reglab/housing_qa huggingface dataset:
TX Ins Code § 424.111 (2021)
2021 Texas Statutes|Insurance Code|Title 4 - Regulation of Solvency|Subtitle B - Reserves and Investments|Chapter 424 - Investments for Certain Insurers|Subchapter C. Investment Pools|Section 424.111. Pooling Agreement Provisions

Sec. 424.111.  POOLING AGREEMENT PROVISIONS.  The pooling agreement for an investment pool must provide that:(1)  100 percent of the ownership interests in the pool must at all times be held by:(A)  an insurer and the insurer's affiliated insurers;(B)  for a pool investing solely in investments authorized under Section 424.104, the insurer and the insurer's subsidiaries and affiliates or any pension or profit-sharing plan of the insurer and the insurer's subsidiaries and affiliates;  or(C)  for a United States branch of an alien insurer, subsidiaries or affiliates of the insurer's United States manager;(2)  the pool's underlying assets are held solely for the benefit of each participant and may not be commingled with the general assets of the pool manager or any other person;(3)  each participant owns an undivided interest in the pool's underlying assets in proportion to the aggregate amount of the participant's interest in the pool; and(4)  a pool participant or, if a pool participant is insolvent, bankrupt, or in receivership, the participant's trustee, receiver, conservator, or other successor-in-interest may withdraw all or any portion of the participant's investment from the pool under the terms of the pooling agreement.|Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.|
TX Ins Code § 424.112 (2021)
2021 Texas Statutes|Insurance Code|Title 4 - Regulation of Solvency|Subtitle B - Reserves and Investments|Chapter 424 - Investments for Certain Insurers|Subchapter C. Investment Pools|Section 424.112. Withdrawals and Distributions

Sec. 424.112.  WITHDRAWALS AND DISTRIBUTIONS.  (a)  A pool participant must be able to make withdrawals on demand without penalty or other assessment on any business day, and settlement of funds must occur within a reasonable and customary period that does not exceed five business days after a withdrawal.(b)  The pooling agreement must provide that the pool manager shall make a distribution to a pool participant, at the manager's discretion:(1)  in cash in an amount equal to the fair market value at the time of the distribution of the participant's pro rata share of each of the pool's underlying assets;(2)  in kind in an amount equal to a pro rata share of each underlying asset; or(3)  in a combination of cash and in-kind distributions in an amount equal to a pro rata share of each underlying asset.(c)  A distribution under Subsection (b) must be computed after subtracting all the investment pool's applicable fees and expenses.|Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.|
TX Ins Code § 424.113 (2021)
2021 Texas Statutes|Insurance Code|Title 4 - Regulation of Solvency|Subtitle B - Reserves and Investments|Chapter 424 - Investments for Certain Insurers|Subchapter C. Investment Pools|Section 424.113. Investment Pool Records

Sec. 424.113.  INVESTMENT POOL RECORDS.  The pool manager shall compile and maintain:(1)  detailed accounting records that show:(A)  the cash receipts and disbursements reflecting each pool participant's proportionate investment in the investment pool; and(B)  a complete description of all the pool's underlying assets, including the amount, interest rate, and maturity date, if any, of each of those assets and other appropriate designations; and(2)  other records that, on a daily basis, allow third parties to verify each participant's investment in the pool.|Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.|
TX Ins Code § 424.114 (2021)
2021 Texas Statutes|Insurance Code|Title 4 - Regulation of Solvency|Subtitle B - Reserves and Investments|Chapter 424 - Investments for Certain Insurers|Subchapter C. Investment Pools|Section 424.114. Inspection of Records

Sec. 424.114.  INSPECTION OF RECORDS.  The pool manager shall make records of the investment pool available for inspection by the commissioner.|Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.|
TX Ins Code § 424.115 (2021)
2021 Texas Statutes|Insurance Code|Title 4 - Regulation of Solvency|Subtitle B - Reserves and Investments|Chapter 424 - Investments for Certain Insurers|Subchapter C. Investment Pools|Section 424.115. Reports of Transactions Between Pool and Participant

