Why does the sponsor self-insure the delivery?
To the best of our knowledge, none of the common carriers will offer to insure the delivery of money. (They think delivering paper money is more dangerous than using your credit card, where people can steal your identity. We disagree. With cash, all you lose is the cash.) We asked the major common carriers, and they said, “No, we will not insure the delivery of money.” So, we started to think about self-insuring. As a former underwriter for CNA Insurance (a long time ago), one of us noted that spread on insurance (between the premiums paid versus the claims paid), can range from 50% to 90%. As such, another way to control the cost, of issuing the private currency over time, was to control the insurance premiums. This being the case, we expanded our real financial industry to include insurance for the delivery of our product.
