Risk Management
Amulet's risk management can be broken down into several key functions:
1. Capital adequacy and management
Adhering with Solvency II requirements creates a desirable level of safety when underwriting risk. It builds a protective moat around Amulet's capital base and ensures there is sufficient reserves for making claim payouts. 
2. Layered risk controls
Several layers of risk controls have been built into Amulet to ensure funds are safe and that the business remains sound:
Technical checks to ensure base level protocol safety, including code auditing, bug bounty program, and continuous testing.
Careful selection of protocols to be covered through rigorous risk assessment.
Identifying over-concentration of risk from the chain level down to individual product level and risk types in order to avoid catastrophic drawdowns by certain covers.
Mechanisms such as an emergency kill-switch to suspend all or some business activities to head-off suspicious transactions.
Clear cover terms and conditions properly detailing the scope of coverage and claims process amongst other particulars.
3. On-chain risk alerts
On-chain data monitoring, analysis, and alerts serve as timely and valuable signals for Amulet to respond rapidly, such as notifications of covered protocols' security status, cover product price adjustments, or the occurrence of a risk event. Amulet has adopted many best practices in this area and continues to work with several other projects to enhance its risk monitoring capabilities.

Amulet Protocol (hereafter referred to as Amulet) is a decentralized insurance protocol built for the Rust-based ecosystem, starting with the Solana blockchain. Amulet has designed an innovative and open insurance model, which not only effectively addresses the common challenges of existing decentralized insurance protocols, but also creates a new paradigm shift for the whole insurance sector. Risk underwriting and insurance claim lies at the core of any insurance business; however, all existing decentralized finance (DeFi) insurance protocols have been facing a critical sustainability challenge for risk underwriting and claims. Amulet is creating the industry?s first Protocol-Controlled Underwriting (PCU) approach, in which Amulet will build up its own underwriting capabilities and introduce a claim structure involving a unique Yield Backed Claim (YBC) method. This is a significant deviation from the incumbent insurance models of renting underwriting capability from capital providers to a more sustainable underwriting and claim structure controlled by the protocol. The vision of Amulet is to offer simple, reliable insurance for everyone in Web3. With the addition of Amulet, users in the entire Rust-based ecosystem will gain access to a new way to hedge various risks with insurance product offerings.

https://amulet.org/