• Insurance Regulatory and Development Authority of India (Irdai) has decided to examine the feasibility of introducing surety bonds by insurance companies for road contracts in the country.
• For this, the insurance regulator has set up a nine-member working group to study the legal framework and suitability of the Indian insurance industry or any other sector to offer such bonds.
• The Working Group will be headed by G Srinivasan, Director, National Insurance Academy.

Responsibility of the Working Group :

• To study the current Indian legal and regulatory framework with reference to Surety Bonds.
• To assess the suitability of the Indian Insurance Industry or any other sector to offer Surety Bonds.
• To provide justification for the recommendations being made by the group, with special reference to the legal and regulatory perspective.
• The insurance legal/regulatory framework does not permit underwriting of bonds that guarantee performance and bid securities as they are financial instruments and not conventional insurance products.