As Introduced 1
123rd General Assembly 4
Regular Session H. B. No. 551 5
1999-2000 6
REPRESENTATIVE SALERNO 8
_________________________________________________________________ 9
A B I L L
To amend section 1707.01 of the Revised Code to make 11
viatical settlement interests subject to the Ohio 12
Securities Law.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO: 13
Section 1. That section 1707.01 of the Revised Code be 15
amended to read as follows: 16
Sec. 1707.01. As used in this chapter: 25
(A) Whenever the context requires it, "division" or 27
"division of securities" may be read as "director of commerce" or 28
as "commissioner of securities." 29
(B) "Security" means any certificate or instrument that 31
represents title to or interest in, or is secured by any lien or 32
charge upon, the capital, assets, profits, property, or credit of 33
any person or of any public or governmental body, subdivision, or 34
agency. It includes shares of stock, certificates for shares of 35
stock, membership interests in limited liability companies, 36
voting-trust certificates, warrants and options to purchase 37
securities, subscription rights, interim receipts, interim 38
certificates, promissory notes, all forms of commercial paper, 39
evidences of indebtedness, bonds, debentures, land trust 40
certificates, fee certificates, leasehold certificates, syndicate 41
certificates, endowment certificates, certificates or written 42
instruments in or under profit-sharing or participation 43
agreements or in or under oil, gas, or mining leases, or 44
certificates or written instruments of any interest in or under 45
the same, receipts evidencing preorganization or reorganization 46
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subscriptions, preorganization certificates, reorganization 47
certificates, certificates evidencing an interest in any trust or 48
pretended trust, any investment contract, ANY VIATICAL SETTLEMENT 49
INTEREST, any instrument evidencing a promise or an agreement to 50
pay money, warehouse receipts for intoxicating liquor, and the 51
currency of any government other than those of the United States 52
and Canada, but sections 1707.01 to 1707.45 of the Revised Code 53
do not apply to the sale of real estate. 54
(C)(1) "Sale" has the full meaning of "sale" as applied by 56
or accepted in courts of law or equity, and includes every 57
disposition, or attempt to dispose, of a security or of an 58
interest in a security. "Sale" also includes a contract to sell, 59
an exchange, an attempt to sell, an option of sale, a 60
solicitation of a sale, a solicitation of an offer to buy, a 61
subscription, or an offer to sell, directly or indirectly, by 62
agent, circular, pamphlet, advertisement, or otherwise. 63
(2) "Sell" means any act by which a sale is made. 65
(3) The use of advertisements, circulars, or pamphlets in 67
connection with the sale of securities in this state exclusively 68
to the purchasers specified in division (D) of section 1707.03 of 69
the Revised Code is not a sale when the advertisements, 70
circulars, and pamphlets describing and offering those securities 71
bear a readily legible legend in substance as follows: "This 72
offer is made on behalf of dealers licensed under sections 73
1707.01 to 1707.45 of the Revised Code, and is confined in this 74
state exclusively to institutional investors and licensed 75
dealers." 76
(4) The offering of securities by any person in 78
conjunction with a licensed dealer by use of advertisement, 79
circular, or pamphlet is not a sale if that person does not 80
otherwise attempt to sell securities in this state. 81
(5) Any security given with, or as a bonus on account of, 83
any purchase of securities is conclusively presumed to constitute 84
a part of the subject of that purchase and has been "sold." 85
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(6) "Sale" by an owner, pledgee, or mortgagee, or by a 87
person acting in a representative capacity, includes sale on 88
behalf of such party by an agent, including a licensed dealer or 89
salesperson. 90
(D) "Person," except as otherwise provided in this 92
chapter, means a natural person, firm, partnership, limited 94
partnership, partnership association, syndicate, joint-stock 95
company, unincorporated association, trust or trustee except 96
where the trust was created or the trustee designated by law or 97
judicial authority or by a will, and a corporation or limited 98
liability company organized under the laws of any state, any 99
foreign government, or any political subdivision of a state or 100
foreign government.
