Around 700 bonds worth Rs 3,000 cr issued by Insurance Cos so far – Business Standard

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Around 700 bonds worth Rs 3,000 cr issued by Insurance Cos so far – Business Standard

The statement further said that the state-owned NHAI has so far received 164 insurance sureties, including 20 sureties for performance guarantee and 144 sureties for bid guarantees.

The product, from the Bajaj Allianz General Insurance stable, was developed in response to a demand identified by the industry and the government.

Press Trust of India New Delhi

Around 700 insurance bonds valued at around Rs 3,000 crore have been issued so far by different insurance companies, an official statement said on Wednesday.

The statement further said that the state-owned NHAI has so far received 164 insurance bonds, including 20 bonds for performance bond and 144 bonds for bid bonds.

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Insurance bonds are financial instruments in which insurers act as a “surety” and provide financial guarantee that the contractor will fulfill its obligations in accordance with the agreed terms.

Wider adoption of these instruments will help strengthen infrastructure development in the country.

According to the statement, the Ministry of Finance has established insurance bonds at par with bank guarantees for all public procurement, and the NHAI has urged insurance companies and contractors to use insurance bonds as a mode additional bid security, and/or performance security.

NHAI on Wednesday organized a workshop in New Delhi on Implementation of Insurance Bonds (ISB) for NHAI contracts.

The objective of this workshop was to review the progress made in the implementation of insurance bonds and encourage stakeholder participation for wider adoption of the instrument, the statement said.

Minister for Roads, Transport and Highways Nitin Gadkari on December 19, 2022 launched the country’s first-ever bond insurance product to reduce infrastructure developers’ dependence on bank guarantees.

The product, from the Bajaj Allianz General Insurance stable, was developed in response to a demand identified by the industry and the government.

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