INS-04 — The stochastic cat-bond lineage, restored and cross-validated (specialist)

Event — none (model-lineage evidence, not a firing).

Starting state — the live F8 cat-bond model is a self-labeled DETERMINISTIC_REFERENCE that consumes authored probabilities (attachment 0.012 / exhaustion 0.004) on faith. Two real stochastic implementations existed in the estate and had become unreachable.

What changed — owner ruling I-1 restored BOTH under distinct identities alongside the untouched reference: CatBondStochasticPricingModel (SEEDED_STOCHASTIC: Poisson × Pareto/Lognormal, three trigger types with basis risk, layer erosion, reinstatements, fair-spread bisection) and CatBondEPCurveModel (INDEPENDENT_STOCHASTIC_CROSS_CHECK: currency-level layers, refuses unseeded, 1e-9 reference agreement).

Who bears the consequence — model governance: no number is called stochastic unless a stochastic model produced it; the three identities are never merged.

Key numbers — on the calibrated US-hurricane config the stochastic model nearly REPRODUCES the authored probabilities: attachment 0.0109 vs 0.012, exhaustion 0.0043 vs 0.004 (annual convention); fair spread 24.44bps; EL rate 0.227%/yr. Cross-validation: expected loss within 1% on a common calibration; annual ↔ term-wise conventions reconcile exactly.

Boundary — the F8-fired number remains the deterministic reference by design; the common-calibration fixture is technical evidence, not a market example.

Evidence status — VERIFIED_AFTER_REPAIR (owner ruling I-1); rerun on freeze commit c3229eed7ed268d9677ce2a7333ecd4417e5fa42, regression-identical.