(E)(1) "Dealer," except as otherwise provided in this 102
chapter, means every person, other than a salesperson, who 104
engages or professes to engage, in this state, for either all or
part of the person's time, directly or indirectly, either in the 105
business of the sale of securities for the person's own account, 106
or in the business of the purchase or sale of securities for the 107
account of others in the reasonable expectation of receiving a 108
commission, fee, or other remuneration as a result of engaging in 109
the purchase and sale of securities. "Dealer" does not mean any 110
of the following:
(a) Any issuer, including any officer, director, employee, 112
or trustee of, or member or manager of, or partner in, or any 113
general partner of, any issuer, that sells, offers for sale, or 115
does any act in furtherance of the sale of a security that 116
represents an economic interest in that issuer, provided no 117
commission, fee, or other similar remuneration is paid to or 118
received by the issuer for the sale; 119
(b) Any licensed attorney, public accountant, or firm of 121
such attorneys or accountants, whose activities are incidental to 122
the practice of the attorney's, accountant's, or firm's 123
profession;
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(c) Any person that, for the account of others, engages in 125
the purchase or sale of securities that are issued and 126
outstanding before such purchase and sale, if a majority or more 127
of the equity interest of an issuer is sold in that transaction, 128
and if, in the case of a corporation, the securities sold in that 129
transaction represent a majority or more of the voting power of 130
the corporation in the election of directors; 131
(d) Any person that brings an issuer together with a 133
potential investor and whose compensation is not directly or 134
indirectly based on the sale of any securities by the issuer to 135
the investor; 136
(e) Any bank, savings and loan association, savings bank, 138
or credit union chartered under the laws of the United States or 139
any state of the United States, provided that all transactions 141
are consummated by or through a person licensed pursuant to 142
section 1707.14 of the Revised Code; 143
(f) Any person that the division of securities by rule 145
exempts from the definition of "dealer" under division (E)(1) of 146
this section. 147
(2) "Licensed dealer" means a dealer licensed under this 150
chapter.
(F)(1) "Salesman" or "salesperson" means every natural 152
person, other than a dealer, who is employed, authorized, or 153
appointed by a dealer to sell securities within this state. 154
(2) The general partners of a partnership, and the 156
executive officers of a corporation or unincorporated 157
association, licensed as a dealer are not salespersons within the 159
meaning of this definition, nor are such clerical or other
employees of an issuer or dealer as are employed for work to 160
which the sale of securities is secondary and incidental; but the 161
division of securities may require a license from any such 162
partner, executive officer, or employee if it determines that 163
protection of the public necessitates the licensing. 164
(3) "Licensed salesperson" means a salesperson licensed 167
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under this chapter.
(G) "Issuer" means every person who has issued, proposes 169
to issue, or issues any security. 170
(H) "Director" means each director or trustee of a 172
corporation, each trustee of a trust, each general partner of a 173
partnership, except a partnership association, each manager of a 174
partnership association, and any person vested with managerial or 175
directory power over an issuer not having a board of directors or 176
trustees. 177
(I) "Incorporator" means any incorporator of a corporation 179
and any organizer of, or any person participating, other than in 180
a representative or professional capacity, in the organization of 181
an unincorporated issuer. 182
(J) "Fraud," "fraudulent," "fraudulent acts," "fraudulent 184
practices," or "fraudulent transactions" means anything 185
recognized on or after July 22, 1929, as such in courts of law or 186
equity; any device, scheme, or artifice to defraud or to obtain 187
money or property by means of any false pretense, representation, 188
or promise; any fictitious or pretended purchase or sale of 189
securities; and any act, practice, transaction, or course of 190
business relating to the purchase or sale of securities that is 191
fraudulent or that has operated or would operate as a fraud upon 193
the seller or purchaser.
