Risk transfer / Prm explained
Brynes Capital

The development of the proprietary Premium Reserve Management (PRM) System was specifically engineered to transfer Extended Longevity Risk away from the investor to create a known Yield-to-Maturity (YTM).

The PRM is not a guarantee but a mechanism to assure that proper asset management and premium administration best practices are in place to protect the investor from premium call liability.

The Extended Longevity Risk Pricing Model employs three hedging mechanisms:

1. Initial Premium Reserves are funded at subscription by an amount equal to life expectancy plus two years (LE+2)

2. Premium Reserves are cash managed to create additional yield to extend premium paying ability

3. In the event of an early policy maturity (prior to LE+2) in any managed portfolio, all surplus premium remaining at maturity is retained and cash managed to further extend the premium paying ability on any policy under management that remains in-force and premium paying.

The PRM System is designed to mitigate the risk of extended longevity to any single investor by applying these hedges to all premium reserves under management in all portfolios to spread the risk across more policies and benefit all investors.

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