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WASHINGTON, DC / ACCESS Newswire / March 3, 2025 / The Surety & Fidelity Association of America (SFAA) and the National Association of Surety Bond Producers (NASBP) led a Legislative Fly-In with members from across the industry to educate Congress on the value of construction surety bonds and advocate for key legislative priorities. These important meetings with policymakers focused on expanding support for the bipartisan Water Infrastructure Subcontractor and Taxpayer Protection Act (S.570 / H.R.1285), which would strengthen the Water Infrastructure Subcontractor Finance & Innovation Act (WIFIA) program by requiring appropriate bonding for all projects, including public-private partnerships (P3s). This bipartisan legislation was introduced by Senators Mark Kelly (D-AZ) and Kevin Cramer (R-ND) and Representatives Mike Bost (R-IL) and Chris Pappas (D-NH) on February 13 of this year. Surety professionals held over 135 meetings with policymakers and staff to emphasize the significant savings that surety bonding provides to taxpayers across the country. Using data from the Ernst & Young (EY) study, The Economic Benefits of Surety Bonds, industry leaders reinforced that surety bonds safeguard taxpayer dollars, ensure project completion, protect subcontractors, suppliers and workers, and drive economic growth. “SFAA members engaging with federal policymakers is a vital part of our advocacy mission, ensuring Congress understands the essential role of surety bonds in supporting and safeguarding public infrastructure projects,” said Ryan Work, President and CEO of SFAA. “Working with our industry partner, NASBP, our critical engagement with Congress strengthens and engages members on key issues affecting our industry.” “The needs of the Nation’s critical infrastructure are readily apparent, and surety bonds guarantee that these projects will be delivered, protecting the investments of taxpayers,” commented Mark McCallum, CEO of NASBP. “The story of surety’s benefits is compelling and one that each new Congress must understand as it legislates for the country’s advancement. My thanks to all those surety professionals who took the time to tell the story to their members of Congress,” McCallum added. During these joint meetings, industry leaders emphasized the critical role of surety bonding in federal infrastructure projects. Discussions included the importance of bonding requirements for WIFIA, ongoing P3 projects, the Broadband Equity, Access, and Deployment (BEAD) program, and other initiatives supporting the nation’s infrastructure. NASBP and SFAA also hosted a special event featuring insights from former Congressman and U.S. Transportation Secretary Ray LaHood and a panel discussion with Jack Ruddy, the Majority Staff Director of the U.S. House of Representatives Transportation & Infrastructure Committee. SFAA and NASBP look forward to our continuing dialogue with Congress, the Administration, and Federal Agencies to advance key priorities that support projects across the country. To read the EY report and get additional information on the value of surety, visit www.surety.org/suretyprotects. The Surety & Fidelity Association of America (SFAA) is a nonprofit, nonpartisan trade association representing all segments of the surety and fidelity industry. Based in Washington, D.C., SFAA works to promote the value of surety and fidelity bonding by proactively advocating on behalf of its members and stakeholders. The association’s more than 425 member companies write 98 percent of surety and fidelity bonds in the U.S. For more information visit www.surety.org. https://www.accessnewswire.com/newsroom/en/government/surety-industry-unites-on-capitol-hill-to-advocate-for-key-legislative-priorities-994562

CHICAGO — PMC Casualty Corp. argues that an Illinois federal judge properly denied Virginia Surety Company Inc.’s motion to dismiss a lawsuit accusing it of failing to remit $20 million allegedly owed under a vehicle service contract reinsurance agreement. In a Feb. 25 opposition filed before Judge Matthew Kennelly of the U.S. District Court for the Northern District of Illinois, PMC says Virginia Surety does not identify a legitimate basis for reconsideration by establishing either a “manifest error” in the opinion or newly discovered evidence. https://www.harrismartin.com/publications/14/reinsurance/articles/54520/reinsurer-says-judge-properly-refused-to-dismiss-vehicle-service-contract-case

