Patent ID: 8160903

Claim:
A system for determining a premium for an insurance policy for insuring a security against a change in value of a security comprising a computer system configured to have entered information related to a security to be insured by the insurance policy and an insured amount of the security to be insured by the insurance policy, the computer system configured to calculate an insurance risk premium based upon a security to be insured and an insured amount of the security to be insured by the insurance policy with the insurance risk premium being determined by use of an options pricing formula having an input being the insured amount of the security to be insured by the insurance policy, determining by the computer system whether the insurance risk premium is adequate, calculating by the computer system a risk margin when the insurance risk premium is determined to be inadequate, combining by the computer system the insurance risk premium and the risk margin to determine a net single premium, calculating by the computer system an expense and profit load similar to an expense associated with buying and selling an option, and combining by the computer system the net single premium and the expense and profit load to determine a total gross premium for the insurance policy.