(K) Except as otherwise specifically provided, whenever 195
any classification or computation is based upon "par value," as 196
applied to securities without par value, the average of the 197
aggregate consideration received or to be received by the issuer 198
for each class of those securities shall be used as the basis for 199
that classification or computation. 200
(L)(1) "Intangible property" means patents, copyrights, 202
secret processes, formulas, services, good will, promotion and 203
organization fees and expenses, trademarks, trade brands, trade 204
names, licenses, franchises, any other assets treated as 205
intangible according to generally accepted accounting principles, 206
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and securities, accounts receivable, or contract rights having no 207
readily determinable value. 208
(2) "Tangible property" means all property other than 210
intangible property and includes securities, accounts receivable, 211
and contract rights, when the securities, accounts receivable, or 212
contract rights have a readily determinable value. 213
(M) "Public utilities" means those utilities defined in 215
sections 4905.02, 4905.03, 4907.02, and 4907.03 of the Revised 216
Code; in the case of a foreign corporation, it means those 217
utilities defined as public utilities by the laws of its 218
domicile; and in the case of any other foreign issuer, it means 219
those utilities defined as public utilities by the laws of the 220
situs of its principal place of business. The term always 221
includes railroads whether or not they are so defined as public 222
utilities. 223
(N) "State" means any state of the United States, any 225
territory or possession of the United States, the District of 226
Columbia, and any province of Canada. 227
(O) "Bank" means any bank, trust company, savings and loan 229
association, savings bank, or credit union that is incorporated 231
or organized under the laws of the United States, any state of 232
the United States, Canada, or any province of Canada and that is 233
subject to regulation or supervision by that country, state, or 234
province.
(P) "Include," when used in a definition, does not exclude 236
other things or persons otherwise within the meaning of the term 237
defined. 238
(Q)(1) "Registration by description" means that the 240
requirements of section 1707.08 of the Revised Code have been 241
complied with. 242
(2) "Registration by qualification" means that the 244
requirements of sections 1707.09 and 1707.11 of the Revised Code 245
have been complied with. 246
(3) "Registration by coordination" means that there has 248
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been compliance with section 1707.091 of the Revised Code. 249
Reference in this chapter to registration by qualification also 250
shall be deemed to include registration by coordination unless 251
the context otherwise indicates. 252
(R) "Intoxicating liquor" includes all liquids and 254
compounds that contain more than three and two-tenths per cent of 255
alcohol by weight and are fit for use for beverage purposes. 256
(S) "Institutional investor" means any corporation, bank, 258
insurance company, pension fund or pension fund trust, employees' 259
profit-sharing fund or employees' profit-sharing trust, any 260
association engaged, as a substantial part of its business or 261
operations, in purchasing or holding securities, or any trust in 262
respect of which a bank is trustee or cotrustee. "Institutional 263
investor" does not include any business entity formed for the 264
primary purpose of evading sections 1707.01 to 1707.45 of the 265
Revised Code. 266
(T) "Securities Act of 1933," 48 Stat. 74, 15 U.S.C. 77a, 269
"Securities Exchange Act of 1934," 48 Stat. 881, 15 U.S.C. 78a, 270
"Internal Revenue Code of 1986," 100 Stat. 2085, 26 U.S.C. 1, 271
"Investment Advisers Act of 1940," 54 Stat. 847, 15 U.S.C. 80b, 272
and "Investment Company Act of 1940," 54 Stat. 789, 15 U.S.C. 80a 274
mean the federal statutes of those names as amended before or 275
after March 18, 1999.
