Cal. INS § 823

(a) A privilege pertaining to a security giving the holder the privilege to convert such security into another security of the same insurer is not a sale of such other security. (b) A right pertaining to a security and entitling the holder of such right to subscribe to another security of the same insurer is not a sale of such other security, but the sale of such other security upon the exercise of such right shall be subject to the provisions of this article.