74th OREGON LEGISLATIVE ASSEMBLY--2007 Regular Session
Enrolled
Senate Bill 257
Printed pursuant to Senate Interim Rule 213.28 by order of the
President of the Senate in conformance with presession filing
rules, indicating neither advocacy nor opposition on the part
of the President (at the request of Senate Interim Committee on
Judiciary)
CHAPTER ................
AN ACT
Relating to variable annuities; creating new provisions; and
amending ORS 59.015 and 731.046.
Be It Enacted by the People of the State of Oregon:
SECTION 1. ORS 59.015 is amended to read:
59.015. As used in the Oregon Securities Law, unless the
context otherwise requires:
(1) 'Broker-dealer' means a person who engages, all or part of
the time, in effecting transactions in securities for the account
of others or for the person's own account. ' Broker-dealer' does
not include:
(a) An issuer effecting sales in its own securities;
(b) The following institutions:
(A) A financial institution or trust company, as defined in ORS
706.008; or
(B) A financial holding company or a bank holding company, as
defined in ORS 706.008, holding an institution described in
subparagraph (A) of this paragraph; a savings and loan holding
company as defined in section 408 of the National Housing Act, 12
U.S.C. section 1730a, holding an association described in
subparagraph (A) of this paragraph; the subsidiaries and
affiliates of the financial holding company, bank holding company
or savings and loan holding company; or subsidiaries and
affiliates of institutions described in subparagraph (A) of this
paragraph, if the appropriate statutory regulatory authority is
exercising control over, or is regulating or supervising the
person in the sale of securities in accord with the purposes of
the Oregon Securities Law;
(c) A person who has no place of business in this state
effecting transactions in this state exclusively with
broker-dealers;
(d) A person effecting sales exempted by ORS 59.035;
(e) A salesperson;
(f) A person effecting sales of securities owned by the person
registered for sale pursuant to ORS 59.065;
(g) A person effecting sales of securities exempted by ORS
59.025 (7);
(h) A person licensed as a mortgage banker or a mortgage broker
under ORS 59.840 to 59.980 when effecting sales of securities
Enrolled Senate Bill 257 (SB 257-A) Page 1
involving real estate paper registered for sale pursuant to ORS
59.065; or
(i) A person designated by rule or order by the director.
(2) 'Control' means the possession, directly or indirectly, of
the power to direct or cause the direction of the management and
policies of a person, whether through the ownership of voting
securities, by contract, or otherwise.
(3) 'Director' means the Director of the Department of Consumer
and Business Services.
(4) 'Federal covered investment adviser' means a person who is
registered as an investment adviser pursuant to section 203 of
the Investment Advisers Act of 1940, as amended.
(5) 'Federal covered security' means any security that is a
covered security under section 18 of the Securities Act of 1933,
as amended, and for which such Act provides that the director may
require filing of a notice and payment of a fee.
(6) 'Fraud,' 'deceit' and 'defraud' are not limited to
common-law deceit.
(7) 'Guaranteed' means guaranteed as to payment of principal,
interest or dividends.
(8)(a) 'Investment adviser representative' means any partner,
officer, director or person occupying a similar status or
performing a similar function, or other individual, except
clerical or ministerial personnel, who is employed by or
associated with:
(A) A state investment adviser that is licensed or required to
be licensed in this state and who does any of the following:
(i) Makes any recommendations or otherwise renders advice
regarding securities;
(ii) Manages accounts or portfolios of clients;
(iii) Determines which recommendation or advice regarding
securities should be given;
(iv) Solicits, offers or negotiates for the sale of or sells
investment advisory services; or
(v) Supervises employees acting under this subparagraph; or
(B) A federal covered investment adviser, subject to the
limitations of section 203A of the Investment Advisers Act of
1940, as amended, as the director may designate by rule or order.
(b) 'Investment adviser representative' does not include a
person designated by rule or order of the director.
