Texas Insurance Code

§ 425.127 — RISK CONTROL TRANSACTIONS: INTERNAL CONTROL PROCEDURES

IN § 425.127Title 4. REGULATION OF SOLVENCY · Part B. RESERVES AND INVESTMENTS · Ch. 425. RESERVES AND INVESTMENTS FOR LIFE INSURANCE · Art. C. AUTHORIZED INVESTMENTS AND TRANSACTIONS FOR CAPITAL STOCK LIFE, HEALTH, AND ACCIDENT INSURERS

Statute text

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An insurance company that enters into a derivative transaction shall establish written internal control procedures that provide for:

(1)a quarterly report to the board of directors that reviews:

(A)each derivative transaction entered into, outstanding, or closed out;

(B)the results and effectiveness of the derivatives program; and

(C)the credit risk exposure to each counterparty for over-the-counter derivative transactions based on the counterparty exposure amount;

(2)a system for determining whether hedging or replication strategies used have been effective;

…

Legislative history

Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.