(U) "Securities and exchange commission" means the 277
securities and exchange commission established by the Securities 278
Exchange Act of 1934. 279
(V)(1) "Control bid" means the purchase of or offer to 281
purchase any equity security of a subject company from a resident 282
of this state if either of the following applies: 283
(a) After the purchase of that security, the offeror would 285
be directly or indirectly the beneficial owner of more than ten 286
per cent of any class of the issued and outstanding equity 287
securities of the issuer. 288
(b) The offeror is the subject company, there is a pending 290
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control bid by a person other than the issuer, and the number of 291
the issued and outstanding shares of the subject company would be 292
reduced by more than ten per cent. 293
(2) For purposes of division (V)(1) of this section, 295
"control bid" does not include any of the following: 296
(a) A bid made by a dealer for the dealer's own account in 298
the ordinary course of business of buying and selling securities; 299
(b) An offer to acquire any equity security solely in 301
exchange for any other security, or the acquisition of any equity 302
security pursuant to an offer, for the sole account of the 303
offeror, in good faith and not for the purpose of avoiding the 304
provisions of this chapter, and not involving any public offering 305
of the other security within the meaning of Section 4 of Title I 306
of the "Securities Act of 1933," 48 Stat. 77, 15 U.S.C.A. 77d(2), 307
as amended; 308
(c) Any other offer to acquire any equity security, or the 310
acquisition of any equity security pursuant to an offer, for the 311
sole account of the offeror, from not more than fifty persons, in 312
good faith and not for the purpose of avoiding the provisions of 313
this chapter. 314
(W) "Offeror" means a person who makes, or in any way 316
participates or aids in making, a control bid and includes 317
persons acting jointly or in concert, or who intend to exercise 318
jointly or in concert any voting rights attached to the 319
securities for which the control bid is made and also includes 320
any subject company making a control bid for its own securities. 321
(X)(1) "Investment adviser" means any person who, for 324
compensation, engages in the business of advising others, either 325
directly or through publications or writings, as to the value of 326
securities or as to the advisability of investing in, purchasing, 327
or selling securities, or who, for compensation and as a part of 328
regular business, issues or promulgates analyses or reports 329
concerning securities.
(2) "Investment adviser" does not mean any of the 331
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following:
(a) Any attorney, accountant, engineer, or teacher, whose 333
performance of investment advisory services described in division 335
(X)(1) of this section is solely incidental to the practice of 336
the attorney's, accountant's, engineer's, or teacher's 337
profession;
(b) A publisher of any bona fide newspaper, news magazine, 340
or business or financial publication of general and regular 341
circulation;
(c) A person who acts solely as an investment adviser 343
representative; 344
(d) A bank holding company, as defined in the "Bank 346
Holding Company Act of 1956," 70 Stat. 133, 12 U.S.C. 1841, that 348
is not an investment company; 349
(e) A bank, or any receiver, conservator, or other 351
liquidating agent of a bank; 352
(f) Any licensed dealer or licensed salesperson whose 354
performance of investment advisory services described in division 355
(X)(1) of this section is solely incidental to the conduct of the 356
dealer's or salesperson's business as a licensed dealer or 357
licensed salesperson and who receives no special compensation for 358
the services;
(g) Any person, the advice, analyses, or reports of which 360
do not relate to securities other than securities that are direct 361
obligations of, or obligations guaranteed as to principal or 362
interest by, the United States, or securities issued or 363
guaranteed by corporations in which the United States has a 364
direct or indirect interest, and that have been designated by the 365
secretary of the treasury as exempt securities as defined in the 366
"Securities Exchange Act of 1934," 48 Stat. 881, 15 U.S.C. 78c; 367
(h) Any person that is excluded from the definition of 369
investment adviser pursuant to section 202(a)(11)(A) to (E) of 371
the "Investment Advisers Act of 1940," 15 U.S.C. 80b-2(a)(11), or 372
that has received an order from the securities and exchange 373
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commission under section 202(a)(11)(F) of the "Investment 374
Advisers Act of 1940," 15 U.S.C. 80b-2(a)(11)(F), declaring that 375
the person is not within the intent of section 202(a)(11) of the 376
Investment Advisers Act of 1940.
(i) Any other person that the division designates by rule, 378
if the division finds that the designation is necessary or 379
appropriate in the public interest or for the protection of 380
investors or clients and consistent with the purposes fairly 381
intended by the policy and provisions of this chapter.
