Tex. Insurance Code § 424.214
This is the official text of Tex. Insurance Code § 424.214, part of Texas’s Insurance Code — regulates insurance companies and the policies they sell.
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§ 424.214. LIMITATION ON SALE OF PUT OPTION ON ASSETS.
Official statutory text
(a) If an income generation transaction is a sale of a put option on assets, the insurer must:
(1) during the entire period the option is outstanding, hold sufficient cash, cash equivalents, or interests in a short-term investment pool to purchase the underlying assets on exercise of the option; and
(2) have the ability to hold the underlying assets in the insurer's portfolio.
(b) If during the entire period the put option is outstanding the total market value of all put options sold by the insurer exceeds two percent of the insurer's assets, the insurer shall set aside, under a custodial or escrow agreement, cash or cash equivalents that have a market value equal to the amount of the insurer's put option obligations in excess of two percent of the insurer's assets.
(1) during the entire period the option is outstanding, hold sufficient cash, cash equivalents, or interests in a short-term investment pool to purchase the underlying assets on exercise of the option; and
(2) have the ability to hold the underlying assets in the insurer's portfolio.
(b) If during the entire period the put option is outstanding the total market value of all put options sold by the insurer exceeds two percent of the insurer's assets, the insurer shall set aside, under a custodial or escrow agreement, cash or cash equivalents that have a market value equal to the amount of the insurer's put option obligations in excess of two percent of the insurer's assets.
Status: in_force · Read it on the official government site
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