Locked Funds Insurance

Locked Funds Insurance is a little known hybrid insurance policy jointly issued by governments and banks. It is used to protect public funds from tamper by unauthorised parties. In special cases, a government may authorise its use in protecting semi-private funds which are liable to tamper. Terms of this type of insurance are usually very strict. As such it is only used in extreme cases where maximum security of funds is required.

Locked Funds Insurance policies are not exactly insurance policies in the real sense. They possess characteristics similar to both ordinary types of insurance covers and International protectorate documents therefore they are more correctly known as hybrid policies.

They exist in 4 main classes: Class A, B, C and D (in decreasing order of strictness of terms). Additionally, these could either be "Interferral" or "Non-Interferral". The Interferral category allows its terms to be modified by special authority of the issuing government while the terms of the Non-Interferral category can only be modified by clauses present within the policy itself.

Locked Funds Insurance policies provide the highest level of security for funds and are rarely used because of the amount of protocol involved in its issue. Any amount of money protected by this type of cover is virtually impossible to tamper with, except the terms with which the insurance was drawn permits for such.

In effect, it eliminates unauthorised tamper for funds usually in excess of US$1,000,000 (One million United States Dollars).