If an income generation transaction is a sale of a call option on a derivative instrument, including a swaption, the insurer must:
- (1) during the entire period the call option is outstanding, hold, or have a currently exercisable right to acquire, assets generating the cash flow necessary to make any payment for which the insurer is liable under the underlying derivative instrument; and
- (2) have the ability to enter into the underlying derivative transaction for the insurer's portfolio.
Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.