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TITLE
"An Analysis of Futures and Options Use by Life Insurers," Journal of Insurance Issues, L. Lee Colquitt and Robert E. Hoyt. Fall 1996, Vol. XIX, No. 2, pp. 149-162.

ABSTRACT
The newfound interest in the investment of insurance company assets in derivative is perhaps the most challenging concern facing insurance company executives and regulators. This paper reviews the economic motivations for why insurers hedge economic risk and explains the possible applications of derivatives by insurers. The paper then reviews the regulatory environment of derivatives use by insurers and the constraints of this regulation. Finally, by analyzing the futures and options use of 571 life and health insurers, the paper describes the actual use of derivatives by these insurers and evaluates the characteristics of firms using futures and options.