Irdai issues guidelines for promoting, regulating surety insurance business

Surety bonds protect the beneficiary against acts or events that impair the underlying obligations of the principal

The insurance regulator, Insurance Regulatory and Development Authority of India (IRDAI), has come out with guidelines to promote and regulate sustainable and healthy development of the surety insurance business in the country. The guidelines will come into force from April 1, 2022.

A surety bond is a three-party contract by which one party (the surety) guarantees the performance or obligations of a second party (the principal) to a third party (the obligee). The surety is