Claims Assessment

Claim Submission
The first step in the claims process is for a member to submit a claim, to do this the member must stake a deposit in the form of NXM tokens which comes from the 10% of NXM tokens that were locked when purchasing cover. The required deposit is 5% of NXM tokens, which means a member can submit a claim for assessment twice. If the claim is accepted the deposit is returned, otherwise it is burned.
Claims Assessor Voting
Claims Assessors must stake value, in the form of member tokens, before they are allowed to assess claims. Any NXM token holder can become a Claims Assessor. Assessing claims in line with the consensus outcome earns Claims Assessors additional NXM tokens, while voting against the consensus outcome results in the assessor’s tokens being staked for a longer period. 
To ensure fraudulent voting is prevented, a Claims Assessor's stake can be burned by the Advisory Board. Burning tokens is a judgement call made by the Advisory Board, it is not automated based on voting results. For more details see the Governance section.

To become a Claims Assessor for the first time, any amount of NXM can be staked for the initial staking period. When voting on a claim the stake period is extended by the staking extension period (7 days). Should the assessor vote with the consensus outcome, this extension period is removed; should they vote against the consensus outcome, it remains in force. 
When submitted, a claim first goes to the Claims Assessor group for voting. When voting on a claim a Claims Assessor's entire stake is applied to that claim as the voting weight. This is used to determine the voting outcome as well as determine the proportionate share of Fee Pool rewards.
The voting period lasts for a minimum of 36 hours. After this point the vote automatically ends on the earliest of either when:
voting stakes of greater than 10x the cover amount have voted; or
72 hours have passed.
The stake weighted voting outcome then determines the claim result. A claim is escalated to a full member vote if either:
Voting consensus is below 70%; or
Voting weight is less than 5x the Cover Amount.
Member Voting
If the claim proceeds to a full member vote then all members, regardless of whether they have staked NXM for Claims Assessment or not, can participate in the vote. To do so they lock all their NXM for 2 days and in return earn a share of the Fee Pool. Tokens locked in this way cannot be redeemed or transferred to other members but can still be used for other actions within the mutual (similarly to the Governance lock-in period).
As per the Claims Assessment vote, the voting period lasts for a minimum of 36 hours and ends when either the total voting stake reaches 10x the Cover Amount have or 72 hours have passed, whichever occurs first. A simple majority outcome is used to determine the claims outcome. Should the minimum 5x voting weight not be achieved in the member vote, the claims outcome is then determined by the earlier Claims Assessor vote using a simple majority basis.
In addition, a Claims Assessor cannot vote on more than one claim every 6 hours: this is known as the Velocity Period.
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Claims Assessment Parameters
Parameter
Value
Initial Stake Period
30 days
Minimum Voting Threshold
5x Cover Amount
Maximum Voting Threshold
10x Cover Amount
Minimum Vote Period
36 Hours
Maximum Vote Period
72 Hours
Claims Assessor Velocity Period
6 Hours
Fee Pool
20% of the Cover Price
Cover Holder Deposit
5% of Cover Price in NXM Tokens
Stake Extension Period (Claims Assessors)
7 days
Member Vote Lock Period
2 days
Flow Chart for Claims Assessment
Full voting flow for Claims Assessment
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Claims Assessment Incentives and Punishments
Outcome
Claim
Cover Deposit
Claims Assessor Rewards
Member Rewards
A1
Pay
Release
Incentive: Share of Fee Pool
Punishment: 7 day stake 
extension enforced.
N/A
D1
Deny
Burn
Incentive: Share of Fee Pool
Punishment: 7 day stake
extension enforced.
N/A
A2
Pay
Release
No incentive or punishment
Incentive: Share of Fee Pool
Punishment: None
D2
Deny
Burn
No incentive or punishment
Incentive: Share of Fee Pool
Punishment: None
A3
Pay
Release
No incentive or punishment
No incentive or punishment
D3
Deny
Burn
No incentive or punishment
No incentive or punishment
Claims Resolution
Once a claim decision has been finalised, if the claim has been approved then the Cover Amount is paid to the Cover Holder's address, cover is ceased and the deposit is released.
Should there be insufficient funds in the liquidity pool then claim payment is attempted again in 24 hours. This process continues for 60 days, after which it is assumed there will never be sufficient funds and the claim is not attempted again.
Should the claim be declined, cover remains active and the Cover Deposit used to submit the claim is burned.
Claims Assessor (or Member) rewards are also distributed at this point. As with other rewards, NXM are not automatically allocated to the Member Address (primarily due to gas considerations). NXM rewards shall be minted and sit in a pool from which the member can subsequently withdraw their rewards. This allows members to wait and claim several rewards at once in order to reduce gas costs.

Risk Assessment

Governance

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Claim Submission

Claims Assessor Voting

Member Voting