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prudent man rule
Anyone acting for another—in a fiduciary or trust capacity—to make judgments and act as would a prudent person. Most states have adopted this rule, named aft er a court case decided in 1830, which provides that a person acting in a fiduciary capacity (e.g., a hospital trustee, executor, custodian, etc.) is required to conduct himself faithfully and exercise sound judgment when investing monies under his care.
- Part of Speech: noun
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- Industry/Domain: Health care; Insurance
- Category: Managed care; Health insurance
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