What are the main contract features of an IFEX ELF?

This is a Summary:

For fuller details of all the relevant terms and conditions, please visit 'Contract Details'.

1.  The Contract Risk Period;
     The Contract Risk Period covers the calendar year of the contract year.

     - January 1 – Dec 31, 2010 for the 2010 contract; 
     - and January 1 to Dec 31, 2011 for the 2011 contract.

     - The insured loss estimating process (for events that occur during a Contract Risk Period) may extend
       beyond the contract year-end.

2.  The Territories Covered (select from);

     US Wind Territories and Possessions (US T & P).
     Insured losses in all 50 states (inc. Alaska and Hawaii), Puerto Rico, US Virgin Islands, Washington DC.

     Florida Wind
     Insured losses in the state of Florida.

     US Gulf Coast Wind
     Insured losses in the states of Alabama, Mississippi, Louisiana and Texas.

     US Eastern Seaboard Wind 
     Insured losses in the seaboard states, Georgia to Maine.

     US North East
     Insured losses in the seaboard states, Virginia to Maine.

3.  Loss Trigger Levels (LTL):

     You select from;

     $10bn, $15bn, $20bn, $25bn, $30bn, $40bn, $50bn, $60bn, $75bn and $100bn.

     When a loss exceeding these levels by an appropriate margin has been declared by Property Claims
     Services a contract  is settled.

     The chosen LTL might be on a First, Second, Third or Fourth Event basis.

     The event structure follows the practice of the reinsurance market.

     For example;

     If a hurricane exceeding $10Bn (see below) occurred,  that would trigger a $10bn First Event claim.

     If a second hurricane exceeding $20bn (see below) then occurred, that would trigger a First Event
    $20bn claim and a Second Event $10bn claim.

4.  Nominal Contract Value;

     This is expressed in ‘lots’, each of $10,000.

     So to purchase (or sell) $1M cover one would buy (or sell) 100 lots.

5.  The IFEX ELF Price;

     Unlike traditional reinsurance, the buyer does not pay an initial premium. Instead, an IFEX ELF is an
     exchange traded futures contract.

6.  Summary

     A typical contract will be expressed as ‘Florida Wind $20bn First Event 2010’.

     In this example; a claim would be payable if a hurricane struck Florida incurring a declared industry
     loss equal to or in excess of $20bn and it was the first hurricane to occur of this magnitude during the
     contract year comprising January 1 2010 and December 31 2010.

     Note that because an ELF is a futures contract,  one can buy cover for the current year and for any
     listed future year.