What is Insurance?
Insurance A risk management contract where an insurer indemnifies another party against specified loss or damage in exchange for a premium, subject to regulatory oversight.
Source: CFA Institute, IFRS Foundation, FASB (GAAP), Basel III Framework
How is “Insurance” Used in Practice?
Banks may require borrowers to have insurance policies that cover collateral in case of loss, as part of risk mitigation practices.
Certification Exam Relevance
Who Needs to Know This Term?
- Financial Analysts
- Bankers
- Traders
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What is Insurance?
A risk management contract where an insurer indemnifies another party against specified loss or damage in exchange for a premium, subject to regulatory oversight.
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