(Y)(1) "Subject company" means an issuer that satisfies 383
both of the following: 384
(a) Its principal place of business or its principal 386
executive office is located in this state, or it owns or controls 387
assets located within this state that have a fair market value of 388
at least one million dollars. 389
(b) More than ten per cent of its beneficial or record 391
equity security holders are resident in this state, more than ten 392
per cent of its equity securities are owned beneficially or of 393
record by residents in this state, or more than one thousand of 394
its beneficial or record equity security holders are resident in 395
this state. 396
(2) The division of securities may adopt rules to 398
establish more specific application of the provisions set forth 399
in division (Y)(1) of this section. Notwithstanding the 400
provisions set forth in division (Y)(1) of this section and any 401
rules adopted under this division, the division, by rule or in an 402
adjudicatory proceeding, may make a determination that an issuer 403
does not constitute a "subject company" under division (Y)(1) of 404
this section if appropriate review of control bids involving the 405
issuer is to be made by any regulatory authority of another 406
jurisdiction. 407
(Z) "Beneficial owner" includes any person who directly or 409
indirectly through any contract, arrangement, understanding, or 410
relationship has or shares, or otherwise has or shares, the power 411
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to vote or direct the voting of a security or the power to 412
dispose of, or direct the disposition of, the security. 413
"Beneficial ownership" includes the right, exercisable within 414
sixty days, to acquire any security through the exercise of any 415
option, warrant, or right, the conversion of any convertible 416
security, or otherwise. Any security subject to any such option, 417
warrant, right, or conversion privilege held by any person shall 418
be deemed to be outstanding for the purpose of computing the 419
percentage of outstanding securities of the class owned by that 420
person, but shall not be deemed to be outstanding for the purpose 421
of computing the percentage of the class owned by any other 422
person. A person shall be deemed the beneficial owner of any 423
security beneficially owned by any relative or spouse or relative 424
of the spouse residing in the home of that person, any trust or 425
estate in which that person owns ten per cent or more of the 426
total beneficial interest or serves as trustee or executor, any 427
corporation or entity in which that person owns ten per cent or 428
more of the equity, and any affiliate or associate of that 429
person. 430
(AA) "Offeree" means the beneficial or record owner of any 432
security that an offeror acquires or offers to acquire in 433
connection with a control bid. 434
(BB) "Equity security" means any share or similar 436
security, or any security convertible into any such security, or 437
carrying any warrant or right to subscribe to or purchase any 438
such security, or any such warrant or right, or any other 439
security that, for the protection of security holders, is treated 440
as an equity security pursuant to rules of the division of 441
securities. 442
(CC) "Investment company" has the same meaning as in 444
section 3(A) of the "Investment Company Act of 1940," 54 Stat. 445
789, 15 U.S.C. 80a-1 to 80a-52. 446
(DD) "Penny stock" has the same meaning as in section 449
3(A)(51) of the "Securities Exchange Act of 1934," 48 Stat. 881, 450
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15 U.S.C. 78a-78jj, and the rules, regulations, and orders issued 451
pursuant to that section. 452
(EE) "Going concern transaction" has the same meaning 455
given that term under the rules or regulations on the securities 456
and exchange commission issued pursuant to section 13(c) of the 457
"Securities Exchange Act of 1934," 48 Stat. 881, 15 U.S.C.
78a-78jj. 458
(FF) "Person acting on behalf of an issuer" means an 461
officer, director, or employee of an issuer.
