<html> <head> <title>Rule 20:06:19:08 Administration and record keeping.</title> <META NAME="Keywords" Content="Administrative Rules 20:06:19:08"> <META NAME="Description" Content="Administrative Rules 20:06:19:08 Administration and record keeping."> <meta name=Generator content="Microsoft Office HTML Filter 2.0"> <meta http-equiv=Content-Type content="text/html; charset=windows-1252"> <meta name=Originator content="Microsoft Word 10"> <style> <!-- --> </style> </head> <body lang=EN-US> <div> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>20:06:19:08.&nbsp;&nbsp;Administration and record keeping.</b> An insurance company must establish policies and procedures prior to engaging in call or put option transactions. These policies must be approved by the board of directors and reviewed annually. These policies shall address but are not limited to investment strategies and objectives, record keeping, and accounting for these transactions.</p> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The record keeping and accounting systems governing the purchase and sale of options must be sufficiently detailed so that the insurance examiners and internal auditors can police the insurer's policies and procedures for these transactions.</p> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Every call or put option transaction must be authorized pursuant to SDCL <A HREF="/statutes/DisplayStatute.aspx?Type=Statute&Statute=58-27-69">58-27-69.</A></p> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>Source:</b> 13 SDR 75, effective December 21, 1986.</p> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>General Authority:</b> SDCL <A HREF="/statutes/DisplayStatute.aspx?Type=Statute&Statute=58-4-1">58-4-1</A>, <A HREF="/statutes/DisplayStatute.aspx?Type=Statute&Statute=58-27-7">58-27-7.</A></p> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>Law Implemented:</b> SDCL <A HREF="/statutes/DisplayStatute.aspx?Type=Statute&Statute=58-27-7">58-27-7.</A></p> </div> </body> </html>