monoline

n. a company specializing in a single type of financial business, such as credit cards, home mortgages, or a sole class of insurance. Subjects: English, Money & Finance

Editorial Note: Monolines are often required by government regulation rather than by market conditions.

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Citations: 1962 New York Times (Jan. 8) “Savings Dollar Eagerly Pursued” p. 114: Health insurance is offered by about 1,300 organizations. Of these, 819 are insurance companies—560 life, 221 casualty and thirty-eight monoline, offering only health insurance. 1985 David LaGesse @ New York City American Banker (Feb. 13) “Escrow Losses Could Hamper Private Issuers” p. 1: Only 13 companies belong to MICA. They are the closely regulated “monoline” mortgage insurance firms that only guarantee mortgage loans, with state laws forbidding them to enter any other insurance business. 2002 Cards International (Feb. 8) “The monoline: modelled for performance” p. 9: The monoline model has succeeded primarily because of its specialisation. Monolines focus their execution on developing specialist skills and lowering operating costs. All are among the best in the world for their risk management, customer service, segmentation and CRM practices. The card business is completely separate from any other profit centre and decisions such as credit granting are made centrally. 2004 Green Sheet (Rohnert Park, California) (July 2) “Credit Card Banks Continue to Post Profits”: The Fed defines a “large” credit card bank as a federally insured financial institution with assets in excess of $200 million, and the bulk of those assets in consumer lending with at least 90% of loans originated using credit cards or related products. In banking parlance, these institutions are known as “monolines.” 2005 James B. Kelleher @ Chicago Reuters (Aug. 18) “MergerTalk: US card issuers eye aftermath of summer of mergers”: Unlike bank-based issuers, which have access to cheap deposits, the three—known in industry parlance as “monolines”—had to borrow from the capital markets at higher rates.

Posted 25 Aug 05 | Permalink | Tell a Friend