Section 424.215 - Limitation on Sale of Call Option on Derivative Instrument 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, Sec. 1, eff. 4/1/2007.