Tex. Insurance Code § 425.126
RISK CONTROL TRANSACTIONS: DERIVATIVE USE PLAN
Texas · Texas Insurance Code · Status: effective
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- Citation
- Tex. Insurance Code § 425.126, RISK CONTROL TRANSACTIONS: DERIVATIVE USE PLAN, Texas, version 1 as recorded 2026-07-09, yourstate.us, https://yourstate.us/provision/677574
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Full text
(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.