Interest Rate Collar
Combination of an interest rate cap and an interest rate floor, creating a band within which interest rates can range. For example, if an interest rate band is between 6% and 10%, the insurance company does not receive or pay a continuous stream of interest payments from or to another party within this band. Above the upper limit on the maximum possible interest rate an insurance company will pay, and below the lower limit of the maximum possible interest rate an insurance company will pay, the insurance company and another party will exchange interest payments.
Popular Insurance Terms
One of two basic types of funding instruments for pensions or employee benefits, in which responsibility for plan assets is vested in a trustee. The other type is known as an insured plan, ...
Additional amount of surplus from an additional amount of capital necessary to act as a supplement to the cash flow in the event unforeseen contingencies occur that disrupt or impair the ...
Contract by which one party agrees to make good the default or debt of another. Actually, three parties are involved: the principal, who has primary responsibility to perform the obligation ...
Common misunderstanding about insurance. In gambling a risk is created that did not exist prior to placing a bet. Under insurance, a risk exists whether or not an insurance policy is ...
Direct relationship between the use to which a building is put and the likelihood that it will catch on fire. Occupancy is one of the most important factors in setting fire insurance rates. ...
Coverage that indemnifies a third party lender if a customer refuses to repay a loan made on a faulty product and the dealer who arranged the loan refuses to correct the fault. This ...
Synopsis of the key financial figures concerning the pension plan that is contained in the form 5500 that must be filed annually with the Internal Revenue Service. This report must be given ...
Form showing notification that an insurance policy has been renewed with the same provisions, clauses, and benefits of the previous policy. ...
Rate applied to risks with similar characteristics or to a specified class of risk. ...
Have a question or comment?
We're here to help.