611.31 Securities regulation. (1) REGISTRATION. No securities issued by a domestic insurance corporation may be sold by or for the corporation unless they are registered or exempt from registration under ch. 551. (2) APPROVAL BY COMMISSIONER. Securities of a domestic insurance corporation may not be registered under ch. 551 without prior approval of the commissioner of insurance. Issuance of an organization permit under s. 611.13 constitutes such approval for the securities described in the permit. (3) HOLDING COMPANIES. No issuer of securities which is being organized in this state or elsewhere solely or partly for the purpose of organizing a corporation under this chapter may register or sell its securities in this state unless it obtains an organization permit under s. 611.13. No security may be registered or sold in this state if there is any representation that an insurer will be organized or purchased in this state with the proceeds of the sale, unless the issuer obtains an organization permit under s. 611.13. (4) INSIDER TRADING OF SECURITIES. (a) 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 insurance corporation, or who is a director or officer thereof, shall file in the office of the commissioner within 10 days after becoming
May 22, 2026, are designated by NOTES. (Published 5-22-26)
Updated 23-24 Wis. Stats. 8 DOMESTIC STOCK AND MUTUAL INSURANCE CORPORATIONS a beneficial owner or a director or officer, and within 10 days af- sideration, into such a security, or carrying any warrant or right to ter the close of any calendar month thereafter in which there has subscribe to or purchase such a security; or any such warrant or been a change in his or her ownership or office, a statement in the right; or any other security which the commissioner deems to be form prescribed by the commissioner, of the office and of all eq- of similar nature and designates as an equity security by rules uity securities of the company of which the person is the benefi- promulgated in the public interest or for the protection of investors. cial owner, and of all changes in either. (5) PROXY SOLICITATION. No person may, in contravention (b) For the purpose of preventing the unfair use of information which may have been obtained by such a beneficial owner or of rules the commissioner promulgates for the protection of inby a director or officer because of his or her relationship to the vestors or the public, solicit or permit the use of his or her name corporation, any profit realized by him or her from any purchase to solicit any proxy or consent or authorization in respect of any and sale or sale and purchase of any equity security of the corpo- equity security of a domestic stock corporation having 100 or ration within any period of less than 6 months, unless the security more shareholders of record. (6) EFFECT OF RELIANCE ON COMMISSIONER’S RULE. No prowas acquired in good faith in connection with a debt previously contracted, shall be recoverable by the corporation, irrespective vision of sub. (4) imposing any liability applies to any act done or of any intention by the beneficial owner, director or officer in en- omitted in good faith in conformity with any rule of the commistering into the transaction to hold the security purchased or not to sioner, even if the rule is, after the act or omission, amended or repurchase the security sold for a period exceeding 6 months. rescinded or determined by judicial or other authority to be Suit to recover the profit may be instituted in any court of compe- invalid. (7) EFFECT OF VIOLATION. A contract for subscription to or tent jurisdiction by the corporation, or if the corporation fails to bring suit within 60 days after request or fails to prosecute it dili- the purchase of shares in any corporation made in violation of gently thereafter by the owner of any security thereof, in the name this chapter or of ch. 551 is valid and enforceable against but not and in behalf of the corporation; but no such suit may be brought in favor of the corporation or the insider, except that the contract more than 2 years after the date the profit was realized. This is valid and enforceable in favor of the corporation against an paragraph does not cover any transaction where the beneficial insider. History: 1971 c. 260; 1979 c. 102 ss. 97, 236 (13). owner was not such both at the time of the purchase and sale, or Cross-reference: See also ss. Ins 6.41, 6.42, and 6.43, Wis. adm. code. the sale and purchase, of the security involved, nor does it cover any transaction which the commissioner by rule exempts as not 611.32 Promoter stock. (1) MANDATORY PURCHASE. comprehended within the purpose of this paragraph. During the period of effectiveness of the organization permit the (c) It is unlawful for any director or officer, or any beneficial incorporators, directors, and principal officers of a stock corporaowner subject to par. (a), to sell any equity security of the corpo- tion shall among themselves subscribe and pay, at