CHARLESTON, W.Va. (WCHS) — West Virginia Sen. Jim Justice has been issued a garnishment summons to pay more than $3 million in debts owed to an Illinois-based creditor after the senator failed to repay a bond, court records show. The summons, issued on Jan. 28 by the United States District Court, Western District of Virginia, states that Justice owes $3,179,383.83 plus $101,369.69 in interests to Western Surety after he allegedly broke a contract with the insurance company. According to the initial filing from Western Surety from August 2024, the debt came after Justice’s Bluestone Resources Inc. and Southern Coal Corp. was ordered to pay more than $2.7 million, plus additional fees, following a judgment from May 2020 in the District Court of Dallas County Texas that ruled in favor of Texas-based financial service business First National Capital which claimed Bluestone breached an equipment lease contract. Following the ruling, Chicago-based Western Surety Company executed a supersedeas bond on behalf of Bluestone Resources Inc. worth more than $3 million to allow for Justice’s company to file an appeal. However, according to the attorney representing First National Capital, the appeals court affirmed the decision and dismissed Bluestone’s petition for review in 2023, thus requesting Western Surety to pay the bond penalty. Sen. Justice now has the option of making a based on the judgment, file a “written answer with the court” or appearing before the U.S. District Court in Harrisonburg, Virginia on March 28. The garnishment summons is the latest in the senator’s financial woes with reports from Forbes in January that estimates $1 billion in debts owed by Justice, as well as a decline in asset valuation. The former governor-turned-senator has faced several legal challenges regarding finances related to both his coal companies and the luxury resort, The Greenbrier, which is owned by the senator’s family. https://wchstv.com/news/local/court-issues-garnishment-summons-to-sen-jim-justice-for-3-million-in-debts

The insurance sector offers significant growth potential despite challenges like outdated underwriting, trust issues, and complex processes. Opportunities exist in areas such as vehicle underwriting, SMB insurance, and surety bonds, with innovation-driven startups poised to capitalise on these gaps. Moneycontrol Opinion February 18, 2025 / 11:15 IST BY Mayank Jain Problems with Medieval Vehicle-Only Underwriting Motor insurance in India continues to rely heavily on vehicle-only underwriting, where premiums are based solely on the type of vehicle and city. This means that two vehicle owners with the same car in a given city are charged identical premiums, ignoring customer-specific factors like driving behaviour, vehicle usage, demographics, or CIBIL scores. The reliance on vehicle-only underwriting stems from third-party distribution, where 95% of new car premiums are distributed by OEM brokers (dominating the 0-4-year car market) and individual agents (dominating the 4-8-year market). These third parties withhold personally identifiable information (PII) from insurance providers to avoid disintermediation during renewal, leaving insurers unable to customise premiums. This has created a scenario where good customer cohorts – such as those with prime CIBIL scores (750+) or middle-aged (35-50 years) customers – end up subsidising high-risk segments. Despite attempts by existing players to address the issue, the complication persists. This creates a clear opportunity for another D2C insurer to emerge, provided they can develop an economically viable direct go-to-market (GTM) strategy. Alarming Trust Deficit in SMB Insurance Our conversations with SMB owners across industries and revenue scales revealed a glaring trust deficit in insurance. Businesses with revenues between ₹10-250 crore report severe pain points, particularly for non-health products like fire, marine, liability, and engineering insurance. This segment views online insurance as a compliance-driven market, where the cheapest policies are purchased solely to meet counterparty or lender requirements. However, SMBs cite a clear unmet need for protection-focused policies. They struggle with unclear policy terms, complex documentation, and surprises at the time of claim, which often result in rejections or reduced payouts. In fact, many SMBs believe insurers lack the intent to honour claims and are designed to reject them. We see this as a greenfield market, with opportunities for startups to take a full-stack approach – owning underwriting, distribution, and claims – while targeting specific industries or supply chains. For insurance-tech startups targeting SMBs, the key will be identifying specific market segments to target and crafting an economically viable GTM strategy. Surety Bonds: Unlocking Capital for Infrastructure In infrastructure and construction, businesses are required to provide guarantees during projects, traditionally through bank guarantees. Bank guarantees require