An Act to confer additional jurisdiction upon the Superintendent of Insurance for the District of Columbia to regulate domestic stock insurance companies and3.1634-11681 to exempt such companies from section 12(g)(1) of the Securities Exchange Act of 1934
PL 89-402 (H.R.11664), enacted 04/18/1966

80 STAT. ] 
PUBLIC LAW 89.402-APRIL 18, 1966 
123 
SEC. 3. The medals authorized to be issued pursuant to this Act 
sizes, materials. 
shall be of such size or sizes and of such various metals as shall be 
determined by the Secretary of the Treasury in consultation with the 
American Numismatic Association. 
Approved April 16, 1966. 
Public Law 89-402 
AN ACT 
Ap^.j ig^ jggg 
To confer additional jurisdiction upon the Superintendent of Insurance for the 
[H. R. 11664] 
District of Columbia to regulate domestic stock insurance companies and to 
exempt such companies from section 12(g)(1) of the Securities Exchange 
Act of 1934. 
D.C. Superin-
tendent of Insur-
Be it enacted hy the Senate and Ilouae of Representatives 
of the 
United States of Ainerlca in Congress assembled. That, as used in this 
Act, unless the context otherwise requires, "domestic stock insurance ance. 
company" means a stock insurance company incorporated or orga- jj^t^^"^""^^ """^' 
nized under the laws of the District of Columbia. 
"Domestic stock 
SEC. 2. (a) The Commissioners of the District of Columbia shall company." 
promulgate rules and regulations with respect to the solicitation and 
voting of proxies, consents, and authorizations of domestic stock 
insurance companies in conformity, as nearly as may be practicable, 
with those prescribed by the National Association of Insurance Com-
missioners. 
The Superintendent of Insurance (hereinafter "Super-
intendent") shall have power to revoke or suspend the certificate of 
authority to transact business in the District of Columbia of any such 
company which has failed or refused to comply with the rules and 
regulations promulgated by the Commissioners of the District of 
Columbia. 
(b) The Superintendent shall not revoke nor suspend the certificate p^"^^'^," °
*
^ ^"^' 
of authority of any such company until he has given the company not 
less than thirty days' notice of the proposed revocation or suspension 
and of the grounds alleged therefor, and has afforded the company an 
opportunity for a full hearing: Provided^ That if the Superintendent 
shall find upon examination that the further transaction of business 
by the company would be hazardous to the public or to the policy-
holders or creditors of the company in the District, he may suspend 
such authority without giving notice as herein required: Provided 
Penalties. 
further^ That in lieu of revoking or suspending the certificate of 
authority of any company, after hearing as herein provided, the 
Superintendent may subject such company to a penalty of not more 
than $500 when, in his judgment, he finds that the public interest 
would be best served by the continued operation of the company. 
The 
amount of any such penalty shall be paid by the company through the 
office of the Superintendent to the Commissioners of the District of 
Columbia. 
At any hearing provided by this section, the Superin-
tendent shall have authority to administer oaths to witnesses. 
Anyone 
testifying falsely after having been administered such an oath shall be 
subject to the penalties of perjury. 
(c) The provisions of subsections (a) and (b) of this section shall 
not apply to securities of a domestic stock insurance company if such 
securities shall be registered, or shall be required to be registered, 
pursuant to section 12 of the Securities Exchange Act of 1934, as 
amended. 
^s stat. 892; 
SEC. 3. (a) Every person who is directly or indirectly the beneficial 
15 use i&i. 
owner of more than 10 per centum of any class of any equity security 
Registration re-
of a domestic stock insurance company, or Avho is a director or an ben'eTci^*i^o°Jners, 
offi^cer of such company, shall file in the office of the Superintendent on etc. 
124 
PUBLIC LAW 89.402-APRIL 18, 1966 
[80 STAT. 
or before the 31st day of December 1965, or within ten days after he 
becomes such beneficial owner, director, or officer, a statement, in such 
form as the Superintendent may prescribe, of the amount of all equity 
securities of such company of which he is the beneficial owner, and 
within ten days after the close of each calendar month thereafter, if 
there has been a change in such ownership during such month, shall 
file in the office of the Superintendent a statement, in such form as the 
Superintendent may prescribe, indicating his ownership at the close of 
the calendar month and such changes in his ownership as have occurred 
during such calendar month. 
transa"tk)*n ami- 
^^^ ^^^ ^^^^ purpose of preventing the unfair use of information 
tation.''' " ""' 
which may have been obtained by suOh beneficial owner, director, or 
officer by reason of his relationship to such company, any profit real-
ized by him from any purchase and sale, or any sale and purchase, of 
any equity security of such company within any period of less than six 
months,, unless such security was acquired in good faith in connection 
with a debt previously contracted, shall inure to and be recoverable 
by the company, irrespective of any intention on the part of such bene-
ficial 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 six months. 
