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In the past we already went through some of the following questions, I believe it is useful to take a look again at.
Q. Is The Rock Insurance comparable to a RL Insurance company?
A. Absolutely not. This is SL not RL. It is a Game (like all the exchanges are claiming so). We try hard to make it a “Fair Game” but, like any other game it would be difficult if not impossible to exist in RL.
Q. How do you maintain your security cash reserves?
A. We maintain our not invested cash reserves on a “confidential avatar” which its existence has been disclose to Linden Lab. We do not release the name of the avatar for security purposes. Also, because we may decide to pay via paypal amounts above 50k lindens, we maintain cash with paypal.
Q. How much cash reserves do you maintain?
A. Enough to cover at least the biggest failure we may have in a single month. Most of the time much more but we guarantee the biggest one.
Q. What happen in case of a catastrophic event (all or most of the companies goes in bankruptcy at once)?
A. Such an event could be possible if LL is going to ban exchanges. Maybe some companies will go private and honor their commitments with shareholders but, we believe, most of them will disappear.
In this unfortunate case, of course we would have a problem as well. If our cash reserves will allow we will honor all outstanding certificates. Otherwise we will distribute proportionally our reserves and closing down.
Q. What do you mean for Bankruptcy?
A. We declare bankruptcy when we feel there is no way for the shareholders to recover any amount.
Normally, we have different warnings. If there is a “small” problem with a listed company we alt new certificates issues. If there is a major problem, we keep the alt for a longer time. If the company disappears, shows no activity, management unreachable etc. we place the company in DEFAULT and start an investigation process which could take up to 30 days. At the end of the research if no positive results are achieved, we will declared bankrupt for that company and pay certificates.
Please note that certificates have expiration. When we alt a company, expiration is frozen and certificate maintains validity.
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