Chapter Ins 6

Ins 6.40(13)(c)2. 2. State the amount of each class of stock of the insurer which you own of record but not beneficially.

Ins 6.40(13)(c)3. 3. State with respect to the stock specified in subds. 1. and 2. the amounts acquired within the past 2 years and the dates of acquisition and the amounts acquired on each date.

Ins 6.40(13)(c)4. 4. If any part of the purchase price or market value of any of the stock specified in subd. 3. is represented by funds borrowed or otherwise obtained for the purpose of acquiring or holding such stock, so state and indicate the amount of the indebtedness as of the latest practicable date. If such funds were borrowed or obtained otherwise than pursuant to a margin account or bank loan in the regular course of business of a bank, broker or dealer, briefly describe the transaction, and state the names of the parties.

Ins 6.40(13)(c)5. 5. State whether or not you are a party to any contracts, arrangements or understandings with any person with respect to any stock of the insurer, including but not limited to joint ventures, loan or option arrangements, puts or calls, guarantees against loss or guarantees of profits, division of losses or profits, or the giving or withholding of proxies. If so, name the persons with whom such contracts, arrangements, or understandings exist and give the details thereof.

Ins 6.40(13)(c)6. 6. State the amount of stock of the insurer owned beneficially, directly or indirectly, by each of your associates and the name and address of each such associate.

Ins 6.40(13)(c)7. 7. State the amount of each class of stock of any parent, subsidiary or affiliate of the insurer which you own beneficially, directly or indirectly.

Ins 6.40(13)(d) (d) Further matters.

Ins 6.40(13)(d)1. 1. Describe the time and circumstances under which you became a participant in the solicitation and state the nature and extent of your activities or proposed activities as a participant.

Ins 6.40(13)(d)2. 2. Describe briefly, and where practicable state the approximate amount of, any material interest, direct or indirect, of yourself and of each of your associates in any material transactions since the beginning of the company’s last fiscal year, or in any material proposed transactions, to which the company or any of its subsidiaries or affiliates was or is to be a party.

Ins 6.40(13)(d)3. 3. State whether or not you or any of your associates have any arrangement or understanding with any person.

Ins 6.40(13)(d)3.a. a. With respect to any future employment by the insurer or its subsidiaries or affiliates; or

Ins 6.40(13)(d)3.b. b. With respect to any future transactions to which the insurer or any of its subsidiaries or affiliates will or may be a party. If so, describe such arrangement or understanding and state the names of the parties thereto.

Ins 6.40(13)(e) (e) Signature. The statement shall be dated and signed in the following manner:

I certify that the statements made in this statement are true, complete, and correct, to the best of my knowledge and belief.
          (Date)     (Signature of participant or
    authorized representative)

Ins 6.40 History History: Cr. Register, November, 1965, No. 119, eff. 12-1-65; corrections in (4) (a) and (12) (g) made under s. 13.93 (2m) (b) 7., Stats., Register, January, 1999, No. 517; correction in (5) (b) made under s. 13.93 (2m) (b) 7., Stats., Register October 2006 No. 610.

Ins 6.41 Ins 6.41 Insider trading of equity securities of domestic stock insurers.

Ins 6.41(1) (1) Definitions.

Ins 6.41(1)(a) (a) “Insurer” means any domestic insurance company with an equity security subject to the provisions of s. 611.31, Stats., and not exempt thereunder.

Ins 6.41(1)(b) (b) “Officer” means a president, vice president, treasurer, actuary, secretary, controller and any other person who performs for the insurer functions corresponding to those performed by the foregoing officers.

Ins 6.41(1)(c) (c) “Equity security” means any stock or similar security; or any voting trust certificate or certificate of deposit for such a security; or any security convertible, with or without consideration, into such a security, or carrying any warrant or right to subscribe to or purchase such a security; or any such warrant or right.

Ins 6.41(1)(d) (d) Securities held of record.

