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promissory note

A promissory note is a financial instrument used to provide an insurer with financial security necessary to implement a collateralized cash flow program, such as a retrospectively rated insurance plan.

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Additional Information

Promissory notes provide an insurer with status as a senior creditor rather than a general creditor.

Related Terms

A letter of credit (LOC) is a legal commitment issued by a bank or other entity stating that, upon...