Sec. 424.115.  REPORTS OF TRANSACTIONS BETWEEN POOL AND PARTICIPANT.  (a)  A transaction between an investment pool and a pool participant is not subject to Subchapter C, Chapter 823, except that before entering into a pool, an insurer subject to Chapter 823 shall give the commissioner the written notice required under Section 823.103.(b)  The investment pool's investment activities and the transactions between the pool and a pool participant must be reported in the registration statement required by Subchapter B, Chapter 823.|Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.|
TX Ins Code § 424.151 (2021)
2021 Texas Statutes|Insurance Code|Title 4 - Regulation of Solvency|Subtitle B - Reserves and Investments|Chapter 424 - Investments for Certain Insurers|Subchapter D. Dollar Roll, Repurchase, Reverse Repurchase,|Section 424.151. Definitions

Sec. 424.151.  DEFINITIONS.  In this subchapter:(1)  "Dollar roll transaction" means two simultaneous transactions with settlement dates not more than 96 days apart, in one of which an insurer sells to a business entity, and in the other of which the insurer is obligated to purchase from the same business entity, substantially similar securities that are:(A)  mortgage-backed securities issued, assumed, or guaranteed by the Government National Mortgage Association, the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, or a successor to one of those organizations; or(B)  other mortgage-backed securities referred to in 15 U.S.C. Section 77r-1 et seq., as amended.(2)  "Repurchase transaction" means a transaction in which an insurer purchases securities from a business entity that is obligated to repurchase the purchased securities or equivalent securities from the insurer at a specified price, either within a specified period or on demand.(3)  "Reverse repurchase transaction" means a transaction in which an insurer sells securities to a business entity and is obligated to repurchase the sold securities or equivalent securities from the business entity at a specified price, either within a specified period or on demand.(4)  "Securities lending transaction" means a transaction in which an insurer lends securities to a business entity that is obligated to return the loaned securities or equivalent securities to the insurer, either within a specified period or on demand.|Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.|
TX Ins Code § 424.152 (2021)
2021 Texas Statutes|Insurance Code|Title 4 - Regulation of Solvency|Subtitle B - Reserves and Investments|Chapter 424 - Investments for Certain Insurers|Subchapter D. Dollar Roll, Repurchase, Reverse Repurchase,|Section 424.152. Transactions Authorized

Sec. 424.152.  TRANSACTIONS AUTHORIZED.  An insurer may engage in dollar roll, repurchase, reverse repurchase, and securities lending transactions as provided by this subchapter.|Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.|
TX Ins Code § 424.153 (2021)
2021 Texas Statutes|Insurance Code|Title 4 - Regulation of Solvency|Subtitle B - Reserves and Investments|Chapter 424 - Investments for Certain Insurers|Subchapter D. Dollar Roll, Repurchase, Reverse Repurchase,|Section 424.153. Period of Transaction

Sec. 424.153.  PERIOD OF TRANSACTION.  An insurer must enter into a written agreement for each transaction under this subchapter, other than a dollar roll transaction.  The agreement must require that the transaction terminate on or before the first anniversary of the transaction's inception.|Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.|
TX Ins Code § 424.154 (2021)
2021 Texas Statutes|Insurance Code|Title 4 - Regulation of Solvency|Subtitle B - Reserves and Investments|Chapter 424 - Investments for Certain Insurers|Subchapter D. Dollar Roll, Repurchase, Reverse Repurchase,|Section 424.154. Cash Requirements

Sec. 424.154.  CASH REQUIREMENTS.  With respect to cash received in a transaction under this subchapter, an insurer shall:(1)  invest the cash in accordance with this subchapter and in a manner that recognizes the liquidity needs of the transaction; or(2)  use the cash for the insurer's general corporate purposes.|Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.|
TX Ins Code § 424.155 (2021)
2021 Texas Statutes|Insurance Code|Title 4 - Regulation of Solvency|Subtitle B - Reserves and Investments|Chapter 424 - Investments for Certain Insurers|Subchapter D. Dollar Roll, Repurchase, Reverse Repurchase,|Section 424.155. Collateral Requirements