(9) 'Issuer' means a person who issues, proposes to issue or
has issued a security and includes an issuer to be formed. With
respect to certificates of deposit, voting-trust certificates or
collateral-trust certificates, or with respect to certificates of
interest or shares in an unincorporated investment trust not
having a board of directors or persons performing similar
functions or of the fixed, restricted management or unit type,
the ' issuer' is the person or persons performing the acts and
assuming the duties of depositor or manager pursuant to the
provisions of the trust or other instrument or agreement under
which the security is issued.
(10) 'License' means a license as provided under the Oregon
Securities Law.
(11) 'Mortgage banker' means a mortgage banker as defined in
ORS 59.840.
(12) 'Mortgage broker' means a mortgage broker as defined in
ORS 59.840.
(13) 'Offer' or 'offer to sell' includes every attempt or offer
to dispose of, or solicitation of an offer to buy, a security or
interest in a security for value. Every sale or offer of a
Enrolled Senate Bill 257 (SB 257-A) Page 2
warrant or right to purchase or subscribe to another security of
the same or another issuer, as well as every sale or offer of a
security which gives the holder a present or future right or
privilege to convert into another security of the same or another
issuer, is considered to include an offer of the other security.
(14) 'Person' includes an individual, a joint venture, a
partnership, a cooperative, a limited liability company, an
association, a joint stock company, a corporation, a trust, an
unincorporated organization or a government or political
subdivision of a government.
(15) 'Real estate paper' means any obligation secured or
purportedly secured by an interest in real property. Real estate
paper includes, but is not limited to, mortgage-backed
securities, collateralized mortgage obligations, and real estate
mortgage investment conduits.
(16) 'Registered' means registered as provided in the Oregon
Securities Law.
(17)(a) 'Sale' or 'sell' includes every contract of sale of,
contract to sell, or disposition of, a security or interest in a
security for value. Any security given or delivered with, or as a
bonus on account of, a purchase of securities or any other thing
shall constitute a part of the subject of the purchase and shall
have been offered and sold for value. A gift of assessable stock
by or for any issuer or promoter shall constitute a sale.
(b) For purposes of the authority of the director under ORS
59.245 and 59.255, the terms 'sale' and 'sell' include the terms
'offer' and 'offer to sell. '
(c) 'Sale' and 'sell' do not include:
(A) A bona fide pledge or loan of securities;
(B) A bona fide security dividend, whether the corporation
distributing the dividend is the issuer of the security or not,
if nothing of value is given by the recipients for the dividend
other than payments in connection with the elimination of
fractional shares; or
(C) An act incident to a judicially approved reorganization in
which a security is issued in exchange for one or more
outstanding securities, claims or property interests, or partly
in such exchange and partly for cash.
(18)(a) 'Salesperson' means a person, other than a
broker-dealer, who represents or purports to represent a
broker-dealer, issuer or owner of securities in effecting or
attempting to effect in any manner transactions in securities.
(b) 'Salesperson' does not include:
(A) A person who represents an issuer in effecting sales in a
security exempted by ORS 59.025;
(B) A person who represents an issuer in effecting sales
exempted by ORS 59.035;
(C) A person who represents an issuer in effecting sales with
existing partners or directors of the issuer, if no commission or
other remuneration is paid or given directly or indirectly for
soliciting any person in this state;
(D) An employee of an institution or organization described in
subsection (1)(b) of this section to the extent the employee is
not a dual employee of the institution and a broker-dealer;
(E) A person effecting transactions in this state limited to
those transactions described in section 15(h)(2) and (3) of the
Securities Exchange Act of 1934, as amended; or
(F) A person designated by rule or order by the director.
(c) A person who is a partner, director or officer of a
broker-dealer, issuer or owner of securities, or a person who
Enrolled Senate Bill 257 (SB 257-A) Page 3
occupies a similar status or performing similar functions, is a '
salesperson' only if the person otherwise comes within this
definition.
(19)(a) 'Security' means a note, stock, treasury stock, bond,
debenture, evidence of indebtedness, certificate of interest or
participation in a pension plan or profit-sharing agreement,
collateral-trust certificate, preorganization certificate or
subscription, transferable share, investment contract,
voting-trust certificate, { + variable annuity, + } certificate
of deposit for a security, certificate of interest or
participation in an oil, gas, or mining title or lease or in
payments out of production under such title or lease, real estate
paper sold by a broker-dealer, mortgage banker, mortgage broker
or a person described in subsection (1)(b) of this section to
persons other than persons enumerated in ORS 59.035 (4), or, in
general, any interest or instrument commonly known as a
'security,' or any certificate of interest or participation in,
temporary or interim certificates for, receipt for, guarantee of,
or warrant or right to subscribe to or purchase any of the
foregoing.
