Section 21.40.010 - 21.40.030 do not apply to foreign or domestic arbitrage transactions unless made in contravention of regulations adopted by the department in carrying out the purposes of this chapter.

A beneficial owner of more than 10 percent of a class of equity security, or a director or officer, may not, directly or indirectly, sell an equity security of the company if the person selling the security or the principal of that person (1) does not own the security sold, or (2) if owning the security, does not deliver it against the sale within 20 days after the sale or does not within five days after the sale deposit it in the mails or other usual channels of transportation; but a person shall not be considered to have violated this section on proof that notwithstanding the exercise of good faith the person was unable to make the delivery or deposit within the time prescribed, or that to do so would cause undue inconvenience or expense.

In this chapter

(1) 'domestic stock insurance corporation' means a stock insurance corporation organized under the laws of this state or the Territory of Alaska;

(2) 'equity security' means a stock or similar security; or a security convertible, with or without considerations, into stock or similar security, or carrying a warrant or right to subscribe to or purchase stock or similar security; or any such warrant or right; or any other security that the department shall consider to be of similar nature and consider necessary or appropriate, by regulations the department may adopt in the public interest or for the protection of investors, to treat as an equity security;

(3) 'officer' means a president, vice president, treasurer, actuary, secretary, controller, and any other person who performs for the company functions corresponding to those performed by the foregoing officers.

Every person who is directly or indirectly the beneficial owner of more than 10 percent of a class of an equity security of a domestic stock insurance company, or who is a director or an officer of the company, shall file with the department on or before July 1, 1966, or within 10 days after becoming the beneficial owner, director, or officer, a statement of the amount of all equity securities of the company of which the person is the beneficial owner. Within 10 days after the close of each calendar month, if there has been a change in ownership during the month, the beneficial owner, director, or officer shall file with the department a statement indicating ownership at the close of the calendar month, the changes in ownership that have occurred during the calendar month, and any other information required by the department. Statements shall be made in a form prescribed by the department.

Section 21.40.020 does not apply to a purchase and sale, or sale and purchase, and Section 21.40.030 does not apply to a sale, of an equity security of a domestic stock insurance company not then or theretofore held in an investment account, by a dealer in the ordinary course of business and incident to the establishment or maintenance of a primary or secondary market, otherwise than on an exchange as defined in the Securities Exchange Act of 1934, as amended, for the security. The department may, by regulations that it considers necessary or appropriate in the public interest, define and prescribe terms and conditions regarding 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.

Section 21.40.010 - 21.40.030 do not apply to equity securities of a domestic stock insurance company if

(1) the securities are registered, or are required to be registered, under 15 U.S.C. 78l (Sec. 12, Securities Exchange Act of 1934), as amended; or

(2) the domestic stock insurance company does not have a class of its equity securities held of record by 100 or more persons on the last business day of the year preceding the year in which equity securities of the company would be subject to Section 21.40.010 - 21.40.030 except for the provisions of this section.

The department may, under Section 44.62 (Administrative Procedure Act), adopt regulations necessary for the execution of the functions vested in it by Section 21.40.010 - 21.40.060, and may for that purpose classify domestic stock insurance companies, securities, and other persons or matters within its jurisdiction. A provision of Section 21.40.010 and 21.40.020 imposing a liability does not apply to an act done or omitted in good faith in conformity with a regulation of the department, notwithstanding that the regulation may, after the act or omission, be amended or rescinded or determined by judicial or other authority to be invalid for any reason.

For the purpose of preventing the unfair use of information that may have been obtained by a beneficial owner of more than 10 percent of a class of an equity security, or by a director or officer by reason of a relationship to a company, the profit realized by the beneficial owner, director, or officer from a purchase and sale, or a sale and purchase, of an equity security of the company within any period of less than six months, unless the security was acquired in good faith in connection with a debt previously contracted, shall inure to and be recoverable by the company. The profit shall inure to and be recoverable by the company irrespective of the intention on the part of the beneficial owner, director, or officer in entering into the transaction of holding the security purchased or of not repurchasing the security sold, for a period exceeding six months. Suit to recover the profit may be instituted at law or in equity in the superior court by the company, or by the owner of a security of the company in the name and in behalf of the company if the company fails or refuses to bring a suit within 60 days after request or fails diligently to prosecute the suit. However, a suit to recover profit may not be brought more than two years after the date the profit was realized. This section may not be construed to cover a transaction where the beneficial owner was not a beneficial owner both at the time of the purchase and sale, or the sale and purchase, of the security involved, or cover a transaction or transactions that the department by regulation may exempt as not comprehended within the purpose of the section.