Chapter Ins 6

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.

Ins 6.41(4)(e)1.d. d. The disposition of a security, pursuant to a merger or consolidation, of an insurer 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 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.

Ins 6.41(4)(e)2. 2. A merger within the meaning of this par. (e) shall include the sale or purchase of substantially all the assets of one insurer by another in exchange for stock which is then distributed to the security holders of the insurer which sold its assets.

Ins 6.41(4)(e)3. 3. Notwithstanding the foregoing, if an officer, director or stockholder shall make any purchase (other than a purchase exempted by this par. (e)) of a security in any company involved in the merger or consolidation and any sale (other than a sale exempted by this par. (e)) of a security in any other company involved in the merger or consolidation within any period of less than 6 months during which the merger or consolidation took place, the exemption provided by this par. (e) shall be unavailable to such officer, director, or stockholder.

Ins 6.41(4)(f) (f) Exemption from s. 611.31 (4) (b), Stats., of certain securities received upon surrender of similar equity securities. Any receipt by a person from an insurer of shares of stock of a class having general voting power, upon the surrender by such person of an equal number of shares of stock of the insurer of a class which does not have general voting power, pursuant to provisions of the insurer’s certificate of incorporation, for the purpose of and accompanied simultaneously or followed immediately by the sale of the shares so received, shall be exempt from the operation of s. 611.31 (4) (b), Stats., as a transaction not comprehended within its purpose, if the following conditions exist:

Ins 6.41(4)(f)1. 1. The person so receiving such shares is not an officer or director, or the beneficial owner, directly or indirectly, immediately prior to such receipt, of more than 10% of an equity security of the insurer;

Ins 6.41(4)(f)2. 2. The shares surrendered and the shares issued upon such surrender shall be of classes which are freely transferable and entitle the holders thereof to participate equally per share in all distributions of earnings and assets;

Ins 6.41(4)(f)3. 3. The surrender and issuance are made pursuant to provisions of a certificate of incorporation which requires that the shares issued upon such surrender shall be registered upon issuance in the name of a person or persons other than the holder of the shares surrendered and may be required to be issued as the right only in connection with the public offering, sale and distribution of such shares and the immediate sale by such holder of such shares for that purpose, or in connection with a gift of such shares;

Ins 6.41(4)(f)4. 4. Neither the shares so surrendered nor any shares of the same class, nor other shares of the same class as those issued upon such surrender, have been or are purchased (otherwise than in a transaction exempted by this par. (f)), by the person surrendering such shares, within 6 months before or after such surrender or issuance.

Ins 6.41(4)(g) (g) Exemption from s. 611.31 (4) (b), Stats., of certain transactions involving an exchange of similar securities. Any acquisition or disposition of securities made in an exchange of shares of a class (or series thereof) of stock of an insurer for an equivalent number of shares of another class (or series thereof) of stock of the same insurer, pursuant to a right of conversion under the terms of the insurer’s articles of incorporation or other governing instruments shall be exempt from the operation of s. 611.31 (4) (b), Stats., if:

Ins 6.41(4)(g)1. 1. The shares surrendered and those acquired in exchange therefor evidence substantially the same rights and privileges except that, pursuant to the provisions of the insurer’s articles of incorporation or other governing instruments, the board of directors may declare and pay a lesser dividend per share on shares of the class surrendered than on shares of the class acquired in exchange therefor, or may declare and pay no dividend on shares of the class surrendered; and

Ins 6.41(4)(g)2. 2. The transaction was effected in contemplation of a public sale of the shares acquired in the exchange; provided that par. (g) shall not be construed to exempt from the operation of s. 611.31 (4) (b), Stats., any purchase or sale of shares of the class surrendered and any sale or purchase of shares of the class acquired in the exchange (otherwise than in the transaction of exchange exempted by par. (g)) within a period of less than 6 months.

Ins 6.41(5) (5) Rules under s. 611.31 (4) (c), Stats.

Ins 6.41(5)(a) (a) Exemption of certain securities from s. 611.31 (4) (c), Stats. Any security shall be exempt from the operation of s. 611.31 (4) (c), Stats., to the extent necessary to render lawful under such section the execution by a broker of an order for an account in which he or she has no direct or indirect interest.

