1204 - Sale of insurance securities.

§ 1204. Sale of insurance securities. (a) Subject to the provisions of  subsection (e) hereof, no person, firm, association or corporation shall  in  this state sell or propose to sell to the public any security issued  by any insurer not authorized to  do  business  in  this  state,  unless  licensed  to  do  so  under  this  section.  In  this  subsection and in  subsection  (b)  hereof,  "insurer"  includes  any   corporation   whose  securities  are  to  be sold or offered for sale (except by exchange for  shares  or  assets  and  except  securities  issued  upon  a  merger  in  conversion  of  securities  of  a merging company) primarily to acquire,  organize or finance the operations of another insurer not authorized  to  do  business  in  this  state  which  is, or as a result of applying the  proceeds of such offering will be, a subsidiary of such corporation.    (b) The superintendent may issue a license to a  named  person,  firm,  association  or corporation to sell and propose to sell to the public in  this state the specified securities of  a  specified  insurer  or  other  company  subject  to  subsection  (a)  hereof.  The applicant for such a  license shall submit a written application, subscribed by the  applicant  and  affirmed  by  him  as  true  under  the  penalties  of  perjury and  containing such information as the superintendent may require, including  the following: the name, residence address,  business  address  in  this  state  and  previous  business  experience  of the applicant and of such  insurer  and  of  his  or  its  officers,  members  and  employees,  and  information  as to their trustworthiness; a copy of every security to be  offered for sale; a statement in detail as to  the  insurer's  financial  condition,  plans  and  purposes, the amount and par value of securities  and their selling price, the manner in which the proceeds of sale are to  be used, the rate of commissions to be paid for the sale of  securities,  the salaries to be paid to the insurer's officers, and the safeguards to  be  provided against diversion of proceeds from such plans and purposes.  Before issuing  any  such  license  the  superintendent  may  make  such  examination  of the affairs of the proposed licensee and of such insurer  as he deems expedient. The  superintendent  may  refuse  to  issue  such  license,  or may after notice and hearing revoke such license, if in his  judgment such refusal or revocation will best promote the  interests  of  the  people  of this state. Such license shall be for a term of one year  unless sooner revoked.   No license  to  sell  or  to  propose  to  sell  securities  of  any foreign or alien insurer shall be issued unless such  insurer is qualified to obtain a license to do an insurance business  in  this  state or, in the case of a corporation described in subsection (a)  hereof, unless the insurer subsidiary is so qualified.    (c) No person, firm, association or corporation shall  in  this  state  issue,  circulate  or  distribute any advertisement, circular, letter or  other public announcement in connection with the sale or  proposed  sale  to  the  public  in this state of any securities of any insurer unless a  copy of such announcement has been filed  with  the  superintendent  and  approved  by  him.  The superintendent may approve any such announcement  if, after such examination or investigation as he sees fit, he finds  it  is  not  false,  misleading  or  likely  to  deceive the public. In this  subsection, "insurer" shall include any corporation whose securities are  to be sold or offered for sale (except by exchange for shares or  assets  and  other  than  securities  issued  upon  a  merger  in  conversion of  securities of a merging  company)  primarily  to  acquire,  organize  or  finance  the  operations  of another insurer which is, or as a result of  applying the proceeds of such offering will be,  a  subsidiary  of  such  corporation;  provided  that  examination  or  investigation of any such  corporation shall be limited to matters relating to  the  operations  of  the insurance subsidiary.(d) Every such license to sell or propose to sell the securities of an  insurer  shall  state  conspicuously in bold-face type: "The issuance of  this license by the superintendent of insurance of  New  York  does  not  constitute  a  recommendation  of  these  securities."  No person, firm,  association  or  corporation  shall represent that the superintendent or  the insurance department or the state of New York  has  recommended  any  securities  for  purchase.  The  superintendent  may  in  his discretion  require the insertion in any public announcement to be approved  by  him  of  a  statement that such approval does not constitute a recommendation  of the securities therein referred to.    (e) This section shall not apply to the selling or proposing  to  sell  securities  after  one  year from the first date upon which the security  was offered to the public in this state, except that subsections (c) and  (d) hereof shall apply to any insurer authorized to do business in  this  state and to any other corporation described in subsection (c) hereof.    (f)  (1)  This  section  shall not apply to annuities or agreements to  provide for annuities issued or to be issued by  an  authorized  insurer  pursuant to section four thousand two hundred forty of this chapter.    (2)  The  superintendent  may  by order or regulation exempt any other  security or class thereof from all or part of this section on such terms  and  conditions  as  he  deems  appropriate  upon  a  finding  that  its  application thereto is not necessary to protect the public.