UNDERWRITER Meaning and
Definition
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An underwriter refers to an individual or organization that assumes financial responsibility for a financial or insurance risk. This entity, typically a financial institution, acts as a guarantor or insurer for various types of financial transactions and creates a contractual agreement with the individuals or businesses seeking coverage.
In the context of insurance, an underwriter assesses risks and determines the terms and conditions for insurance policies. They analyze various factors such as the applicant's personal information, medical history, financial status, and the potential risks involved. Based on these evaluations, the underwriter decides whether to accept or reject an application, and at what premium rate. They also determine the coverage limits and exclusions that may apply.
Moreover, in the field of investment banking, an underwriter plays a crucial role in the issuance of securities. They guarantee the purchase of shares, bonds, or other financial instruments from the issuing entity and then sell them to investors. In this process, underwriters evaluate the financial prospects and creditworthiness of the issuer, determine the appropriate offering price, and manage the distribution and marketing of the securities.
Overall, underwriters act as financial intermediaries, assuming risks and providing necessary capital or insurance coverage. They play a fundamental role in maintaining the stability of the financial system by evaluating risks and offering financial protection to both individuals and businesses.
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One who insures ships, goods, &c., for a certain amount in case of loss, by subscribing his name to a formal document in consideration of a certain sum percent.
Etymological and pronouncing dictionary of the English language. By Stormonth, James, Phelp, P. H. Published 1874.
Top Common Misspellings for UNDERWRITER *
* The statistics data for these misspellings percentages are collected from over 15,411,110 spell check sessions on www.spellchecker.net from Jan 2010 - Jun 2012.
Other Common Misspellings for UNDERWRITER
Etymology of UNDERWRITER
The word "underwriter" has roots in the Middle English language. It comes from the combination of two words: "under" and "write".
The term "write" originally referred to a written or printed document, like a contract or policy. And when someone signed their name under that document to indicate their agreement or acceptance, it was known as "underwriting" the document. This practice was common in the 16th and 17th century and led to the development of the modern meaning of "underwriter".
Over time, "underwriter" began to be used specifically in the context of insurance. In the insurance industry, an underwriter is a person or company that evaluates risks and assumes the financial responsibility for insuring them. The underwriter assesses the risks associated with a policy and determines the terms and conditions of coverage, as well as the premium to be charged.
Similar spelling words for UNDERWRITER
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