Tex. Insurance Code § 424.205
DERIVATIVE USE PLAN
Texas · Texas Insurance Code · Status: effective
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- Citation
- Tex. Insurance Code § 424.205, DERIVATIVE USE PLAN, Texas, version 1 as recorded 2026-07-09, yourstate.us, https://yourstate.us/provision/677492
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Full text
(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.