securian representatives.All of these programs are designed to encourage Securian’s representatives to sell products through Securian, including Minnesota Life’s products.
