# EIP 1523: Standard for Insurance Policies as ERC-721 Non Fungible Tokens Source

Author Christoph Mussenbrock https://github.com/ethereum/EIPs/issues/1523 Draft Standards Track ERC 2018-10-10 721

## Simple Summary

A standard interface for insurance policies, based on ERC 721.

## Abstract

The following standard allows for the implementation of a standard API for insurance policies within smart contracts. Insurance policies are financial assets which are unique in some aspects, as they are connected to a customer, a specific risk, or have other unique properties like premium, period, carrier, underwriter etc. Nevertheless, there are many potential applications where insurance policies can be traded, transferred or otherwise treated as an asset. The ERC 721 standard already provides the standard and technical means to handle policies as a specific class of non fungible tokens. insurance In this proposal, we define a minimum metadata structure with properties which are common to the greatest possible class of policies.

## Motivation

For a decentralized insurance protocol, a standard for insurance policies is crucial for interoperability of the involved services and application. It allows policies to be bundled, securitized, traded in a uniform and flexible way by many independent actors like syndicates, brokers, and insurance companies.

## Specification

The key words “MUST”, “MUST NOT”, “REQUIRED”, “SHALL”, “SHALL NOT”, “SHOULD”, “SHOULD NOT”, “RECOMMENDED”, “MAY”, and “OPTIONAL” in this document are to be interpreted as described in RFC 2119.

An ERC-1523 compliant insurance policy is a non-fungible token which MUST adhere to the ERC-721 token standard and MUST implement theERC721Metadata and the ERC721Enumerable interface:

/// @title ERC-1523 Insurance Policy Standard
///  Note: the ERC-165 identifier for this interface is 0x5a04be32
interface ERC1523 /* is ERC721, ERC721Metadata, ERC721Enumerable */ {

}


The implementor MAY choose values for the name and symbol.

The policy metadata extension is RECOMMENDED for ERC-1523 smart contracts. This allows your smart contract to be interrogated for policy metadata.

/// @title ERC-1523 Insurance Policy Standard, optional policy metadata extension
/// @dev See ...
///  Note: the ERC-165 identifier for this interface is 0x5a04be32
interface ERC1523PolicyMetadata /* is ERC1523 */ {

/// @notice Metadata string for a given property.
/// Properties are identified via hash of their property path.
/// e.g. the property "name" in the ERC721 Metadata JSON Schema has the path /properties/name
/// and the property path hash is the keccak256() of this property path.
/// this allows for efficient addressing of arbitrary properties, as the set of properties is potentially unlimited.
/// @dev Throws if _propertyPathHash is not a valid property path hash.
function policyMetadata(uint256 _tokenId, bytes32 _propertyPathHash) external view returns (string _property);

}


In analogy to the “ERC721 Metadata JSON Schema”, the tokenURI MUST point to a JSON file with the following properties:

{
"type": "object",
"properties": {
"name": {
"type": "string",
"description": "Identifies the asset to which this NFT represents",
},
"description": {
"type": "string",
"description": "Describes the asset to which this NFT represents",
},
"carrier": {
"type": "string",
"description": "Describes the carrier which takes the primary risk",
},
"risk": {
"type": "string",
"description": "Describes the risk",
},
"parameters": {
"type": "string",
"description": "Describes further parameters characterizing the risk",
},
"status": {
"type": "string",
"description": "Defines the status of the policy, e.g. Applied, Underwritten, Claimed, Paid out, etc."
}
}
}


## Rationale

Insurance policies form an important class of financial assets, and it is natural to express those assets as a class of non-fungible tokens which adhere to the established ERC-721 standard. We propose a standard for the accompanying metadata structures which are needed to uniquely define an insurance policy. While policies can have a multitude of possible properties, it is common that policies are issued by some entity, which is basically the entity responsible for paying out claims. Second, an insurance policy is typically related to a specific risk. Some risks are unique, but there are cases where many policies share the same risk (e.g. all flight delay policies for the same flight). In general, the relation of policies to risks is a many-to-one relation with the special case of a one-to-one relation. Third, most policies need more parameters to characterize the risk and other features, like premium, period etc. Forth, a policy has a lifecycle of different statuses. We believe that those four properties are necessary to describe a policy. For many applications, those properties may be even sufficient. However, any implementation MAY chose to implement more properties.

For some applications it will be sufficient to store the metadata in an off-chain repository or database which can be addressed by the tokenURI resource locator. For more advanced applications, it can be desirable to have metadata available on-chain. Therefore, we require that the tokenURI MUST point to a JSON with the above structure, while the implementation of the policyMetadata function is OPTIONAL.