Understanding Recognized Insurance Coverage: A Legal Perspective
Definition & Meaning
Recognized insurance coverage refers to the types of insurance that are acknowledged by certain federal entities as meeting specific standards. This includes insurance provided by the Federal Deposit Insurance Corporation (FDIC) and the National Credit Union Administration (NCUA), as well as other insurance organizations that have been approved by the Secretary of the Treasury. Such coverage is essential for protecting depositors and ensuring the stability of financial institutions.
Legal Use & context
This term is primarily used in the context of financial regulation and insurance law. Recognized insurance coverage plays a critical role in safeguarding consumer deposits in banks and credit unions. It is relevant in legal areas such as finance, banking, and insurance, where users may need to understand their rights and protections. Users can manage related forms and procedures themselves with tools like US Legal Forms, which offers templates drafted by licensed attorneys.
Real-world examples
Here are a couple of examples of abatement:
For instance, if a person deposits money in a bank that is insured by the FDIC, their deposits are protected up to a certain limit, typically $250,000 per depositor, per insured bank. This means that in the event of a bank failure, the depositor will not lose their insured funds. (Hypothetical example).