(a) A domestic insurer may effect or maintain bona fide hedging transactions pertaining to securities otherwise eligible for investment under this part including, but not limited to:
Terms Used In Hawaii Revised Statutes 431:6-321
Contract: A legal written agreement that becomes binding when signed.
Interest rate: The amount paid by a borrower to a lender in exchange for the use of the lender's money for a certain period of time. Interest is paid on loans or on debt instruments, such as notes or bonds, either at regular intervals or as part of a lump sum payment when the issue matures. Source: OCC
(1) Financial futures contracts, warrants, options, calls, and other rights to purchase, and(2) Puts and other rights to require another person to purchase the securities.(b) The contracts, options, calls, puts, and rights shall be traded on a commodity exchange regulated under the Commodity Exchange Act, as amended, on a securities exchange, or on an over-the-counter market regulated under the Securities Exchange Act of 1934, as amended.(c) For purposes of this section, a bona fide hedging transaction means a purchase or sale of a contract, warrant, option, call, put, or right entered into for the purpose of:
(1) Minimizing interest rate risks in respect to interest obligations on insurance policies or contracts supported by securities held by the insurer, or(2) Offsetting changes in the market values or yield rates of securities held by the insurer.
