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Financial Interest Coverage

Financial Interest Coverage

Definition

Financial Interest Coverage — provides insurance protection to a parent company against the risk of damage to the parent's financial interest in its uninsured local subsidiaries. What this means is that, where the local subsidiary cannot be directly insured by the global insurance company under the master policy for licensing, regulatory, or other reasons, the parent is nevertheless insured for its financial interest in that subsidiary. So, if the subsidiary suffers a loss, the parent company is covered for its financial interest in that loss suffered by the subsidiary.

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