Sec. 424.155.  COLLATERAL REQUIREMENTS.  (a)  While a transaction under this subchapter is outstanding, the insurer or the insurer's agent or custodian shall maintain, as to acceptable collateral received in the transaction, either physically or through the book-entry system of the Federal Reserve, Depository Trust Company, Participants Trust Company, or another securities depository approved by the commissioner:(1)  possession of the collateral;(2)  a perfected security interest in the collateral;  or(3)  in the case of a jurisdiction outside of the United States, title to, or the rights of a secured creditor to, the collateral.(b)  The amount of collateral required for repurchase, reverse repurchase, and securities lending transactions is the amount required under the Purposes and Procedures Manual of the securities valuation office or a successor publication.|Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.|
TX Ins Code § 424.156 (2021)
2021 Texas Statutes|Insurance Code|Title 4 - Regulation of Solvency|Subtitle B - Reserves and Investments|Chapter 424 - Investments for Certain Insurers|Subchapter D. Dollar Roll, Repurchase, Reverse Repurchase,|Section 424.156. Percentage Limitations

Sec. 424.156.  PERCENTAGE LIMITATIONS.  (a)  An insurer may not enter into a transaction under this subchapter if, as a result of and after making the transaction, the aggregate amount of securities loaned or sold to or purchased from:(1)  a single business entity counterparty under this subchapter would exceed five percent of the insurer's assets; or(2)  all business entities under this subchapter would exceed 40 percent of the insurer's assets.(b)  In computing the amount sold to or purchased from a business entity counterparty under a repurchase or reverse repurchase transaction, effect may be given to netting provisions under a master written agreement.|Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.|
TX Ins Code § 424.157 (2021)
2021 Texas Statutes|Insurance Code|Title 4 - Regulation of Solvency|Subtitle B - Reserves and Investments|Chapter 424 - Investments for Certain Insurers|Subchapter D. Dollar Roll, Repurchase, Reverse Repurchase,|Section 424.157. Rules

Sec. 424.157.  RULES.  The commissioner may adopt reasonable rules and issue reasonable orders as necessary to implement this subchapter.|Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.|
TX Ins Code § 424.202 (2021)
2021 Texas Statutes|Insurance Code|Title 4 - Regulation of Solvency|Subtitle B - Reserves and Investments|Chapter 424 - Investments for Certain Insurers|Subchapter E. Risk Control Transactions|Section 424.202. Risk Control Transactions Authorized

Sec. 424.202.  RISK CONTROL TRANSACTIONS AUTHORIZED.  (a)  Except as provided by Subsection (b), an insurer may engage in a risk control transaction authorized by this subchapter to:(1)  protect the insurer's assets against the risk of changing asset values or interest rates;(2)  reduce risk; and(3)  generate income.(b)  An insurer with a statutory net capital and surplus as determined by the insurer's most recent financial statement required to be filed with the department that is less than the minimum amount of capital and surplus required for a new charter and certificate of authority for the same type of insurer may not engage in a transaction authorized under this subchapter.|Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.|
TX Ins Code § 424.203 (2021)
2021 Texas Statutes|Insurance Code|Title 4 - Regulation of Solvency|Subtitle B - Reserves and Investments|Chapter 424 - Investments for Certain Insurers|Subchapter E. Risk Control Transactions|Section 424.203. Notice of Intent to Engage in Risk Control Transactions Required

