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Insurance Abstract
Automated insurance products, services, and processes are enabled
by the more complete, timely, and accurate information provided
by a conditional access network. Automated insurance processes are
able to receive timely product information, such as product status
and location, and adapt insurance policies or coverage responsive
to the information. For example, an insurance policy may be adapted
according to product activations, products that are deactivated,
or according to which distributor is holding product. Information
from the conditional access network may also be used to evaluate
policy claims. For example, the insurance provider can use information
from the conditional access network to confirm specific item coverage,
to determine if products moved through authorized distributors,
and to make sure they do not pay claims for items actually sold
and activated. In this way, the insurance provider in enable to
make more accurate and timely claim payments.
Insurance Claims
1. An automated process for providing insurance for targets, the
automated process operating on a general purpose computer system,
comprising: receiving electronic messages from a conditional access
network, the messages selected from the group consisting of: target
activation message, target kill-confirmation message, target movement
message, and additional deactivated targets added message; and adapting
an insurance policy responsive to the received messages.
2. The automated process according to claim 1, wherein the step
of adapting the insurance policy comprises calculating the value
of remaining targets after removing value associated with activated
and killed targets.
3. The automated process according to claim 1, wherein the step
of adapting the insurance policy comprises adjusting a price for
the insurance.
4. The automated process according to claim 1, wherein the step
of adapting the insurance policy comprises adjusting a non-price
term of the insurance.
5. The automated process according to claim 1, wherein the adapting
step comprises adding the additional deactivated products as covered
products under the insurance policy.
6. The automated process according to claim 5, further including
increasing a price for the insurance responsive to adding the additional
deactivated products.
7. The automated process according to claim 1, wherein the adapting
step comprises removing some products as covered products responsive
to receiving one of the messages.
8. The automated process according to claim 1, wherein the adapting
step comprises reducing coverage responsive to activation messages
and kill messages.
9. The automated process according to claim 1, wherein the adapting
step comprises changing insurance terms responsive to the product
movement message.
10. The automated process according to claim 1, wherein the adapting
step comprises using a set of rules and the received messages to
adapt the insurance policy.
11. A process for providing insurance for products, comprising:
confirming the manufacturer of the products uses a conditional access
network to disable the products; confirming distribution entities
for the products use a conditional access network to track the products;
confirming retail entities for the products use a conditional access
network to activate the products; receiving location and activation
information from the conditional access network; and adapting the
insurance according to the received information.
12. The process according to claim 11, wherein the receiving step
comprises receiving automated messages from the conditional access
network.
13. The process according to claim 12, wherein the adapting step
comprises using computerized algorithms to adapt the insurance according
to the received automated messages.
14. The process according to claim 11, wherein the adapting step
comprises using computerized algorithms to adapt the insurance.
15. A process for paying an insurance claim, comprising: receiving
a claim to pay for products covered by an insurance policy; receiving
identification numbers from a conditional access network, the identification
numbers usable to confirm that specific items in the products are
covered by the insurance claim; receiving distributor information
from the conditional access network, the distributor information
usable to determine if the products were handled only by authorized
distributors; receiving activation information from a conditional
access network, the activation information usable to determine if
the products can be excluded from payment; making a claim payment
for products with covered identification numbers, that were handled
properly, and are not activated.
16. The process for paying an insurance claim according to claim
15, further including the step of receiving kill information from
a conditional access network, and comparing the killed products
to the covered products.
17. The process for paying an insurance claim according to claim
11, further including the step of sending a kill message to the
conditional access network, the kill message identifying products
fro which a claim was paid, but that were no included in the kill
information.
18. An automated insurance product, comprising: a risk of loss
determined in response to: messages indicating status of targets;
and messages indicating location of the targets.
19. The automated insurance product according to claim 18, wherein
the messages are received from a conditional access network.
20. The automated insurance product according to claim 18, further
including adapting the risk of loss from time to time in response
to additional messages indicating status and additional messages
indication location.
21. The automated insurance product according to claim 20, wherein
the risk of loss is adapted in near-real time.
22. The automated insurance product according to claim 20, wherein
the risk of loss is adapted periodically.
23. The automated insurance product according to claim 20, wherein
the risk of loss is adapted hourly, daily, weekly, or monthly.
24. The automated insurance product according to claim 18, further
including automatically adjusting billing according to the determined
risk of loss.
25. The automated insurance product according to claim 18, wherein
the scope of coverage is defined by: adding new targets according
to receiving messages indicating additional deactivated targets;
reducing according to receiving messages indicating a covered target
has been activated; and reducing according to receiving messages
indicating a covered target has been permanently disabled.
26. The automated insurance product according to claim 18, wherein
the messages received indicating status are kill-confirmation messages
or activation messages.
27. The automated insurance product according to claim 18, wherein
the messages received indicating location are messages confirming
which distribution party has control of the respective target.
Insurance Description
RELATED APPLICATIONS
[0001] This application claims priority to U.S. patent application
No. 60/698,407, filed Jul. 11, 2005, and entitled "Conditional
Access Network for Providing Insurance"; and to U.S. patent
application No. 60/699,945, filed Jul. 14, 2005, and entitled "Conditional
Access Network for Providing Insurance"; both of which are
incorporated herein in their entirety.
