To repeal section 409.402, RSMo 1994, and section 409.401, RSMo Supp. 1996, relating to consumer protection, and to enact in lieu thereof fifteen new sections relating to the same subject, with penalty provisions and an effective date.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF MISSOURI, AS FOLLOWS:

     Section A. Section 409.402, RSMo 1994, and section 409.401, RSMo Supp. 1996, are repealed and fifteen new sections enacted in lieu thereof, to be known as sections 376.1100, 376.1102, 376.1104, 376.1106, 376.1108, 376.1110, 376.1112, 376.1114, 376.1116, 376.1118, 376.1120, 376.1122, 376.1124, 409.401 and 409.402, to read as follows:

     376.1100. 1. Sections 376.1100 to 376.1120 may be cited as the "Viatical Settlements Act".

     2. As used in sections 376.1100 to 376.1120, the following terms mean:

     (1) "Director", the director of the department of insurance;

     (2) "Person", any natural or artificial entity, including but not limited to, individuals, partnerships, associations, trusts or corporations;

     (3) "Viatical settlement broker", an individual, partnership, corporation or other entity who or which for another and for a fee, commission or other valuable consideration, offers or advertises the availability of viatical settlements, introduces viators to viatical settlement providers, or offers or attempts to negotiate viatical settlements between a viator and one or more viatical settlement providers. "Viatical settlement broker" does not include an attorney, accountant or financial planner retained to represent the viator whose compensation is not paid by the viatical settlement provider;

     (4) "Viatical settlement contract", a written agreement entered into between a viatical settlement provider and a person owning a life insurance policy or who owns or is covered under a group policy insuring the life of a person who has a catastrophic or life-threatening illness or condition. The agreement shall establish the terms under which the viatical settlement provider will pay compensation or anything of value, which compensation or value is less than the expected death benefit of the insurance policy or certificate, in return for the policy owner's assignment, transfer, sale, devise or bequest of the death benefit or ownership of the insurance policy or certificate to the viatical settlement provider. "Viatical settlement contract" does not include any insurance contract, application, assignment, settlement option, beneficiary designation, accelerated death benefit arrangement or other written agreement between the insurer owner of any life insurance contract;

     (5) "Viatical settlement provider", an individual, partnership, corporation or other entity that enters into an agreement with a person owning a life insurance policy or who owns or is covered under a group policy insuring the life of a person who has a catastrophic or life-threatening illness or condition, under the terms of which the viatical settlement provider pays compensation or anything of value, which compensation or value is less than the expected death benefit of the insurance policy or certificate, in return for the policy owner's assignment, transfer, sale, devise or bequest of the death benefit or ownership of the insurance policy or certificate to the viatical settlement provider. Viatical settlement provider does not include:

     (a) Any bank, savings bank, savings and loan association, credit union or other licensed lending institution which takes an assignment of a life insurance policy as collateral for a loan;

     (b) Any natural person who enters into no more than one agreement in a calendar year for the transfer of life insurance policies for any value less than the expected death benefit; or

     (c) Any insurance company or licensed insurance agent in connection with any written agreement between a life insurance company and its insured or policy owner.

     (6) "Viator", the owner of a life insurance policy insuring the life of a person with a catastrophic or life-threatening illness or condition or the certificate holder who enters into an agreement under which the viatical settlement provider will pay compensation or anything of value, which compensation or value is less than the expected death benefit of the insurance policy or certificate, in return for the viator's assignment, transfer, sale, devise or bequest of the death benefit or ownership of the insurance policy or certificate to the viatical settlement provider.

     376.1102. 1. No individual, partnership, corporation or other entity may act as a viatical settlement provider or enter into or solicit a viatical settlement contract without first having obtained a license from the director.

     2. Application for a viatical settlement provider license shall be made to the director by the applicant on a form prescribed by the director, and the application shall be accompanied by a fee of one hundred dollars.

     3. Licenses may be renewed from year to year on the anniversary date upon payment of the annual renewal fee of one hundred dollars. Failure to pay the fee within the terms prescribed shall result in the automatic revocation of the license.

