[Rev. 11/21/2013 1:17:07 PM--2013]

CHAPTER 694A - TRADING OF EQUITY SECURITIES BY INSIDERS

NRS 694A.010        “Equity security” defined.

NRS 694A.020        Beneficial owner, director or officer required to file statements concerning equity securities with Commissioner.

NRS 694A.030        Profits realized from certain transactions recoverable by insurer; actions, limitations and exceptions.

NRS 694A.040        Unlawful sales of equity securities.

NRS 694A.050        Investment accounts and transactions.

NRS 694A.060        Foreign or domestic arbitrage transactions.

NRS 694A.070        Inapplicability of provisions to stock insurers.

NRS 694A.080        Regulations; classification of insurers and securities; acts done or omitted in good faith.

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      NRS 694A.010  “Equity security” defined.  The term “equity security” when used in this chapter means:

      1.  Any stock or similar security;

      2.  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;

      3.  Any such warrant or right; or

      4.  Any other security which the Commissioner deems to be of similar nature and considers necessary or appropriate, by such rules and regulations as the Commissioner may prescribe in the public interest or for the protection of investors, to treat as an equity security.

      (Added to NRS by 1971, 1824)

      NRS 694A.020  Beneficial owner, director or officer required to file statements concerning equity securities with Commissioner.  Every person who is directly or indirectly the beneficial owner of more than 10 percent of any class of any equity security of a domestic stock insurer, or who is a director or an officer of such insurer, shall:

      1.  File in the Office of the Commissioner within 10 days after the person becomes such beneficial owner, director or officer, a statement, in such form as the Commissioner may prescribe, of the amount of all equity securities of such insurer of which the person is the beneficial owner; and

      2.  Within 10 days after the close of each calendar month thereafter, if there has been a change in such ownership during such month, file in the Office of the Commissioner a statement, in such form as the Commissioner may prescribe, indicating the person’s ownership at the close of the calendar month and such changes in the person’s ownership as have occurred during such calendar month.

      (Added to NRS by 1971, 1824)

      NRS 694A.030  Profits realized from certain transactions recoverable by insurer; actions, limitations and exceptions.

      1.  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 or her relationship to such insurer, any profit realized by the beneficial owner, director or officer from any purchase and sale, or any sale and purchase, of any equity security of such insurer within any period of less than 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 insurer, 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 6 months.

      2.  Suit to recover such profit may be instituted at law or in equity in any court of competent jurisdiction by the insurer, or by the owner of any security of the insurer in the name and in behalf of the insurer if the insurer fails or refuses to bring such suit within 60 days after request or fails diligently to prosecute the same thereafter; but no such suit shall be brought more than 2 years after the date such profit was realized.

      3.  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 Commissioner by rules and regulations may exempt as not comprehended within the purpose of this section.

      (Added to NRS by 1971, 1825)

      NRS 694A.040  Unlawful sales of equity securities.  It is unlawful for any such beneficial owner, director or officer, directly or indirectly, to sell any equity security of such insurer if the person selling the security or the principal of the person:

      1.  Does not own the security sold; or

      2.  If the owner of the security, does not deliver it against such sale within 20 days thereafter, or does not within 5 days after such sale deposit it in the mails or other usual channels of transportation,

Ê but no person shall be deemed to have violated this section if he or she proves that notwithstanding the exercise of good faith he or she was unable to make such delivery or deposit within such time, or that to do so would cause undue inconvenience or expense.

      (Added to NRS by 1971, 1825)

      NRS 694A.050  Investment accounts and transactions.

      1.  The provisions of NRS 694A.030 do not apply to any purchase and sale, or sale and purchase, and the provisions of NRS 694A.040 do not apply to any sale, of an equity security of a domestic stock insurer not then or theretofore held by him or her in an investment account, by a dealer in the ordinary course of his or her business and incident to the establishment or maintenance by the dealer of a primary or secondary market (otherwise than on an exchange as defined in the Securities Exchange Act of 1934) for such security.

      2.  The Commissioner may, by such rules and regulations as the Commissioner deems necessary or appropriate in the public interest, define and prescribe terms and conditions with respect to 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.

      (Added to NRS by 1971, 1826)

      NRS 694A.060  Foreign or domestic arbitrage transactions.  The provisions of NRS 694A.020, 694A.030 and 694A.040 do not apply to foreign or domestic arbitrage transactions unless made in contravention of such rules and regulations as the Commissioner may adopt in order to carry out the purposes of this chapter.

      (Added to NRS by 1971, 1826)

      NRS 694A.070  Inapplicability of provisions to stock insurers.  The provisions of NRS 694A.020, 694A.030 and 694A.040 do not apply to equity securities of a domestic stock insurer if:

      1.  Such securities are registered, or are required to be registered, pursuant to section 12 of the Securities Exchange Act of 1934, as amended; or

      2.  Such domestic stock insurer has not any class of its equity securities held of record by 100 or more persons on the last business day of the year next preceding the year in which equity securities of the insurer would be subject to the provisions of NRS 694A.020, 694A.030 and 694A.040 except for the provisions of this subsection.

      (Added to NRS by 1971, 1826)

      NRS 694A.080  Regulations; classification of insurers and securities; acts done or omitted in good faith.

      1.  The Commissioner shall have the power to make such rules and regulations as may be necessary for the execution of the functions vested in the Commissioner by NRS 694A.010 to 694A.070, inclusive, and may for such purpose classify domestic stock insurers, securities and other persons or matters within the jurisdiction of the Commissioner.

      2.  No provision of NRS 694A.020, 694A.030 and 694A.040 imposing any liability shall apply to any act done or omitted in good faith in conformity with any rule or regulation of the Commissioner, notwithstanding that such rule or regulation may, after such act or omission, be amended or rescinded or determined by judicial or other authority to be invalid for any reason.

      (Added to NRS by 1971, 1826)