New York Codes, Rules and Regulations
Title 11 - INSURANCE
Chapter I - GENERAL PROVISIONS
Part 7 - Sale Of Insurance Securities
Section 7.2 - Exemptions
Universal Citation: 11 NY Comp Codes Rules and Regs ยง 7.2
Current through Register Vol. 46, No. 39, September 25, 2024
(a) Pursuant to section 1204, the application of section 1204 with respect to the following securities and transactions is determined not to be necessary for the protection of the public and, accordingly, such securities and transactions are herewith exempted from the provisions of section 1204, except as provided in subdivisions (b) and (c) of this section:
(1)
any security listed or approved for listing upon notice of issuance on the New
York Stock Exchange, the American Exchange, the National Stock Exchange or such
other stock exchanges as the superintendent may designate from time to time;
any other security of the same issuer which is of senior or substantially equal
rank; any security called for by subscription rights or warrants so listed or
approved; or any warrant or right to purchase or subscribe to any of the
foregoing;
(2) the issuance of
securities in connection with a consolidation or other form of corporate
reorganization or recapitalization, and the solicitation of proxies from
stockholders in connection therewith, provided such solicitation is subject to
the requirements of the Securities Exchange Act of 1934, the insurance laws of
any State of the United States or any other law or regulation prescribing
substantially similar requirements;
(3) the offer of, or proposal to sell, any
security for which a registration statement has been filed under the Securities
Act of 1933, and the sale of any such security;
(4) any transaction pursuant to an offer to
existing security holders of the issuer or a company which controls, is
controlled by or is under common control with the issuer, including persons who
at the time of the transaction are holders of convertible securities,
nontransferable warrants, or transferable warrants exercisable within not more
than 90 days of their issuance, if no commission or other remuneration (other
than a standby commission) is paid or given directly or indirectly for
soliciting any security holder in this State, or if the issuer first files a
notice specifying the terms of the offer and the superintendent does not by
order disallow the exemption within the next five full business days;
(5) any offer or sale to a bank, savings
institution, trust company, insurance company, investment company as defined in
the Investment Company Act of 1940, pension or profit- sharing trust, or other
financial institution or institutional buyer, whether the purchaser is acting
for itself or in some fiduciary capacity;
(6) any transaction pursuant to an offer
directed by the offeror to not more than 25 persons, exclusive of or in
addition to those designated in paragraph (5) of this subdivision, in this
State during any period of 12 consecutive months, whether or not the offeror or
any of the offerees is then present in this State, if:
(i) the seller reasonably believes that all
the buyers in this State are purchasing for investment; and
(ii) no commission or other remuneration is
paid or given directly or indirectly for soliciting any prospective buyer in
this State;
(7) any
commercial paper (notes, drafts, bills of exchange or bankers' acceptances)
which arises out of a current transaction or the proceeds of which have been or
are to be used for current transactions, and which evidences an obligation to
pay cash within nine months of the date of issuance, exclusive of days of
grace, or any renewal of such paper which is likewise limited, or any guarantee
of such paper or of any such renewal;
(8) the offer or sale of any security which
is not made directly or indirectly by or for the benefit of the issuer thereof
if either:
(i) Moody's, Standard and Poor's,
Best's Insurance Reports, or any other recognized securities manual designated
by the superintendent contains the names of the issuer's officers and
directors, a balance sheet of the issuer as of a date within 18 months, and a
profit and loss statement for either the fiscal year preceding that date or the
most recent year of operations; or
(ii) the issuer of such security is required
to file reports with the Securities and Exchange Commission pursuant to section
13 of the Securities Exchange Act of 1934 or is exempt from the requirements of
section 12(g) of that Act by reason of subsection (2)(G) thereof; and
(9) such other securities or
transactions, or types of securities or transactions, as the superintendent may
by order exempt on such terms and conditions as he or she deems appropriate to
protect the public upon a finding that the application of section 1204 to such
securities or transactions will cause unnecessary or unreasonable hardship and
is not necessary to protect the public.
(b) The exemptions set forth in paragraphs (a)(1), (3), (4), (5) and (6) of this section shall be inapplicable to the sale to the public in this State by or for the benefit of a domestic insurer of:
(1) shares of its stock or subscription
rights or warrants to purchase such stock;
(2) any security convertible into such stock;
and
(3) any evidence of
indebtedness having a stated maturity in excess of one year from the date of
sale.
(c) Within 30 days following the commencement of any exempt offering by an insurer, such insurer shall file with the superintendent, for information purposes, a copy of the principal prospectus or similar offering circular, if any, used for purposes of the offering.
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