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Here is the scenario:

Let's say you are an insurance company and you pool premiums from policyholders in pools of different risk (low, medium, high). Now you want to propose to other people to stake money in order to earn interest. People would choose what type of risk they are willing to take. If there is money left in the pool at the end of the year/term, these investors who staked their money would receive a cut from the pool. Basically, these "investors" would serve as a reinsurer for these pools of premium.

Is that legally possible?

thank you!

  • I guess this is kind of like a CDO – Cyzanfar Dec 24 '18 at 20:15
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    That sounds like a variation of a collateralized debt obligation (CDO). It's legally possible if the regulatory agencies say it's legal. LOL, your post beat me by 3 seconds. – Bob Baerker Dec 24 '18 at 20:15
  • thanks a lot. Is there a limit on investment? like if you have a hard cap on the amount of money you can stake, maybe regulations are more lenient for small investments. Haha just saw that :) – Cyzanfar Dec 24 '18 at 20:17
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Here is a link to one example of insurance-linked-securities:

https://www.swissre.com/investors/investors-ILS.html

.

  • That's great! I was looking for the exact terminology: "insurance-linked-securities" describes exactly that. thanks you – Cyzanfar Dec 24 '18 at 20:39
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    good answers don't just contain links. They quote from the link, so that if the link rots the answer can still be usable. – mhoran_psprep Dec 24 '18 at 20:47
  • The post could contain "Insurance-Linked Securities", including the use of the quotation marks, and that would quote the webpage. – S Spring Dec 26 '18 at 17:00

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