collateral, often in the form of fixed deposits, which ties up valuable liquidity. With high capital costs, freeing this collateral could bring significant economic benefits to these sectors. Surety bonds, which are an unsecured alternative to bank guarantees and are issued by insurers, help solve this problem. While the commission for surety bonds is higher, they free up working capital for businesses. Although widely adopted in the U.S., this market is nascent in India, with IRDAI introducing the framework only in 2022. Insurers are still exploring how to underwrite these products, and service providers and beneficiaries lack awareness. Startups can play a key role in enabling adoption by educating the market and building underwriting capabilities. However, the market’s limited size and the complexity of the product mean it remains an emerging opportunity that calls for cautious optimism. Thinking Ahead Beyond these opportunities, the insurance sector also grapples with several other problem statements that present scope for innovation. In healthcare insurance, delays in cashless approvals are driven by mistrust between hospitals and insurers, aggravated by a lack of standardised medical coding, which leads to manual inefficiencies. In microinsurance, categories like crop and trip insurance are held back by manual claims processes – there is no automated or parametric claims system in place, even though it is feasible. In life insurance, mis-selling by agents – who prioritise commissions over customer needs – results in poor policies with low coverage and high churn, with over 50% of policies lapsing within five years. Ultimately, at its core, the insurance industry is burdened by an outdated tech stack and resistance to change. Nevertheless, the sector offers massive opportunities for startups willing to tackle specific pain points. Success in this sector will depend on the founders’ ability to develop economically viable GTM strategies, build trust, and leverage technology to modernise underwriting, distribution, and claims processes. (Mayank Jain, Principal, Stellaris Venture Partners.) Views are personal, and do not represent the stand of this publication. https://www.moneycontrol.com/news/opinion/ripe-for-disruption-opportunities-and-challenges-in-the-evolving-insurance-sector-12943480.html

According to the police, on January 4, they received information that forged documents were being submitted before the Cantonment Court for bail of an accused Bachhan Singh Bhond, who was arrested in a criminal offence registered at Kondhwa police station. Pune city police arrested 11 persons including two lawyers in connection with a racket of producing forged documents and fake sureties in various courts to secure bail for accused persons in serious offences. According to the police, on January 4, they received information that forged documents were being submitted before the Cantonment Court for bail of an accused Bachhan Singh Bhond, who was arrested in a criminal offence registered at Kondhwa police station. A police team led by police sub inspector Dhanaji Tone then laid a trap and nabbed a suspect, Santoshkumar Shankar Telang (32), a resident of Shewalwadi near Hadapsar at the court premises. Police nabbed five others identified as Jitendra Shivram Karangutkar (39) of Thane, Subhashan Shankar Totre (40) of Ambegaon and Dnyaneshwar Shinde (55) of Khed taluka in Pune district, Sanjay Manohar Padwal (42) and Sujit Sakpal (36) of Mulund in Mumbai. A key accused, Farhan alias Bablu Shaikh, managed to escape from the court, police said. Probe revealed the suspects allegedly appeared before the court as witnesses with fake names and submitted forged Ration cards, Aadhaar cards, 7/12 extract documents for the bail of an undertrial, Bhond, lodged in Yerwada jail. A first information report (FIR) was lodged at Wanavdi police station against the accused persons under sections 319 (2), 318 (4), 338, 336 (3), 340 (2), 3 (5) of the Bharatiya Nyaya Sanhita. During investigation, police arrested Darshan Ashok Shah (45) of Pune Camp on January 7 for allegedly providing fake rubber stamps to the wanted Farhan Shaikh. On January 9, police arrested Piraji alias Chandrakant Shinde (60) of Moshi and Gopal Kangne (35) of Pimpri for allegedly providing copies of bogus ration cards to the accused producing fake sureties in the courts. During investigation, police recovered 95 suspicious ration cards, 11 Aadhaar cards and various other documents from the accused persons. A press release issued on Monday mentioned that the statement of accused Telang was recorded before the court, in which he named Farhan Shaikh and three lawyers – Aslam Sayyad, Yogesh Jadhav and Narendra Jadhav, with whom he allegedly conspired to produce