38.2-1428 - Hedging transactions.
§ 38.2-1428. Hedging transactions.
A domestic insurer may effect or maintain bona fide hedging transactionspertaining to securities otherwise eligible for investment under §§ 38.2-1415through 38.2-1427 and 38.2-1433, including, but not limited to: (i) financialfutures contracts, warrants, options, calls and other rights to purchase, and(ii) puts and other rights to require another person to purchase suchsecurities. The contracts, options, calls, puts, and rights shall be tradedon a commodity exchange regulated under the Commodity Exchange Act, asamended, or on a securities exchange or on an over-the-counter marketregulated under the Securities Exchange Act of 1934, as amended. For purposesof this section, a "bona fide hedging transaction" means a purchase or saleof a contract, warrant, option, call, put or right entered into for thepurpose of (a) minimizing interest rate or foreign currency risks in respectof obligations on insurance policies or contracts supported by securitiesheld by the insurer or (b) offsetting changes in the market values or yieldrates of securities held by the insurer, currency risks or other items thatqualify for hedge accounting.
(1983, c. 457, § 38.1-217.31; 1985, c. 36; 1986, c. 562; 2001, c. 387.)