Guarantee Fund
/ˈɡærənˌti fʌnd/
Definitions
- (n.) A reserve fund established to ensure the fulfillment of financial obligations or to cover losses in specific contexts, such as insurance or banking.
The bank set up a guarantee fund to protect depositors against potential losses.
- (n.) A fund designed to provide security to policyholders or creditors in case of default by an insurer or obligor.
The guarantee fund reimbursed clients after the insurance company became insolvent.
Forms
- guarantee fund
- guarantee funds
Related terms
See also
Commentary
Guarantee funds commonly feature in financial regulation and insurance law to provide risk mitigation; drafting should specify the scope and triggers for fund deployment.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.