X-Message-Number: 1225
Date: Wed, 23 Sep 92 12:57:03 EDT
From:  (Perry E. Metzger)
Subject: CRYONICS: the future structure of Alcor

Keith writes:

>Thomas Donaldson writes: 

>>If Alcor could be structured as an insurance company, some of 
>>these issues would go away: we could meaningfully charge much 
>>more for those who join late. That has proven hard to do for any 
>>present cryonics society. 

>The main problem here is the 2 million dollar capital requirement 
>for starting a California insurance company.  However, the case 
>is *so* strong that Alcor should be (or own) an insurance company 
>that I believe this is only a matter of time.  This is one case 
>where I think some significant fraction of the patient care fund 
>should be invested i.e., as capital in a captive insurance 
>company.  If we only provide insurance to suspension members for 
>the purpose of their suspension funding (and charge actuarial 
>based rates) this is a "can't lose" business for the patient care 
>fund to be in.  (I.e., when a member goes into suspension, we 
>take money out of one pocket and put it in another.) 

I would disagree that we should be handling insurance ourselves. I
think that this is best left to professional insurance companies.

Indeed, I would further argue that cryonics in the long run should
move to unbundle all services. I think that in the long run we would
be best served by competitive suspension, storage, and trust
companies. One would go to a cryonics broker who for a small fee would
help one select an insurance company to pay for ones suspension (say,
Northwest Mutual), a trust company to hold and manage one's money
post-suspension and otherwise defend one's rights while on ice (like
Morgan Guarantee or Union Bank of Switzerland, probably via an
intermediate dummy corporation in a jurisdiction without a rule
against perpetuities, as per Saul Kent's Reanimation Foundation), a
suspension vendor (say, a company owned by Mike Darwin or one of his
competitors), and a company to manage one's body in suspension (say,
some company in Iowa with a huge dewar farm in an earthquake and bomb
proof facility, and a small round the clock staff to handle the 10,000
patients there.) When technology advances enough your trust company
could select a revival and rehabilitation clinic, as per your
instructions.

You may ask, why bother. The answer is that the more I think about it,
the more I want my money managed by the trust department at a good
swiss bank, and the less I want it handled by the board of a
non-profit corporation, who's motives may be good, but who's members
must be selected for too wide a variety of skills.  Trust companies
are USED to the idea of managing large trust funds and cutting checks
every four weeks -- many have been doing it for centuries. They have
track records you can check that go back into the mists of time. They
are also likely oblivious to what the money is being used for; they
deal with much stranger trusts than the ones we would set up.
Unbundling all services would allow people to pick whomever seemed
like the best guys at the time. If you decide you don't like UBS, you
can go to Credit Suisse. If you don't like Darwin's stabilization and
suspension company, you can go to someone else, even long after you've
signed yourself up. Indeed, if you structure things right, if the
annual inspection you've provided for in your trust documents whos the
trustees of your suspension that your storage company looks like it is
degenerating your trustees could have you moved.

Everyone could go for what makes them individually most comfortable.
There would be no need for people to trust a single organization for
all services, there would be no bundling issues to worry about, and
there would be the capacity to use companies of known merit in
financial managment wherever possible.

I agree that much of this is currently impractical -- however, I
suggest that we should seriously consider whether, in the long run, we
would want to move towards more centralization and dependance on one
organization, which is what the "have Alcor handle its own insurance"
paradigm would hold us to, and the "have everything become unbundled
and decentralized" paradigm. Since neither of these alternatives is
likely to come up within the next year or two, we have a long while to
discuss the possibilities and come up with the best idea.

Perry

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