(b) 'Security' does not include:
(A) An insurance or endowment policy or annuity contract { + ,
other than a variable annuity contract, + } under which an
insurance company promises to pay a fixed or variable sum of
money either in a lump sum or periodically for life or some other
specified period;
(B) A beneficial interest in a voluntary inter vivos trust
unless the trust is created solely for the purpose of voting or
is part of an attempt to evade the provisions of ORS 59.005 to
59.451; or
(C) A beneficial interest in a testamentary trust.
(20)(a) 'State investment adviser' means a person who, for
compensation:
(A) Engages all or part of the time of the person, in this
state, in the business of advising others, either directly or by
mail or through publication or writing, as to the value of
securities or as to the advisability of investing in, purchasing
or selling securities;
(B) Engages all or part of the time of the person, in this
state, in the business of managing an investment or trading
account in securities for other persons; or
(C) Issues or promulgates, as part of a regular business in
this state, analyses or reports concerning securities.
(b) 'State investment adviser' does not include:
(A) An investment adviser representative;
(B) An institution or organization described in subsection
(1)(b) of this section;
(C) A licensed broker-dealer whose performance of investment
advisory services is solely incidental to the conduct of business
as a broker-dealer and who receives no special compensation for
such services;
(D) A salesperson licensed to a broker-dealer whose performance
of investment advisory services is solely incidental to that
person's activities as a salesperson and who receives no special
compensation for such services;
(E) A publisher of or contributor to a bona fide newspaper,
newsmagazine, investment manual or service, or business or
financial publication of general, regular and paid circulation;
(F) A person whose only clients are federal covered investment
advisers, state investment advisers, broker-dealers, mortgage
Enrolled Senate Bill 257 (SB 257-A) Page 4
bankers, mortgage brokers, banks, savings institutions or trust
companies, insurance companies, investment companies as defined
in the Investment Company Act of 1940, as amended, pension or
profit-sharing trusts, or other financial institutions or
institutional buyers, whether acting for themselves or as
trustees;
(G) A duly licensed lawyer, engineer or accountant whose
performance of investment advisory services is solely incidental
to the practice of the profession;
(H) A person whose advice, analyses or reports relate only to
securities exempted by ORS 59.025 (1);
(I) A federal covered investment adviser in compliance with ORS
59.165 (7);
(J) A person, advising others, that has no place of business in
this state and during the preceding 12-month period has had fewer
than six clients, other than those persons included in
subparagraph (F) of this paragraph, who are residents of this
state; or
(K) Such other persons as the director may by rule or order
designate.
SECTION 2. ORS 731.046 is amended to read:
731.046. Any policy { + , other than a variable annuity
policy, + } whose form has been filed with and approved by the
Director of the Department of Consumer and Business Services
{ - shall be - } { + is + } exempt from the application of ORS
59.005 to 59.451, 59.660 to 59.830, 59.991 and 59.995, and the
marketing of such policy { - shall be - } { + is + } likewise
exempt.
SECTION 3. { + The amendments to ORS 59.015 and 731.046 by
sections 1 and 2 of this 2007 Act apply to variable annuities
offered for sale on or after the effective date of this 2007
Act. + }
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Enrolled Senate Bill 257 (SB 257-A) Page 5
Passed by Senate April 16, 2007
...........................................................
Secretary of Senate
...........................................................
President of Senate
Passed by House May 29, 2007
...........................................................
Speaker of House
Enrolled Senate Bill 257 (SB 257-A) Page 6
Received by Governor:
......M.,............., 2007
Approved:
......M.,............., 2007
...........................................................
Governor
Filed in Office of Secretary of State:
......M.,............., 2007
...........................................................
Secretary of State
Enrolled Senate Bill 257 (SB 257-A) Page 7