CHAPTER 10. EQUITY SECURITIES OF INSURANCE COMPANIES
IC 27-2-10
Chapter 10. Equity Securities of Insurance Companies
IC 27-2-10-1
Statement of equity ownership and changes in holdings
Sec. 1. Every person who is directly or indirectly the beneficial
owner of more than ten per cent (10%) of any class of any equity
security of a domestic stock insurance company, or who is a director
or an officer of such company, shall file in the office of the insurance
commissioner of Indiana on or before December 31, 1965, or within
ten (10) days after he becomes such beneficial owner, director, or
officer, a statement, in such form as the insurance commissioner may
prescribe, of the amount of all equity securities of such company 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
insurance commissioner a statement, in such form 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.
(Formerly: Acts 1965, c.5, s.1.)
IC 27-2-10-2
Accounting for profits from short term equity trading; persons
entitled to bring action; limitation of actions
Sec. 2. 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 domestic stock insurance
company, any profit realized by him from any purchase and sale, or
any sale and purchase, of any equity security of such company within
any period of less than six (6) months, unless such security was
acquired in good faith in connection with a debt previously
contracted, shall inure to and be recoverable by the company,
irrespective of any intention on the part of such beneficial owner,
director, or officer in entering into such transaction of holding the
security purchased or of not repurchasing the security 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 company, or by the owner of any security of the company in
the name and in behalf of the company if the company 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 section 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 insurance commissioner
by rules and regulations may exempt as not comprehended within the
purpose of this section.
(Formerly: Acts 1965, c.5, s.2.)
IC 27-2-10-3
Short sales; time for delivery of securities sold
Sec. 3. It shall be unlawful for any such beneficial owner,
director, or officer, directly or indirectly, to sell any equity security
of such domestic insurance company if the person selling the security
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 section 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.
(Formerly: Acts 1965, c.5, s.3.)
IC 27-2-10-4
Exemption of dealers
Sec. 4. The provisions of section 2 of this chapter shall not apply
to any purchase and sale, or sale and purchase, and the provisions of
section 3 of this chapter 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, 15 U.S.C. 78a et seq.) for such security. The insurance
commissioner may, by such rules as he deems necessary or
appropriate and in the public interest, define and prescribe terms and
conditions with respect to equity 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.
(Formerly: Acts 1965, c.5, s.4.) As amended by P.L.252-1985,
SEC.132.
IC 27-2-10-5
Exemption of arbitrage transactions
Sec. 5. The provisions of sections 1, 2, and 3 of this chapter shall
not apply to foreign or domestic arbitrage transactions unless made
in contravention of such rules as the insurance commissioner may
adopt in order to carry out the purposes of this chapter.
(Formerly: Acts 1965, c.5, s.5.) As amended by P.L.252-1985,
SEC.133.
IC 27-2-10-6
"Equity security" defined
Sec. 6. The term "equity security", when used in this chapter,
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 insurance
commissioner shall deem to be of similar nature and consider
necessary or appropriate, by such rules as he may prescribe in the
public interest or for the protection of investors, to treat as an equity
security.
(Formerly: Acts 1965, c.5, s.6.) As amended by P.L.252-1985,
SEC.134.
IC 27-2-10-7
Exemption of sale of registered securities or securities in closely
held corporation
Sec. 7. The provisions of sections 1, 2, and 3 of this chapter shall
not apply to transactions in equity securities of a domestic stock
insurance company if:
(a) such securities shall be registered, or shall be required to be
registered, pursuant to section 12 of the Securities Exchange
Act of 1934 (15 U.S.C. 781), as amended; or
(b) such domestic stock insurance company shall not have any
class of its equity securities held of record by one hundred
(100) or more persons on the last business day of the year next
preceding the year in which equity securities of the company
would be subject to the provisions of sections 1, 2, and 3 of this
chapter except for the provisions of this subdivision.
(Formerly: Acts 1965, c.5, s.7.) As amended by P.L.252-1985,
SEC.135; P.L.3-1989, SEC.153.
IC 27-2-10-8
Powers of commissioner
Sec. 8. The insurance commissioner shall have the power to make
such rules as may be necessary for the execution of the functions
vested in him by sections 1 through 7 of this chapter and may for
such purpose classify domestic stock insurance companies,
securities, and other persons or matters within his jurisdiction. No
provision of sections 1, 2, and 3 of this chapter imposing any liability
shall apply to any act done or omitted in good faith in conformity
with any rule of the insurance commissioner, notwithstanding that
such rule may, after such act or omission, be amended or rescinded
or determined by judicial or other authority to be invalid for any
reason.
(Formerly: Acts 1965, c.5, s.8.) As amended by P.L.252-1985,
SEC.136.
IC 27-2-10-9
Construction of act
Sec. 9. This chapter shall be construed as supplemental to IC 27-1.
(Formerly: Acts 1965, c.5, s.9.) As amended by P.L.252-1985,
SEC.137; P.L.11-1987, SEC.30.