     4. The applicant shall provide such information as the director may require on forms prepared by the director. The director shall have authority, at any time, to require the applicant to fully disclose the identity of all stockholders, partners, officers and employees, and the director may, in the exercise of discretion, refuse to issue a license in the name of any firm, partnership or corporation if not satisfied that any officer, employee, stockholder or partner thereof who may materially influence the applicant's conduct meets the standards of sections 376.1100 to 376.1120.

     5. A license issued to a partnership, corporation or other entity authorizes all members, officers and designated employees to act as viatical settlement providers under the license, and all those persons must be named in the application and any supplements to the application.

     6. Upon the filing of an application and the payment of the license fee, the director shall make an investigation of each applicant and may issue a license if the director finds that the applicant:

     (1) Has provided a detailed plan of operation;

     (2) Is competent and trustworthy and intends to act in good faith in the capacity involved by the license applied for;

     (3) Has a good business reputation and has had experience, training or education so as to be qualified in the business for which the license is applied for; and

     (4) If a corporation, is incorporated under the laws of this state or a foreign corporation authorized to transact business in this state.

     7. The director shall not issue any license to any nonresident applicant, unless a written designation of an agent for service of process is filed and maintained with the director or unless the applicant has filed with the director the applicant's written irrevocable consent that any action against the applicant may be commenced against the applicant by service of process on the director.

     376.1104. 1. The director may suspend, revoke or refuse to renew the license of any viatical settlement provider if the director finds that:

     (1) There was any misrepresentation in the application for the license;

     (2) The holder of the license has been guilty of fraudulent or dishonest practices, is subject to a final administrative action or is otherwise shown to be untrustworthy or incompetent to act as a viatical settlement provider;

     (3) The licensee demonstrates a pattern of unreasonable payments to policy owners;

     (4) The licensee has been convicted of a felony or any misdemeanor of which criminal fraud is an element; or

     (5) The licensee has violated any of the provisions of sections 376.1100 to 376.1120.

     2. Before the director shall deny a license application or suspend, revoke or refuse to renew the license of a viatical settlement provider, the director shall conduct a hearing in accordance with chapter 536, RSMo.

     376.1106. No viatical settlement provider may use any viatical settlement contract in this state unless it has been filed with and approved by the director and the filing fee required pursuant to subdivision (6) of section 374.230, RSMo, has been paid. Any viatical settlement contract form filed with the director shall be deemed approved if it has not been disapproved within sixty days of the filing. The director shall disapprove a viatical settlement contract form if, in the director's opinion, the contract or provisions contained therein are unreasonable, contrary to the interests of the public, or otherwise misleading or unfair to the policy owner.

     376.1108. Each licensee shall file with the director on or before the first day of March of each year an annual statement containing such information as the director by rule may prescribe.

     376.1110. 1. The director may, when the director deems it reasonably necessary to protect the interests of the public, examine the business and affairs of any licensee or applicant for a license. The director may order any licensee or applicant to produce any records, books, files or other information reasonably necessary to ascertain whether or not the licensee or applicant is acting or has acted in violation of the law or otherwise contrary to the interests of the public. The expenses incurred in conducting any examination shall be paid by the licensee or applicant.

     2. Names and individual identification data for all viators shall be considered private and confidential information and shall not be considered public records nor disclosed by the director unless otherwise specifically required by law.

     3. Records of all transactions of viatical settlement contracts shall be maintained by the licensee and shall be available to the director for inspection during reasonable business hours.

     376.1112. A viatical settlement provider shall disclose the following information to the viator no later than the date the viatical settlement contract is signed by all parties:

     (1) Possible alternatives to viatical settlement contracts for persons with catastrophic or life-threatening illnesses, including, but not limited to, accelerated benefits offered by the issuer of the life insurance policy;

     (2) That some or all of the proceeds of the viatical settlement may be taxable, and that assistance should be sought from a personal tax advisor;

     (3) That the viatical settlement could be subject to the claims of creditors;

     (4) That receipt of a viatical settlement may adversely affect the recipients' eligibility for public assistance or other government benefits or entitlements, and that advice should be obtained from the appropriate agencies;

     (5) The policy owner's right to rescind a viatical settlement contract within thirty days of the date it is executed by all parties or fifteen days of the receipt of the viatical settlement proceeds by the viator, whichever is less, as provided in subsection 3 of section 376.1114; and

     (6) The date by which the funds will be available to the viator and the source of the funds.