Ins 6.41(1)(d)1. 1. For the purpose of determining whether the equity securities of an insurer are held of record by 100 or more persons, securities shall be deemed to be “held of record” by each person who is identified as the owner of such securities on records of security holders maintained by or on behalf of the insurer, subject to the following:

Ins 6.41(1)(d)1.a. a. In any case where the records of security holders have not been maintained in accordance with accepted practice, any additional person who would be identified as such an owner on such records if they had been maintained in accordance with accepted practice shall be included as a holder of record.

Ins 6.41(1)(d)1.b. b. Securities identified as held of record by a corporation, a partnership, a trust whether or not the trustees are named, or other organization shall be included as so held by one person.

Ins 6.41(1)(d)1.c. c. Securities identified as held of record by one or more persons as trustees, executors, guardians, custodians or in other fiduciary capacities with respect to a single trust, estate or account shall be included as held of record by one person.

Ins 6.41(1)(d)1.d. d. Securities held by 2 or more persons as co-owners shall be included as held by one person.

Ins 6.41(1)(d)1.e. e. Each outstanding unregistered or bearer certificate shall be included as held of record by a separate person, except to the extent that the insurer can establish that, if such securities were registered, they would be held of record, under the provisions of this rule, by a lesser number of persons.

Ins 6.41(1)(d)1.f. f. Securities registered in substantially similar names where the insurer has reason to believe because of the address or other indications that such names represent the same person, may be included as held of record by one person.

Ins 6.41(1)(d)2. 2. Notwithstanding subd. 1.:

Ins 6.41(1)(d)2.a. a. Securities held, to the knowledge of the insurer, subject to a voting trust, deposit agreement or similar arrangement shall be included as held of record by the record holders of the voting trust certificates, certificates of deposit, receipts or similar evidences of interest in such securities; provided, however, that the insurer may rely in good faith on such information as is received in response to its request from a nonaffiliated insurer of the certificates or evidences of interest.

Ins 6.41(1)(d)2.b. b. If the insurer knows or has reason to know that the form of holding securities of record is used primarily to circumvent the provisions of s. 611.31, Stats., the beneficial owners of such securities shall be deemed to be the record owners thereof.

Ins 6.41(1)(e) (e) “Class” means all securities of an insurer which are of substantially similar character and the holders of which enjoy substantially similar rights and privileges.

Ins 6.41(2) (2) Transactions exempted from the operation of s. 611.31 (4) (b), Stats. Any acquisition or disposition of any equity security by a director or officer of an insurer within 6 months prior to June 27, 1965 shall not be subject to the operation of s. 611.31 (4) (b), Stats.

Ins 6.41(3) (3) Rules under s. 611.31 (4) (a), Stats.

Ins 6.41(3)(a) (a) Filing of statements. Initial statements of beneficial ownership of equity securities required by s. 611.31 (4) (a), Stats., shall be filed on the form prescribed by s. Ins 6.42. Statements of changes in such beneficial ownership required by s. 611.31 (4) (a), Stats., shall be filed on the form prescribed by s. Ins 6.43. All such statements shall be prepared and filed in accordance with the requirements of the applicable form.

Ins 6.41(3)(b) (b) Ownership of more than 10% of an equity security. In determining, for the purpose of s. 611.31 (4) (a), Stats., whether a person is the beneficial owner, directly or indirectly, of more than 10% of any class of any equity security, such class shall be deemed to consist of the total amount of such class outstanding, exclusive of any securities of such class held by or for the account of the insurer or a subsidiary of the insurer; except that for the purpose of determining percentage ownership of voting trust certificates or certificates of deposit for equity securities, the class of voting trust certificates or certificates of deposit shall be deemed to consist of the amount of voting trust certificates or certificates of deposit issuable with respect to the total amount of outstanding equity securities of the class which may be deposited under the voting trust agreement or deposit agreement in question, whether or not all of such outstanding securities have been so deposited. For the purpose of this par. (b) a person acting in good faith may rely on the information contained in the latest annual statement form, prescribed by s. Ins 7.02, filed with the commissioner with respect to the amount of securities of a class outstanding or in the case of voting trust certificates or certificates of deposit the amount thereof issuable.

