215 ILCS 5/28.1
2021 Illinois Compiled Statutes|Chapter 215 - INSURANCE|215 ILCS 5/ - Illinois Insurance Code.|Article II - Domestic Stock Companies

 (from Ch. 73, par. 640.1)(Section scheduled to be repealed on January 1, 2027)Sec. 28.1.     Dealing in shares of company by officers, directors and  principal stockholders.(a) Any person who is directly or indirectly the beneficial owner of  more than 10% of any class of any equity security of a domestic stock  insurance company, or who is a director or an officer of such company,  shall file in the office of the Director by January 31, 1966 or within  10 days after he becomes such beneficial owner, director or officer, a  statement, in such form as the Director may prescribe, of the amount of  all equity securities of such company of which he is the beneficial  owner; and, within 10 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 Director a statement, in such  form as the Director 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.(b) 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 relationship to such company, any profit  realized by such beneficial owner, officer or director from any purchase  and sale, or any sale and purchase, of any equity security of such  company 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 company,  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. Suit to recover such profit may be instituted at law  or in equity by the company, or if the company shall fail or refuse to  bring such suit within 60 days after request or shall fail diligently to  prosecute such a suit, a suit may be instituted by the owner of any  security of the company in the name and in behalf of the company, but no  such suit shall be brought more than 2 years after the date such profit  was realized. This subsection 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 Director by rules  and regulations may exempt as not comprehended within the purpose of  this subsection.(c) It is unlawful for any such beneficial owner, director or  officer, directly or indirectly, to sell any equity security of such  company if the person selling the security or his principal (i) does not  own the security sold, or (ii) if owning 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; provided, however, that this provision does not apply if  such person 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 paragraph b of this Section do not apply to  any purchase and sale, or sale and purchase, and the provisions of  paragraph c of this Section do not apply to any sale, of an equity  security of a domestic stock insurance company not then or theretofore  held by such beneficial owner, director or officer in an investment  account, by a dealer in the ordinary course of his business and incident  to the establishment or maintenance by him of a primary or secondary  market (otherwise than on an exchange as defined in the Securities  Exchange Act of 1934) for such security. The Director may, by such rules  and regulations as he finds to be 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.(e) The provisions of paragraphs a, b and c of this Section do not  apply to foreign or domestic arbitrage transactions unless made in  contravention of such rules and regulations as the Director may adopt in  order to carry out the purposes of this Act.(f) The term "equity security" when used in this Act means 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 Director finds to be of similar nature  and considers necessary or appropriate, by such rules and regulations as  he may prescribe in the public interest or for the protection of  investors, to treat as an equity security.(g) The provisions of paragraphs a, b and c of this Section do not  apply to equity securities of a domestic stock insurance company if (i)  such securities are registered, or are required to be registered,  pursuant to Section 12 of the Securities Exchange Act of 1934, as  amended, or if (ii) such domestic stock insurance company does not have  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 company would be subject to the provisions of  paragraphs a, b and c of this Section except for the provisions of this  subsection (ii).(h) The Director may make such rules and regulations as may be  necessary for the execution of the functions vested in him by this  Section, and may for such purpose classify domestic stock insurance  companies, securities, and other persons or matters within his  jurisdiction. No provision 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 Director, 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) The provisions of this Section do not apply to any sale made  prior to its effective date.    (Source: Laws 1965, p. 2257.)