Covers loss from specific financial transactions and guarantees that investors in debt portfolios receive timely payment of principal and interest or guarantees in the event of default by the debtor or obligor. Financial guarantee insurances include: mortgage indemnity insurances; performance bonds; residual value insurance. Financial guarantee cover originated in suretyship.
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A surety bond, insurance policy or, when issued by an insurer, an indemnity contract and any guaranty similar to the foregoing types, under which loss is payable upon proof of occurrence of financial loss to an insured claimant, obligee, or indemnitee.