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Insurance Abstract
Apparatus (method implemented with a machine, the machine, and the
method for making the machine, and products produced thereby). The
computer system can, for example, be structured (e.g., including
programmed) to carry out the steps of: calculating an insurance
reserve requirement from data; segmenting, for the reserve requirement,
an insured contingency risk from a corresponding capital requirement
to produce components; and carrying out the reinsurance transaction
by steps including: allocating the components to different parties,
one of the parties from a group including an insurance risk carrier
and a source of an asset for said capital requirement; and assigning
assets for the reserve requirement to a reinsurance asset trust
to receive reinsurance credit for said reserve requirement.
Insurance Claims
1. A computer-aided method for managing an insurance reserve requirement
by segmenting risk components in a reinsurance transaction, the
method including the steps of: controlling performance of a computer
system with control means in carrying out the steps of: calculating
an insurance reserve requirement from data; and segmenting, for
the reserve requirement, an insured contingency risk from a corresponding
capital requirement to produce components; and carrying out the
reinsurance transaction by steps including: allocating the components
to different parties, one of the parties from a group including
an insurance risk carrier and a source of an asset for said capital
requirement; and assigning assets for the reserve requirement to
a reinsurance asset trust to receive reinsurance credit for said
reserve requirement.
2. The method of claim 1, wherein said reinsurance transaction
provides reinsurance for life insurance, and further including the
step of associating data corresponding to the life insurance with
the reinsurance transaction.
3. The method of claim 2, wherein said step of segmenting includes:
selecting said insured contingency risk from a group including mortality
risk, morbidity risk, and survivorship risk.
4. The method of claim 2, wherein said step of calculating includes:
calculating a statutory reserve requirement; calculating an economic
reserve requirement; and calculating an excess of the statutory
over the economic reserve requirement.
5. The method of claim 2, wherein said step of segmenting includes:
calculating a capital requirement corresponding to an economic reserve;
and calculating a capital requirement corresponding to an excess
of the statutory reserve over the economic reserve.
6. The method of any one of claims 1-2, wherein the step of allocating
the components to different parties includes: allocating the capital
requirement to at least one of the parties from a group including
a bank, a syndicate, a pension plan, another securities lender,
or an investor through the purchase of some of any traunche of a
trust funding financial instrument, and further including the steps
of: associating data corresponding to said source of an asset with
the reinsurance transaction; and for each of a plurality of time
periods: calculating the reserve requirement and the capital requirement;
and making an asset adjustment corresponding to the asset in the
reinsurance asset trust.
7. The method of claim 1, wherein the step of allocating the components
to different parties includes funding the capital requirement by
issuing a security into the capital market, and further including
the steps of: associating data corresponding to said security with
the reinsurance transaction; and for each of a plurality of time
periods: calculating the reserve requirement and the capital requirement;
and making an asset adjustment corresponding to the asset in the
reinsurance asset trust.
8. The method of claim 7, wherein said step of issuing said security
into the capital market includes issuing a Funding Agreement.
9. The method of claim 7, wherein said step of issuing said security
into the capital market includes issuing a Capital Redemption Bond.
10. The method of claim 7, wherein said step of issuing said security
into the capital market includes issuing a Guaranteed Investment
Contract.
11. The method of any one of claims 8-10, further including the
step of computer-aided managing said security consistent with investment
guidelines such that the asset held for said insured contingency
risk qualifies as an admitted asset in a jurisdiction of the contingency
risk.
12. The method of any one of claims 8-10, further including the
step of associating data corresponding to said security with a corresponding
asset from a group including an investment grade bond, a Collateralized
Mortgage Obligation, Mortgage Backed Security, real estate, and
an equity.
13. The method of any one of claims 8-10, further including the
step of computer-aided managing said reinsurance asset trust consistent
with terms of the trust.
14. The method of claim 11, further including the step of computer-aided
managing said reinsurance asset trust consistent with terms of the
trust.
15. The method of any one of claims 1-2, wherein the step of allocating
the components to different parties, includes allocating said insured
contingency risk to at least one of the parties from a group including
a reinsurer, a reinsurance pool, a retrocessionaire, a retrocession
pool, or another insurance risk assumer, and further including the
steps of: associating data corresponding to a provider of insurance
coverage for said insured contingency risk with the reinsurance
transaction; and for each of a plurality of time periods: calculating
the reserve requirement and the insured contingency risk; and making
an adjustment to the insurance risk coverage.
16. The method of any one of claims 1-2, further including the
step of managing, for a reinsurance company, to accommodate change
in the insured contingency risk and change in the capital requirement.
17. The method of any one of claims 7-10, further including, for
said for said reinsurance asset trust, calculating a value of said
asset on a legally required filing date of a financial statement
for said reserve requirement.
18. The method of any one of claims 1-2, further including, for
each of a plurality of time periods, the steps of: calculating reserve
requirement using emerging experience data; and recalculating corresponding
values for said insured contingency risk and said capital requirement.
19. The method of any one of claims 1-2, further including, for
each of a plurality of time periods, the steps of: valuing traunches
for financial instrument funding of said reinsurance asset trust;
calculating relative proportion of each said traunche; and making
a corresponding asset adjustment corresponding to said asset of
said trust.
20. The method of any one of claims 1-2, further including, for
each of a plurality of time periods, the steps of: generating a
report by inserting datum produced in one of said method steps into
the report, said datum from a group including said reserve requirement,
said insured contingency risk, said corresponding capital requirement,
and a value of said asset; and printing the report.
21. The method of any one of claims 1-2, further including the
steps of: generating a contract by inserting datum produced in one
of said method steps into the contract for said reinsurance transaction
to one of the parties from a group including an insurance company,
a risk carrier and a source of asset; and printing the contract.
22. The method of any one of claims 1-2, further including, for
each of a plurality of time periods, the step of: performing a valuation
and pricing said insurance contingency risk and said corresponding
capital requirement.
23. The method of claim 22, further including the steps of: computer-aided
managing said reinsurance transaction for a reinsurance company
providing collateral for said economic reserve requirement, said
excess reserve requirement funded by one of the parties from a group
including a bank, a syndicate, a pension plan, a securities lender,
or an investor through the purchase of any portion of any traunche
of a trust funding financial instrument; and further including the
step of associating data corresponding to said source of said asset
with said reinsurance company.
24. The method of claim 2, wherein the step of allocating the components
to different parties further includes funding the capital requirement
by issuing a security into the capital market, and further including
the step of associating said security with the reinsurance transaction;
and for each of a plurality of time periods: calculating the reserve
requirement and the capital requirement; and making an asset adjustment
corresponding to the asset in the reinsurance asset trust.
25. The method of claim 24, wherein said issuing said security
into the capital market includes issuing a Funding Agreement.
26. The method of claim 24, wherein said issuing said security
into the capital market includes issuing a Capital Redemption Bond.
27. The method of claim 24, wherein said issuing said security
into the capital market includes issuing a Guaranteed Investment
Contract.
28. The method of claim 12, wherein said reinsurance asset trust
is managed along the statutory rules on terms of the trust.
29. The method of claim 12, further including the step of computer-aided
managing said reinsurance asset trust consistent with terms of the
trust.
30. The method of claim 18, further including, for each of a plurality
of time periods, the steps of: valuing traunches for financial instrument
funding of said reinsurance asset trust; calculating relative proportion
of each said traunche; and making a corresponding asset adjustment
corresponding to said asset of said trust.
31. Apparatus arranged to manage a reinsurance transaction, the
apparatus comprising: a computer system arranged to arranged to
manage an insurance reserve requirement by segmenting risk components
in a reinsurance transaction, the computer system comprising logic
means controlling the system in carrying out the steps of: calculating
an insurance reserve requirement from data; and segmenting, for
the reserve requirement, an insured contingency risk from a corresponding
capital requirement to produce components, to support carrying out
the reinsurance transaction in which the components are allocated
to different parties, one of the parties from a group including
an insurance risk carrier and a source of an asset for said capital
requirement and the assets for the reserve requirement are assigned
to a reinsurance asset trust to receive reinsurance credit for said
reserve requirement.
32. The apparatus of claim 31, wherein said reinsurance transaction
provides reinsurance for life insurance, and wherein said logic
means controls the system to carry out the step of associating data
corresponding to the life insurance with the reinsurance transaction.
33. The apparatus of claim 32, wherein said step of segmenting
includes: selecting said insured contingency risk from a group including
mortality risk, morbidity risk, and survivorship risk.
34. The apparatus of claim 32, wherein said step of calculating
includes: calculating a statutory reserve requirement; calculating
an economic reserve requirement; and calculating an excess of the
statutory over the economic reserve requirement.
35. The apparatus of claim 32, wherein said step of segmenting
includes: calculating a capital requirement corresponding to an
economic reserve; and calculating a capital requirement corresponding
to an excess of the statutory reserve over the economic reserve.
36. The apparatus of any one of claims 31-32, wherein the step
of allocating the components to different parties includes: allocating
the capital requirement to at least one of the parties from a group
including a bank, a syndicate, a pension plan, another securities
lender, or an investor through the purchase of some of any traunche
of a trust funding financial instrument, and wherein said logic
means controls the system to carry out the steps of: associating
data corresponding to said source of an asset with the reinsurance
transaction; and for each of a plurality of time periods: calculating
the reserve requirement and the capital requirement; and making
an asset adjustment corresponding to the asset in the reinsurance
asset trust.
37. The apparatus of claim 31, wherein the step of allocating the
components to different parties includes funding the capital requirement
by issuing a security into the capital market, and said logic means
controls the system to carry out the steps of: associating data
corresponding to said security with the reinsurance transaction;
and for each of a plurality of time periods: calculating the reserve
requirement and the capital requirement; and making an asset adjustment
corresponding to the asset in the reinsurance asset trust.
38. The apparatus of claim 37, wherein said step of issuing said
security into the capital market includes issuing a Funding Agreement.
39. The apparatus of claim 37, wherein said step of issuing said
security into the capital market includes issuing a Capital Redemption
Bond.
40. The apparatus of claim 37, wherein said step of issuing said
security into the capital market includes issuing a Guaranteed Investment
Contract.
41. The apparatus of any one of claims 38-40, wherein said logic
means controls the system to carry out the step of computer-aided
managing said security consistent with investment guidelines such
that the asset held for said insured contingency risk qualifies
as an admitted asset in a jurisdiction of the contingency risk.
42. The apparatus of any one of claims 38-40, wherein said logic
means controls the system to carry out the step of associating data
corresponding to said security with a corresponding asset from a
group including an investment grade bond, a Collateralized Mortgage
Obligation, Mortgage Backed Security, real estate, and an equity.
43. The apparatus of any one of claims 38-40, wherein said logic
means controls the system to carry out the step of computer-aided
managing said reinsurance asset trust consistent with terms of the
trust.
44. The apparatus of claim 41, said logic means controls the system
to carry out the step of computer-aided managing said reinsurance
asset trust consistent with terms of the trust.
45. The apparatus of any one of claims 31-32, wherein the step
of allocating the components to different parties, includes allocating
said insured contingency risk to at least one of the parties from
a group including a reinsurer, a reinsurance pool, a retrocessionaire,
a retrocession pool, or another insurance risk assumer, and said
logic means controls the system to carry out the steps of: associating
data corresponding to a provider of insurance coverage for said
insured contingency risk with the reinsurance transaction; and for
each of a plurality of time periods: calculating the reserve requirement
and the insured contingency risk; and making an adjustment to the
insurance risk coverage.
46. The apparatus of any one of claims 31-32, wherein said logic
means controls the system to carry out the step of managing, for
a reinsurance company, to accommodate change in the insured contingency
risk and change in the capital requirement.
47. The apparatus of any one of claims 37-40, wherein said logic
means controls the system to carry out, for said for said reinsurance
asset trust, the step of calculating a value of said asset on a
legally required filing date of a financial statement for said reserve
requirement.
48. The apparatus of any one of claims 31-32, wherein said logic
means controls the system to carry out, for each of a plurality
of time periods, the steps of: calculating reserve requirement using
emerging experience data; and recalculating corresponding values
for said insured contingency risk and said capital requirement.
49. The apparatus of any one of claims 1-2, wherein said logic
means controls the system to carry out, for each of a plurality
of time periods, the steps of: valuing traunches for financial instrument
funding of said reinsurance asset trust; calculating relative proportion
of each said traunche; and making a corresponding asset adjustment
corresponding to said asset of said trust.
50. The apparatus of any one of claims 31-32, wherein said logic
means controls the system to carry out, for each of a plurality
of time periods, the steps of: generating a report by inserting
datum produced in one of said apparatus steps into the report, said
datum from a group including said reserve requirement, said insured
contingency risk, said corresponding capital requirement, and a
value of said asset; and printing the report.
51. The apparatus of any one of claims 31-32, wherein said logic
means controls the system to carry out the steps of: generating
a contract by inserting datum produced in one of said apparatus
steps into the contract for said reinsurance transaction to one
of the parties from a group including an insurance company, a risk
carrier and a source of asset; and printing the contract.
52. The apparatus of any one of claims 31-32, wherein said logic
means controls the system to carry out, for each of a plurality
of time periods, the step of: performing a valuation and pricing
said insurance contingency risk and said corresponding capital requirement.
53. The apparatus of claim 52, wherein said logic means controls
the system to carry out the steps of: computer-aided managing said
reinsurance transaction for a reinsurance company providing collateral
for said economic reserve requirement, said excess reserve requirement
funded by one of the parties from a group including a bank, a syndicate,
a pension plan, a securities lender, or an investor through the
purchase of any portion of any traunche of a trust funding financial
instrument; and further including the step of associating data corresponding
to said source of said asset with said reinsurance company.
54. The apparatus of claim 52, wherein the step of allocating the
components to different parties further includes funding the capital
requirement by issuing a security into the capital market, and wherein
said logic means controls the system to carry out the steps of associating
said security with the reinsurance transaction, and for each of
a plurality of time periods: calculating the reserve requirement
and the capital requirement; and making an asset adjustment corresponding
to the asset in the reinsurance asset trust.
55. The apparatus of claim 54, wherein said issuing said security
into the capital market includes issuing a Funding Agreement.
56. The apparatus of claim 54, wherein said issuing said security
into the capital market includes issuing a Capital Redemption Bond.
57. The apparatus of claim 54, wherein said issuing said security
into the capital market includes issuing a Guaranteed Investment
Contract.
58. The apparatus of claim 52, wherein said reinsurance asset trust
is managed along the statutory rules on terms of the trust.
59. The apparatus of claim 32, wherein said logic means controls
the system to carry out the step of computer-aided managing said
reinsurance asset trust consistent with terms of the trust.
60. The apparatus of claim 38, wherein said logic means controls
the system to carry out, for each of a plurality of time periods,
the steps of: valuing traunches for financial instrument funding
of said reinsurance asset trust; calculating relative proportion
of each said traunche; and making a corresponding asset adjustment
corresponding to said asset of said trust.
61. Apparatus controlling a system, the apparatus including: means
disposed for controlling a computer system carrying out an implementation
of managing an insurance reserve requirement by segmenting risk
components in a reinsurance transaction, the means controlling cooperation
of: means for calculating an insurance reserve requirement from
data; means for segmenting, for the reserve requirement, an insured
contingency risk from a corresponding capital requirement to produce
components; and means for computer-aided carrying out the reinsurance
transaction by steps including: allocating the components to different
parties, one of the parties from a group including an insurance
risk carrier and a source of an asset for said capital requirement;
and assigning assets for the reserve requirement to a reinsurance
asset trust to receive reinsurance credit for said reserve requirement.
62. A computer-readable media tangibly embodying a program of instructions
executable by a computer carrying out the step of: controlling performance
of a computer system in carrying out the operations of: calculating
an insurance reserve requirement from data; segmenting, for the
reserve requirement, an insured contingency risk from a corresponding
capital requirement to produce components; and processing data to
carrying out the reinsurance transaction in which the components
are allocated to different parties, one of the parties from a group
including an insurance risk carrier and a source of an asset for
said capital requirement and the assets for the reserve requirement
are assigned to a reinsurance asset trust to receive reinsurance
credit for said reserve requirement, to carry out managing an insurance
reserve requirement by segmenting risk components in a reinsurance
transaction.
63. The media of claim 62, wherein the media comprises at least
one of a RAM, a ROM, a disk, an ASIC, and a PROM.
64. An electronic transmission apparatus for handling communications
to implement a part of insurance reserve requirement by segmenting
risk components in a reinsurance transaction, the apparatus including:
in cooperation with means for calculating an insurance reserve requirement
from data and means for segmenting, for the reserve requirement,
an insured contingency risk from a corresponding capital requirement
to produce components, in supporting the reinsurance transaction
by steps including allocating the components to different parties,
one of the parties from a group including an insurance risk carrier
and a source of an asset for said capital requirement, and assigning
assets for the reserve requirement to a reinsurance asset trust
to receive reinsurance credit for said reserve requirement, program
control means governing generating a data set unique to the reinsurance
transaction; and electronic transmission means for communicating
said data set over an Internet network addressed to another computer.
65. An electronic transmission apparatus for handling communications
to implement a part of insurance reserve requirement by segmenting
risk components in a reinsurance transaction, the apparatus including
means for calculating an insurance reserve requirement from data
and means for segmenting, for the reserve requirement, an insured
contingency risk from a corresponding capital requirement to produce
components, both said means cooperating to produce a unique data
set for the reinsurance transaction, said reinsurance transaction
carried out by steps including allocating the components to different
parties, one of the parties from a group including an insurance
risk carrier and a source of an asset for said capital requirement,
and assigning assets for the reserve requirement to a reinsurance
asset trust to receive reinsurance credit for said reserve requirement,
said apparatus comprising program control means governing sending
the data set via electronic transmission means for communicating
said data set over an Internet network addressed to another computer.
66. An electronic receiver apparatus for handling communications
to implement a part of insurance reserve requirement by segmenting
risk components in a reinsurance transaction, the apparatus cooperating
with means for calculating an insurance reserve requirement from
data and means for segmenting, for the reserve requirement, an insured
contingency risk from a corresponding capital requirement to produce
components, both said means interacting to produce a unique data
set for the reinsurance transaction, said reinsurance transaction
carried out by steps including allocating the components to different
parties, one of the parties from a group including an insurance
risk carrier and a source of an asset for said capital requirement,
and assigning assets for the reserve requirement to a reinsurance
asset trust to receive reinsurance credit for said reserve requirement,
said apparatus comprising program control means for receiving the
data set via electronic transmission means for communicating said
data set over an Internet network.
67. A computer-readable media tangibly embodying a program of instructions
executable by a computer carrying out the step of: controlling performance
of a computer system in carrying out the operations of: calculating
an insurance reserve requirement from data; segmenting, for the
reserve requirement, an insured contingency risk from a corresponding
capital requirement to produce components; and processing data to
carrying out the reinsurance transaction in which the components
are allocated to different parties, one of the parties from a group
including an insurance risk carrier and a source of an asset for
said capital requirement and the assets for the reserve requirement
are assigned to a reinsurance asset trust to receive reinsurance
credit for said reserve requirement.
Insurance Description
[0001] This patent application claims priority from, and incorporates
by reference, U.S. Patent Application Ser. No. 60/517,180 titled,
"Computer System for Redundant Insurance Reserve Financing,"
filed Nov. 4, 2004, and U.S. Patent Application Ser. No. 60/603,608
titled "Computer System for Redundant Insurance Reserve Financing,"
filed Aug. 23, 2004.
I. TECHNICAL FIELD
[0002] The technical field is computers and data processing systems.
Depending on the implementation, there is apparatus, a method for
use and method for making, and corresponding products produced thereby,
as well as data structures, computer-readable media tangibly embodying
program instructions, manufactures, and necessary intermediates
of the foregoing, each pertaining to digital aspects of managing
risk components in a reinsurance transaction.
II. BACKGROUND ART
[0003] Illustratively, the adoption of Regulation XXX by U.S. state
insurance regulators significantly increased the statutory reserves
required for Level Premium Term Life and certain guarantee riders
for Universal Life policies. A portion of these reserves are generally
considered to be "redundant", or an excess of the total
basic reserve as defined under Regulation XXX over the "economic
reserve", which is defined as the GAAP reserve. The redundant
reserves are released back into capital at the time a policy experiences
a death claim or terminates by lapse, because term insurance and
the riders have no cash surrender value. The reserves are far in
excess of those required for the same policies in other jurisdictions.
[0004] For policy pricing purposes, these redundant reserves are
capital investments and require a "hurdle rate" return,
so pricing of Level Term insurance and certain Universal Life products
were affected when the Regulation was adopted. Since term life insurance
is a very price competitive product, most carriers were reluctant
to raise prices and therefore looked to transfer the redundant reserves
to reinsurers. The redundant reserves problem is especially acute
for level term products with durations exceeding ten years.
[0005] Reinsurers were willing to accept these reserves for a fee
as they could, either directly or indirectly, move the policies
to other non-U.S. jurisdiction where the higher reserves dictated
by Guideline XXX were not required. The reinsurer ending up with
the policies could not be licensed in the US, however, as that would
require them to post the reserves in their US Statutory statement.
Therefore, the reserves wound up in an "unauthorized reinsurer",
which is generally an offshore insurance company.
[0006] For the US ceding insurer (i.e., the original writing carrier)
to be able to take credit for the reinsurance in its statutory statement,
however, the unauthorized reinsurer is required to post collateral
equal to the reserves for which the cedant is taking credit. The
reinsurers typically used Bank Letters of Credit (LOC) which met
the statutory rules of the states to collateralize the agreement.
[0007] Similar situations exist in countries other than the United
States, for example, Canada.
[0008] Letters of Credit are not the only way these reinsurance
contracts can be collateralized. The states also allow credit when
the collateral is assets in trust for the benefit of the cedant
under the reinsurance treaty. The assets would be assets that qualify
as admitted assets in a US Life Insurance Company. This would include
investment grade bonds, Collateralized Mortgage Obligations's (CMO),
Mortgage Backed Securities's (MBS) and very limited amounts of Real
Estate and Equities. The terms of the trust meet the statutory rules.
Stringent trust rules include those promulgated by the state of
New York.
[0009] This alternative, funding a trust with qualifying assets,
has not been widely used. First the offshore entities that are used
for this reinsurance typically are subsidiaries of the reinsurer
and are not as large or highly capitalized, so they don't have the
assets to contribute to the trust structure. Secondly, the trust
requires some administration and management while providing LOC's
do not. Third, LOC's were cheap. Recently, however, LOC's have become
more scarce and prices are increasing. Since LOC's renew and reprice
annually, this market change affects not just new business, but
also business already reinsured.
[0010] There are several sources of Trust assets used by the reinsurer,
for example, assets from its own portfolio, assets loaned to it
by others or assets purchased with the proceeds from the issuance
of securities, funding agreements (FA), Capital Redemption Bonds
(CRB), and Guaranteed Investment Contracts (GIC) by the reinsurer
or a Special Purpose Entity created for that purpose. The various
types of securities, FA's, CRB's, and GIC's are collectively referred
to as trust funding financial instruments.
[0011] In carrying out the foregoing, in addition to the different
focused computer structuring, there have been significant needs
regarding such as efficiency and/or security, with manual systems
being prone to manual problems, and with automated variants having
limitations regarding control and management of corresponding computer
resources.
III. DISCLOSURE
[0012] In the area of said technical field, representatively, consider
a computer system (illustratively representing, for the sake of
brevity, methods, articles of manufacture, transmitter, receiver,
network implementations, etc.) structured to aid managing an insurance
reserve requirement by segmenting risk components in a reinsurance
transaction. The computer system can, for example, be structured
(e.g., including programmed) to carry out the steps of: calculating
an insurance reserve requirement from data; segmenting, for the
reserve requirement, an insured contingency risk from a corresponding
capital requirement to produce components; and carrying out the
reinsurance transaction by steps including: allocating the components
to different parties, one of the parties from a group including
an insurance risk carrier and a source of an asset for said capital
requirement; and assigning assets for the reserve requirement to
a reinsurance asset trust to receive reinsurance credit for said
reserve requirement. Consider too a computer system comprising means
for calculating an insurance reserve requirement from data; means
for segmenting, for the reserve requirement, an insured contingency
risk from a corresponding capital requirement to produce components;
and means for carrying out the reinsurance transaction by means
including: means for allocating the components to different parties,
one of the parties from a group including an insurance risk carrier
and a source of an asset for said capital requirement; and means
for assigning assets for the reserve requirement to a reinsurance
asset trust to receive reinsurance credit for said reserve requirement.
Consider further a computer apparatus arranged for controlling a
system carrying out an implementation of managing an insurance reserve
requirement by segmenting risk components in a reinsurance transaction,
the apparatus including: a computer system arranged to receive data
and locate said data into a memory; calculating means for calculating
said insurance reserve requirement; program control means for segmenting,
for said reserve requirement, said insured contingency risk from
a corresponding capital requirement to produce components; program
control means for carrying out said reinsurance transaction; program
control means for allocating said components to different parties,
one of the parties from a group including an insurance risk carrier
and a source of an asset for said capital requirement; and program
control means for assigning assets for the reserve requirements
to said reinsurance asset trust to receive reinsurance credit for
said reserve requirement.
IV. BRIEF DESCRIPTION OF THE DRAWINGS
[0013] FIG. 1 illustrates an overview of an embodiment.
[0014] FIG. 2 is a diagram representing the computer system of
an embodiment.
[0015] FIG. 3 is a flowchart showing the logic of the logic means
for controlling the computer system in accordance with an embodiment.
[0016] FIG. 4 shows a combination of FIGS. 4a-4c.
[0017] FIG. 4a, which continues to FIG. 4c, represents a portion
of a flowchart showing the data input, computational and other logic,
and the data output of the logic means for controlling the computer
system in accordance with an embodiment.
[0018] FIG. 4b is a continuation of FIG. 4a, and represents a portion
of a flowchart showing the data input, computational and other logic,
and the data output of the logic means for controlling the computer
system in accordance with an embodiment.
[0019] FIG. 4c is a continuation of FIG. 4b, and represents a portion
of a flowchart showing the data input, computational and other logic,
and the data output of the logic means for controlling the computer
system in accordance with an embodiment.
[0020] FIG. 5 shows a combination of FIGS. 5a-5e.
[0021] FIG. 5a, which continues to FIG. 5c, represents a portion
of a flowchart showing the data input, computational and other logic,
and the data output of the logic means for controlling the computer
system in accordance with an embodiment applied to issuing securities.
[0022] FIG. 5b is a continuation of FIG. 5a, and represents a portion
of a flowchart showing the data input, computational and other logic,
and the data output of the logic means for controlling the computer
system in accordance with an embodiment applied to funding the capital
requirement by issuing securities.
[0023] FIG. 5c is a continuation of FIG. 5b, and represents a portion
of a flowchart showing the data input, computational and other logic,
and the data output of the logic means for controlling the computer
system in accordance with an embodiment applied to funding the capital
requirement by issuing securities.
[0024] FIG. 5d is a continuation of FIG. 5c, and represents a portion
of a flowchart showing the data input, computational and other logic,
and the data output of the logic means for controlling the computer
system in accordance with an embodiment applied to funding the capital
requirement by issuing securities.
[0025] FIG. 5e is a continuation of FIG. 5d, and represents a portion
of a flowchart showing the data input, computational and other logic,
and the data output of the logic means for controlling the computer
system in accordance with an embodiment applied to funding the capital
requirement by issuing securities.
[0026] FIG. 6 shows a combination of FIGS. 6a-6c.
[0027] FIG. 6a, which continues to FIG. 6c, represents a portion
of a flowchart showing the data input, computational and other logic,
and the data output of the logic means for controlling the computer
system in accordance with an embodiment applied to a reinsurance
company managing the reinsurance transaction.
[0028] FIG. 6b is a continuation of FIG. 6a, and represents a portion
of a flowchart showing the data input, computational and other logic,
and the data output of the logic means for controlling the computer
system in accordance with an embodiment applied to a reinsurance
company managing the reinsurance transaction.
[0029] FIG. 6c is a continuation of FIG. 6b, and represents a portion
of a flowchart showing the data input, computational and other logic,
and the data output of the logic means for controlling the computer
system in accordance with an embodiment applied to a reinsurance
company managing the reinsurance transaction.
[0030] FIG. 7 is a graphic representation of interrelated computer
systems in accordance with an embodiment.
[0031] FIG. 8 is a graphic representation of a funding agreement
in accordance with an embodiment.
[0032] FIG. 9 illustrates a flowchart for an embodiment.
V. MODES
[0033] The accompanying drawings illustrate embodiments intended
to illustrate and exemplify in a teaching manner.
[0034] As used herein, the term "computer" generally
refers to hardware or hardware in combination with one or more program(s),
such as can be implemented in software. Computer aspects can be
implemented on general purpose computers or specialized devices,
and can operate electrically, optically, or in any other fashion.
A computer as used herein can be viewed as at least one computer
having all functionality or as multiple computers with functionality
separated to collectively cooperate to bring about the functionality.
Logic flow can represent signal processing, such as digital data
processing, communication, or as evident from the context hereinafter.
Logic flow or "logic means" can be implemented in discrete
circuits, programmed computer, or the equivalent. Computer-readable
media, as used herein can comprise at least one of a RAM, a ROM,
A disk, an ASIC, and a PROM. Industrial or technical applicability
is clear from the description, and is also indicated below.
[0035] By way of the following prophetic teaching, there can be
computer support, as in a data processing system, for implementing
parts of, or from, a financial product or instrument to accomplish
certain financial objectives to and advance such as efficiency and/or
security, over said manual systems and corresponding problems, and
automated variants having limitations regarding management of corresponding
computer resources.
[0036] First, though, consider some context. In general, FIG. 1
illustrates the nature of the financial innovation that can give
rise to a need for that which is set forth below.
[0037] Under United States statutory reserving procedures, for
example, certain products with long term premium guarantees, for
example level premium term and level cost of insurance universal
life policies, are required to set up significantly higher reserves
than economic reserves would call for. The amounts above the economic
reserve, while required, are considered redundant and not necessary,
except under extreme and unrealistic conditions.
[0038] However, the inventors observed that a Reinsurance Transaction
2 between an Insurance Company 4 and a Reinsurance Company 6 can
be carried out such that in exchange for reinsurance premiums, the
insurance company receives something else, such as benefit claims,
and credit and related collateral for economic reserves and for
redundant reserves. The Reinsurance Company 6, aided by Computer
Systems 32, e.g., in cooperation with such as an Administration
System 28, Actuarial Pricing System 22, Risk Analysis System 24
and Valuation System 26, handles segmenting the insurance contingency
risk from the capital requirements. The insurance contingency risk
can be ceded to an Insurance Risk Carrier 10, which provides benefit
claims and collateral for the economic reserve in exchange for the
benefit claims premiums. Through a SPV (Special Purpose Vehicle)
14, trust funding financial instruments can be issued to a Source
Of An Asset 12 which then provides the funding or allows the assigning
of assets to a Reinsurance Trust 8 in exchange for asset charges.
The Reinsurance Company 6 also can provide oversight to the Reinsurance
Trust 8. The assets in the Reinsurance Trust 8 allow the Insurance
Company 4 to take credit for the redundant reserves. The Computer
Systems 32 includes a Risk Analysis System 24 that can calculate
the relative proportions and the pricing of any traunches of trust
funding financial instruments.
[0039] Consider now more particularly a computer system managing
fluctuating reserve requirements and the related reinsurance trust(s)
and trust(s) funding financial instruments (or a similar financial
vehicle to maintain the assets) requirements. In general, uncertain
events that can be measured using statistical or actuarial methodologies
but are not certain in timing and/or amounts, and such events are
uncontrolled by the parties, can produce financial results that
may vary from expected results.
[0040] Reinsurance reserve requirements vary from period to period
based upon emerging experience. As such, reserve requirements also
change based upon the experience. In addition, values of reinsurance
reserves trusts are calculated using market values of the securities
on the date of the financial statements currently filed. Maintaining
the appropriate levels of investments contained in the reinsurance
trusts requires a myriad of interrelated detailed calculations to
determine the amounts to be added or removed from the trusts each
reporting period, usually the calendar quarter.
[0041] The reinsurance transaction requirement is to find an appropriate
asset source(s), an appropriate insurance risk assumer(s), an appropriate
unauthorized reinsurer, and an appropriate ceding insurance company(s).
[0042] Once done, the business to be reinsured can be evaluated
and priced, both economically and statutorily, using electronic
computer based pricing programs; the appropriate insurance risk
premiums can be calculated; the expected reserve requirements can
be calculated using electronic computer analysis of inputted data;
the value of the economic and excess reserves can be calculated
by electronic computer programs to determine the value required
for the trust; should multiple traunches of trust funding financial
instruments be necessary the relative proportions of each traunche
can be calculated using proprietary risk analysis software and these
calculations can be made at the end of each reporting period (usually
every 90 days), with appropriate adjustment to the contents of the
trust(s).
[0043] The computer systems can also produce periodic reports (at
least quarterly) on current reserve requirements, current trust
values, current trust value requirements and reinsurance premiums
and claims for the period.
[0044] In addition, the computer-based systems can produce all
contracts between the participating parties.
[0045] For example, this approach can be used to manage the fluctuating
reserve requirements under Guideline XXX for establishing statutory
reserves for guaranteed level premium products (both term and universal
life) in the U.S. Life Insurance market. In some jurisdictions,
the reinsurer is only required to post economic reserves. A Reinsurance
Company can segment the insurance risks from the capital requirements
and manage each risk component with the most efficient party. The
insurance risks can be moved to a Reinsurer (s), Retrocessionnaire
(s), a Retrocession Pool, or another insurance risk assumer. The
capital requirements can be funded thru a Bank, Syndicate, Pension
Plan, another Securities Lender, or an investor through the purchase
of any portion of any traunche of trust funding financial instruments.
As such the ceding Life Insurance Company can receive the mortality
risk protection as well as the collateral and related reinsurance
credit for the economic reserve and the credit for the redundant
reserves, as well as the reinsurance credit for the Statutory Risk
Based Capital efficiently thru the Reinsurance Company.
[0046] Computer System
[0047] FIG. 2 provides a graphic representation of an exemplary
computer system managing an insurance reserve requirement.
[0048] Consider, more particularly, a Computer System 32 (i) that
manipulates signals comprising (a) Input Data 34 pertaining to data
for the Reinsurance Transaction 2, (b) documents such as Stored
Documents 48, and/or (c) previously encoded and processed data Stored
Data Files 46; and/or (ii) that transforms these signals into analyses
of the data; and/or (iii) that documents the results in Financial
Analysis Output 56; and/or (iv) that illustrates selected results
in Processed Documents 58.
[0049] The Computer System 32 can comprise a Computer (e.g., an
IBM, Hewlett Packard, or other personal computer) With Central Processor
38 58 (e.g., an Intel series processor or the like), a Memory System
40 (such as a hard drive, disk drive, etc.), an Input Device 36
(keyboard, mouse, modem, or the like), and one or more output devices,
Output Device 52 and Output Device 54 (e.g., a Hewlett Packard printer,
a Dell monitor, a modem, or other such output device). The Memory
System 40 includes an operating system Logic Means 42 such as Microsoft
XP Professional (and its applications such as EXCEL, ACCESS, and
WORD) to run the Computer System 32, a Word Processing System 44
such as Microsoft Word to process transaction data, and results
into Processed Documents 58. The Input Device 36 such as a keyboard
receives Input Data 34 either manually or electronically. Output
Device 52 and Output Device 54, such as a printer or a CD drive;
produce such relevant documents as the Financial Analysis Output
56. Financial Analysis Output 56, including the input data, processed
results, and other relevant information as well as processing logic,
is normally shared via a network of computers as indicated in FIG.
7 (Computer System 32, and computer systems, Blocks 372-388, of
parties involved such as Insurance Company, Reinsurance Company,
Insurance Risk Assumer, Source Of An Asset, Reinsurance Asset Trust,
Special Purpose Vehicle, Advisors, Consultants and Regulatory Bodies)
and technical discussions occur until desired results are processed
and illustrated formally in Processed Documents 58.
[0050] Logic Means
[0051] FIG. 3 is a flowchart of the overall operational processes
for Computer System 32.
[0052] Logic Means 82 allows for two pathways, one for processing
data, using Title Screen Data Processing System 84, and the other
for processing model documents, using Word Processing System 44.
[0053] Title Screen Data Processing System 84 (which could be a
coded or programmed EXCEL application, or an application that allows
processing of numbers and logical evaluations; as reflected by logic
behind a control system such as Main Menu 86 that can allow for
the processing of information for the embodiment and controlling
the system or part thereof, as may be desired), enables the creation
of new data file (Block 92), update of existing data file (Block
88, retrieval of data file and Block 90, identification of data
file), processing the data (Blocks 94-98, display and input/edit
of data form then processing of data), printing the data information
(Block 100) and storing the data (Blocks 102, 46-48, store data
form, stored data file and stored documents). Data files are maintained
historically, per contract, from its effective date. Data storage
is physically in the computer or in a computer readable file kept
offsite.
[0054] Word Processing System 44 allows for creating blank documents
(Blocks 48), editing existing documents for any updates (Block 106),
printing such results (Block 108) and storing different versions
of documents (Block 110).
[0055] The Logic Means 42 allows for continuing processing in Blocks
84,86 and 112 (thru the title screen, main menu and the logic to
continue with the word processing program) as well as for finalization
of the process thru Blocks 104 and 112 (through the quit routine
in the title screen and the logic to quit with the word processing
program).
[0056] General Example
[0057] FIG. 4a-4c shows the logic of the processes in a general
exemplary embodiment. Input data is received starting from the early
stages of preparation for the transaction and during regular time
periods for the duration of the contract.
[0058] The process includes Calculating An Insurance Reserve Requirement
From Data 142, Segmenting, For The Reserve Requirement, An Insured
Contingency risk, From A Corresponding Capital Requirement To Produce
Components 144, Carrying Out The Reinsurance Transaction 146, Allocating
The Components To Different Parties, One Of The Parties From A Group
Including An Insurance Risk Carrier And A Source Of An Asset For
Said Capital Requirement 152, and Assigning Assets For The Reserve
Requirement To A Reinsurance Asset Trust To Receive Reinsurance
Credit For Said Reserve Requirement 154. Often, the Carrying Out
The Reinsurance Transaction is for Life Insurance 148 and further
Associating Data Corresponding To The Life Insurance With The Reinsurance
Transaction 150. Generating A Contract By inserting Datum Produced
In One Of Said Method Steps Into the Contract For Said Reinsurance
Transaction To One Of The Parties From A Group Including An Insurance
Company, A Risk Carrier And a Source of Asset 156 and Generating
A Report By Inserting Datum Produced In One Of Said Method Steps
Into The Report, Said Datum From A Group Including Reserve requirement,
Said Insured Contingency Risk, Said Corresponding Capital Requirement
and Statutory Value Of Assets 158 also occur. Also there is Printing
Of The Contract and Printing Of The Report that occur in Block 156
and Block 158, respectively.
[0059] Calculating An Insurance Reserve Requirement From Data 142
further goes into Calculating A Statutory Reserve Requirement 160,
Calculating an Economic Reserve Requirement 162 and
[0060] Calculating the Excess Of Statutory Over Economic Reserve
Requirement 164. Further, Selecting Said Insured Contingency Risk
From A Group Including Mortality Risk, Morbidity risk And Survivorship
Risk 180 also occurs.
[0061] For Each A Plurality Of Time Periods, Calculating The Reserve
Requirement 166 further includes Calculating The Insured Contingency
Risk 168 and Making An Adjustment To The Insurance Risk Coverage
170, and Calculating the Capital Requirement 172 and Making Adjustment
An Asset Adjustment Corresponding To The Assets In The Reinsurance
Asset Trust 174. Calculating The Capital Requirement 172 also involves
Calculating A Capital Requirement Corresponding To An Economic Reserve
176 and Corresponding To An Excess Of The Statutory Reserve Over
The Economic Reserve 178.
[0062] Input Data 34 and results of the above processes are stored
through Blocks 182-208 (data; reserve requirements, statutory, economic
and excess; selected insurance contingency risk; carrying out of
the reinsurance transaction, including for life insurance; capital
requirement corresponding to an economic reserve and the excess;
the segmentation; allocation of the components to different parties;
assignment of assets; the contract; and the report).
[0063] An Embodiment for Funding the Capital Requirement by Issuing
a Security
[0064] FIG. 5a-5e shows the logic of the processes in the embodiment
of an embodiment for funding the capital requirement by issuing
a security.
[0065] In this embodiment, Calculating An Insurance Reserve Requirement
From Data 142, further involves For Each Time Period, Calculating
Reserve Requirement From Emerging Experience Data 234 and For Each
Time Period, Calculating Corresponding Insured Contingency Risk
and Capital Requirement 236.
