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Potts opinion: Difference between revisions
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{{A|cdd|}}In the primordial times of {{cderiv}} — the Children of the Forest, the First Men and so on — wise people from [[J.P. Morgan|JP Morgan]] and {{icds}} worried that a [[credit derivative]] might be able to be characterised as an [[insurance contract]]. Bad for many reasons, not least of which that offering insurance is regulated business, requiring compliance with capital rules and so on. | {{A|cdd|}}In the primordial times of {{cderiv}} — the Children of the Forest, the First Men and so on — wise people from [[J.P. Morgan|JP Morgan]] and {{icds}} worried that a [[credit derivative]] might be able to be characterised as an [[insurance contract]]. Bad for many reasons, not least of which that offering insurance is regulated business, requiring compliance with capital rules and so on. | ||
The [[First Men]] did what prudent pioneers of financial products do, and sought wise counsel. In this case, a Mr Robin Potts QC, who in 1997 opined that a credit derivative should not be characterised as an insurance contract, because as it is generally structured to pay out upon a {{cddprov|Credit Event}} occuring to the {{cddprov|Reference Entity}} whether or not the buyer is exposed to the {{cddprov|Reference Entity}} or otherwise suffers any loss. | The [[First Men]] did what prudent pioneers of financial products do, and sought wise counsel. In this case, a Mr [[Robin Potts QC]], who in 1997 opined that a credit derivative should not be characterised as an insurance contract, because as it is generally structured to pay out upon a {{cddprov|Credit Event}} occuring to the {{cddprov|Reference Entity}} whether or not the buyer is exposed to the {{cddprov|Reference Entity}} or otherwise suffers any loss. | ||
At common law an insurance policy is “a contract to indemnify the insured in respect of some interest which {{sex|he}} has against the perils which {{sex|he}} contemplates it will be liable to.” | At common law an insurance policy is “a contract to indemnify the insured in respect of some interest which {{sex|he}} has against the perils which {{sex|he}} contemplates it will be liable to.” | ||