The Insurance Regulatory and Development Authority of India (IRDAI) and the General Insurance Council (GIC) convened a Surety Conclave on Friday (August 23). The regulatory bodies addressed the progress and challenges of the surety bond market in India.

The event was led by IRDAI Chairman Debasish Panda and Tapan Singhel, Chairman, the GIC and MD & CEO of Bajaj Allianz General Insurance.

Here are the key discussion points

• Bank-Insurer Collaboration: Strategies to improve cooperation and streamline surety bond issuance processes.
• Data Sharing: The role of data sharing in enhancing risk assessment and underwriting practices.
• Scope Expansion: Identifying new sectors and beneficiaries for surety bond coverage.

Challenges highlighted

• Regulatory Parity: Need for equal legal recourse for insurers under the Insolvency and Bankruptcy Code.
• Enforceability: Strengthening the enforceability of surety indemnity agreements.
• Data Access: Improving timely and efficient data sharing between banks and financial institutions.

A task force has been established, comprising representatives from insurers, banks, and reinsurers.

The task force will work on risk-sharing strategies, improving collaboration, and creating a supportive environment for surety bond insurance growth.

IRDAI Chairman Panda emphasised the importance of overcoming current challenges to fully leverage surety bonds for infrastructure development.

Chairman of GIC Tapan Singhel highlighted the role of collaboration and data sharing in advancing the surety bond market.