Ins 6.41(3)(c) (c) Disclaimer of beneficial ownership. Any person filing a statement may expressly declare therein that the filing of such statement shall not be construed as an admission that such person is, for the purpose of s. 611.31, Stats., the beneficial owner of any equity securities covered by the statement.

Ins 6.41(3)(d) (d) Exemptions from s. 611.31 (4) (a) and (b), Stats.

Ins 6.41(3)(d)1. 1. During the period of 12 months following their appointment and qualification, securities held by the following persons shall be exempt from s. 611.31 (4) (a) and (b), Stats.:

Ins 6.41(3)(d)1.a. a. Executors or administrators of the estate of a decedent;

Ins 6.41(3)(d)1.b. b. Guardians or committees for an incompetent; and

Ins 6.41(3)(d)1.c. c. Receivers, trustees in bankruptcy, assignees for the benefit of creditors, conservators, liquidating agents, and other similar persons duly authorized by law to administer the estate or assets of other persons.

Ins 6.41(3)(d)2. 2. After the 12-month period following their appointment or qualification the foregoing persons shall be required to file reports with respect to the securities held by the estates which they administer under s. 611.31 (4) (a), Stats., and shall be liable for profits realized from trading in such securities pursuant to s. 611.31 (4) (b), Stats., only when the estate being administered is a beneficial owner of more than 10% of any class of equity security of an insurer subject to s. 611.31, Stats.

Ins 6.41(3)(d)3. 3. Securities reacquired by or for the account of an insurer and held by it for its account shall be exempt from s. 611.31 (4) (a) and (b), Stats., during the time they are held by the insurer.

Ins 6.41(3)(e) (e) Exemption from s. 611.31, Stats., of securities purchased or sold by odd-lot dealers. Securities purchased or sold by an odd-lot dealer in odd lots so far as reasonably necessary to carry on odd-lot transactions or in round lots to offset odd-lot transactions previously or simultaneously executed or reasonably anticipated in the usual course of business, shall be exempt from the provisions of s. 611.31, Stats., with respect to participation by such odd-lot dealer in such transactions.

Ins 6.41(3)(f) (f) Certain transactions subject to s. 611.31 (4) (a), Stats. The acquisition or disposition of any transferable option, put, call, spread or straddle shall be deemed such a change in the beneficial ownership of the security to which such privilege relates as to require the filing of a statement reflecting the acquisition or disposition of such privilege. Nothing in this par. (f), however, shall exempt any person from filing the statements required upon the exercise of such option, put, call, spread or straddle.

Ins 6.41(3)(g) (g) Ownership of securities held in trust.

Ins 6.41(3)(g)1. 1. Beneficial ownership of a security for the purpose of s. 611.31 (4) (a), Stats., shall include:

Ins 6.41(3)(g)1.a. a. The ownership of securities as a trustee where either the trustee or members of his or her immediate family have a vested interest in the income or corpus of the trust,

Ins 6.41(3)(g)1.b. b. The ownership of a vested beneficial interest in a trust, and

Ins 6.41(3)(g)1.c. c. The ownership of securities as a settlor of a trust in which the settlor has the power to revoke the trust without obtaining the consent of all the beneficiaries.

