AAUG Insurance Company Ltd AAUG Insurance Company writes Surety AAUG Insurance Company currently writes various forms of Surety Business on a global basis. AAUG definition of Surety is a follows: Is a promise by one party to assume responsibility for the debt obligation of a borrower if that borrower defaults. The person or company providing this promise is also known as a "surety" or as a "guarantor". A surety most typically requires a guarantor when the ability of the primary obligor or principal to perform its obligations to the oblige (counterparty) under a contract is in question, or when there is some public or private interest which requires protection from the consequences of the principal's default or delinquency. In most common-law jurisdictions, a contract of surety ship is subject to the Statute of Frauds (or its equivalent local laws) and is only enforceable if recorded in writing and signed by the surety and by the principal. In the United States of America, the Miller Act may require a surety bond for certain federal projects; in addition, many states have adopted their own "Little Miller Acts".[1] The surety transaction will typically involve a producer,[2]; in the United States the National Association of Surety Bond Producers (NASBP) is a trade association which represents this group. If the surety is required to pay or perform due to the principal's failure to do so, the law will usually give the surety a right of subrogation, allowing the surety to "step into the shoes of" the principal and use his (the surety's) contractual rights to recover the cost of making payment or performing on the principal's behalf, even in the absence of an express agreement to that effect between the surety and the principal. Traditionally, a distinction was made between a surety-ship arrangement and that of a guaranty. In both cases, the lender gained the ability to collect from another person in the event of a default by the principal. However, the surety's liability was joint and www.AAUG.com
primary with the principal: the creditor could attempt to collect the debt from either party independently of the other. The guarantor's liability was ancillary and derivative: the creditor first had to attempt to collect the debt from the debtor before looking to the guarantor for payment. Many jurisdictions have abolished this distinction, in effect putting all guarantors in the position of the surety. In order to underwrite surety business AAUG has developed underwriting criteria that includes the following but is not limited to these items. AAUG requires strong collateral from its counter parties in order to write a Surety contract. The financials need to reflect strong collateral and must be produced from a recognized audit firm within the jurisdiction of which the company is operating. It is also important to have the full details of the contract for which the Surety is being written. AAUG will review the companies past history in completing the deals and its expertise that the contract is covering. In order to learn more about our Surety Business you can contact Ralf Kaiser at r.kaiser@aaug.com. For more information, visit http://www.aaug.com or call us @ (954) 315-3879.
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