N.Y. ISC Law § 1204 — New York Code / Act ISC / Article 12 / Section 1204
Sale of insurance securities
Status: in_force

§ 1204. Sale of insurance securities. (a) Subject to the provisions of\nsubsection (e) hereof, no person, firm, association or corporation shall\nin this state sell or propose to sell to the public any security issued\nby any insurer not authorized to do business in this state, unless\nlicensed to do so under this section. In this subsection and in\nsubsection (b) hereof, "insurer" includes any corporation whose\nsecurities are to be sold or offered for sale (except by exchange for\nshares or assets and except securities issued upon a merger in\nconversion of securities of a merging company) primarily to acquire,\norganize or finance the operations of another insurer not authorized to\ndo business in this state which is, or as a result of applying the\nproceeds of such offering will be, a subsidiary of such corporation.\n  (b) The superintendent may issue a license to a named person, firm,\nassociation or corporation to sell and propose to sell to the public in\nthis state the specified securities of a specified insurer or other\ncompany subject to subsection (a) hereof. The applicant for such a\nlicense shall submit a written application, subscribed by the applicant\nand affirmed by him as true under the penalties of perjury and\ncontaining such information as the superintendent may require, including\nthe following: the name, residence address, business address in this\nstate and previous business experience of the applicant and of such\ninsurer and of his or its officers, members and employees, and\ninformation as to their trustworthiness; a copy of every security to be\noffered for sale; a statement in detail as to the insurer's financial\ncondition, plans and purposes, the amount and par value of securities\nand their selling price, the manner in which the proceeds of sale are to\nbe used, the rate of commissions to be paid for the sale of securities,\nthe salaries to be paid to the insurer's officers, and the safeguards to\nbe provided against diversion of proceeds from such plans and purposes.\nBefore issuing any such license the superintendent may make such\nexamination of the affairs of the proposed licensee and of such insurer\nas he deems expedient. The superintendent may refuse to issue such\nlicense, or may after notice and hearing revoke such license, if in his\njudgment such refusal or revocation will best promote the interests of\nthe people of this state. Such license shall be for a term of one year\nunless sooner revoked. No license to sell or to propose to sell\nsecurities of any foreign or alien insurer shall be issued unless such\ninsurer is qualified to obtain a license to do an insurance business in\nthis state or, in the case of a corporation described in subsection (a)\nhereof, unless the insurer subsidiary is so qualified.\n  (c) No person, firm, association or corporation shall in this state\nissue, circulate or distribute any advertisement, circular, letter or\nother public announcement in connection with the sale or proposed sale\nto the public in this state of any securities of any insurer unless a\ncopy of such announcement has been filed with the superintendent and\napproved by him. The superintendent may approve any such announcement\nif, after such examination or investigation as he sees fit, he finds it\nis not false, misleading or likely to deceive the public. In this\nsubsection, "insurer" shall include any corporation whose securities are\nto be sold or offered for sale (except by exchange for shares or assets\nand other than securities issued upon a merger in conversion of\nsecurities of a merging company) primarily to acquire, organize or\nfinance the operations of another insurer which is, or as a result of\napplying the proceeds of such offering will be, a subsidiary of such\ncorporation; provided that examination or investigation of any such\ncorporation shall be limited to matters relating to the operations of\nthe insurance subsidiary.\n  (d) Every such license to sell or propose to sell the securities of an\ninsurer shall state conspicuously in bold-face type: "The issuance of\nthis license by the superintendent of financial services of New York\ndoes not constitute a recommendation of these securities." No person,\nfirm, association or corporation shall represent that the superintendent\nor the department of financial services or the state of New York has\nrecommended any securities for purchase. The superintendent may in his\ndiscretion require the insertion in any public announcement to be\napproved by him of a statement that such approval does not constitute a\nrecommendation of the securities therein referred to.\n  (e) This section shall not apply to the selling or proposing to sell\nsecurities after one year from the first date upon which the security\nwas offered to the public in this state, except that subsections (c) and\n(d) hereof shall apply to any insurer authorized to do business in this\nstate and to any other corporation described in subsection (c) hereof.\n  (f) (1) This section shall not apply to annuities or agreements to\nprovide for annuities issued or to be issued by an authorized insurer\npursuant to section four thousand two hundred forty of this chapter.\n  (2) The superintendent may by order or regulation exempt any other\nsecurity or class thereof from all or part of this section on such terms\nand conditions as he deems appropriate upon a finding that its\napplication thereto is not necessary to protect the public.\n