Current through Register Vol. XLI, No. 38, September 20, 2024
3.1. Filing of
statements. -- Initial statements of beneficial ownership of equity securities
required by subsection (a) of the Act shall be filed on Form 3, attached hereto.
Statements of changes in such beneficial ownership required by subsection (a) of the
Act shall be filed on Form 4, attached hereto. All such statements shall be prepared
and filed in accordance with the requirements of the applicable form.
3.2. Ownership of more than ten percent (10%) of
an equity security. -- In determining, for the purpose of subsection (a) of the Act
whether a person is the beneficial owner, directly or indirectly, of more than ten
percent (10%) of any class of any equity security, such class shall be deemed to
consist of the total amount of such class outstanding, exclusive of any securities
of such class held by or for the account of the insurer or a subsidiary of the
insurer; except that for the purpose of determining percentage ownership of voting
trust certificates or certificates of deposit for equity securities, the class of
voting trust certificates or certificates of deposit shall be deemed to consist of
the amount of voting trust certificates or certificates of deposit issuable with
respect to the total amount of outstanding equity securities of the class which may
be deposited under the voting trust agreement or deposit agreement in question,
whether or not all of such outstanding securities have been so deposited. For the
purpose of this section a person acting in good faith may rely on the information
contained in the latest Convention Form Statement filed with the Commissioner with
respect to the amount of securities of a class outstanding or in the case of voting
trust certificates or certificates of deposit the amount thereof issuable.
3.3. Disclaimer of beneficial ownership. -- Any
person filing a statement may expressly declare therein that the filing of such
statement shall not be construed as an admission that such person is, for the
purpose of the West Virginia Code section thirty, article five, chapter
thirty-three, the beneficial owner of any equity securities covered by the
statement.
3.4. Exemptions from
subsections (a) and (b) of West Virginia Code section thirty, article five, chapter
thirty-three.
(a) During the period of twelve (12)
months following their appointment and qualification, securities held by the
following persons shall be exempt from subsections (a) and (b) of the Act:
(1) Executors or administrators of the estate of a
decedent;
(2) Guardians or committees
for an incompetent; and
(3) Receivers,
trustees in bankruptcy, assignees for the benefit of creditors, conservators,
liquidating agents and other similar persons duly authorized by law to administer
the estate or assets of other persons.
(b) After the twelve (12) month period following
their appointment or qualification the foregoing persons shall be required to file
reports with respect to the securities held by the estates which they administer
under subsection (a) of the Act and shall be liable for profits realized from
trading in such securities pursuant to subsection (b) of the Act only when the
estate being administered is a beneficial owner of more than ten percent (10%) of
any class of equity security of an insurer subject to the Act.
(c) Securities reacquired by or for the account of
an insurer and held by it for its account shall be exempt from subsections (a) and
(b) of the Act during the time they are held by the insurer.
3.5. Exemption from the Act of securities
purchased or sold by odd-lot dealers. -- Securities purchased or sold by an odd-lot
dealer (1) in odd lots so far as reasonably necessary to carry on odd-lot
transactions or (2) in round lots to offset odd-lot transactions previously or
simultaneously executed or reasonably anticipated in the usual course of business,
shall be exempt from the provisions of the Act with respect to participation by such
odd-lot dealer in such transactions.
3.6. Certain transactions subject to subsection
(a) of the Act. -- The acquisition or disposition of any transferable option, put,
called, spread or straddle shall be deemed such a change in the beneficial ownership
of the security to which such privilege relates as to require the filing of a
statement reflecting the acquisition or disposition of such privilege. Nothing in
this section, however, shall exempt any person from filing the statements required
upon the exercise of such option, put, call, spread or straddle.
3.7. Ownership of securities held in trust.
(a) Beneficial ownership of a security for the
purpose of subsection (a) of the Act shall include:
(1) The ownership of securities as a trustee where
either the trustee or members of his immediate family have a vested interest in the
income or corpus of the trust;
(2) The
ownership of a vested beneficial interest in a trust; and
(3) The ownership of securities as a settlor of a
trust in which the settlor has the power to revoke the trust without obtaining the
consent of all the beneficiaries.