BACKGROUND
[0002] 1. Field
[0003] The present invention relates computer processes for providing
insurance. More particularly, the invention relates to automated
processes that adaptively provide information for delivering insurance
products.
[0004] 2. Description of Related Art
[0005] Providing insurance, is by its nature, a risky business.
In the insurance business, better information, and more timely information,
leads to better insurance products. There are many types of insurance
products that protect trading parties against losses that result
from theft or misappropriation of goods as they traverse a multi-party
supply chain. Credit insurance, for example, protects against the
loss resulting from the inability to collect accounts due to insolvency
or unwillingness or inability to pay. Supply contract bonds guarantee
faithful performance under a contract to supply goods and services,
and cargo insurance provides warehouse to warehouse coverage for
goods in transit. Business floater policies include consignment
and sales floaters, which are policies that are sold to manufacturers
and wholesalers to protect them from losses of property that is
sold through consignment with another party.
[0006] Premiums for such insurance products are priced based on
the perceived risk of providing the coverage. A component of this
risk is the possibility of loss and theft of the products associated
with an insurance policy, and the value of the covered products.
Unfortunately, information for such multi-party trading models is
typically incomplete, and often not timely, so risk decisions are
made based on assumptions, historical averages, and guesswork. For
example, the quantity of product in the supply chain is an ever-moving
number. Products are continually added, products are sold, products
are returned, and some products are lost or stolen. Without visibility
the current inventory status, an insurance provider may be over
or under covering based on actual numbers. Accordingly, there is
needed an insurance system that can accurately and automatically
adapt insurance products according to more current and more complete
product information.
SUMMARY
[0007] Briefly, the present invention provides new automated insurance
products, services, and processes, which are enabled by the more
complete, timely, and accurate information provided by a conditional
access network. Automated insurance processes are able to receive
timely product information, such as product status and location,
and adapt insurance policies or coverage responsive to the information.
For example, an insurance policy may be adapted according to product
activations, products that are deactivated, or according to which
distributor is holding product. Information from the conditional
access network may also be used to evaluate policy claims. For example,
the insurance provider can use information from the conditional
access network to confirm specific item coverage, to determine if
products moved through authorized distributors, and to make sure
they do not pay claims for items actually sold and activated. In
this way, the insurance provider in enable to make more accurate
and timely claim payments.
[0008] The present invention generally relates to devices, networks,
methods, procedures, products and business models for providing
insurance products and services. Such products and services make
use of the ability of a processor or other device associated with
a target to provide authorized parties with conditional access to
the target and to deny access to a target by unauthorized parties.
Further, the process, upon authorized command, is able to permanently
disable a product from future use. Since the network can securely
and selectively activate or disable each insured product, an insurance
company can better assess risk, and thereby set policy rates adapted
to the specific product distribution condition. Also, the network
may provide timely information on the condition of the products
in the distribution chain, so that the insurance policy can be adapted
to current distribution conditions.
[0009] Insurance can be provided according to the present methods
by evaluating the risk associated with a conditionally accessible
target or activity of a potential client. Among the factors which
can be evaluated are the rate of loss associated with an activated
target, the timeliness of the information about target sales and
returns provided by a conditional access network, or the credibility
of such information. As described below, a conditional access network
using the embedded processors described herein can provide accurate
and secure information concerning whether a target in the network
is activated or deactivated, and whether such activation or deactivation
is permanent (due to the disablement of an embedded processor's
ability to change the activation state of a target). A price for
the insurance product or policy evaluated in this way can be established
based on the volume of targets in the supply chain, for example,
and the product can be offered to a potential client (i.e., the
beneficiary of the insurance). The insurance product can be, for
example, credit insurance, consignment insurance, or a supply bond.
[0010] Potential clients for such an insurance product can be identified
as a result of their participation in a conditional access network.
Such participation can be validated through a system connection
with the conditional access network. The potential client can also
solicit the insurance product through the conditional access network.
In one embodiment, the amount of risk or the policy value of an
insurance product is adapted based upon authenticated events or
information derived from authenticated events associated with the
targets that are the subject of the insurance policy or product.
Such information on authenticated events can be retrieved by the
insurance provider or by the beneficiary of the insurance product
in near-real time or in periodic batches.
BRIEF DESCRIPTION OF DRAWINGS
[0011] These and other features, aspects and advantages of the
present invention will become better understood with regard to the
following description, appended claims, and accompanying figures
where:
[0012] FIG. 1 is a flowchart of a system for providing insurance
in accordance with the present invention.
[0013] FIG. 2 is a block diagram of a network system for providing
information to support insurance products in accordance with the
present invention.
[0014] FIG. 3 is a flowchart of a process for providing insurance
in accordance with the present invention.
[0015] FIG. 4 is a flowchart of a process for providing insurance
in accordance with the present invention.
[0016] FIG. 5 is a flowchart of a process for making claim payments
for insurance in accordance with the present invention.
[0017] FIG. 6 is a flowchart of a process for adaptively providing
insurance in accordance with the present invention.
