SB 14-152 Summary

• Expands definition of "derivative instrument" to include substantially similar agreements and investments permitted under Commissioner rules, and broadens "income generation" transactions to include covered call/put options and covered caps/floors

• Establishes specific percentage limits on derivative transactions: purchased options/caps/floors/warrants capped at 7.5% of admitted assets, written options/caps/floors at 3%, and collars/swaps/forwards/futures at 6.5% of admitted assets

• Requires derivative use plans approved by board of directors with ability to demonstrate hedging characteristics and effectiveness through cash flow testing or other appropriate analysis

• Creates new Part 8 (Insurance Holding Company Systems) establishing registration requirements, standards for affiliate transactions, disclosure obligations, examination authority, and confidential treatment of regulatory information

• Takes effect July 1, 2014; applies standardized requirements to insurance holding company systems including subsidiaries, affiliates, control definitions, and merger/acquisition approval procedures