Sec. 424.203.  NOTICE OF INTENT TO ENGAGE IN RISK CONTROL TRANSACTIONS REQUIRED.  (a)  Before an insurer with a statutory net capital and surplus of less than $10 million engages in a transaction authorized under this subchapter, the insurer shall file a written notice with the commissioner describing:(1)  the need to engage in the transaction;(2)  the lack of acceptable alternatives; and(3)  the insurer's plan to engage in the transaction.(b)  If the commissioner does not issue an order prohibiting an insurer who files a notice under Subsection (a) from engaging in the transaction on or before the 90th day after the date the commissioner receives the notice, the insurer may engage in the transaction described in the notice.(c)  For purposes of this section, an insurer's net capital and surplus are determined by the insurer's most recent financial statement required to be filed with the department.|Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.|
TX Ins Code § 424.204 (2021)
2021 Texas Statutes|Insurance Code|Title 4 - Regulation of Solvency|Subtitle B - Reserves and Investments|Chapter 424 - Investments for Certain Insurers|Subchapter E. Risk Control Transactions|Section 424.204. Trading Requirements for Derivative Instruments

Sec. 424.204.  TRADING REQUIREMENTS FOR DERIVATIVE INSTRUMENTS.  Each derivative instrument must be:(1)  traded on a securities exchange;(2)  entered into with, or guaranteed by, a business entity;(3)  issued or written by, or entered into with, the issuer of the underlying interest on which the derivative instrument is based; or(4)  in the case of futures, traded through a broker who is:(A)  registered as a futures commission merchant under the Commodity Exchange Act (7 U.S.C. Section 1 et seq.), as amended; or(B)  exempt from that registration under 17 C.F.R. Section 30.10, adopted under the Commodity Exchange Act (7 U.S.C. Section 1 et seq.), as amended.|Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.|
TX Ins Code § 424.205 (2021)
2021 Texas Statutes|Insurance Code|Title 4 - Regulation of Solvency|Subtitle B - Reserves and Investments|Chapter 424 - Investments for Certain Insurers|Subchapter E. Risk Control Transactions|Section 424.205. Derivative Use Plan

Sec. 424.205.  DERIVATIVE USE PLAN.  (a)  Before an insurer enters into a derivative transaction, the insurer's board of directors must approve a derivative use plan as part of the insurer's investment plan otherwise required by law.(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 and the assets or liabilities being replicated; and(3)  require compliance with the insurer's internal control procedures established under Section 424.206.|Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.|
TX Ins Code § 424.206 (2021)
2021 Texas Statutes|Insurance Code|Title 4 - Regulation of Solvency|Subtitle B - Reserves and Investments|Chapter 424 - Investments for Certain Insurers|Subchapter E. Risk Control Transactions|Section 424.206. Internal Control Procedures

Sec. 424.206.  INTERNAL CONTROL PROCEDURES.  An insurer that enters into a derivative transaction shall establish written internal control procedures that require:(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 by the insurer have been effective;(3)  a system of reports, at least as frequent as monthly, to the insurer's management, that include:(A)  a description of each derivative transaction entered into, outstanding, or closed out during the period since the last report;(B)  the purpose of each outstanding derivative transaction;(C)  a performance review of the derivative instrument program; and(D)  the counterparty exposure amount for each over-the-counter derivative transaction;(4)  a written authorization that identifies the responsibilities and limitations of authority of each person authorized to effect and maintain derivative transactions; and(5)  appropriate documentation for each transaction, including:(A)  the purpose of the transaction;(B)  the assets or liabilities to which the transaction relates;(C)  the specific derivative instrument used in the transaction;(D)  for an over-the-counter derivative transaction, the name of the counterparty and the counterparty exposure amount; and(E)  for an exchange-traded derivative instrument, the name of the exchange and the name of the firm that handled the transaction.|Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.|
TX Ins Code § 424.207 (2021)
2021 Texas Statutes|Insurance Code|Title 4 - Regulation of Solvency|Subtitle B - Reserves and Investments|Chapter 424 - Investments for Certain Insurers|Subchapter E. Risk Control Transactions|Section 424.207. Ability to Demonstrate Hedging Characteristics and Effectiveness

