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Texas Insurance Code - Section 424.212. Authority To Enter Into Income Generation Transaction

Legal Research Home > Texas Lawyer > Insurance Code > Texas Insurance Code - Section 424.212. Authority To Enter Into Income Generation Transaction

§ 424.212. AUTHORITY TO ENTER INTO INCOME GENERATION 
TRANSACTION.  An insurer may enter into an income generation 
transaction only if:
		(1)  as a result of and after making the transaction, 
the sum of the following amounts does not exceed 10 percent of the 
insurer's assets:
			(A)  the aggregate statement value of admitted 
assets that at the time of the transaction are subject to call or 
that generate the cash flows for payments the insurer is required to 
make under caps and floors sold by the insurer and that at the time 
of the transaction are outstanding under this subchapter;
			(B)  the statement value of admitted assets 
underlying derivative instruments that at the time of the 
transaction are subject to calls sold by the insurer and 
outstanding under this subchapter;  and
			(C)  the purchase price of assets subject to puts 
that at the time of the transaction are outstanding under this 
subchapter;  and
		(2)  the transaction is a sale of:                                            
			(A)  a call option on assets that meets the 
requirements of Section 424.213;
			(B)  a put option on assets that meets the 
requirements of Section 424.214;
			(C)  a call option on a derivative instrument, 
including a swaption, that meets the requirements of Section 
424.215;  or
			(D)  a cap or floor that meets the requirements of 
section 424.216         

Added by Acts 2005, 79th Leg., ch. 727, § 1, eff. April 1, 2007.           

Last modified: August 10, 2007