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
Measure of the sensitivity of the insurance company's liability for resultant higher mortality rates than charged for in the premium. ...
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Amount that each member of a pool contributes to that pool. ...
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credit reflected on a ceding company's annual statement, showing reinsurance premiums ceded and losses recoverable from the reinsurer. ...
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Branch of knowledge dealing with the mathematics of insurance, including probabilities. It is used in ensuring that risks are carefully evaluated, that adequate premiums are charged for ...
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