DETAILED DESCRIPTION OF THE INVENTION
[0018] Detailed descriptions of examples of the invention are provided
herein. It is to be understood, however, that the present invention
may be exemplified in various forms. Therefore, the specific details
disclosed herein are not to be interpreted as limiting, but rather
as a representative basis for teaching one skilled in the art how
to employ the present invention in virtually any detailed system,
structure, or manner.
[0019] The ability to deny access to a feature of a target and
to securely enable an authorized and authenticated party access
to such feature can broaden the range of possible distribution channels
for a product, and thereby increase sales opportunities. In particular,
it enables the creation of new types of insurance products that
are tailored to reflect the enhanced information available about
targets that participate in a conditional access network.
[0020] There are many types of insurance products that protect
trading parties against losses that result from theft or misappropriation
of goods as they traverse a multi-party supply chain. Credit insurance,
for example, protects against the loss resulting from the inability
to collect accounts due to insolvency or unwillingness or inability
to pay. Supply contract bonds guarantee faithful performance under
a contract to supply goods and services, and cargo insurance provides
warehouse to warehouse coverage for goods in transit. Business floater
policies include consignment and sales floaters, which are policies
that are sold to manufacturers and wholesalers to protect them from
losses of property that is sold through consignment with another
party.
[0021] Premiums for such insurance products are priced based on
the perceived risk of providing the coverage. A component of this
risk is the possibility of loss and theft of the products (i.e.,
targets) associated with an insurance policy. It is possible to
provide an enhanced insurance product or policy for targets that
participate in a conditional access network.
[0022] Insurance can be issued to manufacturers or wholesalers
that participate in a conditional access network. Initially, the
potential insurance beneficiary is determined to be a participant
in a conditional access network. This can be validated through a
network connection to a conditional access network. Once this is
determined, the targets to be sold are verified to be manageable
through such a network. The targets, or products, have an attached
or integral embedded processor (EP) or other integrated circuit.
This embedded processor may be scanned and read by authorized parties
in the distribution chain, and the information verified and used
by the conditional access network. Preferably, the communication
from the reader to the embedded processor is an RF communication.
With the parties and products confirmed to be on the conditional
access network, the appropriate premium and amount of insurance
for a given policy associated with the targets can be established.
Determining factors for arriving at the premium amount can include
the volume (absolute quantity or quantity over a defined period
of time) of conditionally accessed targets to be sold; the level
of historical or prospective risk associated with this target, this
type of target, or other types of targets when they participate
in a conditional access network; and the accuracy and timeliness
of information about the distribution and sale of targets when they
participate in a conditional access network.
[0023] The amount of outstanding insurance for targets can also
be dynamically adjusted to reflect the volume of targets outstanding
in the supply chain (remaining to be manufactured, shipped, or sold)
when such targets participate in a conditional access network. As
a new target is made or distributed, the amount of insurance can
be dynamically increased. As return transactions occur involving
such targets, the amount of outstanding coverage can likewise be
increased. As targets are activated and sold, or when they are permanently
deactivated (and thereby rendered valueless or reduced in value),
the amount of insurance can be dynamically reduced. The dynamic
aspects of this process are particularly significant in the case
of consignment insurance.
[0024] As products (or targets) move through the distribution chain,
the status of the products change according to authenticated transactions
on the conditional access network. For example, the products may
be shipped from the manufacturer in a disabled state, may be disabled
through the entire distribution chain, and then be activated at
a point of sale location. In another example, the products may be
shipped from the manufacturer in a disabled state, and may be permanently
disabled by a authorized distribution party if the product was defective,
for example. As the status of the product changes, the value for
the product also changes, which affects the insurance required to
adequately protect the product. In this regard, the aggregate value
of the insured products may be readily determined by assessing the
status for all the covered products.
[0025] Bills from an insurance carrier can be generated based on
information obtained from the conditional access network. In addition,
payments from a beneficiary to the insurance carrier can be handled
directly through the conditional access network, such as through
a NOC, or can alternatively be made on the beneficiary's behalf
by a third party using information obtained from the conditional
access network. The amount of such payments, which are generally
made on a periodic basis, can be varied according to a pre-determined
formula or arrangement based on information obtained from the conditional
access network concerning the targets.
[0026] This system can also support dynamic application for insurance
by participants in the conditional access network. One or more insurers
can establish a relationship with a conditional access provider.
The potential insurance client can access the insurers through the
network. The conditional access provider forwards the information
that it has concerning the client and targets under the client's
control to the insurance provider. The insurance provider can then
respond through the conditional access provider connection or directly
to the potential client.
[0027] Referring now to FIG. 1, a method 10 for providing insurance
is illustrated. Method 10 uses information obtained from a conditional
access network, which enables a more refined and accurate approach
to assess risk, and therefore, for pricing and providing insurance.
Method 10 advantageously enables both the provider and beneficiary
of insurance services to be more informed, and to better manage
insurance issues. For example, with more complete and timely information
regarding policy pricing, beneficiaries can adjust behaviors and
processes to obtain better-valued insurance products. However, prior
to fully describing method 10, it may be useful to generally describe
the radio frequency integrated circuit, and the conditional access
network in which it operates.
DESCRIPTION OF THE NETWORK SYSTEM
[0028] The insurance system 10 described with reference to FIG.
