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Texas Insurance Code - INS § 424.205. Derivative Use Plan

Current as of January 01, 2024 | Updated by Findlaw Staff

(a) Before an insurer enters into a derivative transaction, the insurer's board of directors must approve a derivative use plan as part of the insurer's investment plan otherwise required by law.

(b) The derivative use plan must:

(1) describe investment objectives and risk constraints, such as counterparty exposure amounts;

(2) define permissible transactions, identifying the risks to be hedged and the assets or liabilities being replicated;  and

(3) require compliance with the insurer's internal control procedures established under Section 424.206.

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Cite this article: FindLaw.com - Texas Insurance Code - INS § 424.205. Derivative Use Plan - last updated January 01, 2024 | https://codes.findlaw.com/tx/insurance-code/ins-sect-424-205/

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