     376.1114. 1. A viatical settlement provider entering into a viatical settlement contract with any person with a catastrophic or life-threatening illness or condition shall first obtain:

     (1) A written statement from a licensed attending physician that the person is of sound mind and under no constraint or undue influence; and

     (2) A witnessed document in which the person consents to the viatical settlement contract, acknowledges the catastrophic or life-threatening illness, represents that such person has a full and complete understanding of the viatical settlement contract, that such person has a full and complete understanding of the benefits of the life insurance policy, releases medical records, and acknowledges that such person has entered into the viatical settlement contract freely and voluntarily.

     2. All medical information solicited or obtained by any licensee shall be subject to the applicable provision of state law relating to confidentiality of medical information, including section 191.227, RSMo.

     3. All viatical settlement contracts entered into in this state shall contain an unconditional refund provision of at least thirty days from the date of the contract, or fifteen days of the receipt of the viatical settlement proceeds, whichever is less.

     4. Immediately upon receipt from the viator of documents to effect the transfer of the insurance policy, the viatical settlement provider shall pay the proceeds of the settlement to an escrow or trust account managed by a trustee or escrow agent in a bank approved by the director pending acknowledgement of the transfer by the issuer of the policy. The trustee or escrow agent shall be required to transfer the proceeds due to the viator immediately upon receipt of acknowledgement of the transfer from the insurer.

     5. Failure to tender the viatical settlement by the date disclosed to the viator renders the contract null and void.

     376.1116. The director may:

     (1) Promulgate regulations implementing sections 376.1100 to 376.1120, pursuant to section 376.982 and chapter 536, RSMo; and

     (2) Establish appropriate licensing requirements and fees for agents and brokers; and

     (3) Require a bond.

     376.1118. A violation of sections 376.1100 to 376.1120 shall be considered an unfair trade practice under sections 375.930 to 375.948, RSMo, and subject to the penalties contained in sections 375.930 to 375.948, RSMo. In addition, a violation of section 376.1122 shall be considered a violation of chapter 409 and shall be subject to the penalties contained therein.

     376.1120. All proceeds received by the viator shall not be considered gross income for purposes of determining Missouri taxable income.

     376.1122. Any person or any licensee attempting to sell or dispose of one or more viatical settlement contracts or soliciting investment in one or more viatical settlement contracts shall comply with the provisions of chapter 409, RSMo, applicable to the sale and marketing of securities.

     376.1124. Sections 376.1100 to 376.1124 shall take effect on January 1, 1998. No viatical settlement provider transacting business in this state may continue to do so after January 1, 1998, unless it is in compliance with sections 376.1100 to 376.1124.

     409.401. When used in sections 409.101 to 409.419, unless the context otherwise requires:

     (a) "Commissioner" means the commissioner of securities.

     (b) "Agent" means any individual other than a broker-dealer who represents a broker-dealer or issuer in effecting or attempting to effect purchases or sales of securities. "Agent" does not include an individual who represents an issuer in (1) effecting transactions in a security exempted by clause (1), (2), (3), (4), (6), (9), (10) or (11) of section 409.402(a), (2) effecting transactions in a security exempted by clause (5) of section 409.402(a), provided such individual prior to the transactions files with the commissioner information on (A) his relationship to the issuer and its affiliates, (B) his proposed methods of soliciting the transactions including sales literature to be used, and (C) commissions and other remuneration he is to receive for effecting the transactions, and such additional information as the commissioner may require, (3) effecting transactions exempted by section 409.402(b), (4) effecting transactions with existing employees, 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, or (5) effecting transactions with such other persons as the commissioner may by rule or order designate. A partner, officer, or director of a broker-dealer or issuer, or a person occupying a similar status or performing similar functions, is an agent only if he otherwise comes within this definition.