(GG) "Blank check company," "roll-up transaction," 464
"executive officer of an entity," and "direct participation
program" have the same meanings given those terms by rule or 465
regulation of the securities and exchange commission. 466
(HH) "Forward-looking statement" means any of the 468
following:
(1) A statement containing a projection of revenues, 470
income including income loss, earnings per share including 471
earnings loss per share, capital expenditures, dividends, capital 472
structure, or other financial items;
(2) A statement of the plans and objectives of the 474
management of the issuer for future operations, including plans 475
or objectives relating to the products or services of the issuer; 476
(3) A statement of future economic performance, including 478
any statement of that nature contained in a discussion and 479
analysis of financial conditions by the management or in the 480
results of operations included pursuant to the rules and 481
regulations of the securities and exchange commission;
(4) Any disclosed statement of the assumptions underlying 483
or relating to a statement described in division (B)(1), (2), or 485
(3) of section 1707.437 of the Revised Code; 486
(5) Any report issued by an outside reviewer retained by 488
an issuer to the extent that the report relates to a 489
forward-looking statement made by the issuer; 490
(6) A statement containing a projection or estimate of any 492
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other items that may be specified by rule or regulation of the 493
securities and exchange commission. 494
(II)(1) "Investment adviser representative" means a 496
supervised person of an investment adviser, provided that the 498
supervised person has more than five clients who are natural 499
persons other than excepted persons defined in division (KK) of 500
this section, and that more than ten per cent of the supervised 501
person's clients are natural persons other than excepted persons
defined in division (KK) of this section. "Investment adviser 502
representative" does not mean any of the following: 503
(a) A supervised person that does not on a regular basis 505
solicit, meet with, or otherwise communicate with clients of the 506
investment adviser;
(b) A supervised person that provides only investment 508
advisory services described in division (X)(1) of this section by 509
means of written materials or oral statements that do not purport 510
to meet the objectives or needs of specific individuals or 511
accounts;
(c) Any other person that the division designates by rule, 514
if the division finds that the designation is necessary or 515
appropriate in the public interest or for the protection of
investors or clients and is consistent with the provisions fairly 517
intended by the policy and provisions of this chapter. 518
(2) For the purpose of the calculation of clients in 520
division (II)(1) of this section, a natural person and the 522
following persons are deemed a single client: Any minor child of 523
the natural person; any relative, spouse, or relative of the 524
spouse of the natural person who has the same principal residence 525
as the natural person; all accounts of which the natural person 526
or the persons referred to in division (II)(2) of this section 528
are the only primary beneficiaries; and all trusts of which the 529
natural person or persons referred to in division (II)(2) of this 530
section are the only primary beneficiaries. Persons who are not 531
residents of the United States need not be included in the 533
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calculation of clients under division (II)(1) of this section. 534
(3) If subsequent to March 18, 1999, amendments are 536
enacted or adopted defining "investment adviser representative" 537
for purposes of the Investment Advisers Act of 1940 or additional 539
rules or regulations are promulgated by the securities and 540
exchange commission regarding the definition of "investment 541
adviser representative" for purposes of the Investment Advisers 543
Act of 1940, the division of securities shall, by rule, adopt the 544
substance of the amendments, rules, or regulations, unless the 545
division finds that the amendments, rules, or regulations are not 546
necessary for the protection of investors or in the public 547
interest.
(JJ) "Supervised person" means a natural person who is any 549
of the following: 550
(1) A partner, officer, or director of an investment 552
adviser, or other person occupying a similar status or performing 553
similar functions with respect to an investment adviser; 554
(2) An employee of an investment adviser; 556
(3) A person who provides investment advisory services 558
described in division (X)(1) of this section on behalf of the 559
investment adviser and is subject to the supervision and control 560
of the investment adviser.
(KK) "Excepted person" means a natural person to whom any 562
of the following applies: 563
(1) Immediately after entering into the investment 565
advisory contract with the investment adviser, the person has at 566
least seven hundred fifty thousand dollars under the management 568
of the investment adviser.
(2) The investment adviser reasonably believes either of 570
the following at the time the investment advisory contract is 571
entered into with the person:
(a) The person has a net worth, together with assets held 574
jointly with a spouse, of more than one million five hundred 575
thousand dollars.
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(b) The person is a qualified purchaser as defined in 578
division (LL) of this section.
(3) Immediately prior to entering into an investment 580
advisory contract with the investment adviser, the person is 581
either of the following: 582
(a) An executive officer, director, trustee, general 585
partner, or person serving in a similar capacity, of the 586
investment adviser;
(b) An employee of the investment adviser, other than an 589
employee performing solely clerical, secretarial, or 590
administrative functions or duties for the investment adviser, 591
which employee, in connection with the employee's regular 592
functions or duties, participates in the investment activities of 593
the investment adviser, provided that, for at least twelve 594
months, the employee has been performing such nonclerical, 595
nonsecretarial, or nonadministrative functions or duties for or 596
on behalf of the investment adviser or performing substantially 597
similar functions or duties for or on behalf of another company. 598
If subsequent to March 18, 1999, amendments are enacted or 601
adopted defining "excepted person" for purposes of the Investment 602
Advisers Act of 1940 or additional rules or regulations are 604
promulgated by the securities and exchange commission regarding 605
the definition of "excepted person" for purposes of the 606
Investment Advisers Act of 1940, the division of securities 608
shall, by rule, adopt the substance of the amendments, rules, or 609
regulations, unless the division finds that the amendments, 610
rules, or regulations are not necessary for the protection of 611
investors or in the public interest.
