What is the purpose of HuRLOs™?
To provide a cost-efficient and simple way for people to hedge against or to speculate on the risk that a selected coastal county or region will be the first hit by a hurricane. The counties and regions cover the Gulf of Mexico and East Coasts of the U.S. between the Mexican and Canadian borders. Each HuRLO™ is priced by the dynamic interaction of trading decisions of all market participants and historical hurricane risk data that is built into the trading platform. Market participants may buy HuRLOs™ at any time without having to find another market participant who wants to sell at a particular price. The premiums collected from HuRLO™ purchases are aggregated into a mutualized risk pool to be allocated among holders of the HuRLO™ for the county or region where a hurricane makes first landfall, or holders of the No Landfall HuRLO™ if no hurricane makes landfall in the calendar year. Weather Risk Solutions, LLC (“WRS”) determines under a transparent methodology whether a hurricane made