Ins 6.41(5)(b) (b) Exemption from s. 611.31 (4) (c), Stats., of certain transactions effected in connection with a distribution. Any security shall be exempt from the operation of s. 611.31 (4) (c), Stats., to the extent necessary to render lawful under such section any sale made by or on behalf of a dealer in connection with a distribution of a substantial block of securities, upon the following conditions:

Ins 6.41(5)(b)1. 1. The sale is represented by an over-allotment in which the dealer is participating as a member of an underwriting group, or the dealer or a person acting on his or her behalf intends in good faith to offset such sale with a security to be acquired by or on behalf of the dealer as a participant in an underwriting, selling or soliciting-dealer group of which the dealer is a member at the time of the sale, whether or not the security to be so acquired is subject to a prior offering to existing security holders or some other class of persons; and

Ins 6.41(5)(b)2. 2. Other persons not within the purview of s. 611.31 (4) (c), Stats., are participating in the distribution of such block of securities on terms at least as favorable as those on which such dealer 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) (c), Stats., by this par. (b). 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. (b).

Ins 6.41(5)(c) (c) Exemption from s. 611.31 (4) (c), Stats., of sales of securities to be acquired.

Ins 6.41(5)(c)1. 1. Whenever any person is entitled, as an incident to ownership of an issued security and without the payment of consideration, to receive another security “when issued” or “when distributed,” the security to be acquired shall be exempt from the operation of s. 611.31 (4) (c), Stats., provided that:

Ins 6.41(5)(c)1.a. a. The sale is made subject to the same conditions as those attaching to the right of acquisition, and

Ins 6.41(5)(c)1.b. b. Such person exercises reasonable diligence to deliver such security to the purchaser promptly after the right of acquisition matures, and

Ins 6.41(5)(c)1.c. c. Such person reports the sale on the appropriate form for reporting transactions by persons subject to s. 611.31 (4) (a), Stats.

Ins 6.41(5)(c)2. 2. This par. (c) shall not be construed as exempting transactions involving both a sale of a security “when issued” or “when distributed” and a sale of the security by virtue of which the seller expects to receive the “when-issued” or “when-distributed” security, if the 2 transactions combined result in a sale of more units than the aggregate of those owned by the seller plus those to be received by him or her pursuant to the right of acquisition.

Ins 6.41(6) (6) Regulation under s. 611.31 (4) (e), Stats.

Ins 6.41(6)(a) (a) Arbitrage transactions under s. 611.31 (4) (e), Stats. It shall be unlawful for any director or officer of an insurer to effect any foreign or domestic arbitrage transaction in any equity security of such insurer, unless he or she shall include such transaction in the statements required by s. 611.31 (4) (a), Stats., and shall account to such insurer for the profits arising from such transaction, as provided in s. 611.31 (4) (b), Stats. The provision of s. 611.31 (4) (c), Stats., shall not apply to such arbitrage transactions. The provisions of s. 611.31, Stats., shall not apply to any bona fide foreign or domestic arbitrage insofar as it is effected by any person other than such director or officer of the insurer.

Ins 6.41 Note Note: Copies of UNITED STATES CODE, title 26, Internal Revenue Code of 1954 as amended to date of adoption of the above section sections 368(c), 422, 423 and 424(b), are available for inspection at the office of the Insurance Department, the Secretary of State, and the Legislative Reference Bureau, or the code may be procured for personal use from the U.S. Government Printing Office, Washington, D. C.

Ins 6.41 History History: Cr. Register, August, 1966, No. 128, eff. 9-1-66; am. Register, December, 1977, No. 264, eff. 1-1-78; am. (1) (d) 2., Register, March, 1979, No. 279, eff. 4-1-79; corrections made under s. 13.93 (2m) (b) 5., Stats., Register, April, 1992, No. 436; correction in (3) (b) made under s. 13.93 (2m) (b) 7., Stats., Register, January, 1999, No. 517; correction in (3) (i) (title) made under s. 13.92 (4) (b) 2., Stats., Register, January, 2012 No. 673.

Ins 6.42 Ins 6.42 Initial statement of beneficial ownership of securities.

Ins 6.42(1) (1) Persons required to file statements. A statement on Form 3 (shown at the end of this rule) of initial statement of beneficial ownership of securities is required to be filed by every person who is directly or indirectly the beneficial owner of more than 10% of any class of any equity security of a domestic stock insurance company, or who is a director or an officer of such a company.

Ins 6.42(2) (2) When statements are to be filed.