1 has been described as operating on a conditional access network
system. Referring now to FIG. 2, an example of such a conditional
access network system is illustrated. System 125 may operate, for
example, in a retail environment, or may be part of a home based
activation system. System 125 has target 126, which may be, for
example, an optical disc such as a DVD, CD, gaming disc, HD DVD,
or Blu-Ray DVD; the target may be an electronic device such as a
portable music player, shaver, or drill; or the target may be a
passport, driver's license, coupon, or other non-electronic good.
It will be understood that target 126 may take other electronic
or non-electronic forms. Target 126 has a utility 127, which is
typically the primary usefulness for the target device. For example,
if target 126 is a portable music player, then utility 127 is the
ability to play music files. In another example, if target 126 is
a DVD, then its primary utility 127 is to be read by an associated
DVD player for presenting a movie or audio file to a user. Typically,
utility 127 is the reason consumers are motivated to purchase or
otherwise obtain target 126. Stated differently, if utility 127
were unavailable, and target 126 is not an attractive good for the
consumer. In a similar way, the target would be unattractive for
a thief or shoplifter. Further, by controlling a consumer's access
to the utility of a product, a manufacturer is enabled to manage
the rights to use the product. In this way, the manufacturer may
set the conditions under which a consumer is able to use the physical
product, and can even make the product forever unusable, thereby
removing it from the stream of commerce. Importantly, this is all
managed through a central network operations center, so does not
require that the physical goods be returned to the manufacturer
to be disabled.
[0029] Target 126 has a radio frequency integrated circuit 128.
The integrated circuit 128 may be, for example, a tag attached to
target 126, or may be integrally formed with other target circuitry
or structures. Integrated circuit 128 couples to utility 127, and
may selectively activate or deactivate the utility for target 126.
For example, a DVD may initially be set such that it is unplayable
in most DVD players, but upon an authorized sale, may have its utility
activated. In this way, the DVD is unattractive to a thief or shoplifter
while the DVD is in the distribution chain, but may be advantageously
used by an authorized consumer. In another example, an electronic
device has its power circuit disabled at the time of manufacture.
The electronic device may then be moved through the distribution
chain with a substantially reduced threat of theft. Since the electronic
device would be unusable by any potential thief or shoplifter, it
is far less likely that anyone will steal or otherwise misappropriate
the device. However, at the point-of-sale and upon consummation
of an authorized transaction, the power circuit for the electronic
device may be activated. In this way, the authorized consumer may
normally use the electronic device for its intended purpose.
[0030] An enlarged view of integrated circuit 128 shows that integrated
circuit 128 has a memory, logic, and a radio frequency portion coupled
to antenna 131. Upon receiving appropriate codes or commands via
antenna 131, the integrated circuit may cause switch 133 to change
states. More particularly, the RF section may receive codes or commands
that the logic compares to commands or codes stored in memory. If
the received codes match codes secretly stored in memory, then the
integrated circuit may determine that an authorized code has been
received. This command may, for example, cause the utility 127 to
activate, or may cause the utility 127 to deactivate. In one state,
switch 133 causes the utility 127 to be unavailable, and in another
state causes the utility 127 to be fully available. It will be appreciated
that switch 133 may be constructed with more than two states. However,
for ease of explanation, switch 133 will be described as having
only a deactivated state and an activated state.
[0031] It will be understood that switch 133 may take several forms.
For example, switch 133 may be an electrochromic material that changes
optical characteristics responsive to the application of a voltage.
In another example, switch 133 may be fuse, anti-fuse, or other
circuit device that is capable of changing electronic states. In
yet another example, switch 133 may be a memory logic state, or
a circuit device that has a voltage that may be sensed and understood
as a logic value. It will also be understood that in some cases
switch 133 main be persistently transitioned from a first state
to a second state, and in other cases switch 133 may be reversible.
[0032] At time of manufacture, IC 128 is typically set to disable
utility 127 for target 126. In this way, target 126 is an unattractive
theft target, as it is in an unusable or disabled state. At the
point-of-sale, which may be a point-of-sale terminal in a retail
establishment, a kiosk, or a home activation site, target 126 is
placed proximate a reader 135. Reader 135 has an RF antenna 137
and RF transceiver for communicating with IC 128. When positioned
proximate reader 135, IC 128 passes identifying information to reader
135, which then communicates the identifying information through
a network connection 139 to an operations center 141. The operations
center 141 generates or retrieves an activation or authorization
code specific for target 126. The activation or authorization code
is transmitted back to reader 135 and then communicated to target
126. Provided a proper code is received, the logic causes switch
133 to change state, and activate the utility 127 for target 126.
In this way, the target has no or reduced utility through the distribution
chain, but is efficiently activated at a point-of-sale.
[0033] Although the above description describes an activation process,
in a more general case, the IC may be used to selectively make a
range of functions available or unavailable, and may make some of
these functions only temporarily available. In this sense, the IC
and network processes are used to affect the utility of the target.
The target with controllable utility may be an electronic device,
or alternatively, may be a tangible media, such as an optical disc.
