Our Insurance-Linked Capitalization Arbitrage Program (iCAP), provides international and domestic project/venture funding through our proprietary system of capital arbitrage and structured finance of institutional notes and bonds.

A significant arbitrage is created between cash-backed Investment Grade Medium Term Notes (MTN) from Institutional Investors which are partially invested in a Reinsured Insurance-Linked Longevity Asset Fund as the underlying collateral for our Structured Note or Bond having a face value of up to One Billion US Dollars ($1,000,000,000 USD) with a term of ten (10) years from the date of issue and bearing an interest rate of the current going rate at the time of issue.  An Indentured Trust is set-up and funded with a certain portion of the MTN funds to insure the payments of minimal baseline interest and associated maintenance cost of the collateral over the term.  The maturity of the collateral Bond in tranches decreases Principal and Interest on our Note, and ensures the return of 100% of the Principal at the end of term.  Allowing for the difference in cost of collateral and fees and costs being deducted from the MTN, the balance is allocated to the project/venture in the form of a ten year “principal only” no interest loan.  We also take a negotiated 10% to 20% Equity position in each project/venture.

The approximate time for the release of funds from project approval to capital distribution is between 90 and 120 days and is virtually guaranteed due to the fact that we pre-approve each client project with our institutional investor sources.

Our firm has well-developed and proven methods for organizing and structuring capital arbitrage finance solutions, including cash-backed collateral instruments and insurance bonds for our institutional investors, and for procurement of full capital funds with favorable terms and rates. For projects/ventures that cannot provide sufficient collateral to secure a commercial loan, a complex and multi-level approach to structuring the transaction makes it possible to successfully receive venture capital funding, without any collateral from the client.  We are recognized by cooperating Institutional Investors as a “Collateral Provider” of “Guaranteed Insurance Contracts” (GIC), allowing us maximum control over management and support for the structured collateral financing process.

Insurance-Linked Securitization Longevity Assets. A longevity asset also known as Senior Life Settlements, is a fast-growing investment-grade asset class that may be one of the best investments and prescriptions for the current volatility in today’s markets. It is an in-force life insurance policy on healthy individuals, purchased at a discount to the policy’s net maturity benefit but at a premium of the policy’s cash surrender value. These longevity-based assets provide financial returns that are guaranteed to be a function of “when” not “if” or “how much”.

Insurance-linked longevity assets are known for low price volatility and a return that is uncorrelated with most traditional, and lately very erratic, markets including equities, credit, commodities and real estate. Longevity assets can provide an investor with a more stable investment that could both reduce their overall risk profile while providing attractive returns, and diversify their investment portfolio in a way that provides securitization of investment, or a hedge against higher risk investments. Historical returns have been shown to be independent of global macroeconomic events such as recessions, capital liquidity events, extreme market volatility and crises of investor confidence away from riskier investments to the safest possible investments, all of which are occurring in today’s global markets. Consider the following:

◙ The current global deterioration in the credit markets has caused an increased interest in alternative investment-grade asset class investments.

◙ Longevity products are a relatively new and growing asset class with participation from mainstream institutional investors, public and private pensions, top-tier investment banks, asset managers, insurance companies, and hedge funds.

◙ When performing actuarial analysis, supporting historical data assumes there is little prospect of identifying a meaningful connection between mortality across the general population and financial risk drivers in the capital markets.*

*Report for the Association of British Insurers on Key Correlation Assumptions in ICA for Life Office, Deloitte and Touche LLP, May 2005.