Definition Of underwrites

verb

(of a bank or other financial institution) engage to buy all the unsold shares in (an issue of new securities).

In addition, most of the clearing banks underwrite new issues of commercial paper and, like the merchant banks, provide lines of credit to their commercial customers.

sign and accept liability under (an insurance policy), thus guaranteeing payment in case loss or damage occurs.

Some are insurance policies, underwritten by insurers; whereas others are written as ‘service contracts’ in order to avoid insurance premium tax.

write (something) below something else, especially other written matter.

Example Of underwrites

  • A composite insurer is one that underwrites both general (short-term) insurance and long-term insurance.

  • A revived stock market helped boost income from equity and bond underwriting , as investment banking activity finally began to pick up.

  • An underwriting bank can enter sub-underwriting agreements with others, under which the latter agree to underwrite a certain amount of the securities.

  • Analysts who make sell recommendations for shares that have been underwritten by the company they work for certainly do not usually ingratiate themselves with their employer.

  • Buying an insurance-backed guarantee, underwritten by a separate insurance company, can solve this problem.


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