fake surety before the court to get bail for accused persons in different crimes for financial gains. Accordingly, police arrested advocates Aslam Sayyad (45) and Yogesh Jadhav, both residents of Hadapsar, on Sunday. During a press conference, Deputy Commissioner of Police (Zone 5) Rajkumar Shinde said so far the probe revealed that the racketeers allegedly played a role in getting bail for 32 accused persons in 24 serious crimes by producing fake surety in different courts in Pune city, Pune district and Pimpri Chinchwad. “These crimes include offences such as attempted murder and Arms Act cases. Appropriate legal action would be taken against these accused released on bail due to fake surety. Some of the courts have already initiated action. Further investigation is on.We are also probing the role of court staff in the racket, ” said Shinde. Police said more arrests are likely in this case. Police are probing into the financial transactions of the accused operating the fake surety racket. Police said the masterminds allegedly hired people by offering them up to Rs 2000 each, along with travel and food expenses, to appear before the court as fake witnesses and produce forged documents required as surety for fulfilling bail conditions. Also, police suspect up to Rs 4000 per fake document was paid to the accused allegedly involved in forgery. https://indianexpress.com/article/cities/pune/fake-surety-of-bail-racket-for-accused-in-serious-crimes-lawyers-arrested-9815666

Marc H. Silverman, Acting United States Attorney for the District of Connecticut, announced that JAMES KEATING, 52, of Paoli, Pennsylvania, was sentenced today by U.S. District Judge Victor A. Bolden in New Haven to 20 months of imprisonment, followed by three years of supervised release, for defrauding his former employer of more than $1.4 million. According to court documents and statements made in court, Keating was an Assistant Vice President and surety bond claims handler at Allied World Insurance Company (“Allied World”). He later served in the same capacity at Crum and Forster subsidiary U.S. Fire Insurance Company, where he also handled claims on Allied World surety bonds. All surety bond claims were handled through Allied World’s offices in Farmington, Connecticut. Between 2017 and 2021, Keating defrauded Allied World in two ways. First, he used a shell company, American Construction & Industrial LLC, to bill Allied World for unnecessary claims work that was not performed and took the proceeds for himself. Second, he solicited and received kickbacks from Allied World vendors through another Keating-owned company, Surety Risk Solutions (also known as “SRS” or “SR5”), without the knowledge of his employer. Keating also caused these vendors to use another company in which he had an undisclosed ownership interest, Kodiak Asset Recovery, for asset searches at vastly inflated prices. Keating profited nearly $1 million through American Construction & Industrial LLC, more than $350,000 in kickbacks through Surety Risk Solutions, and nearly $125,000 through Kodiak Asset Recovery. Judge Bolden ordered Keating to pay restitution of $1,226,603.97, which represents the loss to Allied World of $1,446,491.95, less $219,887.98 that he previously repaid as part of a civil judgment. On July 30, 2024, Keating pleaded guilty to wire fraud. This matter was investigated by the Federal Bureau of Investigation and prosecuted by Assistant U.S. Attorney David E. Novick. https://www.justice.gov/usao-ct/pr/pennsylvania-resident-who-defrauded-allied-world-insurance-company-sentenced-prison#:~:text=Marc%20H.%20Silverman%2C%20Acting%20United,release%2C%20for%20defrauding%20his%20former

On November 20, 2024, the Surety Bonds regulation (O.Reg. 461/24) came into force under Ontario’s Planning Act. This regulation provides land owners and those applying for planning approvals with the option to stipulate that a surety bond will secure their approval-related obligations. This type of surety bond is generally called a subdivision or development bond. Section 2 of the Surety Bonds regulation requires the bond to provide as follows: BLG’s Construction and Surety Group is available to answer questions about this new regulation and related considerations for your contracts, and its Municipal Group is available to assist with agreements under the Planning Act. This article provides an overview and is not intended to be exhaustive of the subject matter contained therein. Although care has been taken to ensure accuracy, this article should not be relied upon as legal advice. https://www.blg.com/en/insights/2024/12/the-new-surety-bonds-regulation-under-ontarios-planning-act