The controlled target has a change effecting device that is set
to a first state, which allows the target to operate according to
a first utility. The controlled target also has a receiver for receiving
an authorization key, and logic, which, responsive to the authorization
key, selectively changes the change effecting device to a second
state. When the change effecting device is in the second state,
the target may operate according to a second utility. In one example,
the controlled target has a restricted access key that was stored
during manufacture, and the restricted access key is used by the
logic in changing the state of the change effecting device. To change
the utility of the controlled target, the controlled target is placed
proximate to an activation device. The activation device may read
an accessible identifier from the controlled target, and retrieve
or generate an authorization key that is associated with the target.
The activation device may cooperate with a network operation center
or other entity to retrieve the authorization key, and to obtain
approval to change the utility of the controlled target. If approved,
the activation device may then send the authorization code to the
controlled target.
[0034] A distribution control system is provided to support the
controlled and selective changing of utility for a target. The target
with controlled utility may be an electronic device, or alternatively,
may be a tangible media, such as an optical disc. The distribution
control system has a target with a change effecting device and a
restricted access key. An activation device retrieves or generates
an authorization key, and sends the authorization key to the target.
The authorization key may be sent to the target wirelessly, for
example, using a radio frequency signal. The target has logic that
uses the restricted access key and the authorization key to change
the utility of the target. In one example, the activation device
retrieves the authorization key from a network operation center
(NOC) by sending a target identifier to the NOC, and the NOC retrieves
the authorization key for the identified target. The activation
device may also connect to other systems for obtaining approval
to change the utility of the target. For example, the authorization
key may be sent to the target upon receiving payment, password,
or other confirmation.
[0035] In a specific example of the distribution control system,
a target is manufactured with a change effecting device set to compromise
the utility of the target. In this way, the compromised target would
be nearly useless to a thief, and therefore would be less likely
to be a target of theft. The manufacturer has also stored an identifier
and a restricted access key with the target. The manufacturer also
stores the accessible identifier and its associated key for later
retrieval by a party authorized to restore the utility to the target.
In one example, the identifiers and keys are stored at a network
operation center (NOC). The compromised target may be moved and
transferred through the distribution chain with a substantially
reduced threat of theft. When a consumer decides to purchase the
target, the target is passed proximally to an activation device.
Its accessible ID is read by activation device, and using a network
connection to the NOC, sends the accessible ID. The NOC retrieves
the authorization key for the target. Additional approvals may be
obtained, for example, confirmation of payment, identification,
password, or age. When approved, the activation device transmits
the authorization key to the target, typically using a wireless
communication. The target receives the authorization key, and using
its logic, compares the authorization key to its stored restricted
access key. If the keys match, then the target uses an activation
power source to switch the state of the change effecting device.
Then, the target will have full utility available to consumer.
[0036] The systems, processes, networks and devices for providing
an RF activatable product are fully set out in the following U.S.
Patent application, which is incorporated herein by reference as
if set forth in its entirety: [0037] 1. U.S. patent application
Ser. No. 11/295,867, filed Dec. 7, 2005, and entitled "Device
and Method for Selectively Activating a Target".
[0038] Referring again to FIG. 1, a system for providing insurance
products is illustrated. System 10 operates on a conditional access
network. Generally, the conditional access network system 12 allows
products to be distributed through a distribution chain in a secured,
authenticated, and controlled manner. More specifically, this means
that the product may be disabled or deactivated at the time of manufacture,
and then upon predefined conditions being met, may be activated
as shown in block 21. Also, the conditional access network system
allows for controlled and managed distribution of the product as
shown in block 23. More specifically, the product may be monitored
as it moves from entity to entity in the distribution chain, so
that the location or holder of the product is known. With this information,
the product's distribution path can be monitored, and the product
can be restricted to only being handled by authorized distributors.
The conditional access network system also allows for permanent
deactivation of the product as shown in block 25. In this way, overstock
merchandise, defective merchandise, recalled merchandise, or lost
merchandise may be permanently deactivated upon presentation at
a point-of-sale location. By providing for controlled activation
of a product, controlled distribution of that product, and selective
permanent deactivation of products, the conditional access network
system enables more efficient and effective insurance products to
be offered.
[0039] In offering insurance, an insurance provider would first
confirm that all entities handling the product are participating
in the network system. For example, the manufacturer 31 must be
able to deactivate the product at the point of manufacture, and
those in the distribution chain 33 should be able to scan the product
upon receipt and delivery so that the precise location of the product
may be tracked. Further, retailers 35 need to have the proper point-of-sale
activation equipment to activate the products. Provided the manufacture,
entities in the distribution chain, and the retailer all participate
in the program, the insurance provider may be able to use the conditional
access network system to offer improved insurance products. Of course,
the insurance provider needs to confirm that all the products 37
are also selectively activatable and deactivatable in the network
[0040] Once the manufacturer has identified the entities in the
distribution chain, including the manufacture and retailer, and
has confirmed the specific products that will be participating in
the insurance policy, the insurance provider is able to more effectively
evaluate risk for providing insurance. This insurance may be, for
example, consignment insurance, risk of loss insurance, credit insurance,
or any other insurance product. Because the insurance provider has
increased visibility to the status of each individual product, and
because the product may be more accurately controlled through its
distribution chain, it is likely that more cost-effective and valuable
insurance products may be provided.
