Texas Insurance Code 424.105 – Short-Term Investment Pool: Certain Short-Term Obligations
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(a) Obligations contained in a short-term investment pool must meet the requirements of this section.
(b) The obligations must:
(1) have a rating by the securities valuation office of one or two, or an equivalent rating issued by a nationally recognized statistical rating organization recognized by the securities valuation office; or
(2) be issued by an issuer with outstanding obligations that have a rating described by Subdivision (1).
Terms Used In Texas Insurance Code 424.105
- 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
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
(c) The obligations must have:
(1) a remaining maturity of 397 days or less or a put that:
(A) entitles the holder to receive the principal amount of the obligation; and
(B) may be exercised through maturity at specified intervals not exceeding 397 days; or
(2) a remaining maturity of three years or less and a floating interest rate that resets at least quarterly on the basis of a current short-term index and is not subject to a maximum limit, if the obligations do not have an interest rate that varies inversely to market interest rate changes.
(d) For purposes of this section, a current short-term index is:
(1) a federal funds rate;
(2) the prime rate;
(3) the rate for treasury bills;
(4) the London InterBank Offered Rate; or
(5) the rate for commercial paper.