Ins 6.20(8r)(8r) Derivative instruments. An insurer, and in the case of an insurer that is subject to special restrictions under s. 620.03, Stats., to the extent other rules are applicable to them, may invest in derivative instruments in addition to investments authorized by s. 620.22 (1) to (7), Stats., provided all of the following requirements are met: Ins 6.20(8r)(a)(a) Derivative instrument contracts shall be entered into to protect the investment portfolio of an insurer against the risk of changing asset values or interest rates, to enhance its liquidity, to aid in cash flow management, as a substitute for cash market transactions, and for any other purpose consistent with the investment objectives for the assets of an insurer stated in s. 620.01, Stats. Ins 6.20(8r)(b)(b) The aggregate market value of all derivative instruments outstanding may not exceed 10% of the insurer’s assets. Ins 6.20(8r)(c)(c) An insurer may purchase put options or sell call options only with regard to derivative instruments or financial instruments owned by the insurer, or which may be obtained through the exercise of warrants or conversion rights held by the insurer. Ins 6.20(8r)(d)(d) An insurer may purchase call options or sell put options on derivative instruments or financial instruments only if the amount of the instrument, which may be acquired upon exercise of the option, when aggregated with current holdings, would be an authorized investment under s. 620.22 (1) to (7), Stats., or this subsection, and would not exceed the limitations specified in s. 620.23, Stats., or this section. Ins 6.20(8r)(e)(e) The board of directors or its authorized committee shall first approve the insurer’s plan relating to such investments, which plan must contain specific policy objectives and strategies, establish aggregate maximum limits in such investments and internal control procedures, and identify the duties, expertise and limits of authority of personnel authorized by the board of directors to engage in such transactions on behalf of the insurer. Ins 6.20(8r)(f)(f) A copy of the insurer’s plan shall be filed with the commissioner 30 days prior to its effective date. The commissioner may disapprove the plan within the 30-day period after receipt. Ins 6.20(9)(9) Changes in qualification of investments. Any investment originally made under s. 620.22 (9), Stats., may thereafter be considered as falling within any other class of investment for which it subsequently qualifies. Ins 6.20(10)(a)(a) General. Security valuations contained in “Valuations of Securities”, issued by the Committee on Valuation of Securities of the National Association of Insurance Commissioners, will be followed in implementing this chapter. Ins 6.20(10)(b)(b) Insurance policies. Insurance policies purchased under sub. (8) (g) will be valued at their cash surrender value. Ins 6.20(10)(c)(c) Claims and demands guaranteed by insurer. When an insurer authorized to sell credit insurance purchases, under sub. (8) (h), claims and demands it has guaranteed, it shall value them at face value or at cost, whichever is less, and shall set up a separate and adequate “loss reserve for guaranteed claims purchased” in an amount satisfactory to the commissioner. Ins 6.20 HistoryHistory: Cr. emerg. eff. 5-2-72; cr. Register, July, 1972, No. 199, eff. 8-1-72; am. (5) (a) 1., Register, October, 1974, No. 226, eff. 11-1-74; r. and recr. (5) (g), cr. (6) (c), Register, December, 1974, No. 228, eff. 1-1-75; emerg. am. (6) (a), eff. 6-22-76, am. (6) (a), Register, September, 1976, No. 249, eff. 10-1-76; am. (8) (intro.), (b), (c), (e), (j), (k) and (l), Register, August, 1981, No. 308, eff. 9-1-81; reprinted to correct printing error in (8) (f), Register, March, 1983, No. 327; correction in (9) made under s. 13.93 (2m) (b) 7., Stats., Register, December, 1984, No. 348; renum. (3) (a) to (e) to be (3) (e) to (h) and (j), cr. (3) (a) to (d), (i), (4) (c) and (8) (o), am. (4) (a) and (b) and (8) (n), Register, April, 1987, No. 376, eff. 5-1-87; am. (8) (l), Register, October, 1990, No. 418, eff. 11-1-90; corrections in (4) (b) and (6) (b) 3. made under s. 13.93 (2m) (b) 5. and 7., Stats., Register, April, 1992, No. 436; renum. (3) (f) to (j) to be (3) (g) to (k), cr. (3) (f), (L), (6) (d) to (h), am. (5) (intro.), (6) (a), r. and recr. (5) (g), (6) (b), (c), Register, December, 1996, No. 492, eff. 1-1-97; CR 20-002: r. (3) (a), cr. (3) (am), r. (3) (b), (d), cr. (3) (ee), (em), (es), (hg), (hr), r. (3) (j), am. (4), (5) (intro.), (a) (intro.), r. and recr. (5) (a) 1., am. (5) (a) 2. to 5., cr. (6) (a) (title), am. (6) (b) (intro.), 1. to 5., cr. (6) (b) 5g., 5r., am. (6) (b) 6., (c) (title), 1., 2., cr. (6) (d) (title), r. (6) (d) 3. (intro.), renum. (6) (d) 3. a. to c. to (6) (d) 3c., 3g., 3L and am. (6) (d) 3g., 3L., cr. (6) (d) 3p., 3t., 3x., r. (6) (d) 5., 8., am. (6) (d) 9., cons. (6) (e) (title), (intro.), 1., 2., renum. to (6) (e) and am., r. (6) (e) 3., am. (6) (f) (intro.), 1., cr. (6) (f) 3. to 5., r. and recr. (6) (g), cr. (6) (h) 4., (i), r. (8) (j), (k), (m), (o), cr. (8g), (8r) Register August 2020 No. 776, eff. 9-1-20; correction in (3) (am), (6) (h) 4. c., made under s. 35.17, Stats., Register August 2020 No. 776; republished to correct an error in transcription in (8) and correction in (8) (n) made under s. 35.17, Stats., Register October 2020 No. 778. Ins 6.25Ins 6.25 Joint underwriting and joint reinsurance associations. Ins 6.25(1)(1) Purpose. This section, pursuant to s. 625.04, Stats., is intended to encourage an active, economical and efficient insurance market; to provide for the regulation of marketing practices; and to exempt certain insurers and organizations from the provisions of s. 625.33, Stats., with respect to joint underwriting or joint reinsurance. Ins 6.25(2)(2) Scope. Subsection (3) applies to joint underwriting and joint reinsurance involving the insurance of risks associated with: Ins 6.25(2)(f)(f) Commercial property policies insuring property damage, business interruption, extra expense, rents and other time element coverages, for any policy whose total property damage limit is an amount not less than $50,000,000. Ins 6.25(2)(g)(g) Excess and umbrella liability with limits in excess of $25 million to risks with underlying coverage or self-insured for a minimum of $25 million. Ins 6.25(3)(3) Persons exempted. If any of the following joint underwriting associations and joint reinsurance associations is licensed as a rate service organization under s. 625.32, Stats., each insurer-member thereof shall be exempted from the provisions of s. 625.33, Stats., with respect to agreements between or among insurer-members to adhere to certain rates and rules in providing insurance or reinsurance as members of such association: