Liquid insurance contracts

Abstract

A liquid insurance contract (LIC) comprises a security which is traded or tradable and which has cash flows to the issuer based upon a liability whose exact value is unknown at the time of issuance. A method for creating and trading these LICs, as well as other financial products derived from LICs, may include any of the following steps: writing at least one LIC; preparing regulatory filings for at least two LICs; issuing the two LICs; preparing regulatory filings for a financial product which includes at least one detachable LIC provision; issuing the financial product; creating at least one underwriter as a closed end fund owned by a parent company; placing ownership of at least a portion of an issue of the financial product in an underwriter owned by a parent company; spinning off the underwriter from the parent company using at least one stock dividend; trading shares of the underwriter; reporting information on trades and positions of the underwriter; and valuing the underwriter using analytic modeling, sensitivity testing, portfolio analysis, and/or investment analysis.

1 - 15 . (canceled) 
     
     
         16 . An insurance underwriting system, comprising:
 an underwriter trading a liquid insurance contract on an exchange;   a first information system connecting to the underwriter;   a record of contractual commitments of the underwriter;   a record of assets of the underwriter;   a second information system connecting to a liquid insurance contract database; and   a third information system connecting to a fourth party.   
     
     
         17 . The system of  claim 16 , wherein the fourth party comprises a surety guarantor. 
     
     
         18 . The system of  claim 16 , wherein the first information system comprises a human interface device. 
     
     
         19 . The system of  claim 16 , wherein the liquid insurance contract database includes a record of a related financial product. 
     
     
         20 . The system of  claim 16 , wherein the liquid insurance contract database includes a record of a non-insurance contract. 
     
     
         21 . The system of  claim 16 , wherein the record of contract commitments are maintained in a first database. 
     
     
         22 . The system of  claim 21 , wherein the third information system connecting to the fourth party moves information to the first database. 
     
     
         23 . The system of  claim 21 , wherein the system connecting to a fourth party computes using information from the first database. 
     
     
         24 . The system of  claim 16 , wherein the fourth party comprises an exchange listing the underwriter's shares. 
     
     
         25 . The system of  claim 16 , wherein the underwriter comprises a publicly traded company. 
     
     
         26 . The system of  claim 16 , wherein the fourth party comprises an investor in the underwriter. 
     
     
         27 . An insurance underwriting system, comprising:
 a first exchange providing for trading of a liquid insurance contract;   an underwriter trading the liquid insurance contract; and   an information conduit providing data on the trading of the liquid insurance contract.   
     
     
         28 . The system of  claim 27 , wherein the underwriter comprises a limited liability entity. 
     
     
         29 . The system of  claim 27 , further comprising:
 a second exchange providing for trading of shares of the underwriter.   
     
     
         30 . The system of  claim 29 , wherein the shares of the underwriter impose no liability on an owner for obligations of the underwriter pursuant to the liquid insurance contract. 
     
     
         31 . The system of  claim 29 , wherein the second exchange comprises an online exchange. 
     
     
         32 . The system of  claim 29 , wherein:
 the first exchange provides for trading of the liquid insurance contract by a plurality of underwriters only; and   the second exchange provides for trading of the shares of the plurality of underwriters.   
     
     
         33 . The system of  claim 29 , further comprising a third exchange providing for trading of assets held by the underwriter. 
     
     
         34 . The system of  claim 29 , further comprising:
 an information system that connects the underwriter to the second exchange.   
     
     
         35 . The system of  claim 29 , further comprising:
 a human interface device connected to a computer network used to communicate information regarding trading on the second exchange to an owner of shares of the underwriter.   
     
     
         36 . The system of  claim 27 , further comprising:
 a surety guaranteeing obligations of the liquid insurance contract.   
     
     
         37 . The system of  claim 36 , wherein the surety provides a performance bond. 
     
     
         38 . The system of  claim 36 , wherein the surety provides a financial guarantee. 
     
     
         39 . The system of  claim 27 , further comprising:
 a surety guaranteeing obligations of the underwriter.   
     
     
         40 . The system of  claim 27 , wherein the liquid insurance contract includes no portion of a surety guarantee. 
     
     
         41 . The system of  claim 27 , wherein the liquid insurance contract specifies obligations of an originating party in the U.S. 
     
     
         42 . The system of  claim 27 , wherein the first exchange comprises an online exchange. 
     
     
         43 . An insurance underwriting system, comprising:
 a first exchange providing for trading of a liquid insurance contract by a plurality of underwriters only; and   a second exchange providing for trading of shares of the plurality of underwriters.   
     
     
         44 . The system of  claim 43 , wherein each underwriter comprises a limited liability entity. 
     
     
         45 . The system of  claim 43 , wherein the second exchange imposes no liability for obligations of the underwriters pursuant to the liquid insurance contract. 
     
     
         46 . The system of  claim 43 , further comprising:
 a surety guaranteeing obligations of the liquid insurance contract.   
     
     
         47 . The system of  claim 43 , further comprising:
 a surety guaranteeing obligations of at least one of the plurality of underwriters.   
     
     
         48 . The system of  claim 43 , wherein the second exchange comprises a government regulated stock exchange. 
     
     
         49 . The system of  claim 43 , wherein the liquid insurance contract specifies obligations of an originating party in the U.S. 
     
     
         50 . The system of  claim 43 , wherein the first exchange comprises a first online exchange. 
     
     
         51 . The system of  claim 43 , wherein the second exchange comprises a second online exchange. 
     
     
         52 . The system of  claim 43 , further comprising:
 a third exchange providing for trading of assets held by at least one of the plurality of underwriters.   
     
     
         53 . The system of  claim 43 , further comprising:
 information conduits used by the plurality of underwriters to communicate information regarding trading on the first exchange.   
     
     
         54 . The system of  claim 43 , further comprising:
 an information system that connects at least one of the underwriters to the second exchange.   
     
     
         55 . The system of  claim 43 , further comprising:
 a human interface device connected to computer network used to communicate information regarding trading on the first exchange.