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.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)(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)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.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)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.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.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)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)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)(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.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:
Ins 6.41(4)(b)4.a.
a. The term “plan" includes any plan, whether or not set forth in any formal written document or documents and whether or not approved in its entirety at one time.
Ins 6.41(4)(b)4.b.
b. The definition of the terms “qualified stock option" and “employee stock purchase plan" that are set forth in sections
442 and
423 of the Internal Revenue Code of 1954, as amended, are to be applied to those terms where used in par.
(b). The term “restricted stock option" as defined in section
424(b) of the Internal Revenue Code of 1954, as amended, shall be applied to that term as used in par.
(b), provided, however, that for the purposes of par.
(b) an option which meets all of the conditions of section
424(b) of the Internal Revenue Code of 1954, as amended, other than the date of issuance shall be deemed to be a “restricted stock option."
Ins 6.41(4)(c)
(c) Exemption from s. 611.31 (4) (b), Stats., of certain transactions in which securities are received by redeeming other securities. Any acquisition of an equity security (other than a convertible security or right to purchase a security) by a director or officer of the insured issuing such security shall be exempt from the operation of s.
611.31 (4) (b), Stats., upon condition that
Ins 6.41(4)(c)1.
1. The equity security is acquired by way of redemption of another security of an insurer substantially all of whose assets other than cash (or government bonds) consist of securities of the insurer issuing the equity security so acquired, and which
Ins 6.41(4)(c)1.a.
a. Represented substantially and in practical effect a stated or readily ascertainable amount of such equity security,
Ins 6.41(4)(c)1.b.
b. Had a value which was substantially determined by the value of such equity security, and
Ins 6.41(4)(c)1.c.
c. Conferred upon the holder the right to receive such equity security without the payment of any consideration other than the security redeemed;
Ins 6.41(4)(c)2.
2. No security of the same class as the security redeemed was acquired by the director or officer within 6 months prior to such redemption or is acquired within 6 months after such redemption;
Ins 6.41(4)(c)3.
3. The insurer issuing the equity security acquired has recognized the applicability of subd.
1. by appropriate corporate action.
Ins 6.41(4)(d)
(d) Exemption of long term profits incident to sales within 6 months of the exercise of an option. Ins 6.41(4)(d)1.1. To the extent specified in subd.
2., the commissioner hereby exempts as not comprehended within the purposes of s.
611.31 (4) (b), Stats., any transaction or transactions involving the purchase and sale, or sale and purchase, of any equity security where such purchase is pursuant to the exercise of an option or similar right either acquired more than 6 months before its exercise; or acquired pursuant to the terms of an employment contract entered into more than 6 months before its exercise.
Ins 6.41(4)(d)2.
2. In respect of transactions specified in subd.
1. the profits inuring to the insurer shall not exceed the difference between the proceeds of sale and the lowest market price of any security of the same class within 6 months before or after the date of sale. Nothing in this par.
(d) shall be deemed to enlarge the amount of profit which would inure to such insurer in the absence of this par.
(d).
Ins 6.41(4)(d)3.
3. The commissioner also hereby exempts, as not comprehended within the purposes of s.
611.31 (4) (b), Stats., the disposition of a security, purchased in a transaction specified in subd.
1., pursuant to a plan or agreement for merger or consolidation, or reclassification of the insurer's securities, or for the exchange of its securities for the securities of another person which has acquired its assets, or which is in control, as defined in section
368(c) of the Internal Revenue Code of 1954, of a person which has acquired its assets, where the terms of such plan or agreement are binding upon all stockholders of the insurer except to the extent that dissenting stockholders may be entitled, under statutory provisions or provisions contained in the certificate of incorporation, to receive the appraised or fair value of their holdings.
Ins 6.41(4)(d)4.
4. The exemptions provided by this par.
(d) shall not apply to any transaction made unlawful by s.
611.31 (4) (c), Stats., or by any rules and regulations thereunder.
Ins 6.41(4)(d)5.
5. The burden of establishing market price of a security for the purpose of this par.
(d) shall rest upon the person claiming the exemption.
Ins 6.41(4)(e)
(e) Exemption from s. 611.31 (4) (b), Stats., of certain acquisitions and dispositions of securities pursuant to merger or consolidations. Ins 6.41(4)(e)1.1. The following transactions shall be exempt from the provisions of s.
611.31 (4) (b), Stats., as not comprehended within its purpose:
Ins 6.41(4)(e)1.a.
a. The acquisition of a security of an insurer, pursuant to a merger or consolidation, in exchange for a security of a company which, prior to said merger or consolidation, owned 85% or more of the equity securities of all other companies involved in the merger or consolidation except, in the case of consolidation, the resulting company;
Ins 6.41(4)(e)1.b.
b. The disposition of a security, pursuant to a merger or consolidation of an insurer which, prior to said merger or consolidation, owned 85% or more of the equity securities of all other companies involved in the merger or consolidation except, in the case of consolidation, the resulting company:
Ins 6.41(4)(e)1.c.
c. The acquisition of a security of an insurer, pursuant to a merger or consolidation, in exchange for a security of a company which, prior to said merger or consolidation, held over 85% of the combined assets of all the companies undergoing merger or consolidation, computed according to their book values prior to the merger or consolidation as determined by reference to their most recent available financial statements for a 12-month period prior to the merger or consolidation.
