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
Fairness (as an objective of insurance pricing). Premium rates are set according to expectation of loss among a classification of policy owners. The premise is that all insureds with the ...
Form showing notification that an insurance policy has been renewed with the same provisions, clauses, and benefits of the previous policy. ...
Projections of future accidental losses based on analyses of historical loss patterns. A projected loss picture is used to determine the pure cost of protection and the resultant basic ...
Policy used to provide the funds for buy and sell agreements under which an income payment or a series of income payments is paid to the buyer of the disabled partner's interest contained ...
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Exemption in ocean marine policy for losses caused by strikes, riots, and civil commotion. ...
Maximum that an insurance company can underwrite. The limits of coverage that a property and casualty company can underwrite are determined by its retained earnings and invested capital. ...
Taking over of an insurance company's assets by the State Insurance Commissioner when examination of the annual report reveals that the company is in substantial financial difficulty. The ...
Frequency of illness, sickness, and diseases contracted. ...
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