(b) Except as provided in Paragraph (c) hereof,
beneficial ownership of securities solely as a settlor or beneficiary of a trust
shall be exempt from the provisions of Subsection (a) where less than twenty percent
(20%) in market value of the securities having a readily ascertainable market value
held by such trust, determined as of the end of the preceding fiscal year of the
trust, consists of equity securities with respect to which reports would otherwise
be required. Exemption is likewise accorded from Subsection (a) with respect to any
obligation which would otherwise be imposed solely by reason of ownership as settlor
or beneficiary of securities held in trust, where the ownership, acquisition or
disposition of such securities by the trust is made without prior approval by the
settlor or beneficiary. No exemption pursuant to this subsection of this regulation
shall, however, be acquired or lost solely as a result of changes in the value of
the trust assets during any fiscal year or during any time when there is no
transaction by the trust in the securities otherwise subject to the reporting
requirements of subsection (a) of the Act.
(c) In the event that ten percent (10%) of any
class of any equity security of an insurer is held in a trust, that trust and the
trustees thereof as such shall be deemed a person required to file the reports
specified in subsection (a) of the Act.
(d) Not more than one (1) report need be filed to
report any holdings or with respect to any transaction in securities held by a
trust, regardless of the number of officers, directors, or ten percent (10%)
stockholders who are either trustees, settlors, or beneficiaries of a trust:
Provided, That the report filed shall disclose the names of all
trustees, settlors and beneficiaries who are officers, directors or ten percent
(10%) stockholders. A person having an interest only as a beneficiary of a trust
shall not be required to file any such report so long as he relies in good faith
upon an understanding that the trustee of such trust will file whatever reports
might otherwise be required of such beneficiary.
(e) As used in Section 3.7 of these rules, the
"Immediate Family" of a trustee means:
(1) A son
or daughter of the trustee, or descendant of either,
(2) A stepson or stepdaughter of the
trustee,
(3) The father or mother of the
trustee, or an ancestor of either,
(4) A
stepfather or stepmother of the trustee,
(5) A spouse of the trustee.
For the purpose of determining whether any of the foregoing
relations exists, a legally adopted child of a person shall be considered a child of
such person by blood.
(f) In determining, for the purposes of subsection
(a) of the Act, whether a person is the beneficial owner, directly or indirectly, of
more than ten percent (10%) of any class of any equity security, the interest of
such person in the remainder of a trust shall be excluded from the
computation.
(g) No report shall be
required by any person, whether or not otherwise subject to the requirement of
filing reports under subsection (a) of the Act, with respect to his indirect
interest in portfolio securities held by:
(1) A
pension or retirement plan holding securities of an insurer whose employees
generally are the beneficiaries of the plan;
(2) A business trust with over twenty-five (25)
beneficiaries.
(h) Nothing in
Section 3.7 of these rules shall be deemed to impose any duties or liabilities with
respect to reporting any transaction or holding prior to its effective
date.
3.8. Exemption for
small transactions.
(a) Any acquisition of
securities shall be exempt from subsection (a) of the Act where:
(1) The person effecting the acquisition does not
within six (6) months thereafter effect any disposition, otherwise than by way of
gift, of securities of the same class; and
(2) The person effecting such acquisition does not
participate in acquisitions or in dispositions of securities of the same class
having a total market value in excess of three thousand dollars ($3,000) for any six
(6) months' period during which the acquisition occurs.
(b) Any acquisition or disposition of securities
by way of gift, where the total amount of such gifts does not exceed three thousand
dollars ($3,000) in market value for any six (6) months' period, shall be exempt
from subsection (a) of the Act and may be excluded from the computations prescribed
in Paragraph (a) Subdivision (2) of Section 3.8 of this regulation.
(c) Any person exempted by Paragraph (a) or (b) of
this section shall include in the first report filed by him after a transaction
within the exemption a statement showing his acquisitions and dispositions for each
six (6) months' period or portion thereof which has elapsed since his last
filing.
3.9. Exemption from
subsection (b) of the Act of transactions which need not be reported under
subsection (a) of the Act. -- Any transaction which has been or shall be exempted
from the requirements of subsection (a) of the Act shall, insofar as it is otherwise
subject to the provisions of subsection (b) of the Act be likewise exempted from
subsection (b) of the Act.
