Guarantee Insurance Legal Issues

Based on the theory and practice research, this paper discussed the new-born surety bond through the following aspects: the principals of insurance law, the comparative analysis and the use of special institutions. There are four chapters in this essay. There is a general description of surety bond in the first chapter. This chapter introduces the definition, characteristic, classification and development in the world. Through the comparison with alike definitions, this chapter demonstrates the particularity of the insurance and gives the surety bond a definition. The second chapter is the key part of this essay and un-solved question: should surety bond be guarantee or insurance? The writer enumerates and comments on several points of view on this question. Then through the analysis on choice of several countries and districts on the development of the surety bond, the social function and value and legislation compatibility, it is found that though surety bond has both the characteristics of insurance and guarantee, for the development of the surety bond and the reduce of legislation cost, surety bond should be adjusted by insurance law. The third chapter discusses insurance risk. The risk of surety bond is the credit risk of the insured. To some extension, this kind of risk is subjective, and only can be produced by the policy-holder. The last chapter discusses subrogation, which is also special. Through the classification of obligor's nonperformance, it is discussed in which nonperformance, the insurer can exercise the right of"subrogation". And the questions of object, name, time and condition in the exercise of the subrogation shall also be involved.