Sec. 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 (H.B. 2017), Sec. 1, eff. April 1, 2007.
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