     (c) "Broker-dealer" means any person engaged in the business of effecting transactions in securities for the account of others or for his own account. "Broker-dealer" does not include (1) an agent, (2) an issuer, (3) a bank, savings institution, or trust company, or (4) a person who has no place of business in this state if (A) he effects transactions in this state exclusively with or through (i) the issuers of the securities involved in the transactions, (ii) other broker-dealers, or (iii) banks, savings institutions, trust companies, insurance companies, investment companies as defined in the Investment Company Act of 1940, pension or profit-sharing trusts, or other financial institutions or institutional buyers, whether acting for themselves or as trustees, or (B) the person has fewer than five clients in the state of Missouri, or (5) such other persons as the commissioner may by rule or order designate.

     (d) "Fraud", "deceit", and "defraud" are not limited to common-law deceit.

     (e) "Guaranteed" means guaranteed as to payment of principal, interest, or dividends.

     (f) "Investment adviser" means any person who, for compensation, engages in the business of advising others, either directly or through publications or writings, as to the value of securities or as to the advisability of investing in, purchasing, or selling securities, or who, for compensation and as a part of a regular business, issues or promulgates analyses or reports concerning securities. "Investment adviser" also includes financial planners and other persons who, as an integral component of other financially related services, provide the foregoing investment advisory services to others for compensation and as part of a business or who hold themselves out as providing the foregoing investment advisory services to others for compensation; except that "investment adviser" does not include (1) an investment adviser representative; (2) a bank, savings institution, or trust company; (3) a lawyer, accountant, engineer, or teacher whose performance of these services is solely incidental to the practice of his profession; (4) a broker-dealer or his agent whose performance of these services is solely incidental to the conduct of his business as a broker-dealer and who receives no special compensation for them; (5) a publisher of any bona fide newspaper, news column, newsletter, news magazine, or business or financial publication or service, whether communicated in hard copy form, or by electronic means, or otherwise, that does not consist of the rendering of advice on the basis of the specific investment situation of each client; or (6) such other persons not within the intent of this subsection as the commissioner may by rule or order designate.

     (g) "Investment adviser representative" means any partner, officer, director or other individual employed by or associated with an investment adviser, except clerical or ministerial personnel, who (1) makes any recommendations or otherwise renders advice regarding securities, except that investment adviser representative does not include an individual whose performance of these services is solely incidental to the conduct of his business as an "agent" of a broker-dealer and who receives no special compensation for them, (2) manages accounts or portfolios of clients, (3) determines which recommendation or advice regarding securities should be given, or (4) supervises employees who perform any of the foregoing.

     (h) "Issuer" means any person who issues or proposes to issue any security, except that (1) 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 term "issuer" means the person or persons performing the acts and assuming the duties of depositor or manager pursuant to the provisions of the trust or other agreement or instrument under which the security is issued; and (2) with respect to certificates of interest or participation in oil, gas, or mining titles or leases, or in payments out of production under such titles or leases there is not considered to be any "issuer".

     (i) "Non-issuer" means not directly or indirectly for the benefit of the issuer.

     (j) "Person" means an individual, a corporation, a partnership, an association, a joint-stock company, a trust where the interests of the beneficiaries are evidenced by a security, an unincorporated organization, a government, or a political subdivision of a government.

     (k) (1) "Sale" or "sell" includes every contract of sale of, contract to sell, or disposition of, a security or interest in a security for value.

     (2) "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.

     (3) Any security given or delivered with, or as a bonus on account of, any purchase of securities or any other thing is considered to constitute part of the subject of the purchase and to have been offered and sold for value.

     (4) A purported gift of assessable stock is considered to involve an offer and sale.

     (5) Every sale or offer of a 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.

     (6) The terms defined in this subsection do not include (A) any bona fide pledge or loan; (B) any stock dividend, whether the corporation distributing the dividend is the issuer of the stock or not, if nothing of value is given by stockholders for the dividend other than the surrender of a right to a cash or property dividend when each stockholder may elect to take the dividend in cash or property or in stock; (C) any act incident to a class vote by stockholders, pursuant to the certificate of incorporation or the applicable corporation statute, on a merger, consolidation, reclassification of securities, or sale of corporate assets in consideration of the issuance of securities of another corporation; or (D) any 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.