[0041] The insurance product may be automatically adapted responsive
to current network information as shown in block 18. For example,
the network system may be able to provide information to the insurance
carrier showing when specific products have been activated as shown
in block 41. In a similar way, the network system may be able to
inform the insurance carrier when products have been permanently
disabled as shown in block 43. In another example, the network system
may be able to show the precise location of a specific product.
Based upon this and other information, the insurance carrier may
automatically adapt the coverage or cost of an insurance policy.
For example, if products are moved to a location not acceptable
to the carrier, the carrier may immediately drop those products
from coverage. In another example, as products are activated or
disabled, the cost of insurance may be timely reduced as fewer products
are at risk. As long as products are in the distribution chain that
need insurance as shown in block 52, the process may continue to
automatically adapt the scope and price of the insurance policy.
As soon as all products are activated or disabled or products have
been used in a way that invalidates the policy, the policy will
end as shown in block 54.
[0042] Advantageously, the insurance system 10 enables an insurance
carrier to more fully assess risk for a particular product distribution
process, and thereby offer more price competitive and valuable products
to its clients. In a similar way, the beneficiaries of the insurance
policies are able to better adjust business practices to control
costs of insurance. For example, high risk distributors or high
risk shipping companies may be avoided to reduce overall insurance
costs. Also, by more precisely controlling the quantity of merchandise
in the distribution chain, the number of products being covered
by the insurance policy may be minimized.
[0043] Referring now to FIG. 3, a general process for offering
insurance is illustrated. Process 200 starts by having an insurance
provider confirm that a party requesting insurance is on a conditional
access network. The insurance carrier also confirms that each entity
in the distribution chain is in the network as shown in block 206.
This would include manufacturers, shippers, warehouses, other distributors,
and the retailer. Of course, if one or more of the distribution
entities is not in the network, insurance may still be offered,
but policy coverage may be reduced or insurance premiums increased.
The insurance carrier can also identify specifically the products
to be covered as shown in block 211. More particularly, the insurance
carrier can identify the product down to the item level. This is
possible, for example, because each product has a unique integrated
circuit device embedded or attached to it, which has an identification
number unique to that individual product. In this way, the insurance
carrier can provide insurance down to the item level, even for specific
items such as DVDs, razors, drills, toys, or other relatively low-cost
items. By enabling product coverage down to the item level, the
insurance carrier is able to better assess risk, and may reduce
false claims. Since the insurance carrier has far more information
than typical with known insurance products, the insurance carrier
is able to more precisely evaluate risk and set accurate pricing
for the insurance policy as shown in block 215. Typically, because
of the increased information, the insurance carrier is able to provide
an insurance policy more adapted or tuned to the specific requirements
of the requesting party. Further, since many of the factors used
by the insurance carrier to set the premium are under the control
of the requesting party, the requesting party may take the necessary
actions to assist in reducing the premium cost.
[0044] Referring now to FIG. 4, another insurance product process
250 is illustrated. Process 250 starts with an initial policy having
already been issued for a set of products in the distribution chain
as shown in block 252. For example, this initial insurance policy
may have been set according to the process defined in FIG. 3. It
will also be understood that the initial insurance policy may be
set in other ways. The insurance carrier receives information from
the conditional access network as shown in block 254. This information
may be received in a near real-time basis, or may be received periodically.
This information received from the conditional access network may
then be used to adapt the insurance policy or premium as shown in
block 268. For example, the conditional network may inform the insurance
carrier as products are activated as shown in block 259. The network
may also inform the carrier as products are permanently disabled
as shown in block 261, or as products are moved between distributors
as shown in block 263. The conditional access network may also be
able to inform the carrier as products are added into the overall
distribution chain. Using this and other information, the insurance
carrier may reassess risk or value of the covered products, and
make near real-time or periodic adjustments to the insurance policy
or premium. In this way, by providing current information on location
and status of products in the distribution chain, a near real-time
insurance product may be offered.
[0045] Referring now to FIG. 5, a process 300 for processing an
insurance claim is illustrated. Process 300 starts with an insurance
company receiving a claim as shown in block 302. Upon receiving
a claim, the insurance carrier may confirm that the specific product
is included in the policy as shown in block 304. More particularly,
because each product in the conditional access network is individually
identifiable, the insurance carrier can confirm that the product
submitted for claim was covered by the insurance policy. In this
way, fraud or mistake may be avoided. Those products that were not
specifically covered may be excluded as shown in block 306. Provided
the product was included in the policy, the insurance carrier has
sufficient information to assess whether the product was handled
properly in the distribution chain as shown in block 309. For example,
the carrier may determine that an unauthorized shipper handled the
product, and thereby voided the insurance policy. The insurance
carrier could also find for example, that a product was shipped
via air freight, when altitude sensitivities are known for the product.
Since the product did not go through a proper distribution channel,
the insurance carrier may possibly exclude that product as shown
in block 311.
[0046] Provided the product was properly handled, then the insurance
carrier can determine whether a kill confirmation has been received
for that product as shown in block 315. As discussed herein, when
a product is permanently disabled by the conditional access network,
the product sends a final kill confirmation message back to the
network. In this way, the network may confidently remove the product
from the stream of commerce, and the product is never activatable.
