California Code of Regulations
Title 10 - Investment
Chapter 5 - Insurance Commissioner
Subchapter 5 - Stock Insurers-Corporate Affairs
Article 2 - Insider Trading
Section 2682.17 - Exemption from Section 1104.3 of Certain Securities Received upon Surrender of Similar Equity Securities
Current through Register 2024 Notice Reg. No. 38, September 20, 2024
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 Section 1104.3 as a transaction not comprehended within the purpose of said section, if the following conditions exist:
(a) 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 percent of an equity security of the insurer;
(b) The shares surrendered and the shares issued upon such surrender shall be classes which are freely transferable and entitle the holders thereof to participate equally per share in all distribution of earnings and assets;
(c) The surrender and issuance are made pursuant to provisions of a certificate of incorporation which require 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 of 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.
(d) 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 section), by the person surrendering such shares, within six months before or after such surrender or issuance.