Suit to recover such profit 
may be instituted at law or in equity in any court of competent juris-
diction by the company, or by the owner of any security of the com-
pany in the name and in behalf of the company if the company shall 
fail or refuse to bring such suit within sixty days after request or 
shall fail diligently to prosecute the same thereafter; but no such suit 
shall be brought more than two years after the date such profit was 
realized. 
This section shall not be construed to cover any transaction 
where such beneficial owner was not such both at the time of the pur-
chase and sale, or the sale and purchase, of the security involved, or 
any transaction or transactions which the Commissioners of the Dis-
trict of Columbia by rules and regulations may exempt as not com-
jirehended within the purpose of this section. 
Sales, restric- 
^Q^ J^ shall be uiilawful for any such beneficial owner, director, or 
officer, directly or indirectly, to sell any equity security of such com-
pany if the person selling the security or his principal (i) does not 
own the security sold, or (li) if owning the security, does not deliver it 
against such sale within twenty days thereafter, or does not within 
five days after such sale deposit it in the mails or other usual channels 
of transportation; but no person shall be deemed to have violated this 
section if he proves that, notwithstanding the exercise of good faith, 
he was unable to make such delivery or deposit within such time, or 
that to do so would cause undue inconvenience or expense. 
(d) The provisions of subsection (b) of this section shall not apply 
to any purchase and sale, or sale and purchase, and the provisions of 
subsection (c) of this section shall not apply to any sale, of an equity 
security of a domestic stock insurance company not then or theretofore 
held by him in an investment account, by a dealer in the ordinary 
course of his business and incident to the establishment or main-
tenance by him of a primary or secondary market (otherwise than on 
48 Stat. 882. 
jjj^ excliauge as defined in the Securities Exchange Act of 1934) for 
such security. 
The Commissioners of the District of Columbia may, 
by such rules and regulations as they deem 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 establish-
ment or maintenance of a primary or secondary market. 
80 STAT. ] 
PUBLIC LAW 89-402-APRIL 18, 1966 
125 
(e) The provisions of subsections (a), (b), and (c) of this section 
shall not apply to foreign or domestic arbitrage transactions unless 
made in contravention of such rules and reguhitions as the Commis-
sioners of the District of Columbia may adopt in order to carry out the 
purposes of this section. 
(f) The term "equity security" when used in this section means . "Equity secu-
any stock or similar security; or 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; or any such 
warrant or right; or any other security which the Commissioners of 
the District of Columbia shall deem to be of similar nature and 
consider necessary or appropriate, by such rules and regulations as 
they may prescribe in the public interest or for the protection of 
investors, to treat as an equity security. 
(g) The provisions of subsections (a), (b), and (c) of this section 
shall not apply to securities of a domestic stock insurance company if 
(i) such securities shall be registered, or shall be required to be regis-
tered, pursuant to section 12 of the Securities Exchange Act of 1934, 
as amended, or if (ii) such domestic stock insurance company shall not ^^^ T^^es^' 
have any class of its equity securities held of record by one hundred 
15 use 78/. 
or more persons on the last business day of the year next preceding the 
year in which equity securities of the company would be subject to 
the provisions of subsections (a), (b), and (c) of this section except 
for the provisions of this subsection (g) (ii). 
(h) The Commissioners of the District of Columbia shall make such 
rules and regulations as may be necessary for the execution of the func-
tions vested in the Superintendent by subsections (a) through (g) 
of this section, and may for such purpose classify domestic stock 
insurance companies, securities, and other persons or matters within 
his jurisdiction. 
No provisions of subsection (a), (b), or (c) of this 
section imposing any liability shall apply to any act done or omitted 
in good faith in conformity with any rule or regulation of the Commis-
sioners of the District of Columbia 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. 
(i) Any person who willfully violates any provision of this section, 
^^^^ity-
or any rule or regulation thereunder the violation of which is made 
unlawful by this section or the observance of which is required under 
the terms of this section, or any person who willfully and knowingly 
makes, or causes to be made, any statement in any application, report, 
or document required to be filed under this section, which statement 
was false or misleading with respect to any material fact, shall upon 
conviction be fined not more than $1,000, or be imprisoned not more 
than thirty days, or both. 
(j) This section shall take effect thirty days after enactment. 
Effective date. 
SEC. 4. Nothing in this Act shall be construed so as to affect the 
authority vested in the Board of Commissioners of the District of 
Columbia by Reorganization Plan Numbered 5 of 1952 (66 Stat. 824). ^^^^ ^°'^^- ^ 
The performance of any function vested by this Act in the Board of 
Commissioners or in any office or agency under the jurisdiction and 
control of said Board of Commissioners may be delegated by said 
Board of Commissioners in accordance with section 3 of such plan. 
Approved April 18, 1966. 
65-300 0-67—11