Financial Interest Clause (FINC) — amends an insurance policy to cover only the multinational organization's
financial interest in its worldwide subsidiaries, so that the parent company is
the only legal entity covered by the global policy. The intent of the clause is
to avoid issues that arise related to losses suffered by a subsidiary of the
parent company that does not have local admitted coverage required by the
jurisdiction in which the subsidiary is located. These provisions have not been
tested widely in claim scenarios and may trigger undesirable or unforeseen
adverse tax consequences. In addition, for programs that are written on a
"shared or layered" basis to achieve required limits, coverage may
not be concurrent throughout the limit tower because some insurers will not
follow this endorsement.