insurers by officers. A. Every person who is directly or indirectly the beneficial owner of more than ten percent (10%) of any class of equity security of a domestic stock insurer or who is a director or officer of such insurer shall file in the office of the Insurance Commissioner on or before the thirty-first day of October, nineteen hundred sixty-five or within ten (10) days after he becomes such beneficial owner, director or officer a statement, in such form and detail and subject to such rules and regulations as the Commissioner may prescribe, of the amount of all equity securities of such insurer of which he is the beneficial owner, and within ten (10) days after the close of each calendar month, thereafter, if there has been a change in such ownership during such month, shall file in the office of the Commissioner a statement, in such form and detail and subject to such rules and regulations as the Commissioner may prescribe, indicating his ownership at the close of the calendar month and such changes in his ownership as have occurred during such calendar month. B. For the purpose of preventing the unfair use of information which may have been obtained by such beneficial owner, director or officer by reason of his relationship to such insurer, any profit realized by him from any purchase and sale, or any sale and purchase, of any equity security of such insurer within any period of less than six (6) months, unless such equity security was acquired in good faith in connection with a debt previously contracted, shall inure to and be recoverable by the insurer, irrespective of any intention on the part of such beneficial owner, director or officer in entering into such transaction of holding the equity security purchased or of not repurchasing the stock sold for a period exceeding six (6) months. Suit to recover such profit may be instituted at law or in equity in any court of competent jurisdiction by the insurer or by the owner of any equity security of the insurer in the name and in behalf of the insurer if the insurer shall fail or refuse to bring such suit within sixty (60) days after request or shall fail diligently to prosecute the same thereafter; but no such suit shall be brought more than two (2) years after the date such profit was realized. This paragraph shall not be construed to cover any transaction where such beneficial owner was not such both at the time of the purchase and sale, or the sale and purchase, of the security involved, or any transaction or transactions which the Commissioner may by rules and regulations exempt as not comprehended within the purpose of this paragraph. C. It shall be unlawful for any such beneficial owner, director or officer, directly or indirectly, to sell any equity security of such insurer if the person selling the stock or his principal (i) does not own the security sold, or (ii) if owning the security, does not deliver it against such sale within twenty (20) days thereafter, or does not within five (5) days after such sale deposit it in the mails or other usual channels of transportation; but no person shall be deemed to have violated this paragraph if he proves that notwithstanding the exercise of good faith he was unable to make such delivery or deposit within such time, or that to do so would cause undue inconvenience or expense. D. The provisions of paragraph B of this section shall not apply to any purchase and sale, or sale and purchase, and the provisions of paragraph C of this section shall not apply to any sale, of an equity security of a domestic stock insurance company not then or theretofore held by him in an investment account, by a dealer in the ordinary course of his business and incident to the establishment or maintenance by him of a primary or secondary market (otherwise than on an exchange as defined in the Securities Exchange Act of 1934) for such security. The Commissioner may, by such rules and regulations as he deems necessary or appropriate in the public interest, define and prescribe terms and conditions with respect to securities held in an investment account and transactions made in the ordinary course of business and incident to the establishment or maintenance of a primary or secondary market. E. The provisions of paragraphs A, B and C of this section shall not apply to foreign or domestic arbitrage transactions unless made in contravention of such rules and regulations as the Commissioner may adopt in order to carry out the purpose of this act. F. The term "equity security" when used in this act means any stock or similar 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; or any other security which the Commissioner shall deem to be of similar nature and consider necessary or appropriate, by such rules and regulations as he may prescribe in the public interest or for the protection of investors, to treat as an equity security. The term "officer" when used in this act means a director, president, vice-president, treasurer, actuary, secretary, controller, and any other person who performs for the company functions corresponding to those performed by the foregoing officers. The term "Commissioner" when used in this act means the Insurance Commissioner. The term "insurer" when used in this act means any domestic stock insurer. The term "person" when used in this act includes any firm, partnership, association or corporation. G. The Commissioner shall have the power to make such rules and regulations as may be necessary for the execution of the functions vested in him by paragraphs A through F of this section, and may for such purpose classify domestic stock insurance companies, securities, and other persons or matters within his jurisdiction. No provision of paragraphs A, B and C of this section, imposing any liability shall apply to any act done or omitted in good faith in conformity with any rule or regulation of the Commissioner, notwithstanding that such rule or regulation may, after such act or omission, be amended or rescinded or determined by judicial or other authority to be invalid for any reason. H. For the purpose of carrying into effect the provisions of this act, there is hereby imposed a filing fee of Two Dollars ($2.00) on each monthly statement filed pursuant to this act. Such fee shall be due and payable when such statement is filed and shall be paid to the Insurance Commissioner. Added by Laws 1965, c. 439, § 1, operative Oct. 1, 1965. Amended by Laws 1979, c. 30, § 11, emerg. eff. April 6, 1979; Laws 1984, c. 215, § 6, operative June 30, 1984; Laws 2009, c. 432, § 17, eff. July 1, 2009.
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