DeFi insurance protocol InsurAce says it was well within its rights to reduce the claims period for people affected by the Terra USD (UST) depeg event from 15 days to seven — but added it has already processed nearly all 173 submitted claims and will pay out $11 million.
InsurAce (INSUR) is the third largest insurance provider for decentralized finance (DeFi) protocols, with a market cap of $15 million.
On May 13, InsurAce caused a stir when it announced it had shortened the claims window for those with cover related to Anchor (ANC), Mirror (MIR), and stablecoin Terra USD (UST) following the collapse of the Terra layer-1 blockchain.
But chief marketing officer Dan Thomson told Cointelegraph on Thursday that its move to shorten the claims window for the 234 covers of Terra portfolios was necessary to prevent further losses as UST had dropped to $0.08 by May 13, according to CoinGecko. He added:
“It is in our terms of service to make such changes. We felt there was no point in delaying the process on behalf of those who lost money and stakers who would have to pay out claims.”
The move was controversial in the crypto community, some of whom suspected InsurAce was trying to reduce the amount of claims it would have to pay. Terra Research Forum member FatMan told his 52,000 Twitter followers on Tuesday that InsurAce has made “a dirty move,” and the firm should not try to “weasel out” of its agreement with clients.
A dirty move from @InsurAce_io – setting an arbitrary ‘claim deadline’ after which UST holders who bought depeg insurance cannot get their money back. I know you guys didn’t collect premiums for long, but this is how things work – a promise is a promise – don’t weasel out of it. pic.twitter.com/5dYuN7hGOZ
— FatMan (@FatManTerra) May 23, 2022
But Thomson said that outside of those rejected, most of the 173 claims submitted have already been processed and that the protocol was ready to pay about $11 million to claimants. He added,
“We want the…
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