40-2a01. United States government obligations; call options.
40-2a01
40-2a01. United States government obligations; call options.Any insurance company other than life heretofore or hereafter organizedunder any law of this state may invest with the direction or approval of amajority of its board of directors or authorized committee thereof, any ofits funds, or any part thereof in bonds or other evidences of indebtednessissued, assumed or guaranteed by the United States of America, or by anyagency or instrumentality thereof.Such insurance company may write call options on government obligationspermitted under this section which it owns. Call options may be purchasedfor the sole purpose of closing out a position taken previously withrespect to one or more options having been written. The purchase of a calloption for any reason other than as a closing transaction and the writingof naked (uncovered) call options are hereby prohibited.
Any United States government obligation owned by an insurance companyobligated under an unexpired written call option shall be valued at thelesser of the striking price or value established in accordance with themethod of valuation as prescribed by the commissioner of insurance forfinancial reporting purposes.
"Striking price" means the price per United States governmentobligation, exclusive of selling costs, the company would receive shouldthe call option be exercised by the holder.
History: L. 1972, ch. 173, § 1;L. 1989, ch. 134, § 1; July 1.