Sec. 424.207.  ABILITY TO DEMONSTRATE HEDGING CHARACTERISTICS AND EFFECTIVENESS.  An insurer must be able to demonstrate to the commissioner on request the intended hedging characteristics and continuing effectiveness of a derivative transaction or combination of transactions through:(1)  cash flow testing;(2)  duration analysis; or(3)  other appropriate analysis.|Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.|
TX Ins Code § 424.208 (2021)
2021 Texas Statutes|Insurance Code|Title 4 - Regulation of Solvency|Subtitle B - Reserves and Investments|Chapter 424 - Investments for Certain Insurers|Subchapter E. Risk Control Transactions|Section 424.208. Offsetting Transactions

Sec. 424.208.  OFFSETTING TRANSACTIONS.  (a)  Subject to this section, an insurer may purchase or sell one or more derivative instruments to wholly or partly offset a derivative instrument previously purchased or sold, without regard to the quantitative limitations of this subchapter.(b)  An offsetting transaction under this section must use the same type of derivative instrument as the derivative instrument being offset.|Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.|
TX Ins Code § 424.209 (2021)
2021 Texas Statutes|Insurance Code|Title 4 - Regulation of Solvency|Subtitle B - Reserves and Investments|Chapter 424 - Investments for Certain Insurers|Subchapter E. Risk Control Transactions|Section 424.209. Inclusion of Counterparty Exposure Amounts

Sec. 424.209.  INCLUSION OF COUNTERPARTY EXPOSURE AMOUNTS.  The insurer shall include all counterparty exposure amounts in determining compliance with the limitations of this subchapter. |Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.|
TX Ins Code § 424.210 (2021)
2021 Texas Statutes|Insurance Code|Title 4 - Regulation of Solvency|Subtitle B - Reserves and Investments|Chapter 424 - Investments for Certain Insurers|Subchapter E. Risk Control Transactions|Section 424.210. Oversight by Commissioner

Sec. 424.210.  OVERSIGHT BY COMMISSIONER.  (a)  Not later than the 10th day before the date an insurer is scheduled to enter into an initial hedging transaction, the insurer shall notify the commissioner in writing that:(1)  the insurer's board of directors has adopted an investment plan that authorizes hedging transactions; and(2)  each hedging transaction will comply with this subchapter.(b)  If a hedging transaction does not comply with this subchapter or if continuing the transaction may create a hazardous financial condition for the insurer that affects the insurer's policyholders or creditors or the public, the commissioner may, after notice and an opportunity for a hearing, order the insurer to take action that the commissioner determines is reasonably necessary to:(1)  remedy a hazardous financial condition; or(2)  prevent an impending hazardous financial condition from occurring.|Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.|
TX Ins Code § 424.211 (2021)
2021 Texas Statutes|Insurance Code|Title 4 - Regulation of Solvency|Subtitle B - Reserves and Investments|Chapter 424 - Investments for Certain Insurers|Subchapter E. Risk Control Transactions|Section 424.211. Authority to Enter Into Hedging Transaction

Sec. 424.211.  AUTHORITY TO ENTER INTO HEDGING TRANSACTION.  After providing notice under Section 424.210, an insurer may enter into a hedging transaction under this subchapter if as a result of and after making the transaction:(1)  the aggregate statement value of all outstanding caps, floors, options, swaptions, and warrants not attached to another financial instrument purchased by the insurer under this subchapter, other than a collar, does not exceed 7.5 percent of the insurer's assets;(2)  the aggregate statement value of all outstanding caps, floors, options, swaptions, and warrants written by the insurer under this subchapter, other than a collar, does not exceed three percent of the insurer's assets; and(3)  the aggregate potential exposure of all outstanding collars, forwards, futures, and swaps entered into or acquired by the insurer under this subchapter does not exceed 6.5 percent of the insurer's assets.|Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.|
TX Ins Code § 424.212 (2021)
2021 Texas Statutes|Insurance Code|Title 4 - Regulation of Solvency|Subtitle B - Reserves and Investments|Chapter 424 - Investments for Certain Insurers|Subchapter E. Risk Control Transactions|Section 424.212. Authority to Enter Into Income Generation Transaction

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.|