Texas · Through 89th 2nd Called Legislative Session, 2025

Tex. Insurance Code § 425.126: RISK CONTROL TRANSACTIONS: DERIVATIVE USE PLAN.

Where this section sits in the code

INSURANCE CODE
TITLE 4. REGULATION OF SOLVENCY
SUBTITLE B. RESERVES AND INVESTMENTS
CHAPTER 425. RESERVES AND INVESTMENTS FOR LIFE INSURANCE COMPANIES AND RELATED ENTITIES
SUBCHAPTER C. AUTHORIZED INVESTMENTS AND TRANSACTIONS FOR CAPITAL STOCK LIFE, HEALTH, AND ACCIDENT INSURERS

(a) Before an insurance company enters into a derivative transaction, the company's board of directors must approve a derivative use plan as part of the investment plan required by Section 425.105.

(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 or the assets or liabilities being replicated; and

(3) require compliance with internal control procedures.

Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.

Collected 2026-08-27T01:47:21Z. Source file · JSON

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