Ins 6.41(3)(g)2. 2. Except as provided in subd. 3., beneficial ownership of securities solely as a settlor or beneficiary of a trust shall be exempt from the provisions of s. 611.31 (4) (a), Stats., where less than 20% in market value of the securities having a readily ascertainable market value held by such trust, determined as of the end of the preceding fiscal year of the trust, consists of equity securities with respect to which reports would otherwise be required. Exemption is likewise accorded from s. 611.31 (4) (a), Stats., with respect to any obligation which would otherwise be imposed solely by reason of ownership as settlor or beneficiary of securities held in trust, where the ownership, acquisition, or disposition of such securities by the trust is made without prior approval by the settlor or beneficiary. No exemption pursuant to this subdivision shall, however, be acquired or lost solely as a result of changes in the value of the trust assets during any fiscal year or during any time when there is no transaction by the trust in the securities otherwise subject to the reporting requirements of s. 611.31 (4) (a), Stats.

Ins 6.41(3)(g)3. 3. In the event that 10% of any class of any equity security of an insurer is held in a trust, that trust and the trustees thereof as such shall be deemed a person required to file the reports specified in s. 611.31 (4) (a), Stats.

Ins 6.41(3)(g)4. 4. Not more than one report need be filed to report any holdings or with respect to any transaction in securities held by a trust, regardless of the number of officers, directors or 10% stockholders who are either trustees, settlors, or beneficiaries of a trust, provided that the report filed shall disclose the names of all trustees, settlors and beneficiaries who are officers, directors or 10% stockholders. A person having an interest only as a beneficiary of a trust shall not be required to file any such report so long as he or she relies in good faith upon an understanding that the trustee of such trust will file whatever reports might otherwise be required of such beneficiary.

Ins 6.41(3)(g)5. 5. As used in this par. (g) the “immediate family” of a trustee means:

Ins 6.41(3)(g)5.a. a. A son or daughter of the trustee, or a descendant of either,

Ins 6.41(3)(g)5.b. b. A stepson or stepdaughter of the trustee,

Ins 6.41(3)(g)5.c. c. The father or mother of the trustee, or an ancestor of either,

Ins 6.41(3)(g)5.d. d. A stepfather or stepmother of the trustee,

Ins 6.41(3)(g)5.e. e. A spouse of the trustee. For the purpose of determining whether any of the foregoing relations exists, a legally adopted child of a person shall be considered a child of such person by blood.

Ins 6.41(3)(g)6. 6. In determining, for the purposes of s. 611.31 (4) (a), Stats., whether a person is the beneficial owner, directly or indirectly, of more than 10% of any class of any equity security, the interest of such person in the remainder of a trust shall be excluded from the computation.

Ins 6.41(3)(g)7. 7. No report shall be required by any person, whether or not otherwise subject to the requirement of filing reports under s. 611.31 (4) (a), Stats., with respect to an indirect interest in portfolio securities held by:

Ins 6.41(3)(g)7.a. a. A pension or retirement plan holding securities of an insurer whose employees generally are the beneficiaries of the plan,

Ins 6.41(3)(g)7.b. b. A business trust with over 25 beneficiaries.

Ins 6.41(3)(g)8. 8. Nothing in this par. (g) shall be deemed to impose any duties or liabilities with respect to reporting any transaction or holding prior to its effective date.

Ins 6.41(3)(h) (h) Exemption for small transactions.

Ins 6.41(3)(h)1. 1. Any acquisition of securities shall be exempt from s. 611.31 (4) (a), Stats., where:

Ins 6.41(3)(h)1.a. a. The person effecting the acquisition does not within 6 months thereafter effect any disposition, otherwise than by way of gift, of securities of the same class, and

Ins 6.41(3)(h)1.b. b. The person effecting such acquisition does not participate in acquisitions or in dispositions of securities of the same class having a total market value in excess of $3,000 for any 6 months’ period during which the acquisition occurs.

Ins 6.41(3)(h)2. 2. Any acquisition or disposition of securities by way of gift, where the total amount of such gifts does not exceed $3,000 in market value for any 6 months’ period, shall be exempt from s. 611.31 (4) (a), Stats., and may be excluded from the computations prescribed in subd. 1. b.

Ins 6.41(3)(h)3. 3. Any person exempted by subd. 1. or 2. shall include in the first report filed by him or her after a transaction within the exemption a statement showing acquisitions and dispositions for each 6 months’ period or portion thereof which has elapsed since the last filing.

