An Insurance Guarantee (Surety Bond) is a financial instrument under which an individual or legal entity (the Principal) transfers the obligation to guarantee its contractual commitments to an insurance company. The insurer, acting as the Surety, undertakes to guarantee payment or performance to the Beneficiary in accordance with the terms and conditions stipulated in the underlying contract and the surety bond agreement.
Advantages of Insurance Guarantees (Surety Bonds)
- Reduces the cost of financial services for individuals and corporate entities, while providing simpler and more accessible guarantee solutions;
- Introduces new insurance products and services, thereby increasing market demand, supply, and accessibility, and enhancing risk management and financial capacity within the insurance sector;
- Facilitates greater access to mortgage financing for individuals;
- Enables enterprises and SMEs to participate in tenders by utilizing insurance guarantees instead of bank guarantees;
- Contributes to the expansion of the financial sector, improves cash flow circulation, and supports the development of a diversified and multi-pillar financial market.
Types of Insurance Guarantees (Surety Bonds)
- Bid Bond (Tender Guarantee)
- Advance Payment Bond
- Performance Bond
- Mortgage Down Payment Guarantee
- Payment Bond
- Other guarantees not prohibited by law
Documents Required for Issuance of an Insurance Guarantee (Surety Bond)
- Completed application form
- Audited financial statements for the past three (3) years
- Copy of business license
- Company registration certificate
- Tender invitation or bidding documents
- Reports evidencing completion of similar projects or contracts
- Credit bureau report
- Official letter requesting the issuance of an insurance guarantee
