compensating balance plan
A compensating balance plan is an insurance cash flow plan whereby the insurer, in an account specifically set up for the plan, collects premiums and deposits them in the insured's bank.
compensating balance plan
A compensating balance plan is an insurance cash flow plan whereby the insurer, in an account specifically set up for the plan, collects premiums and deposits them in the insured's bank.
Additional Information
Although the account is in the insurer's name, the insured's bank recognizes the funds as the insured's compensating balance, freeing the insured's funds.
