| 摘要 |
Disclosed herein is a system and method for eliminating or transferring the non-economic risk of financial securities. The system and method serves to avoid non-economic losses in the first instance, and to counter the adverse capital impact of prior non-economic gap losses by providing capital relief consistent with a determined protected amount. A second party provides to a first party a policy covering potential losses in value for a fixed income securities (FIS) Portfolio, particularly losses between an upper attachment value and a lower exit value. The second party provides capital to the first party as a policy security in the event that the aggregate principle payments (APP) of the FIS Portfolio are less than the attachment value and the first party makes a claim under the policy. The first party pledges policyholder security for its future obligation to return all or a portion of the policy security should no claims arise under the policy or if the policy security exceeds the amount sought by any claims. The policyholder security may be the FIS Portfolio or other agreed upon assets, or some combination thereof.
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