the public ofration, directly or indirectly, unless the director, officer or benefi- fering price, at least $100,000 in cash or in property of equivalent cial owner or the director’s, officer’s or beneficial owner’s princi- value approved by the commissioner, for shares offered by the pal owns the security sold and either delivers it within 20 days af- corporation under the organization permit. (2) RESTRICTIONS ON ISSUANCE. (a) No person may subter the sale or deposits it within 5 days after the sale in the mails or other usual channels of transportation. A person has not vio- scribe for promoter stock on terms more favorable than those on lated this paragraph if the person proves that despite the exercise which subscriptions are being solicited from the general public. of good faith the person was unable to deliver or deposit the secu(b) Except under this section and s. 611.18 (2) (a) 2., and exrities within the specified times, or could only have done so with cept for stock dividends, no promoter stock may be issued for 5 unreasonable inconvenience or expense. years following the initial issuance of the certificate of authority, (d) Paragraph (b) does not apply to a purchase and sale or sale without the approval of the commissioner which may be granted and purchase and par. (c) does not apply to a sale of any equity se- by the commissioner only if he or she finds that: curity of a domestic stock insurance corporation not then or ear1. The corporation is in need of additional capital; and lier held by him or her in an investment account, by a dealer in the 2. The value proposed to be given for the stock is fair to existordinary course of his or her business and incident to his or her ing shareholders and has a reasonable relation to the current value establishment or maintenance of a primary or secondary market of the outstanding shares. (otherwise than on an exchange as defined in the federal securi(c) This subsection shall not affect the exercise of preemptive ties exchange act of 1934) for the security. The commissioner rights. may by rule define and prescribe terms and conditions with re(3) RESTRICTIONS ON TRANSFER. (a) Deposit in escrow. spect to securities held in an investment account and transactions Shares of promoter stock and any stock received thereon as the remade in the ordinary course of business and incident to the estab- sult of a stock dividend, stock split or exercise of preemptive lishment or maintenance of a primary or secondary market. rights shall be deposited in escrow with a depository satisfactory (e) Paragraphs (a) to (c) do not apply to foreign or domestic to the commissioner under an agreement providing that the arbitrage transactions unless made in contravention of rules the shares may not be transferred without the approval of the commissioner adopts in order to carry out this subsection. commissioner. (f) Paragraphs (a) to (c) do not apply to equity securities of a (b) Release from escrow. If the corporation issues any life incorporation if: surance policies, any shares subject to this section shall be re1. The securities are registered, or are required to be regis- leased from escrow 5 years after issuance of the certificate of autered, pursuant to s. 12 of the federal securities exchange act of thority. In other cases, the shares shall be released from escrow 3 years after issuance of the certificate of authority. 1934, as amended; or (4) APPROVAL. (a) Definition. In this subsection, “earned 2. The corporation did not have any class of its equity securities held of record by 100 or more persons on the last business surplus” means the balance of the net profits, income, gains and day of the year preceding the year in which equity securities of losses of a corporation from the date of incorporation. the corporation would otherwise be subject to pars. (a) to (c). (b) Conditions. Approval of the transfer of promoter stock (g) In this subsection “equity security” means any stock or under sub. (3) (a): similar security; or any security convertible, with or without con1. Shall be granted upon request if the corporation has made 611.31
May 22, 2026, are designated by NOTES. (Published 5-22-26)
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Updated 23-24 Wis. Stats. DOMESTIC STOCK AND MUTUAL INSURANCE CORPORATIONS
an addition to earned surplus in each of the 2 immediately preceding years of at least 6 percent of the capital raised by the sale of shares under the organization permit; and 2. May be granted upon a showing of hardship by the shareholder or the shareholder’s estate or legatee, if the release from escrow of the shares or a portion thereof would not, in the commissioner’s opinion, endanger the interests of insureds or the public. (5) OPTIONS TO PURCHASE STOCK. For 3 years after the issuance of the certificate of authority, an option to purchase stock may be issued only pursuant to a plan approved by the commissioner. History: 1971 c. 260; 1979 c. 102 s. 236 (5); 1989 a. 303; 1991 a. 316.