Lucia Kerri

11
Apr
2021

Blockchain and State Insurance Laws – Features vs. Requirements

Blockchain technology has gained traction as a helpful solution in reducing costs, fraud risks and/or cyber attacks in various financial services sectors. Yet the one sector that has been struggling with blockchain adoption is the insurance industry. Primarily because basic blockchain features, specifically anonymity of participants, do not conform with basic regulatory and legal requirements that tend to vary in certain jurisdictions.

 

Federal and state insurance laws require insurance holders to provide personal data and other information in relation to policy coverage. Yet provision of such information is subject to data and privacy protection laws. While blockchain technology allows anonymity between transacting parties, transactions run on a decentralized system that reduces information failure, which at times, poses an advantage to one party over another. Financial transactions carried in the blockchain ledger are blocks of encrypted pieces of stored information.

An Example of How Automobile Insurance Laws Work

In citing an example of how automobile insurance laws work, reference is made to vehicle insurance requirements in North Carolina. The state is one of several U.S. jurisdictions that require additional insurance protection for uninsured and underinsured third parties. Uninsured or underinsured third parties who suffer from bodily injury, damage to property or death as results of a car accident, can make financial claims from the car insurance provider of the driver at fault.

The Old North State also requires motorists who drive rented/leased vehicles, or drive vehicles that they do not own, to obtain non-owner insurance coverage as financial protection

Moreover, the state does not acknowledge out-of-state insurance policies as acceptable compliance with NC’s insurance laws. Primarily because the state laws require a​ll vehicles registered with North Carolina’s Division of Motor Vehicles (DMV) to purchase continuous liability insurance coverage from a North Carolina-licensed insurance company.

Under the state’s laws, NC’s insurance companies are required to notify the NC-DMV if an owner of a vehicle has canceled his liability insurance policy or has allowed his policy to expire for any reason. The NC-DMV will then send the owner of the vehicle, a notification about the terminated or expired policy, whilst giving the car owner 10 days to respond.

Failure to respond or for that matter, obtain continuous liability coverage will result in the revocation and surrender of the car’s license plate. In addition, the car owner will have to pay civil penalties, late fees and interests.

Apparently, all these denote that transactions related to insurance coverage in the Tar Heel State are for the account of the vehicle owner only. Unlike goods and other financial services that can be transacted anonymously by way of blockchain, insurance policy transactions must point and be confined to the account of a purchaser, and whose identity must be specified for reporting purposes.

Cost of Liability Insurance Policies, a Greater Concern for NC Motorists

The greater concern among owners of vehicles in North Carolina is the cost of liability insurance and not the manner by which they can be bought. NC’s minimum coverage amounts are higher when compared to other states.

That is why many North Carolinians prefer to lease rather than own a car, and then buy a non-owner insurance policy for their protection and as a cost-efficient means of complying with insurance laws. In the event that they decide to buy and own a car, the non-owner insurance can simply be converted into the more conforming type of insurance coverage with little if no extra costs.

As there are also many providers of non-owner insurance in NC, those looking for one can simply go to website of Non Owners Car Insurance NC to compare insurance quotes, so they can save on auto insurance and cost of SR22 or proof of minimum liability insurance coverage.

Posted by Lucia Kerri
09
Oct
2020

Quick Glimpse of Cryptocurrencies as Part of Norges Lifestyle

Cryptocurrencies are very much a part of Norges lifestyle and of Norway’s taxation system; bitcoins as assets, as income and as a means, are all subject to tax. That being said cryptocurrency is legal in Norway, but is classified as an asset and not recognized as a form of currency.

Tax rates on digital money earned from mining activities depend on the size or scale of the blockchain transactions from which the income was earned. On the other hand, income from the sale of cryptocurrencies are recognized as income from sale of capital assets, and therefore subject to payment of Capital Gains Tax.

Since the Norwegian government actively takes part in controlling the economies of the nation, all cryptocurrency market operators are required to register with the Norwegian Financial Supervisory Authority. The latter is the government agency tasked to oversee that all Norwegian financial companies are operating in accordance with the laws and regulations legislated by Stortinget, Norway’s supreme legislature.

Inasmuch as cryptocurrencies are recognized as assets in Norway, Norges banks do not release loàn proceeds by way of digital money. After all, the value of crypto money is volatile, being dependent on the level of supply and demand. That is why not even a short-term no-credit check loan per minute or lån på minuttet uten kredittsjekk can be released in the form of digital currency.

How Norwegians Buy Cryptocurrencies?

In Norway, the most common form of cryptocurrency in use is bitcoin, while most Norwegians purchase their bitcoins from leading crypto-exchange entity Bitcoins Norway (BN). Mainly because Bitcoins Norway has ties with the largest Norges bank DNB ASA, specifically in relation to the use of the bank’s mobile phone app Vipps. Bitcoin purchasers however must have a registered account with BN through which they can purchase or send bitcoins to other cryptocurrency users.

DNB’s Vipps app enables BN customers to complete their bitcoin transactions using their credit or debit card as mode of payment. That is regardless of whether a BN customer maintains a deposit account with DNB. Statistical reports show that about 43 percent of Vipps app users are not DNB customers, while 27% of the entire Norwegian population are actively using the DNB Vipps app.

