Texas § 425.126 RISK CONTROL TRANSACTIONS: DERIVATIVE USE PLAN.

Texas Statutes

§ 425.126 — RISK CONTROL TRANSACTIONS: DERIVATIVE USE PLAN.

Texas § 425.126

Code INInsurance Code

This text of Texas § 425.126 (RISK CONTROL TRANSACTIONS: DERIVATIVE USE PLAN.) is published on Counsel Stack Legal Research, covering Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Tex. Insurance Code Code Ann. § 425.126 (2026).

Text

Sec. 425.126. RISK CONTROL TRANSACTIONS: DERIVATIVE USE PLAN.

(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.

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Sec. 425.126. RISK CONTROL TRANSACTIONS: DERIVATIVE USE PLAN. (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.