# kaal:claim:3396542-025

**Claim.** Aggregate capital under the DAO structure is lower than under a traditional corporate insurer only if the incremental risk that contingent underwriting liabilities add to agents' private portfolios is small enough; the reduction is conditional, not automatic.

**Type.** condition  **Support.** argued

**Holds when.**

- all policies and agents identical
- agent payouts independent and identically distributed and uncorrelated with private portfolios

**Source quote.**

> Thus, to reiterate the main point, if the incremental risk to the private portfolios of the agents from the contingent liabilities is small enough, the sum of the individual amounts of capital the DAO agents will hold will be less than the capital requirement for a traditional corporate entity.

**From.** Craig Calcaterra, Wulf A. Kaal, Vadhindran K. Rao, *Decentralized Underwriting* (2019), V. MODEL, 4. Capital Requirements, page 23

**Cite as.** Craig Calcaterra, Wulf A. Kaal, Vadhindran K. Rao, Decentralized Underwriting (2019). SSRN: https://ssrn.com/abstract=3396542

**Verify.** sha256 of source PDF `ce2bda03a0b788ea3e7747f02c3c351ef7c808a41150d5cda34767bbe98800c0` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Calcaterra%20et%20al.%20-%202019%20-%20Decentralized%20Underwriting.pdf

**Topics.** systemic-risk, risk-and-incentives

**Keywords.** capital-requirements, diversification, risk-aggregation, capital-regulation

**Canonical form.** This markdown file is the canonical hashed representation of the claim. Its sha256 is the content hash used for attestation.