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Insurance Definition: FINANCIAL GUARANTEE INSURANCE

By Compuquotes Team on March 27th, 2008

FINANCIAL GUARANTEE INSURANCE:

Definition:

  • Covers losses from specific financial transactions and guarantees that investors in debt instruments, such as municipal bonds, receive timely payment of principal and interest if there is a default. Raises the credit rating of debt to which the guarantee is attached. Investment bankers who sell asset-backed securities, securities backed by loan portfolios, use this insurance to enhance marketability. (See Municipal bond insurance)

Information provided by Insurance Information Institute

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