     (l) "Securities Act of 1933", "Securities Exchange Act of 1934", "Public Utility Holding Company Act of 1935", "Investment Advisers Act of 1940", and "Investment Company Act of 1940" mean the federal statutes of those names as amended before or after January 1, 1968.

     (m) "Security" means any note; stock; treasury stock; bond; debenture; evidence of indebtedness; certificate of interest or participation in any profit-sharing agreement; collateral-trust certificate; preorganization certificate or subscription; transferable share; investment contract; limited partnership interest; viatical settlement contract; voting-trust certificate; 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 a title or lease; or, in general, any interest or instrument commonly known as a "security", or any certificate of interest or participation in, temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase, any of the foregoing. "Security" does not include any insurance or endowment policy or annuity contract under which an insurance company promises to pay money either in a lump sum or periodically for life or for some other specified period.

     (n) "State" means any state, territory, or possession of the United States, the District of Columbia and Puerto Rico.

     (o) "Cooperative association" means any association in which farmers act together in processing, preparing for market, handling, and/or marketing the farm products of persons so engaged, and also means any association in which farmers act together in purchasing, testing, grading, processing, distributing and/or furnishing farm supplies and/or farm business services; provided, however, that such associations are operated for the mutual benefit of the members thereof as such producers or purchasers and conform to one or both of the following requirements: (1) no member of the association is allowed more than one vote because of the amount of stock or membership capital he may own therein, and (2) the association does not pay dividends on stock or membership capital in excess of eight percent per year, and in any case to the following: (3) the association does not deal in farm products, farm supplies, and farm business services with or for nonmembers in an amount greater in value than the total amount of such business transacted by it with or for members; further, all business transacted by any cooperative association for or on behalf of the United States or any agency or instrumentality thereof shall be disregarded in determining the volume of member and nonmember business transacted by such association.

     409.402. (a) The following securities are exempted from sections 409.301 and 409.403:

     (1) Any security (including a revenue obligation) issued or guaranteed by the United States, any state, any political subdivision of a state, or any agency or corporate or other instrumentality of one or more of the foregoing; or any certificate of deposit for any of the foregoing;

     (2) Any security issued or guaranteed by Canada, any Canadian province, any political subdivision of any such province, any agency or corporate or other instrumentality of one or more of the foregoing, or any other foreign government with which the United States currently maintains diplomatic relations, if the security is recognized as a valid obligation by the issuer or guarantor;

     (3) Any security issued by and representing an interest in or a debt of, or guaranteed by, any bank organized under the laws of the United States, or any bank, savings institution, or trust company organized and supervised under the laws of any state;

     (4) Any security issued by and representing an interest in or a debt of, or guaranteed by, any federal savings and loan association, or any building and loan or similar association organized under the laws of any state and authorized to do business in this state;

     (5) Any security issued by an agricultural cooperative corporation organized under the laws of this state and operated as an agricultural "cooperative association" if the commissioner is notified in writing thirty days, or such shorter period of time as the commissioner may by rule or order specify, before any such security is sold or offered for sale other than in transactions exempted under subsection (b) hereof, which notification shall contain the form of prospectus or other sales literature intended to be used in connection with the offering of such security together with financial statements;

     (6) Any security issued or guaranteed by any federal credit union or any credit union, industrial loan association, or similar association organized and supervised under the laws of this state;

     (7) Any security issued or guaranteed by any railroad, other common carrier, public utility, or holding company which is (A) subject to the jurisdiction of the Interstate Commerce Commission; (B) a registered holding company under the Public Utility Holding Company Act of 1935 or a subsidiary of such a company within the meaning of that act; (C) regulated in respect of its rates and charges by a governmental authority of the United States or any state; or (D) regulated in respect of the issuance or guarantee of the security by a governmental authority of the United States, any state, Canada, or any Canadian province;

     (8) Any security listed or approved for listing upon notice of issuance on the New York Stock Exchange, the American Stock Exchange, or the Midwest Stock Exchange or any other duly organized stock exchange approved by the commissioner by rule or order; any other security of the same issuer which is of senior or substantially equal rank, any security called for by subscription rights or warrants so listed or approved; or any warrant or right to purchase or subscribe to any of the foregoing;

