# Insurance Capital Layer (ICL) Overview

**Insurance Capital Layers (ICLs)** are the core custody vaults that hold user deposits and allocate capital to the real‑world reinsurance market. Think of an ICL as the protocol’s on‑chain “treasury account” for a specific risk/return sleeve (Basis‑Plus or Alpha).

#### Key Characteristics

| Feature                  | Description                                                                                                                     |
| ------------------------ | ------------------------------------------------------------------------------------------------------------------------------- |
| **Dedicated Vault**      | Each ICL has its own Fireblocks storage vault and on‑chain vault contract.                                                      |
| **Token Binding**        | One ICL ↔ one ERC‑20 yield token (e.g. **reUSD** or **reUSDe**).                                                                |
| **Daily Sweeps**         | All idle stablecoins sweep into the vault every 24 h, minimizing contract exposure.                                             |
| **Surplus Note Gateway** | Capital can only exit the ICL after a Surplus Note is signed between Re Protocol and a licensed reinsurer.                      |
| **Transparency**         | Draw‑downs and repayments are emitted on‑chain between the protocol and reinsurance counterparties.                             |
| **Audit Trail**          | Off‑chain balances (Primary operating a/c or 114 Trust accounts) are reported daily by **The Network Firm** → Chainlink oracle. |

#### How ICLs Fit in the Capital Stack

1. **User Deposits** → Mint yield token (**reUSD** or **reUSDe**).
2. **ICL Vault** → Holds deposits; performs daily Fireblocks sweep.
3. **Surplus Note** → When signed, allows reinsurer to draw capital (up to a pre‑agreed limit).
4. **114 Trust** → For reUSD, funds regulatory collateral; for reUSDe, funds loss reserve.
5. **Claims & Premiums** → Flow back; repayments credited to the ICL → reflected in token NAV.
6. **Redemptions & Curve LPs** → Liquidity sourced first from vault, second from Curve pools.

#### Current ICLs

| Token      | Layer Name     | Risk Profile | Capital Use                                 |
| ---------- | -------------- | ------------ | ------------------------------------------- |
| **reUSD**  | Basis‑Plus ICL | Low          | Regulatory collateral in 114 Trust (senior) |
| **reUSDe** | Alpha ICL      | Medium‑High  | First‑loss reserve for claims (junior)      |