New Delhi [India], November 29: In India’s rapidly growing construction and infrastructure landscape, securing contractual obligations is paramount. Traditionally, bank guarantees have served as the backbone for ensuring performance, payment security, and contract fulfillment. However, with challenges such as high costs, reduced liquidity, and restricted access for many contractors, the reliance on bank guarantees is being reconsidered. Enter the surety bond: a modern financial tool that is emerging as the perfect replacement for bank guarantees, particularly in the construction sector and for Engineering, Procurement, and Construction (EPC) companies. This article explores how surety bonds are revolutionizing the industry and why they are a blessing for Indian EPC firms striving to thrive in a competitive and capital-intensive environment. Read More: https://theprint.in/ani-press-releases/surety-bond-a-game-changer-for-indian-epc-companies-and-the-construction-industry/2380454/

Constructive Thoughts Newsletter October 2024 – 5 min read The Guarantee Company of North America v. Raeside highlights the enforceability of surety rights under a General Indemnity Agreement (GIA). For a party to advance defences such as non est factum or relief from forfeiture, substantial proof to substantiate these defences is needed. Otherwise, a court will seek to uphold the terms of the GIA, however onerous those may seem. When surety bonds are issued, underlying indemnity agreements provided to the surety are required. These indemnity agreements ensure that obligations—whether in construction, commercial contracts, or other ventures—are met, and they provide security to the party relying on that performance. The Guarantee Company of North America v. Raeside offers valuable insight into how surety rights work, and what can happen when the obligations under an indemnity agreement are not fulfilled. Case Overview This case revolves around the estate of Vernon S. Bates, who died without a will (intestate) in Michigan. Mr. Raeside, a cousin of Mr. Bates, sought to manage the estate as the personal representative. To do so, the Michigan court required him to post a bond of $4,000,000. A bond like this acts as a safeguard, ensuring that the estate’s assets are properly handled. GCNA issued the bond to Mr. Raeside, who signed a General Indemnity Agreement (GIA) with GCNA. Mr. Raeside distributed around $7,000,000 to maternal heirs, keeping $500,000 for himself. Later, paternal heirs came forward, claiming part of the estate. The Michigan Probate Court found that Mr. Raeside had improperly distributed funds and ordered him to return the money (a process called disgorgement). When Mr. Raeside failed to comply with this order, GCNA sought collateral under the terms of the GIA. GCNA applied for summary judgment, asking the court to compel Mr. Raeside to post collateral amounting to $3,585,000 to cover potential liabilities. Mr. Raeside argued that he didn’t understand the indemnity provisions in the GIA, and relief from forfeiture (arguing the financial demand was unfair). The court rejected these defenses and upheld GCNA’s right to enforce the GIA. The Court’s Decision The court found that GCNA had fully complied with its obligations under the GIA for two reasons: Unsuccessful Defenses: Non Est Factum + Relief from Forfeiture Non Est Factum Mr. Raeside claimed he did not fully understand the GIA when he signed it, invoking non est factum, which allows a person to escape liability if they were fundamentally mistaken about the nature of the contract. However, the court dismissed this defense for two main reasons: Relief from Forfeiture Mr. Raeside also sought relief from forfeiture, arguing that enforcing the collateral demand would impose a severe financial burden on him and his spouse. The court denied this defense for the following reasons: Takeaways This case highlights the importance of understanding and complying with indemnity agreements. When such an agreement is in place, the surety’s rights are strongly protected, and defenses like non est factum or relief from forfeiture require substantial proof to succeed. It serves as a clear reminder that negligence or failure to meet contractual obligations can result in significant financial liabilities for those involved in any industry where indemnity agreements are required. If you’re dealing with complex surety and/or indemnity agreements, it’s critical to seek legal advice. Contact Anthony Burden orJordan Lalonde in Calgary, Ryan Krushelnitzky in Edmonton, or any member of Field Law’s Construction Group for guidance and assistance in this area. https://www.fieldlaw.com/news-views-events/239902/behind-the-bond-understanding-surety-rights-indemnity-agreements?utm_source=mondaq&utm_medium=syndication&utm_content=articleoriginal&utm_campaign=article