Patent ID: 8452620

Claim:
A method, performed by a computer system, for determining a parametric index value for a parametric Directors' & Officers' insurance policy issued by a policy provider to a policy holder, the method comprising: accessing from a policy database by the computer system a plurality of parameters for the parametric Directors' & Officers' insurance policy, the plurality of parameters including a reference period; selecting by the computer system from at least one information source a plurality of filed litigation cases filed against one or more corporate defendants for which there is a potential future financial exposure to the policy holder based on the plurality of parameters for the parametric Directors' & Officers' insurance policy; allocating by the computer system each of the selected cases to the reference period associated with the parametric index, and storing the allocated cases to an index database; filtering by the computer system the selected cases in the index database with respect to one or more categorical characteristics of the cases, the categorical characteristics specified in the parameters; dynamically determining by the computer system for each of the filtered cases the potential future financial exposure to the policy holder based upon a change in a market capitalization of each defendant during the reference period and storing the determined potential future financial exposures in an exposure database; accessing by the computer system the exposure database and determining from the potential future financial exposures of the filtered cases, a value of the parametric index, where the value of the parametric index is not fixed and predetermined, and storing the parametric index; and determining by the computer system, based on the parametric index value, amounts of one or more payments due from the policy provider to the policy holder.