WITH THE AIM OF DEVELOPING SURETY...
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THE USE OF SURETY AT HOME AND ABROAD
In Turkey and in the world, depending on growing conditions, to find a long-term letter of guarantee from banks or to impose it abroad is becoming increasingly difficult.
This limits the capacity of exporters and contractors engaged in undertaking business abroad.
However, the one-to-one equivalent of the various guarantees used by the exporters and contractors from the banks in the transaction processes exists in the surety market offered by the insurers.
In Turkey, usually taken from banks guarantees such as Advance Letter, Performance Guarantee, Goods-Material Payment Guarantee, Import L / C, Customs Guarantee, Guarantee Period Guarantee can also be obtained from the surety markets.
As in the countries that actively use surety transactions, exporters and contractors who obtain guarantee needs from surety markets can use bank limits for cash loans, thus expanding their working area.
On the one hand, there is a high potential to use surety bonds actively, while there are foreign insurance - reinsurance companies that want to use these products.
As a new development, banks have started to cooperate with surety insurers. Banks can receive support from re/insurance companies for guarantee needs of their customers.
The guarantees required by the customer can be made by sharing them between banks and insurers, as well as insurers can undertake all.
WHAT IS THE SURETY INSURANCE SYSTEM
The surety system works differently from conventional insurance. In classical insurance, the insurer buys the risks of the insured. In case the risk occurs, the insured pays the cost of the damage. In the classical insurance procedure, there are two parties, "insurer" and "insured".
In the surety system, the insurer provides a guarantee to the employer with the risk of failing to fulfill the obligations arising from the legal relationship between the contractor and the employer. In the surety process, there are three parties as "the insurer" is surety, "the insured" is contractor and "the benefiary of the insurance" is employer.
1. Getting of Customer Information: The customer sends the company information to the insurance company.
2. Preliminary Evaluation and Rating: Customer information and credit status are assessed and rated by the insurer and the customer is informed.
3. Getting Surety Application for the Project: The project documents and signed application form are requested from the customer. After reviewing documents, if the project meets the criteria, the customer is informed.
4. Surety Contract: If the project is appropriate and the parties agree to the conditions, a "Surety Agreement" is made between the surety and the customer.
5. Fee Payment: The customer pays the fees determined for the surety to the insurer.
6. Issuing the Bonds: After the agreement is concluded and the fees collected, the bonds are issued on behalf of the employer.
FOLLOWING THE BONDS TO PREVENT FRAUD
7. Surety bonds issued on behalf of the employer must be forwarded directly to the employer by the insurer and uploaded to the insurance company's system. The employer should be able to check the bonds by entering the system with the code given to him by the insurer.
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