Tex. Ins. Code § 424.205 · Subchapter E. RISK CONTROL TRANSACTIONS
DERIVATIVE USE PLAN.
Text — Current through the 89th 2nd Called Legislative Session, 2025
(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.
Notes and commentary — not statutory text
History
Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.
Source of truth
- Edition
- Current through the 89th 2nd Called Legislative Session, 2025
- Official file
- https://statutes.capitol.texas.gov/Docs/IN/htm/IN.424.htm
- Text hash
- sha256 7da809e32e7a803b2ed9503cfdc7eeac59bb0efd44700486199a1c89a3def168
- Composed by
- compose_tx.py 2026-10-05: the Legislative Council's chapter files read in document order; verify_tx.py's independent reading (lxml DOM walk) agrees character for character
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Procedural information only. Not legal advice and not a substitute for the advice of an attorney. Confirm the current text with the official publisher before relying on it.