Ins 6.42(2)(a) (a) Beginning September 1, 1966, persons who hold any of the relationships specified in sub. (1) are required to file a statement within 10 days after assuming such relationship. Statements are not deemed to have been filed with the commissioner until they have actually been received by him or her.

Ins 6.42(2)(b) (b) Persons who held any of the relationships specified in sub. (1) as of January 31, 1966, or who assumed such relationship(s) during the period of January 31, 1966 through August 31, 1966, are required to file such initial statement of beneficial ownership of securities by September 10, 1966.

Ins 6.42(3) (3) Where statements are to be filed. One signed copy of each statement shall be filed with the commissioner of insurance, P.O. Box 7873, Madison, Wisconsin 53707-7873.

Ins 6.42(4) (4) Separate statement for each company. A separate statement shall be filed with respect to the securities of each company.

Ins 6.42(5) (5) Relation of reporting person to company. Indicate clearly the relationship of the reporting person to the company; for example, “Director”, “Director and Vice President”, “Beneficial owner of more than 10% of the company’s stock”, etc.

Ins 6.42(6) (6) Date as of which beneficial ownership is to be given. The information as to beneficial ownership of securities shall be given as of January 31, 1966, or, in the case of persons who subsequently assume any of the relationships specified in sub. (1), as of the date that relationship was assumed.

Ins 6.42(7) (7) Title of security. The statement of the title of a security shall be such as clearly to identify the security even though there may be only one class; for example, “Class A Common Stock”.

Ins 6.42(8) (8) Nature of ownership. Under “Nature of ownership”, state whether ownership of the securities is “direct” or “indirect”. If the ownership is indirect, i.e., through a partnership, corporation, trust or other entity, indicate, in a footnote or other appropriate manner, the name or identity of the medium through which the securities are indirectly owned. The fact that securities are held in the name of a broker or other nominee does not, of itself, constitute indirect ownership. Securities owned indirectly shall be reported on separate lines from those owned directly and also from those owned through a different type of indirect ownership.

Ins 6.42(9) (9) Statement of amount owned. In stating the amount of securities beneficially owned, give the face amount of debt securities or the number of shares or other units of other securities. In the case of securities owned indirectly, the entire amount of securities owned by the partnership, corporation, trust or other entity shall be stated. The person whose ownership is reported may, if he or she so desires, also indicate in a footnote, or other appropriate manner, the extent of his or her interest in the partnership, corporation, trust or other entity.

Ins 6.42(10) (10) Inclusion of additional information. A statement may include any additional information or explanation deemed relevant by the person filing the statement.

Ins 6.42(11) (11) Signature. If the statement is filed for a corporation, partnership, trust, etc., the name of the organization shall appear over the signature of the officer or other person authorized to sign the statement. If the statement is filed for an individual, it shall be signed by him or her or specifically on his or her behalf by a person authorized to sign for him or her.

Ins 6.42 History History: Cr. Register, August, 1966, No. 128, eff. 9-1-66; am. Register, September, 1976, No. 249, eff. 10-1-76; corrections made under s. 13.93 (2m) (b) 5., Stats., Register, April, 1992, No. 436.

________________________________________________
State of Wisconsin
Commissioner of Insurance
Form 3

INITIAL STATEMENT OF BENEFICIAL OWNERSHIP OF SECURITIES
(Filed pursuant to Wisconsin Administrative Code section Ins 6.42)

(Name of insurance company)

(Name of person whose ownership is reported)

(Business address of such person; street, city, state, zip code)

Relationship of such person to company named above. (See s. Ins 6.42 (5))

Date of event which requires the filing of this statement. (See s. Ins 6.42 (6))

Securities Beneficially Owned

Remarks: (See s. Ins 6.42 (10))
  I affirm under penalty of perjury that the       foregoing is full, true, and correct.

Date of statement

Signature

Ins 6.43 Ins 6.43 Statement of changes in beneficial ownership of securities.

Ins 6.43(1) (1) Persons required to file statements. Statements on Form 4 (shown at the end of this rule) of changes in beneficial ownership of securities are required to be filed by every person who at any time during any calendar month was directly or indirectly the beneficial owner of more than 10% of any class of equity security of a domestic stock insurance company, or by a director or officer of the company which is the issuer of such securities, and who during such month had any change in his or her beneficial ownership of any class of equity security of such company.

Ins 6.43(2) (2) When statements are to be filed.

