40-2b01. United States government obligations; call options.
40-2b01
40-2b01. United States government obligations; call options.Any life insurance company heretofore or hereafter organized under anylaw of this state may invest by loans or otherwise, with the direction orapproval of a majority of its board of directors or authorized committeethereof, any of its funds, or any part thereof in bonds or other evidencesof indebtedness issued, assumed or guaranteed by the United States ofAmerica, or by any agency or instrumentality thereof.Such life 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. 179, § 1;L. 1989, ch. 134, § 2; July 1.