Source: https://development.code.dccouncil.us/dc/council/code/sections/31-1372.10.html
Timestamp: 2019-04-18 22:55:51+00:00

Document:
D.C. Law Library - § 31–1372.10. Derivative transactions.
↪ § 31–1372.10. Derivative transactions.
§ 31–1372.09. Foreign investments and foreign currency exposure.
(a) An insurer may, directly or indirectly through an investment subsidiary, engage in derivative transactions under this section, subject to the requirements of this section.
(b)(1) An insurer may use derivative instruments under this section to engage in hedging transactions and certain income generation transactions, as these terms may be further defined in regulations promulgated by the Commissioner.
(2) An insurer shall be able to demonstrate to the Commissioner the intended hedging characteristics and the ongoing effectiveness of the derivative transaction, or combination of the transactions, through cash flow testing or other appropriate analyses.
(3) The aggregate potential exposure of collars, swaps, forwards, and futures used in hedging transactions does not exceed 6.5% of its admitted assets.
(4) Sales of covered caps or floors if the insurer holds in its portfolio the investments generating the cash flow to make the required payments under the caps or floors during the complete term that the cap or floor is outstanding.
(e) An insurer shall include all counterparty exposure amounts in determining compliance with the limitations of § 3-1372.02.
(f) Under regulations promulgated under § 31-1375.01, the Commissioner may approve additional transactions involving the use of derivative instruments in excess of the limits of subsection (c) of this section or for other risk management purposes under regulations promulgated by the Commissioner; provided, that the replication transactions shall not be permitted for other than risk management purposes.
This section is referenced in § 31-1371.02, § 31-1371.03, § 31-1372.02, § 31-1372.09, and § 31-1372.12.

References: § 31
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