Apparatus for insuring futures contracts against catastrophic loss

• US 5,202,827 A
• Filed: 05/10/1990
• Issued: 04/13/1993
• Est. Priority Date: 05/10/1990
• Status: Expired due to Fees

• Current Assignee: Michael S. Sober
• Original Assignee: Michael S. Sober
• Inventors: Sober, Michael S.
• Primary Examiner(s): Envall, Jr., Roy N.
• Assistant Examiner(s): Hazard, Jennifer L.
• Application Number:
  US07/521,531
• Time in Patent Office: 1,069 Days
• Field of Search: 364/401, 364/408, 364/406, 434/107
• US Class Current: 705/36.00R
• CPC Class Codes: G06Q 40/06 Asset management; Financial planning or analysis
• CPC Class Codes: G06Q 40/08 Insurance

Abstract

Point-of-sale stations serve as data entry points for customer transactions including various data for insurance unit purchases and renewals, unit cancellations resulting from investor- or broker- initiated sales of insured futures contracts, and insurance-activated sales when the price of the futures contract has declined below the insurance activation price. A central office computer receives, tests and processes the customer transaction data from the multiple point-of-sale stations. The central system provides information concerning the number and type of futures contracts currently insured, as well as how the current investment portfolio matches the current projection of possible loss claims against the insurance plan. By comparing the current price with the purchase price of the futures contract, it is determined when the insured'"'"'s loss has exceeded the insurance activation price, at which time the futures position is to be sold by the broker. The central system provides periodic reports concerning insurance transactions.

Claims

1. A data processing system for administering an insurance program to insure against uncertainty of a futures contract price, the data processing system comprising:

data communications means for remotely entering customer transaction data relating to a futures contract sales transaction into a central processor of the data processing system;

the futures contract sale transaction being a particular one of a group of futures contract sale transactions consisting of customer-initiated sale, broker-initiated sale, and insurance-activated sale;

the customer transaction data including (i) identification of the futures contract, (ii) customer identification, (iii) transaction type identification, the transaction being one of a group of transaction types consisting of insurance unit purchase, insurance unit renewal, and futures contract sale, and (iv) a futures contract purchase price;

means responsive to receipt by the central processor of the customer transaction data including data concerning the insurance-activated ale, for determining portions of a loss resulting from the insurance-activated sale which are to be (i) borne entirely by the customer, (ii) shared by at least one predetermined ratio by the customer and an insurer, and (iii) borne entirely by the insurer;

means for receiving and storing the customer transaction data in the central processor;

means for determining an insurance activation price based upon the futures contract purchase price stored in the central processor;

means for receiving real-time data concerning a current price of the futures contract;

means for comparing the current price of the futures contract with the insurance activation for the futures contract; and

means for transmitting an order to the data communication means to sell the futures contract upon decline of the current futures contract price below the insurance activation price.