Municipal Bond Insurance
Definition of "Municipal bond insurance"
Coverage that guarantees bond holders against default by a municipality. This form of financial guarantee was introduced in the early 1970s and became a runaway success. Municipalities embraced it because their offerings took on the credit rating of the company that wrote the insurance, rather than their own ratings. It meant that most municipal bond offerings were elevated to Triple-A, and municipalities could raise money at a lower rate of interest. For investors, it made municipal bonds less risky.
Popular Insurance Terms
Tool of risk management used for risk financing by local governments. The technique is for many local governments to combine resources in order to self insure a particular line of business, ...
Length of employment as measured to determine eligibility, vesting, and benefit levels for employee participants in tax qualified pension plans. There is often a requirement that years of ...
Same as term Captive Agent: representative of a single insurer or fleet of insurers who is obliged to submit business only to that company, or at the very minimum, give that company first ...
Former method of funding a pension plan. When employees retire, the employer sets aside a lump sum that will pay them lifetime monthly benefits. When determining the amount, these factors ...
Total of net investment income plus underwriting income plus other miscellaneous income. This type of income is an indication of how the underwriting function and the investment function of ...
Insurance policy that combines the characteristics of a debit insurance policy with that of an ordinary life insurance policy. These policies were historically sold by the debit agent. ...
Approach used for sole proprietorships, partnerships, and close corporations in which the business interests of a deceased or disabled proprietor, partner, or shareholder are sold according ...
Mortality table used to calculate the legal reserve and life insurance policy cash surrender values. ...
Coverage primarily for the liability of an individual or organization that results from negligent acts and omissions, thereby causing bodily injury and/or property damage to a third party. ...
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