Ins 6.41(3)(i) (i) Exemption from s. 611.31 (4) (b), Stats. Any transaction which has been or shall be exempted from the requirements of s. 611.31 (4) (a), Stats., shall, insofar as it is otherwise subject to the provisions of s. 611.31 (4) (b), Stats., be likewise exempted from s. 611.31 (4) (b), Stats.

Ins 6.41(4) (4) Rules under s. 611.31 (4) (b), Stats.

Ins 6.41(4)(a) (a) Exemption from s. 611.31 (4) (b), Stats., of certain transactions effected in connection with a distribution.

Ins 6.41(4)(a)1. 1. Any transaction of purchase and sale, or sale and purchase, of a security which is effected in connection with the distribution of a substantial block of securities shall be exempt from the provisions of s. 611.31 (4) (b), Stats., to the extent specified in par. (a) as not comprehended within the purpose of s. 611.31 (4) (b), Stats., upon the following conditions:

Ins 6.41(4)(a)1.a. a. The person effecting the transaction is engaged in the business of distributing securities and in participating in good faith, in the ordinary course of such business, in the distribution of such block of securities;

Ins 6.41(4)(a)1.b. b. The security involved in the transaction is a part of such block of securities and is acquired by the person effecting the transaction, with a view to the distribution thereof, from the insurer or other person on whose behalf such securities are being distributed or from a person who is participating in good faith in the distribution of such block of securities; or a security purchased in good faith by or for the account of the person effecting the transaction for the purpose of stabilizing the market price of securities of the class being distributed or to cover an over-allotment or other short position created in connection with such distribution; and

Ins 6.41(4)(a)1.c. c. Other persons not within the purview of s. 611.31 (4) (b), Stats., are participating in the distribution of such block of securities on terms at least as favorable as those on which such person is participating and to an extent at least equal to the aggregate participation of all persons exempted from the provisions of s. 611.31 (4) (b), Stats., by this par. (a). However, the performance of the functions of manager of a distributing group and the receipt of a bona fide payment for performing such functions shall not preclude an exemption which would otherwise be available under this par. (a).

Ins 6.41(4)(a)2. 2. The exemption of a transaction pursuant to this par. (a) with respect to the participation therein of one party thereto shall not render such transaction exempt with respect to participation of any other party therein unless such other party also meets the conditions of this par. (a).

Ins 6.41(4)(b) (b) Exemption from s. 611.31 (4) (b), Stats., of acquisitions of shares of stock and stock options under certain stock bonus, stock option or similar plans. Any acquisition of shares of stock (other than stock acquired upon the exercise of an option, warrant or right) pursuant to a stock bonus, profit sharing, retirement, incentive, thrift, savings or similar plan, or any acquisition of a qualified or a restricted stock option pursuant to a qualified or a restricted stock option plan, or a stock option pursuant to an employee stock purchase plan, by a director or officer of an insurer issuing such stock or stock option shall be exempt from the operation of s. 611.31 (4) (b), Stats., if the plan meets the following conditions:

Ins 6.41(4)(b)1. 1. The plan has been approved, directly or indirectly,

Ins 6.41(4)(b)1.a. a. By the affirmative votes of the holders of a majority of the securities of such insurer present, or represented, and entitled to vote at a meeting held in accordance with the applicable laws of the state of Wisconsin, or