If no kill confirmation has been received for the product, then
the insurance carrier may assess whether the product should have
been killed as shown in block 317. Of course, there will be reasons
why a product could not legitimately be killed, for example, if
the products are lost in fire or accident. However, for products
that should have been killed, the insurance carrier may be able
to possibly exclude them as shown in block 321. For those products
that should have been killed, the insurance carrier may notify the
conditional access network that these products are to be removed
from the commerce stream, and if ever presented for activation,
will be killed instead.
[0047] For those products with a confirmed kill, the insurance
carrier can make payment according to the policy as shown in block
325. The insurance carrier may also include products that generally
did not have a confirmed kill confirmation, and those that were
not excludable under policy conditions. By specifically controlling
which products are covered, managing the distribution chain, and
determining the kill status, an insurance carrier may more precisely
pay claims, thereby reducing fraud or over/under payments. In a
similar manner, policyholders who follow policy guidelines and act
responsibly can assure that they are properly paid by having complete
information for the insurance carrier.
[0048] Referring now to FIG. 6, an automatically adaptable insurance
product 350 is illustrated. Product 350 has a set of defined insurance
conditions as shown in 352. For example, these defined insurance
conditions may be a set of rules that are associated with product
costs, location, and status. Accordingly, these rules may use information
from the conditional access network to automatically set and adapt
insurance coverage and cost. In this way, a near real-time insurance
product is enabled. For example, the conditional access network
may provide information as to when specific items are added to the
stream of commerce as shown in block 354. This information is provided
down to the item level, so that the insurance policies may be written
to particularly identify the item being covered. As additional items
are added to the stream of commerce, the cost and coverage of the
insurance policy may be adjusted upward as shown in block 356.
[0049] The conditional access network may also provide timely information
as to when some of the items are being activated as shown in block
358. As items are activated, they are removed from the stream of
commerce and coverage is no longer needed, so the policy coverage
or premiums may be adjusted downward as shown in block 361. In a
similar manner, the conditional access network may provide information
as to when products are permanently disabled as shown in block 363.
As these parts are permanently disabled and removed from the stream
of commerce, the insurance coverage or premium may be adjusted downward
as shown in block 365. The insurance conditions 352 may contain
rules according to the specific location of products. For example,
as items are moved to more secure distributors as shown in block
368, the cost of the insurance may be adjusted downward as shown
in block 369. However, as products are moved to more high risk distributors
or locations as shown in block 372, the insurance cost may be adjust
upward as shown in block 374. With these and other risk factors,
the automated system may adaptively set an insurance rate as shown
in 375.
Providing for Secure Activation
[0050] To provide the automated insurance processes, a supporting
activation network provides a system for authenticating and securing
product transactions. An integrated circuit is attached to a target,
such as an optical disc or electronic device. The integrated circuit
has an RF transceiver that is capable of establishing communication
with an associated reading device. The integrated circuit also has
a hidden memory, which can not be read externally, and a user memory.
The hidden memory stores an authentication message, while the user
memory stores readable authentication information. The hidden authentication
message and the authentication information are related through a
cryptographic process. However, even though the integrated circuit
benefits from the cryptographic security, the integrated circuit
only operates relatively simple logic operations. In this way, a
highly secure transaction is enabled without requiring significant
processing power or time at the integrated circuit. When the integrated
circuit is placed near the reader, the reader reads the authentication
information, and with the cooperation of a network operation center,
uses the authentication information to derive an activation code.
The reader passes the activation code to the integrated circuit,
which compares the activation code to its hidden activation message.
If they have a proper relationship, the communication has been authenticated,
and the integrated circuit proceeds to perform an action.
[0051] In one example, a random plaintext number is stored as the
hidden authentication message, and the user memory has authentication
information that includes an identifier, as well as an encrypted
version of the plaintext number. When the integrated circuit is
placed near a reader, the reader reads the authentication information,
which is sent to a network operation center. The network operation
center uses the identification information to retrieve a decryption
key, and uses the key to decrypt the encrypted message to derive
the plaintext number. The plaintext number is sent to the reader,
which communicates it to the integrated circuit. The integrated
circuit does a simple logical compare between the received number
and the hidden number, and if they match, the integrated circuit
proceeds to perform an action. The action may be, for example, activating
or deactivating the product the circuit is attached to. The hidden
authentication message and the authentication information are related
through a cryptographic process. In this example, the integrated
circuit benefits from the cryptographic security, even though the
integrated circuit only operates a relatively simple logic operation.
In this way, a highly secure transaction is enabled without requiring
significant processing power or time at the integrated circuit.
[0052] In another example, an authentication code is stored as
the hidden authentication message, and the user memory has authentication
information that includes identifiers, as well as a public key that
can be used to recreate the authentication code. When the integrated
circuit is placed near a reader, the reader reads the authentication
information, which is sent to a network operation center. The network
operation center uses the identification information to retrieve
a private key, and uses the public key, private key and other authentication
information generate the authentication code. The authentication
code is sent to the reader, which communicates it to the integrated
circuit. The integrated circuit does a simple logical compare between
the received code and the hidden code, and if they match, the integrated
circuit proceeds to perform an action. The action may be, for example,
activating or deactivating the product it is attached to. The hidden
authentication message and the authentication information are related
through a cryptographic process. In this example, the integrated
circuit benefits from the cryptographic security, even though the
integrated circuit only operates a relatively simple logic operation.
