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FidelityThe Surety & America <br /> 11 ' 1 : 11 : <br /> HOKE I MEMBERACCESS I SUBSCR.IBER ACCESS AUTOMATION STANDARD BOND FORM NUMBER :s <br /> "`"""�' Surety <br /> What is Suretyship? <br /> ( SEARCH <br /> Suretyship is a very specialized line of insurance that is created whenever one party guar <br /> performance of an obligation by another party. There are three parties to the agreement. <br /> Publications Thelprincipal is the party that undertakes the obligation. <br /> Statistical Services <br /> About SFAA The I,surety guarantees the obligation will be performed. <br /> About the Industry <br /> Surety Fidelity The',obligee is the party who receives the benefit of the bond. <br /> Industry Issues <br /> Bond Authenticity What is a Surety Bond? <br /> Program <br /> Learn More About <br /> Surety Companies A surety bond is a written agreement that usually provides for monetary compensation in <br /> Development and principal fails to perform the acts as promised. There are many different types of surety t <br /> Diversity two general categories are contract and commercial surety bonds. <br /> Links <br /> News and Information What characteristics of suretyship are like more common forms of insurance? <br /> They are both risk transfer mechanisms. <br /> State insurance commissioners regulate them both. <br /> They both provide for financial loss. <br /> How is suretyship different from more common lines of insurance? <br /> In traditional insurance, the risk is transferred to the insurance company. In Buret, <br /> risk remains with the principal. The protection of the bond is for the obligee. <br /> In traditional insurance, the insurance company takes into consideration that a cel <br /> amount of the premium for the policy will be paid out in losses. In true suretyship, <br /> premiums paid are "service fees" charged for the use of the surety company's fina <br /> backing and guarantee. <br /> In underwriting traditional insurance products the goal is "spread of risk." In suret <br /> surety professionals view their underwriting as a form of credit so the emphasis is <br /> prequalification and selection. <br /> How does:,a surety underwrite? <br /> Each surety',company has its own guidelines and underwriting criteria. However, the follol <br /> factors will be taken into consideration in some format. <br /> Capacity. Does the applicant have the skill and ability to perform the obligation? <br /> Capital. Does the financial condition of the applicant justify approval of the particu <br /> Character. Does the applicant's record show him to be of good character and likely <br />