The Insurance Regulatory and Development Authority of India (Irdai) made significant changes to the norms governing ‘surety bonds, a type of insurance policy that protects parties involved in a transaction or contract from potential financial losses.

• As per a circular issued by the IRDAI, the solvency requirement applicable for such products has now been reduced to control the level of 1.5 times from 1.875 times previously prescribed.
• Further, the prevailing 30 per cent exposure limit applicable on each contract underwritten by an insurer has also been removed.