2023 New York Laws › ISC - Insurance › Article 12 - Organization and Corporate Procedure › 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 financial  services  of  New  York
does  not  constitute  a recommendation of these securities." No person,
firm, association or corporation shall represent that the superintendent
or  the  department  of  financial services 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.