What is the Definition of Municipal Bond Insurance?

What is the Definition of Municipal Bond Insurance?

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)

Source: Insurance Handbook A guide to insurance: what it does and how it works | https://www.iii.org/

Label: Insurance
Theme: Dictionary of Insurance Terms

Other Questions: What is the definition of Annuity?

What is the Definition of Municipal Bond Insurance?

What is the Definition of Municipal Bond Insurance?

You can find random definition and meaning of insurance terms below:


Meaning of Admitted Company in Insurance Terms

An insurance company licensed and authorized to do business in a particular state.


Meaning of Affinity Sales in Insurance Terms

Selling insurance through groups such as professional and business associations.


Meaning of Agent in Insurance Terms

Insurance is sold by two types of agents: independent agents, who are self-employed, represent several insurance companies and are paid on commission; and exclusive or captive agents, who represent only one insurance company and are either salaried or work on commission. Insurance companies that use exclusive or captive agents are called direct writers.


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