Why Does NatLUST Use a “Two Payment” Financing Model?
If we were to purchase claims using a single payment model, we would still have to set the Initial Payment percentage at a rate sufficiently low to cover the expected accrued carrying costs, plus a ssafety margin sufficient to satisfy our credit providers.This would in all likelihood result in NatLUST making a windfall profit off, which would be contrary to our public purpose mission. Instead, NatLUST believes that the less costly method for our participants is to set a conservative Initial Payment %, then remit a second and final payment after the claim is reimbursed.