(LL)(1) "Qualified purchaser" means either of the 613
following:
(a) A natural person who owns not less than five million 616
dollars in investments as defined by rule by the division of 617
securities;
(b) A natural person, acting for the person's own account 620
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or accounts of other qualified purchasers, who in the aggregate 621
owns and invests on a discretionary basis, not less than 622
twenty-five million dollars in investments as defined by rule by 623
the division of securities. 624
(2) If subsequent to March 18, 1999, amendments are 626
enacted or adopted defining "qualified purchaser" for purposes of 627
the Investment Advisers Act of 1940 or additional rules or 629
regulations are promulgated by the securities and exchange
commission regarding the definition of "qualified purchaser" for 630
purposes of the Investment Advisers Act of 1940, the division of 631
securities shall, by rule, adopt the amendments, rules, or 632
regulations, unless the division finds that the amendments, 633
rules, or regulations are not necessary for the protection of 634
investors or in the public interest. 635
(MM)(1) "Purchase" has the full meaning of "purchase" as 637
applied by or accepted in courts of law or equity and includes 638
every acquisition of, or attempt to acquire, a security or an 639
interest in a security. "Purchase" also includes a contract to 640
purchase, an exchange, an attempt to purchase, an option to 641
purchase, a solicitation of a purchase, a solicitation of an 642
offer to sell, a subscription, or an offer to purchase, directly 643
or indirectly, by agent, circular, pamphlet, advertisement, or
otherwise. 644
(2) "Purchase" means any act by which a purchase is made. 646
(3) Any security given with, or as a bonus on account of, 648
any purchase of securities is conclusively presumed to constitute 649
a part of the subject of that purchase. 650
(NN) "VIATICAL SETTLEMENT INTEREST" MEANS THE ENTIRE 652
INTEREST OR ANY FRACTIONAL INTEREST IN AN INSURANCE POLICY OR 653
CERTIFICATE OF INSURANCE, OR IN THE BENEFIT UNDER SUCH A POLICY 654
OR CERTIFICATE, THAT IS THE SUBJECT OF A VIATICAL SETTLEMENT 655
CONTRACT.
FOR PURPOSES OF THIS DIVISION, "VIATICAL SETTLEMENT 657
CONTRACT" MEANS AN ARRANGEMENT BETWEEN AN INSURED PERSON AND 658
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ANOTHER PERSON PURSUANT TO WHICH ANY PERSON WILL GIVE 659
COMPENSATION, CONSIDERATION, OR ANYTHING ELSE OF VALUE TO THE 660
INSURED PERSON, OR TO THE INSURED PERSON'S SUCCESSOR OR 661
SUCCESSORS IN INTEREST, IN RETURN FOR THE ASSIGNMENT, TRANSFER, 662
SALE, DEVISE, OR BEQUEST BY THE INSURED PERSON, OR THE INSURED 663
PERSON'S SUCCESSOR OR SUCCESSORS IN INTEREST, OF THE ENTIRE 664
INTEREST OR ANY FRACTIONAL INTEREST IN THE BENEFIT OR OWNERSHIP
OF THE INSURANCE POLICY OR CERTIFICATE OF INSURANCE. "INSURED 666
PERSON" MEANS THE OWNER OR BENEFICIARY OF AN INDIVIDUAL INSURANCE
POLICY, OR A CERTIFICATE HOLDER UNDER, OR BENEFICIARY OF, A GROUP 667
INSURANCE POLICY. 668
Section 2. That existing section 1707.01 of the Revised 670
Code is hereby repealed. 671