Insurers seek legal recourse for surety bond biz, urge changes in key laws

Reach out to reinsurers for expertise on surety bonds business

General insurance companies are seeking changes in Indian Contract Act and Insolvency and Bankruptcy Code (IBC) to bring surety bonds at par with bank guarantees when it comes to recourse available to them in case of a default.

In her budget speech this year, the finance minister said that surety bonds can be used as a substitute for bank guarantees for government procurement in order to reduce the indirect cost for suppliers and work contractors. The insurance industry has hailed this as a very positive move as this will give a big boost to project financing with overall improvement in project