[0066] The Segmenting, For the Reserve Requirement 144, Carrying
out The Reinsurance Transaction 146 are carried further For Life
Insurance 148, Associating Data Corresponding To The Life Insurance
150, Allocating the Components 152, Assigning Assets For the Reserve
Requirement 154, Generating a Contract 156 and Generating a Report
156. Additionally, there is Managing, for A Reinsurance Company
238, the Allocating The Capital To One Of the Parties From A Group
Including a Bank, A Syndicate, A Pension Plan, Another Securities
Lender Or An Investor Through The Purchase Of Some Of Any Traunche
Of A Trust Funding Financial Instrument 240, Associating Data Corresponding
To Said Source Of Asset With The Reinsurance Transaction 242, Funding
The Capital Requirement By Issuing a Security Into the Capital Market
244, again Associating Data Corresponding To Said Security With
The Reinsurance Transaction 246, and Allocating Said Insured Contingency
Risk To One Of The Parties From a Group Including A Reinsurer, A
Reinsurance Pool, A Retrocessionaire, A Retrocession Pool, Or Another
Insurance Risk Assumer 248 and again Associating Data Corresponding
To A Provider Of Insurance Coverage for Said Insured Contingency
Risk With The Reinsurance Transaction 250
[0067] Involved in the Allocating The Capital 240 is Valuing Traunches
For Financial Instrument Funding Said Reinsurance Asset Trust 252,
Calculating Relative Proportion of Each Said Traunche 254 and Making
A n Asset Adjustment corresponding To the Asset In The Reinsurance
Asset Trust 256. Then there is the Issuing Of A Funding Agreement
258, the Issuing Of A Capital Redemption Bond 260, the Issuing Of
A Guaranteed Investment Contract (GIC) 262, and the Issuing Of A
Security 263. Further to the issuing of securities are Computer-aided
Managing Said Security consistent with The Investment Guideline
Such that the Assets Held for Said Insured Contingency Risk Qualifies
As An Admitted Asset In A Jurisdiction Of The Contingency Risk 264,
Associating Data corresponding to Said Security with Corresponding
Asset From A Group Including investment Grade Bonds, Collateralized
Mortgage Obligation, Mortgage Backed Security, Real Estate And Equities
266, Computer-aided Managing Said Reinsurance Trust consistent With
Terms Of The Trust 268 and Calculating The Value Of Said Asset On
a Legally Required filing Date Of A Financial Statement For Said
Reserve Requirement 270.
[0068] All input data and data resulting from the logic processes
are stored in the computer with steps indicated in Blocks 182-198,
and Blocks 274-310. Stored are data, reserve requirement, segmented
components, reinsurance transaction, details for life insurance,
data association linking life insurance, allocated components, valuation
and pricing, assigned assets, contract and report for the transaction.
Further stored are reserve requirement from emerging experience,
corresponding insured contingency risk and capital requirement,
management by a reinsurance company, allocating capital to one of
the parties, data association linking said source of capital, issuance
of the security, data association linking said security, allocating
said insurance contingency risk to one of the parties, its data
association, valuing traunches, relative proportion of each said
traunche, adjustment to contents of said trust, `funding agreement`,
`capital redemption bond`, `guaranteed investment contract`, security,
investment guidelines to qualify as admitted assets, types of investments,
terms of the trust and statutory values of said assets
[0069] Reinsurance reserve requirements vary from period to period
based upon emerging experience. As such, reserve requirements also
change based upon the experience. In addition, values of reinsurance
reserves trusts are calculated using market values of the securities
on the date of the financial statements currently filed. Maintaining
the appropriate levels of investments contained in the reinsurance
trusts requires a myriad of interrelated detailed calculations to
determine the amounts to be added or removed from the trusts each
reporting period, usually the calendar quarter.
[0070] The reinsurance transaction requirement is to find an appropriate
asset source(s), an appropriate insurance risk assumer(s), an appropriate
unauthorized reinsurer, and an appropriate ceding insurance company(s).
[0071] Once done, the business to be reinsured can be evaluated
and priced, both economically and statutorily, using electronic
computer based pricing programs; the appropriate insurance risk
premiums can be calculated; the expected reserve requirements can
be calculated using electronic computer analysis of inputted data;
the value of the economic and excess reserves can be calculated
by operating electronic computer programs (for example) to determine
the value suitable for the trust; should multiple traunches of trust
funding financial instruments be necessary the relative proportions
of each traunche can be calculated using proprietary risk analysis
software and these calculations can be made at the end of each reporting
period (usually every 90 days), with appropriate adjustment to the
contents of the trust(s).
[0072] The computer systems can also produce periodic reports (at
least quarterly) on current reserve requirements, current trust
values, current trust value requirements and reinsurance premiums
and claims for the period.
[0073] In addition, the computer-based systems can produce all
contracts between the participating parties.
[0074] A Reinsurance Company Managing the Reinsurance Transaction
[0075] FIG. 6a-6c shows the logic of the processes in an embodiment
as applied with a reinsurance company managing the reinsurance transaction.
exposures.
[0076] For example, this approach can be used to manage the fluctuating
reserve requirements under Guideline XXX for establishing statutory
reserves for guaranteed level premium products (both term and universal
life) in the U.S. Life Insurance market. In some jurisdictions,
the reinsurer is only required to post economic reserves. A Reinsurance
Company can segment the insurance risks from the capital requirements
and manage each risk component with the most efficient party. The
insurance risks can be moved to a Reinsurer (s), Retrocessionnaire
(s), a Retrocession Pool, or another insurance risk assumer. The
capital requirements can be funded thru a Bank, Syndicate, Pension
Plan, another Securities Lender, or an investor through the purchase
of any portion of any traunche of trust funding financial instruments.
As such the ceding Life Insurance Company can receive the mortality
risk protection as well as the collateral and related reinsurance
credit for the economic reserve and the credit for the redundant
reserves, as well as the reinsurance credit for the Statutory Risk
Based Capital efficiently thru the Reinsurance Company.
[0077] As in the general embodiment, the process includes calculating
insurance reserve requirement Block 142, segmenting an insured contingency
risk from a corresponding capital requirement Block 144, carrying
out the reinsurance transaction Block 146 for life insurance Blocks
148-150, allocating components Block 152, assigning assets Block
154 and the reports and contracts Blocks 156-158. Additional steps
would include Managing, For A Reinsurance Company 238, with Said
Reinsurance Company Providing Collateral for Said Economic Reserve
Requirement 336 and for Said Excess reserve Requirement Funded By
One Of the Parties From A Group Including A Bank, A Syndicate, A
Pension Plan, Another Securities lender, Or An Investor Through
The Purchase Of Some Of Any Traunche Of A Trust Funding Financial
Instrument 338. Again also Associating Data Corresponding To Said
Source Of Asset With Said Reinsurance Company 340.
[0078] Blocks 182-198 stores data and processed results in the
general embodiment and Blocks 342-350 additionally stores results
where the reinsurance transaction is managed by a reinsurance company.
The later data includes valuation and pricing, management of reinsurance
transaction, reinsurance company providing collateral for economic
reserve, excess reserve from a source of capital and data association
with source of capital and reinsurance company.
[0079] Network of Computer Systems
[0080] FIG. 7 shows the network of computer systems held together
by computer systems Block 32, with back and forth communications
mainly linked by financial analysis output Block 56 and processed
documents Block 58, involving the computer systems of interested
and involved parties, systems 372-388, to enumerate a few. These
parties are insurance company, reinsurance company, insurance risk
assumer, source of an asset, reinsurance asset trust, special purpose
vehicle, advisors, consultants and regulatory bodies. In this manner,
each computer serves as a transmitter with another computer serving
as a receiver.
