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Ch. 660
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2000 LAWS OF MARYLAND
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REDUCED BY THE MARKET VALUE OF ACCEPTABLE COLLATERAL HELD BY THE
INSURER OR A CUSTODIAN ON THE INSURER'S BEHALF.
(5) (7) (I) "DERIVATIVE INSTRUMENT" MEANS AN AGREEMENT,
OPTION, INSTRUMENT, OR A SERIES OR COMBINATION THEREOF:
1. TO MAKE OR TAKE DELIVERY OF, OR ASSUME OR
RELINQUISH, A SPECIFIED AMOUNT OF ONE OR MORE UNDERLYING INTERESTS, OR
TO MAKE A CASH SETTLEMENT IN LIEU THEREOF; OR
2. THAT HAS A PRICE, PERFORMANCE, VALUE, OR CASH
FLOW BASED PRIMARILY UPON THE ACTUAL OR EXPECTED PRICE, LEVEL,
PERFORMANCE, VALUE, OR CASH FLOW OF ONE OR MORE UNDERLYING INTERESTS.
(II) "DERIVATIVE INSTRUMENT" INCLUDES OPTIONS, WARRANTS
USED IN A HEDGING TRANSACTION AND NOT ATTACHED TO ANOTHER FINANCIAL
INSTRUMENT, CAPS, FLOORS, COLLARS, SWAPS, FORWARDS, FUTURES, AND ANY
OTHER AGREEMENTS, OPTIONS, OR INSTRUMENTS SUBSTANTIALLY SIMILAR
THERETO OR ANY SERIES OR COMBINATION THEREOF AND ANY AGREEMENTS,
OPTIONS, OR INSTRUMENTS PERMITTED UNDER REGULATIONS ADOPTED UNDER
THIS SECTION.
(III) "DERIVATIVE INSTRUMENT" DOES NOT INCLUDE
COLLATERALIZED MORTGAGE OBLIGATIONS, OTHER ASSET-BACKED SECURITIES,
PRINCIPAL-PROTECTED STRUCTURED SECURITIES, FLOATING RATE SECURITIES, OR
INSTRUMENTS THAT AN INSURER IS OTHERWISE PERMITTED TO INVEST IN OR
RECEIVE UNDER THIS ARTICLE OTHER THAN UNDER THIS SUBSECTION, AND ANY
DEBT OBLIGATIONS OF THE INSURER
(6) (8) "DERIVATIVE TRANSACTION" MEANS A TRANSACTION
INVOLVING THE USE OF ONE OR MORE DERIVATIVE INSTRUMENTS.
(7) (9) "DOLLAR ROLL TRANSACTION" MEANS TWO SIMULTANEOUS
TRANSACTIONS WITH DIFFERENT SETTLEMENT DATES NO MORE THAN 96 DAYS
APART, SO THAT IN THE TRANSACTION WITH THE EARLIER SETTLEMENT DATE, AN
INSURER SELLS TO A BUSINESS ENTITY, AND IN THE OTHER TRANSACTION THE
INSURER IS OBLIGATED TO PURCHASE FROM THE SAME BUSINESS ENTITY,
SUBSTANTIALLY SIMILAR SECURITIES OF THE FOLLOWING TYPES:
(I) ASSET-BACKED SECURITIES ISSUED, ASSUMED OR
GUARANTEED BY THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION, THE
FEDERAL NATIONAL MORTGAGE ASSOCIATION, OR THE FEDERAL HOME LOAN
MORTGAGE CORPORATION OR THEIR RESPECTIVE SUCCESSORS; AND
(II) OTHER ASSET-BACKED SECURITIES REFERRED TO IN SECTION
106 OF TITLE I OF THE SECONDARY MORTGAGE MARKET ENHANCEMENT ACT OF 1984
(15 U.S.C., § 77R-1), AS AMENDED.
(8) (10) "DOMESTIC JURISDICTION" MEANS THE UNITED STATES,
CANADA, A STATE, A PROVINCE OF CANADA, OR A POLITICAL SUBDIVISION OF THE
UNITED STATES, CANADA, A STATE, OR A PROVINCE OF CANADA.
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- 3370 -
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