In this way, a highly secure transaction is enabled without requiring
significant processing power or time at the integrated circuit.
[0053] In yet another example, the present invention discloses
a cryptographic process. Two pairs of public/private keys are generated
in such a way that a combination of the first private key and the
second public key is equivalent to the combination of the first
public key with the second private key. The key combinations, when
combined with additional meaningful information, produce a limited
set of authentication messages. The process provides a highly secure
method of authentication requiring minimal computation and power
at the embedded processor.
[0054] Advantageously, the conditional access network enables a
highly secure and authenticated transaction, even when the authorizing
circuit is operating in a low-power, low processing capability environment.
This means that an RFID tag or other RF-enabled integrated circuit
may be used to communicate sensitive information, and become an
integral part of a secure transaction process. This enables an RF-enabled
circuit to perform secured actions, thereby allowing manufacturers
to enforce distribution and use rules
[0055] The systems, processes, and devices for providing a secure
activation network are fully set out in the following U.S. Patent
applications, all of which are incorporated herein by reference
as if set forth in their entirety: [0056] 1. U.S. patent application
Ser. No. 11/456,037, filed Jul. 6, 2006, and entitled "Device
and System for Authenticating and Securing Transactions Using RF
Communication"; [0057] 2. U.S. patent application Ser. No.
11/456,040, filed Jul. 6, 2006, and entitled "Method for Authenticating
and Securing Transactions Using RF Communication"; [0058] 3.
U.S. patent application Ser. No. 11/456,043, filed Jul. 6, 2006,
and entitled "Device and Method for Authenticating and Securing
Transactions Using RF Communication:" and [0059] 4. U.S. patent
application Ser. No. 11/456,046, filed Jul. 6, 2006, and entitled
"System and Method for Loading an Embedded Device to Authenticate
and Secure Transactions. Providing for Permanent Deactivation
[0060] To provide the automated insurance processes, supporting
deactivation devices and process are used. The deactivation systems
have an integrated circuit device attached to a target. In one example,
the integrated circuit device is a tag attached to or integrated
with a product such as an electronic device or optical disc. In
another example, the integrated circuit device may be integrated
into the product's circuitry. The integrated circuit is controllable
to effect an action at the target, such as activating or deactivating
the usefulness of the product. The integrated circuit has a logic
and memory section connected to an antenna for receiving communications
from an associated reader or scanner. The integrated circuit also
has a component constructed to transition from a first state to
a permanent second state. For example, the component may be a fuse,
a partial fuse, or an anti-fuse. The integrated circuit also stores
a hidden secret kill code, and upon receiving a matching kill code
from the reader, permanently transitions the component to its second
state. When the component is in the permanent second state, the
integrated circuit is incapable of effecting the action on the target.
In this way, the integrated circuits ability to affect the target
may be permanently disabled. The integrated circuit may also verify
its function is disabled, and report a kill confirmation to the
reader.
[0061] In one example, the integrated circuit is attached to an
optical disc such as a DVD. The integrated circuit couples to an
RF antenna for receiving data and power. The integrated circuit
also has output ports connected to an electrochromic device, with
the electrochromic device positioned over some important data on
the disc. The optical disc is initially shipped with the electrochromic
material in a darkened state, such that the DVD will not operate
in an associated DVD player. If properly authorized, the integrated
circuit is capable of transitioning the electrochromic material
to a relatively transparent state, such that it activates the usefulness
of the DVD so that it may be played. However, in some cases it may
be desirable to cause the DVD to be permanently unplayable by disabling
the ability of the integrated circuit to effect a change in the
electrochromic material. Accordingly, the integrated circuit has
a secret kill code in a write-once memory location. Upon receiving
a matching kill code through the RF communication path, the integrated
circuit causes a component to permanently transition to a second
state. This component may be, for example, a fuse, a partial fuse,
an anti-fuse, or a logic state. Upon transitioning the component,
the integrated circuit is incapable of transitioning the electrochromic
material to its transparent state. In this way, integrated circuit
has been disabled from ever activating the DVD disc. The integrated
circuit may also verify its ability to activate the disc is disabled,
and report a kill confirmation to the reader. In this way, the retailer
and manufacturer may be confident that the DVD has been permanently
removed from the stream of commerce.
[0062] Advantageously, the kill process confidently and controllably
allows products to be permanently disabled. In this way, manufacturers
are enabled to more fully control the distribution of their products,
and be assured that specific goods have been removed from the stream
of commerce.
[0063] The systems, processes, and devices for permanently disabling
the target from being activated are fully set out in the following
U.S. Patent application, which is incorporated herein by reference
as if set forth in its entirety: [0064] 1. U.S. patent application
Ser. No. 11/456,680, filed Jul. 11, 2006, and entitled "A Radio
Frequency Activated Integrated Circuit and method of Disabling the
Same".
[0065] While particular preferred and alternative embodiments of
the present intention have been disclosed, it will be appreciated
that many various modifications and extensions of the above described
technology may be implemented using the teaching of this invention.
All such modifications and extensions are intended to be included
within the true spirit and scope of the appended claims. |