Ins 6.41(4)(b)1.b. b. By the written consent of the holders of a majority of the securities of such insurer entitled to vote: provided, however, that if such vote or written consent was not solicited substantially in accordance with s. Ins 6.40 in effect at the time of such vote or written consent, the insurer shall furnish in writing to the holders of record of the securities entitled to vote for the plan substantially the same information concerning the plan which would be required by any such rules and regulations so prescribed and in effect at the time such information is furnished, if proxies to be voted with respect to the approval or disapproval of the plan were then being solicited, on or prior to the date of the first annual meeting of security holders held subsequent to the later of the date s. 611.31, Stats., first applies to such insurer; or the acquisition of an equity security for which exemption is claimed. Such written information may be furnished by mail to the last known address of the security holders of record within 30 days prior to the date of mailing. Four copies of such written information shall be filed with, or mailed for filing to, the commissioner not later than the date on which it is first sent or given to security holders of the insurer. For the purposes of subd. 1. b., the term “insurer” includes a predecessor corporation if the plan or obligations to participate thereunder were assumed by the insurer in connection with the succession.

Ins 6.41(4)(b)2. 2. If the selection of any director or officer of the insurer to whom stock may be allocated or to whom qualified, restricted or employee stock purchase plan stock options may be granted pursuant to the plan, or the determination of the number or maximum number of shares of stock which may be allocated to any such director or officer or which may be covered by qualified, restricted or employee stock purchase plan stock options granted to any such director or officer, is subject to the discretion of any person, then such discretion shall be exercised only as follows:

Ins 6.41(4)(b)2.a. a. With respect to the participation of directors: 1) By the board of directors of the insurer, a majority of which board and a majority of the directors acting in the matter are disinterested persons; 2) By, or only in accordance with the recommendations of, a committee of 3 or more persons having full authority to act in the matter, all of the members of which committee are disinterested persons; or 3) Otherwise in accordance with the plan, if the plan specifies the number or maximum number of shares of stock which directors may acquire or which may be subject to qualified, restricted or employee stock purchase plan stock options granted to directors and the terms upon which, and the times at which, or the periods within which, such stock may be acquired or such options may be acquired and exercised; or sets forth, by formula or otherwise, effective and determinable limitations with respect to the foregoing based upon earnings of the insurer, dividends paid, compensation received by participants, option prices, market value of shares, outstanding shares or percentages thereof outstanding from time to time, or similar factors.

Ins 6.41(4)(b)2.b. b. With respect to the participation of officers who are not directors: 1) By the board of directors of the insurer or a committee of 3 or more directors; or 2) By, or only in accordance with the recommendations of, a committee of 3 or more persons having full authority to act in the matter, all of the members of which committee are disinterested persons. For the purpose of this subd. 2., a director or committee member shall be deemed to be a disinterested person only if such person is not at the time such discretion is exercised eligible and has not at any time within one year prior thereto been eligible for selection as a person to whom stock may be allocated or to whom qualified, restricted or employee stock purchase plan stock options may be granted pursuant to the plan or any other plan of the insurer or any of its affiliates entitling the participants therein to acquire stock or qualified, restricted or employee stock purchase plan stock options of the insurer or any of its affiliates.

Ins 6.41(4)(b)2.c. c. The provisions of this subd. 2. shall not apply with respect to any option granted, or other equity security acquired, prior to June 27, 1965.

Ins 6.41(4)(b)3. 3. As to each participant or as to all participants the plan effectively limits the aggregate dollar amount or the aggregate number of shares of stock which may be allocated, or which may be subject to qualified, restricted, or employee stock purchase plan stock options granted, pursuant to the plan. The limitations may be established on an annual basis, or for the duration of the plan, whether or not the plan has a fixed termination date; and may be determined either by fixed or maximum dollar amounts or fixed or maximum numbers of shares or by formulas based upon earnings of the insurer, dividends paid, compensation received by participants, option prices, market value of shares, outstanding shares or percentages thereof outstanding from time to time, or similar factors which will result in an effective and determinable limitation. Such limitations may be subject to any provisions for adjustment of the plan or of stock allocable or options outstanding thereunder to prevent dilution or enlargement of rights.

Ins 6.41(4)(b)4. 4. Unless the context otherwise requires, all terms used in this par. (b) shall have the same meaning as in s. 611.31, Stats., and in sub. (1). In addition, the following definitions apply: