Insurance Validator
How scheduled payments become protocol records and covered shortfalls become claims.
Responsibility
In the dashboard, the insurance role has a Policies tab and a Compensation tab. An Insurance Validator (IV) underwrites specified asset obligations. It does this through policies, each with defined coverage, an expiry, and a beneficiary. The IV must keep enough capital and an operational process to meet covered claims.
Insurance capital and protocol stake do different jobs. The IV pays claims from its business capital. Its ASSET stake makes failures costly. A posted stake balance does not prove that the IV can pay every insured loss.
The payment schedule anchors the obligation
An asset's schedule records amounts and due times. The settlement interface shows whether each payment is missed or resolved. Insurance and scoring both use these records, so each integration must give them the same meaning.
A partial payment does not resolve a full obligation. A payment is resolved only when the recorded total paid reaches the amount due.
How payments are recorded
The T-REX settlement adapter can resolve a payment in two ways.
Reporter attestation. An authorized settlement reporter records payment attestations. Each record includes a payment reference and an evidence commitment. Only the reporter can record an attestation. Other callers can trigger timer-based missed-payment marking and open eligible claims. An attestation does not move fiat or stablecoins. So a payment recorded this way is only as reliable as the reporter and its evidence process. It is not independent proof of a bank transfer.
Funded distribution. A payout contract (ClaimDistributor) holds a payment token in escrow. Activation marks the payment or the claim as paid in the settlement records, without the reporter:
- For a scheduled payment, the Tokenization Validator prepares and activates the payout, and the issuer funds it. Investors then claim their share.
- For an insurance claim, the IV prepares, funds, and activates the compensation. See Pay compensation.
On Real Testnet, payouts are switched on, and the payment token is Mock USD, a test-only token.
Governance approves the issuer wallet of each asset token through the timelock. On Real Testnet, the timelock delay is one hour. Until governance approves the issuer, the TV cannot lock the asset's record dates. Only the approved issuer wallet can fund the asset's scheduled payments.
When the TV locks an asset's record dates, the asset moves to funded distribution for all of its payments and claims. From then on, the reporter cannot record attestations for that asset. If the TV activates a scheduled payment after its due time, the settlement records show the payment as missed at the due time, and then as resolved.
From a shortfall to a claim
An IV binds a policy to an asset with specified coverage, expiry, and a beneficiary. When a covered scheduled payment is missed, the protocol derives claim eligibility and size from the policy and settlement records.
Governance can change the settlement-reporter address through the timelock, a control that runs governance changes after a delay. The reporter's evidence and operational controls matter because scoring and insurance use its records. A keeper (a service that submits routine transactions) can trigger eligible time-based processing. A keeper cannot replace a missing payment attestation with independent proof of payment.
Coverage has limits. The adapter counts the remaining shortfall and the available policy coverage. It does not let every overlapping policy claim the whole loss. When several policies cover a payment, the order in which claims open can decide which policy's coverage is used first.
The tokenization adapter treats the policy beneficiary as a trustee or special-purpose entity that represents holders. It does not automatically divide the claim among all current token holders.
Pay compensation
Compensation through the payout contract is available only for an asset that uses funded distribution.
Open a claim
On the Compensation tab, select Open a claim for a covered shortfall. The panel takes you through Record missed payment, Open claim, and Register obligation. The claim then shows in the table. Do the next steps for each claim in the table.
Prepare the entitlement
Select Prepare entitlement. This records the payment to the policy's named beneficiary.
Approve the amount
Select Approve amount. This lets the payout contract take the payment token from your wallet.
Fund the compensation
Select Fund compensation. Before activation, you can take the funds back with Withdraw funding. You can remove an unfunded preparation with Discard preparation.
Activate the compensation
Select Activate compensation. The beneficiary can then claim the payment on Income in the investor portal, under Insurance.
Record the on-time payment
Select Record on-time payment to record an on-time fulfillment with the protocol.
An activated compensation payment cannot be changed or withdrawn.
Payout and enforcement
The IV must fund the claim from its operating capital. When the full payment is recorded, by the reporter or by an activated compensation payment, the claim is resolved. Late resolution and continued non-payment lead to different penalty paths.
A penalty against stake and payment of the insurance claim are separate events. A slash (a penalty that takes collateral) does not by itself show that the beneficiary has received compensation.
Recovery has its own limits
The protocol includes interfaces for the Disaster Recovery Fund (DRF) and NDT recovery claims. Through these interfaces, enforcement and wind-down can record recovery obligations and route proceeds.
These components are reference implementations. They do not guarantee funding or redemption. For each instrument, confirm the coverage, beneficiary rights, available recovery funds, and distribution arrangements.
Prepare insurance operations
Follow Become a Business Validator for admission and role preparation. Plan for insurance book transfer and wind-down before accepting long-lived policies.