     (9) Any security issued by any person organized and operated not for private profit but exclusively for religious, educational, benevolent, charitable, fraternal, social, athletic, or reformatory purposes, or as a chamber of commerce or trade or professional association if the commissioner is notified in writing thirty days, or such shorter period of time as the commissioner may by rule or order specify, before any such security is sold or offered for sale other than in transactions exempted under subsection (b) hereof;

     (10) Any commercial paper which arises out of a current transaction or the proceeds of which have been or are to be used for current transactions, and which evidences an obligation to pay cash within nine months of the date of issuance, exclusive of days of grace, or any renewal of such paper which is likewise limited, or any guarantee of such paper or of any such renewal;

     (11) Any security offered, sold, issued, distributed or transferred in connection with an employees' stock ownership, savings, pension, profit-sharing, stock bonus, or similar benefit plan or trust (including a self-employed persons retirement plan), provided, in the case of plans or trusts which are not qualified under section 401 of the Internal Revenue Code of 1954 and which provide for contributions by employees, if the commissioner is notified in writing thirty days before the inception of the plan or, with respect to plans which are in effect on January 1, 1968, within sixty days thereafter (or within thirty days before they are reopened if they are closed on January 1, 1968). The commissioner may for good cause shown accept written notification at any time before the issuance of any such security in this state or any security offered, sold, issued, distributed or transferred in connection with an employees' stock purchase or stock option plan. In the case of issuers who do not have a class of securities registered under section 12 of the Securities Exchange Act of 1934 the commissioner may for good cause shown accept notification in writing before the first issuance of interests or participations under a stock purchase plan or before the first exercise of options under a stock option plan.

     (b) The following transactions are exempted from sections 409.301 and 409.403 except that no transaction in a certificate of interest or participation, including a limited partnership interest, in an oil, gas or mining title or lease, or in payments out of production or under such a title or lease shall be so exempted:

     (1) Any isolated nonissuer transaction, whether effected through a broker-dealer or not;

     (2) Any nonissuer distribution of an outstanding security if (A) a recognized securities manual contains the names of the issuer's officers and directors, a balance sheet of the issuer as of a date within eighteen months, and a profit and loss statement for either the fiscal year preceding that date or the most recent year of operations, or (B) the security has a fixed maturity or a fixed interest or dividend provision and there has been no default during the current fiscal year or within the three preceding fiscal years, or during the existence of the issuer and any predecessors if less than three years, in the payment of principal, interest, or dividends on the security;

     (3) Any nonissuer transaction effected by or through a registered broker-dealer pursuant to an unsolicited order to buy if the broker-dealer acts as agent for the purchaser and receives no commission or other compensation from any source other than the purchase; but the commissioner may by rule require that the purchaser acknowledge upon a specified form that his order to buy was unsolicited, and that a signed copy of each such form be preserved by the broker-dealer for a specified period;

     (4) Any transaction between the issuer or other person on whose behalf the offering is made and an underwriter, or among underwriters;

     (5) Any transaction in a bond or other evidence of indebtedness secured by a real or chattel mortgage or deed of trust, or by an agreement for the sale of real estate or chattels, if the entire mortgage, deed of trust, or agreement, together with all the bonds or other evidences of indebtedness secured thereby, is offered and sold as a unit;

     (6) Any transaction in a viatical settlement contract, if the viatical settlement contract is offered and sold as a single unit;

     [(6)] (7) Any transaction by an executor, administrator, sheriff, marshal, receiver, trustee in bankruptcy, guardian, or conservator;

     [(7)] (8) Any transaction executed by a bona fide pledgee without any purpose of evading this act;

     [(8)] (9) Any offer or sale to a bank, savings institution, trust company, insurance company, investment company as defined in the Investment Company Act of 1940, pension or profitsharing trust, or other financial institution or institutional buyer, or to a broker-dealer, whether the purchaser is acting for itself or in some fiduciary capacity;

     [(9)] (10) Any transaction by an issuer in a security of its own issue if immediately thereafter the total number of persons who are known to the issuer to have any direct or indirect record or beneficial interest in any of its securities (but not including persons with whom transactions have been exempted by paragraph (8) of this subsection) does not exceed twenty-five and if no commission or other remuneration is paid or given to anyone for procuring or soliciting the transaction;

