Common use of Use of Derivatives to Mitigate Risk Clause in Contracts

Use of Derivatives to Mitigate Risk. The use of derivative transactions by the Company will be a part of its overall risk management strategy. In this regard, the Company may, where appropriate, use derivative transactions to address risks found in its investment portfolio and as a tool to manage and hedge certain existing and expected future assets, liabilities, earnings and cash flows. The Company shall conduct its derivative activities under this Plan in such a manner as to ensure that neither its liquidity nor its statutory financial position will be jeopardized. The following provides a description of the risks affecting the Company, along with a description of the Company’s possible use of derivatives to address such risks.