Ins 6.43(2)(a) (a) Beginning September 1, 1966, statements are required to be filed on or before the 10th day after the end of each month in which any change in beneficial ownership has occurred. Statements are not deemed to have been filed with the commissioner until they have actually been received by him or her.

Ins 6.43(2)(b) (b) Statements for each month for the period January 31, 1966, through August 31, 1966, in which any changes in beneficial ownership have occurred shall be filed by September 10, 1966.

Ins 6.43(3) (3) Where statements are to be filed. One signed copy of each statement shall be filed with the commissioner of insurance, P.O. Box 7873, Madison, Wisconsin 53707-7873.

Ins 6.43(4) (4) Separate statements for each company. A separate statement shall be filed with respect to the securities of each company.

Ins 6.43(5) (5) Relationship of reporting person to company. Indicate clearly the relationship of the reporting person to the company; for example, “Director”, “Director and Vice President”, “Beneficial owner of more than 10% of the company’s common stock”, etc.

Ins 6.43(6) (6) Transactions and holdings to be reported. Every transaction shall be reported even though purchases and sales during the month are equal or the change involves only the nature of ownership; for example, from direct to indirect ownership. Beneficial ownership at the end of the month of all classes of securities required to be reported shall be shown even though there has been no change during the month in the ownership of securities of one or more classes.

Ins 6.43(7) (7) Title of security. The statement of the title of the security shall be such as clearly to identify the security even though there may be only one class; for example, “Class A Common Stock”.

Ins 6.43(8) (8) Date of transaction. The exact date (month, day and year) of each transaction shall be stated opposite the amount involved in the transaction.

Ins 6.43(9) (9) Statement of amounts of securities. In stating the amount of the securities acquired, disposed of, or beneficially owned, give the face amount of debt securities or the number of shares or other units of other securities. In the case of securities owned indirectly, i.e., through a partnership, corporation, trust or other entity, the entire amount of securities involved in the transaction or owned by the partnership, corporation, trust or other entity shall be stated. The person whose ownership is reported may, if he or she so desires, also indicate in a footnote, or other appropriate manner, the extent of his or her interest in the transaction or holdings of the partnership, corporation, trust or other entity.

Ins 6.43(10) (10) Nature of ownership. Under “Nature of ownership”, state whether ownership of the securities is “direct” or “indirect”. If the ownership is indirect, i.e., through a partnership, corporation, trust or other entity, indicate in a footnote, or other appropriate manner, the name or identity of the medium through which the securities are indirectly owned. The fact that securities are held in the name of a broker or other nominee does not, of itself, constitute indirect ownership. Securities owned indirectly shall be reported on separate lines from those owned directly and from those owned through a different type of indirect ownership.

Ins 6.43(11) (11) Character of transaction. If the transaction was with the issuer of the securities, so state. If it involved the purchase of securities through the exercise of options, so state and give the exercise price per share. If any other purchase or sale was effected otherwise than in the open market, that fact shall be indicated. If the transaction was not a purchase or sale, indicate its character; for example, gift, 5% stock dividend, etc., as the case may be. The foregoing information may be appropriately set forth in the table or under “Remarks” at the end of the table.

Ins 6.43(12) (12) Inclusion of additional information. A statement may include any additional information or explanation deemed relevant by the person filing the statement.

Ins 6.43(13) (13) Signature. If the statement is filed for a corporation, partnership, trust, etc., the name of the organization shall appear over the signature of the officer or other person authorized to sign the statement. If the statement is filed for an individual, it shall be signed by him or her or specifically on his or her behalf by a person authorized to sign for him or her.

___________________________________________________

State of Wisconsin
Commissioner of Insurance
Form 4

STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP OF SECURITIES
(Filed pursuant to Wisconsin Administrative Code section Ins 6.43)

(Name of insurance company)

(Name of person whose ownership is reported)

(Business address of such person; street, city, state, zip code)

Relationship of such person to company named above. (See s. Ins 6.43 (5))

Statement of Calendar Month of , 2
Changes During Month and Month-End Ownership (See s. Ins 6.43 (6))

Remarks: (See s. Ins 6.43 (11))
  I affirm under penalty of perjury that the       foregoing is full, true, and correct.

Date of statement

Signature

Ins 6.43 History History: Cr. Register, August, 1966, No. 128, eff. 9-1-66; am. Register, September, 1976, No. 249, eff. 10-1-76.

Ins 6.50 Ins 6.50 Kinds of individual intermediary or agent licenses.