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
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Coverage that exceeds the normal insurance capacity of an insurer or reinsurer. ...
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Sum it takes to replace an insured's damaged or destroyed property with one of like kind and quality, equivalent to the actual cash value, minus physical depreciation (fair wear and tear) ...
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All insured losses paid in full. ...
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