August 21, 2020

Long Term Endowment Funding Mechanisms

Financial Assurances for Mitigation Banks

NEBA member, Ecosystems Insurance Associates https://www.eco-ins.com/ has received the 1st Corps approval for a new approach to meeting required long term endowment funding obligations - “Insured Endowments”.   The product has 2 primary benefits 1) it provides investment returns linked to a variety of market indices that are commonly used to balance investment portfolios/limit risk and 2) insures the principal balance against investment loss.  Linking the investment returns to an index can provide long term returns that are many multiples of commonly used platforms like bank CDs.   There are many commonly available indices to choose from. One example:  https://www.youtube.com/watch?v=ckZhb9-0Z_g  The advantage of the insured endowment over a commonly available investment portfolio using an actively managed index, like the Barclays Morningstar index, is the annuity insures the principal balance against investment loss.  In good times investment returns are high and in bad, like the 2008 crisis or todays shutdown, principal is protected.  That preserves the benefit of compounding investment returns and keeps a mitigation banker or an endowment holder from having to commit additional funds due to investment losses.  These are long term investment products with early withdrawal penalties.  Ecosystems Insurance Associates created a new sister company to help meet the regulatory requirement for a gatekeeper “Stewardship Preservation Trust, A Virginia Business Trust”.  Please call us at (703) 232 – 0258 with questions or email rspoth@eco-ins.com.      

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