Posted by Lucia Kerri
12
May
2020

MA of Singapore Grants Temporary Payment Services Licenses to Crypto Firms

In line with the recent passing of the Payment Services Act, the MAS announced that temporary licenses have been granted to 7 cryptocurrency companies.

The Monetary Authority of Singapore (MAS) named Binance, Bitstamp, Coinbase, Gemini, Upbit, Luno and Wirex as the only cryptocurrency operators permitted to act as payment service providers up to six months. Within the six-month period, the related license applications of the said crypto firms will be approved or rejected by the MAS.

The Monetary Authority granted temporary license-exemption to the aforementioned companies, because they complied with the prerequisite of giving notification of their cryptocurrency operations in Singapore, even before the Payment Services Act passed legislation in January 2020. The MAS, which acts as the central bank of Singapore, made it clear that the unlicensed status will cease once the institution approves or rejects the related applications for payment-services licensure in the country.

Overview of the Payment Services Act of Singapore

The Payment Services Act is described as one that sets the framework for the dynamic and flexible regulation of Singapore’s payment system and providers of payment services. The purpose of which, is to establish regulatory certainty aimed at safeguarding the interest of consumers, whilst encouraging growth and innovation of the country’s payment services and FinTech systems.

”Specific Payment Services”

The regulatory framework of the PS Act applies to licensed payment Institutions that provide “specific payment services” such as account issuance, e-money issuances, merchant acquisitions, domestic money transfers, inward cross-border money transfers, and digital payment tokens. Under the Act, the payment services of cryptocurrency companies fall under the digital payment token classification.

Distinction of Licenses to Conduct Payment Services as a Business, from License to Conduct Money-Changing Services as a Business

Although some payment services may include foreign currency conversion, a licensed payment service provider must be a licensed money-changer when including stand-alone money-changing services as part of its business activities. In the same way, a licensed money changer can conduct only money-changing services, unless the operator obtains a duly approved license to provide payment services.

Distinction of Payment Services from Banking Services

The PS Act also contains prohibitions that distinguish payment services from banking services, by stating that:

Licensed payment service providers are prohibited from storing or accepting e-money as deposits on behalf of Singapore residents and of facilitating e-money cash withdrawals in Singapore dollars. This suggests that all e-money transactions will cover only direct payment transactions.

Moreover, payment service providers conducting e-money issuance as payments are prohibited from lending its customers’ money, or using customers’ money to finance any of the business activities being performed in connection with payment-service operations.

The above distinctions clearly state beforehand that for inquiries on whether the licensed money lender SG City Loan recommends, can loan out cryptocurrency money, the answer is no.

Posted by Lucia Kerri in Crypto
29
Mar
2020

Why Bitcoin Miners Ceased Operations Amidst Crisis

The Covid-19 crisis and the resulting volatility of the cryptocurrency market prompted many digital asset farms and independent miners to stop operations.

Contrary to expectations that Bitcoin, being the leading digital asset, will surge once stock market investors shift to cryptocurrency investment during the crisis, the opposite happened. Along with the stock market rush that saw many investors unloading their shares, the bitcoin market reacted similarly. The cryptocurrency market also crashed, resulting to daily losses of about 50% that eventually drove the Bitcoin price below the $4,000 threshold, down to as low as $3,600.

Although the crypto-community saw the prices of cryptocurrencies rising, after the government legislated CARES Act was passed by Senate. The increases though were not enough to warrant that the price of bitcoin will not go down below threshold again.

That being the trend, many bitcoin miners and mining farms went ahead with decisions to halt operations, wary that the worsening health crisis will yet again spur sell offs that only spell losses to digital currency miners.

Why Volatility in Prices Affects Crypto Mining Operations

First off, it should be understood that the profitability of crypto mining operations is not the same as what investors could gain when trading their digital currencies.

Cryptomining after all is cost intensive, particularly with bitcoin; being the most transacted of all digital assets. Where some bitcoin investors may realize gains by leveraging their cryptocurrencies during price volatility, the same cannot be held true for coin miners.

If at the end of the day the price of a bitcoin is much lower than the costs incurred in analyzing and solving encryptions bitcoin transactions for the day, bitcoin miners incur losses. Mainly because the bitcoin compensations they will receive will not be enough to cover the corresponding costs of mining.

Underscoring the Significance of Digital Assets in Times of Economic Crisis

One trait that can distinguish digital assets from physical assets is that the uncertainty of cryotocurrency prices creates an advantage in times of real-cash insolvency. There have been bankruptcy proceedings in which the bankruptcy court was unable to pin down digital money as potential payment in satisfying the legal demands of creditors.

The extreme volatility in the price of bitcoins as demonstrated by the recent bitcoin trading activities, makes digital currency an unlikely asset to demand as settlement for a credit obligation.

Let us say a bankruptcy court includes bitcoins without objection by creditors, because at the time of awarding, the digital currency had a value of $6,600.

However, if in the next few days the price of bitcoin drops to $2,300, the creditor can trade or exchange the digital money for real cash at the lowered price, or wait until the price rises. The creditors can no longer demand for more bitcoins, since they took a risk when they agreed to accept digital currency as settlement of the bankrupt person’s obligations.

When looking for a bankruptcy lawyer san diego businesses recommend those who will be able to make the court understand why cryptocurrencies will not work as a reliable, equitable settlement of credit obligations.

Posted by Lucia Kerri in Crypto, Cryptocurrency Mining