     [(10)] (11) Any transaction by an issuer in a security of its own issue if (A) during the twelve months' period ending immediately after such transaction the issuer will have made no more than fifteen transactions exempted by this paragraph (other than transactions also exempted by paragraphs (8) and (9), and (B) the issuer reasonably believes that the buyer is purchasing for investment and the buyer so represents in writing and (C) no commission or other remuneration is paid or given to anyone for procuring or soliciting the sale; but the commissioner may by rule or order, as to any security or transaction or any type of security or transaction, withdraw or further condition this exemption, or increase or decrease the number of prior transactions permitted by clause (A) or waive the conditions in clauses (B) or (C) with or without the substitution of a limitation on remuneration;

     [(11)] (12) Any transaction pursuant to an offer to existing security holders of the issuer, including persons who at the time of the transaction are holders of convertible securities, nontransferable warrants, or transferable warrants exercisable within not more than ninety days of their issuance, if (A) no commission or other remuneration (other than a standby commission) is paid or given directly or indirectly for soliciting any security holder in this state, or (B) the issuer first files a notice specifying the terms of the offer and the commissioner does not by order disallow the exemption within the next five full business days;

     [(12)] (13) Any offer (but not a sale) of a security for which registration statements have been filed under both this act and the Securities Act of 1933 if no stop order or refusal order is in effect and no public proceeding or examination looking toward such an order is pending under either act;

     [(13)] (14) Any nonissuer transaction by a person who does not control, or who is not controlled by or under common control with, the issuer in a security which has been (and securities which are of the same class as securities of the same issuer which have been) either registered for sale under the laws of this state regulating the sale of securities or lawfully sold in this state as a security exempt from such registration;

     [(14)] (15) Any nonissuer transaction in a security which at the time of such transaction would be eligible for registration by notification;

     [(15)] (16) Any nonissuer transaction by a person who does not control, and is not controlled by or under common control with, the issuer if (i) the transaction is at a price reasonably related to the current market price, and (ii) the security is registered with the Securities and Exchange Commission under section 12 of the Securities Exchange Act of 1934 and the issuer files reports with the Securities and Exchange Commission pursuant to section 13 of that act;

     [(16)] (17) Any patronage distributions of an agricultural cooperative corporation received by a patron or member in the form of capital stock, revolving fund certificate, retain certificate, certificate of indebtedness, letter of advice, or other written notice.

     (c) The commissioner may by rule or order exempt from sections 409.301 and 409.403 any other transaction not exempted in subsection (b), and may by order withdraw or condition the exemption as he deems necessary in the public interest.

     (d) The commissioner may by order deny or revoke any exemption specified in clause (9) or (11) of subsection (a) or in subsection (b) with respect to a specific security or transaction. No such order may be entered without appropriate prior notice to all interested parties, opportunity for hearing, and written findings of fact and conclusions of law, except that the commissioner may by order summarily deny or revoke any of the specified exemptions pending final determination of any proceeding under this subsection. Upon the entry of a summary order, the commissioner shall promptly notify all interested parties that it has been entered and of the reasons therefor and that within fifteen days of the receipt of a written request the matter will be set down for hearing. If no hearing is requested and none is ordered by the commissioner the order will remain in effect until it is modified or vacated by the commissioner. If a hearing is requested or ordered, the commissioner, after notice of and opportunity for hearing to all interested persons, may modify or vacate the order or extend it until final determination. No order under this subsection may operate retroactively. No person may be considered to have violated section 409.301 or 409.403 by reason of any offer or sale effected after the entry of an order under this subsection if he sustains the burden of proof that he did not know, and in the exercise of reasonable care could not have known, of the order.

     (e) The commissioner may by order after a hearing deny or revoke any exemption for a security issued by an agricultural cooperative corporation not qualifying under clause (5) of subsection (a).

     (f) In any proceeding under this act, the burden of proving an exemption or an exception from a definition is upon the person claiming it.

     (g) A person required to file for an exemption under this section shall pay a fee not to exceed one hundred dollars.