[0081] A Funding Agreement
[0082] FIG. 8 is a graphic representation of a funding agreement
in accordance with an embodiment. FIG. 8 shows, in summary fashion,
a representative embodiment in connection with a funding agreement
issued by a special purpose vehicle Block 14 tapping such assets
Block 16 as a funding agreement Block 17, a capital redemption bond
Block 18, a guaranteed investment income contract Block 19, and
a security Block 20, all being managed under the guidelines of the
admitted assets requirements for statutory regulations and also
tapping into source of an asset Block 12, multiple layers of investors
via traunches. Note the computer systems Block 32 with its Administration
System Block 28, Actuarial Pricing System 22, proprietary Risk Analysis
System 24 and Valuation System 26. The assets are assigned to a
Reinsurance Asset Trust 8 to allow the insurance company to get
credit for the reserve requirement.
[0083] A Special Embodiment
[0084] FIG. 9 illustrates a flowchart for an embodiment showing
how the process with the computer system provides for means for
receiving data and locating data into memory Block 402, means for
calculating reserve requirements Block 404, means for segmenting
reserve requirements Block 406, means for carrying out the reinsurance
transaction Block 408, means for allocating said components to different
parties Block 410, and means for assigning assets for the reserve
requirements Block 412. The process and the computer support also
provide means for further receiving data including management specifications
of said reinsurance transaction by a reinsurance company Block 414.
Additional means for include, means for performing a valuation and
pricing Block 416, means for reinsurance company providing collateral
for economic reserve Block 418, means for funding excess reserve
requirement from one of the parties Block 420 and means for forming
a data association linking source of capital to reinsurance company
Block 422.
[0085] Additional Embodiments
[0086] In addition to corresponding methods of making and using,
as well as necessary data intermediates and products produced in
various embodiments, to understand permutations, consider an apparatus
for controlling a system carrying out an implementation of managing
an insurance reserve requirement by segmenting risk components in
a reinsurance transaction. The apparatus can include: means for
calculating an insurance reserve requirement from data; means for
segmenting, for the reserve requirement, an insured contingency
risk from a corresponding capital requirement to produce components;
and means for computer-aided carrying out the reinsurance transaction
by steps including: means for computer-aided allocating the components
to different parties, one of the parties from a group including
an insurance risk carrier and a source of an asset for said capital
requirement; and means for computer-aided assigning assets for the
reserve requirement to a reinsurance asset trust to receive reinsurance
credit for said reserve requirement.
[0087] For this or any aspect thereof, there can be a computer-readable
media tangibly embodying a program of instructions executable by
a computer to perform the steps of: calculating an insurance reserve
requirement from data; segmenting, for the reserve requirement,
an insured contingency risk from a corresponding capital requirement
to produce components; and processing data to carrying out the reinsurance
transaction in which the components are allocated to different parties,
one of the parties from a group including an insurance risk carrier
and a source of an asset for said capital requirement and the assets
for the reserve requirement are assigned to a reinsurance asset
trust to receive reinsurance credit for said reserve requirement.
[0088] Viewed alternatively, there can be a computer-readable media
tangibly embodying a program of instructions executable by a computer
to control performance of a computer system carrying out the steps
of: calculating an insurance reserve requirement from data; segmenting,
for the reserve requirement, an insured contingency risk from a
corresponding capital requirement to produce components; and processing
data to carry out the reinsurance transaction in which the components
are allocated to different parties, one of the parties from a group
including an insurance risk carrier and a source of an asset for
said capital requirement and the assets for the reserve requirement
are assigned to a reinsurance asset trust to receive reinsurance
credit for said reserve requirement, to carry out managing an insurance
reserve requirement by segmenting risk components in a reinsurance
transaction. The media can comprise at least one of a RAM, a ROM,
a disk, an ASIC, and a PROM.
[0089] From a different perspective, in understanding the robust
nature of the embodiments herein, consider an electronic transmission
apparatus for handling communications to implement a part of insurance
reserve requirement by segmenting risk components in a reinsurance
transaction, the apparatus including: in cooperation with means
for calculating an insurance reserve requirement from data and means
for segmenting, for the reserve requirement, an insured contingency
risk from a corresponding capital requirement to produce components,
in supporting the reinsurance transaction by steps including allocating
the components to different parties, one of the parties from a group
including an insurance risk carrier and a source of an asset for
said capital requirement, and assigning assets for the reserve requirement
to a reinsurance asset trust to receive reinsurance credit for said
reserve requirement, program control means for generating a data
set unique to the reinsurance transaction, and electronic transmission
means for communicating said data set over an Internet network addressed
to another computer.
[0090] From yet another perspective, consider an electronic transmission
apparatus for handling communications to implement a part of insurance
reserve requirement by segmenting risk components in a reinsurance
transaction, the apparatus including means for calculating an insurance
reserve requirement from data and means for segmenting, for the
reserve requirement, an insured contingency risk from a corresponding
capital requirement to produce components, both said means cooperating
to produce a unique data set for the reinsurance transaction, said
reinsurance transaction carried out by steps including allocating
the components to different parties, one of the parties from a group
including an insurance risk carrier and a source of an asset for
said capital requirement, and assigning assets for the reserve requirement
to a reinsurance asset trust to receive reinsurance credit for said
reserve requirement, said apparatus comprising program control means
for sending the data set via electronic transmission means for communicating
said data set over an Internet network addressed to another computer.
[0091] Still another perspective is that of an electronic receiver
apparatus for handling communications to implement a part of insurance
reserve requirement by segmenting risk components in a reinsurance
transaction, the apparatus cooperating with means for calculating
an insurance reserve requirement from data and means for segmenting,
for the reserve requirement, an insured contingency risk from a
corresponding capital requirement to produce components, both said
means interacting to produce a unique data set for the reinsurance
transaction, said reinsurance transaction carried out by steps including
allocating the components to different parties, one of the parties
from a group including an insurance risk carrier and a source of
an asset for said capital requirement, and assigning assets for
the reserve requirement to a reinsurance asset trust to receive
reinsurance credit for said reserve requirement, said apparatus
comprising program control means for receiving the data set via
electronic transmission means for communicating said data set over
an Internet network.
[0092] In sum, appreciation is requested for the robust range of
possibilities flowing from the core teaching herein. More broadly,
however, the terms and expressions which have been employed herein
are used as terms of teaching and not of limitation, and there is
no intention, in the use of such terms and expressions, of excluding
equivalents of the features shown and described, or portions thereof,
it being recognized that various modifications are possible within
the scope of the embodiments contemplated and suggested herein.
Further, various embodiments are as described and suggested herein.
Although the disclosure herein has been described with reference
to specific embodiments, the disclosures are intended to be illustrative
and are not intended to be limiting. Various modifications and applications
may occur to those skilled in the art without departing from the
true spirit and scope defined in the appended claims.
[0093] Thus, although only a few exemplary embodiments have been
described in detail above, those skilled in the art will readily
appreciate that many modifications are possible in the exemplary
embodiments without materially departing from the novel teachings
and advantages herein. Accordingly, all such modifications are intended
to be included within the scope defined by claims. In the claims,
means-plus-function claims are intended to cover the structures
described herein as performing the recited function and not only
structural equivalents, but also equivalent structures. Thus, although
a nail and a screw may not be structural equivalents in that a nail
employs a cylindrical surface to secure wooden parts together, whereas
a screw employs a helical surface, in the environment fastening
wooden parts, a nail and a screw may be equivalent structures.
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