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Insurance Definition: MUNICIPAL BOND INSURANCE

By Compuquotes Team on March 27th, 2008

MUNICIPAL BOND INSURANCE:

Definition:

  • Coverage that guarantees bondholders timely payment of interest and principal even if the issuer of the bonds defaults. Offered by insurance companies with high credit ratings, the coverage raises the credit rating of a municipality offering the bond to that of the insurance company. It allows a municipality to raise money at lower interest rates. A form of financial guarantee insurance. (See Financial guarantee insurance)

Information provided by Insurance Information Institute

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