• OPEN AN ACCOUNT
Indian Indices
Nifty
22,326.90 203.25
(0.92%)
Sensex
73,651.35 655.04
( 0.90%)
Bank Nifty
47,124.60 338.65
( 0.72%)
Nifty IT
34,898.15 153.80
( 0.44%)
Global Indices
Nasdaq
16,379.46 -20.06
(-0.12%)
Dow Jones
39,807.37 47.29
(0.12%)
Hang Seng
16,541.42 148.58
(0.91%)
Nikkei 225
40,369.44 201.37
(0.50%)
Forex
USD-INR
83.34 0.01
(0.01%)
EUR-INR
90.21 -0.13
(-0.15%)
GBP-INR
105.20 -0.12
(-0.11%)
JPY-INR
0.55 0.00
(-0.01%)

Insurance

Information about Insurance regulator IRDAI issues draft rules for promoting and regulating surety insurance business available for investment. Back
Insurance regulator IRDAI issues draft rules for promoting and regulating surety insurance business
10-Sep-21   09:02 Hrs IST


The insurance regulator has issued draft guidelines to promote and regulate sustainable and healthy development of the surety insurance business in the country.

A working group set up by the regulator had recommended promoting the development of the surety bonds markets in the country.

Surety bonds protect the beneficiary against acts or events that impair the underlying obligations of the principal. Surety bonds guarantee the performance of a variety of obligations, from construction or service contracts to licensing and commercial undertakings.

According to the regulator, a general insurer can commence a surety insurance business if it has 1.25 times the solvency margin it is required to keep. Also, if at any point in time the solvency of the insurer goes below the required level, the insurer shall stop underwriting the new surety insurance business until its solvency margin is restored to above the threshold limit.

Further, the regulator has said the underwritten premium in a financial year for any general insurers from the surety insurance business shall not exceed 10% of the total gross written premium subject to a maximum of Rs 500 crore.

The insurers need to have a board-approved underwriting philosophy on the Surety Insurance business, incorporating all aspects for managing this business., the regulator has said.

The regulator has said the surety insurance contracts can be offered to construction companies in India that cover road projects, housing/commercial buildings, and other infrastructure projects of the government or the private sector.

Also, the limit of guarantee shall not exceed 30% of the project value and surety insurance contracts can only be issued only to specific projects and not clubbed for multiple projects.

No Commodity Detailed News..!!