Deposits and Surety Bonds
The Bonds Branch provides fidejussory policies with which the guarantor company undertakes, in favor of the public administration or private individuals, to guarantee the fulfillment, by the contractor, of obligations deriving from laws or contracts – which include obligations to do, of behavior or to give as long as they are based on regulatory provisions.
Therefore the sphere of application of the Branch must be identified in the context of the existence of a legal relationship, deriving from law or contract, which provides for the provision of a security in the form of a surety policy. Moreover, the Bonds Class, compared to the traditional classes, is not influenced by random factors dependent on the height in the sense that it is not based on the actuarial determination of the risks of loss deriving from unknown or contingent events but, on the basis of preliminary investigation principles, borrowed it also starts from the banking system, designed to verify the technical and organizational capacity of the company requesting the guarantee.
What is the security deposit?
The security is the guarantee, characterized by the deposit of the cash amount in favor of the creditor for the eventual failure to fulfill the contractual obligations by the debtor and which, by virtue of legal or contract provisions, can also be given in the form of a surety policy or a bank guarantee.
What is the surety policy?
It is that contract by which the guarantor company (authorized to operate the Bonds Branch), upon payment of a prize, undertakes personally to guarantee the fulfillment of the obligations assumed by the contracting party (principal debtor) towards the beneficiary ( creditor). As can be seen, the figure of the surety policy is borrowed from that of the surety (personal guarantee) so much so that the Civil Code (art. 1936) defines the surety as “one who, by obliging himself personally to the creditor, guarantees the fulfillment of a obligation of others ”.
Function of the surety policy
The surety policy fulfills two functions: the compensation and the replacement function. Compensation function since the guarantor company, due to the contractor’s default, is required to repay a mere patrimonial damage to the beneficiary. Replacement function because it intervenes every time a person (principal debtor) called upon to fulfill obligations towards the beneficiary, by virtue of law or contract, can resort to the surety policy as a substitute for the more expensive security deposit.
Application of the surety policy
For what reason the principal subject, in order to meet his obligations towards the beneficiary / creditor, can resort to the insurance suretyin place of the payment of the amount by deposit?
The reason for the substitution mechanism of the security is to be found in the recognition by the State – through the creation of a series of suitable regulatory sources – of the possibility for the surety policyto replace the security and to have the same citizenship and value as the bank guarantee. Just think of the Public Procurement Code which, with regard to participation in tenders, recalls the possibility, on the part of the competitor, to provide surety also in the form of a surety policy (Article 75, Legislative Decree 163/2006).
THE DIFFERENCE BETWEEN FIDEIUSSORIA AND FIDEIUSSION POLICY
The insurance guarantee policy is a contract under which the insurance company, or possibly the bank, guarantees compliance with the beneficiary of the agreements agreed by the contractor.
The insurance guarantee is therefore an agreement that governs the relationship between three parties:
- the contractor: subject who is required to provide a guarantee but unable to provide the entire financial coverage;
- the beneficiary: subject who benefits from the insurance guarantee policy as a guarantee of the fulfillment of the commitment signed by the contractor;
- the guarantor: or the insurance agency or the bank body that issues the deposits.
The surety policy is defined by the United Sections of the Court of Cassation (18 February 2010, n. 3947) as an atypical guarantee, thus distinguishing it from the “ordinary” guarantee; consequently, the surety regulations do not apply to the surety policy.
“The surety policy stipulated to guarantee the obligations assumed by a contractor becomes an atypical guarantee, on the basis of the irreplaceable nature of the main obligation, so that the creditor can claim from the guarantor only compensation, a service different from that to which he was entitled. With the clarification, moreover, of the invalidity of the policy itself if it intervened subsequently with respect to the non-fulfillment of the obligations “
The surety policy is, from the genetic point of view, a stipulated shop, according to the contract in favor of a third party ( a party – the stipulator – designates a third party as having the right to the service to which the promisor is bound) and characterized by the assumption of commitment to pay a certain amount to the beneficiary, by a bank or an insurance company, in order to guarantee the latter in the event of non-fulfillment of the benefit due to him by the contractor.
The third – creditor – is not a part, neither in a substantial sense nor in a formal sense, of the relationship. It merely receives the effects of an agreement already established and operating between two other parties.
Once the solvency of the applicant has been verified and the extent of the risk, the body prepared for the stipulation of the sureties, will issue the guaranteed surety policy which will specify:
- the amount guaranteed to the beneficiary if the policyholder defaults;
- the duration of the contract;
- the relative premium of the policy, or the cost of the guarantee.
The guarantee issued by an insurance agency provides for the payment of the policy as the only cost, while if a bank is responsible for issuing the guarantee, this could require the freezing of assets, securities or sums of money as protection.
Obviously, if you contact an insurance agency for the stipulation of policies, the advantage is, in addition to a greater speed in obtaining the policy, not having to immobilize a certain liquidity or your own assets.
The surety, on the other hand, can also be free of charge.
The types of insurance policies are numerous and varied. The most requested are:
- Policy for public tenders;
- Policy to guarantee contracts between private individuals;
- Guarantee for foreign contracts;
- Customs bail;
- Rental policy;
- Policy for urbanization;
- Guarantee for VAT and income tax refunds Irpef / Irpeg / Ilor.
The significant difference that distinguishes the surety policy from the surety is to be identified in the function of holding the creditor harmless from the consequences of the failure to fulfill the service on the principal debtor.
The surety is protected interest in the exact fulfillment of the principal service, while in the policy guarantors the guarantor’s undertaking is qualitatively different from the originator, because it is not directed to the payment of principal debt, but to compensate the creditor dissatisfied through the timely payment of a predetermined sum of money, replacing the failed or incorrect performance of the debtor.
From this it follows that the surety policy and the surety, although united by the same purpose of offering the creditor-beneficiary the guarantee of the positive outcome of a given economic operation, are distinguished because the surety policy is an indemnity or reinstatement guarantee, (the creditor is protected against the debtor’s non-fulfillment through compensation for damages) while the guarantee is a satisfaction guarantee, characterized by the creditor’s power to specifically achieve the fulfillment of his right.
Concluding the United Sections considered that the surety policy, is configured as an atypical guarantee, which does not aim to guarantee the fulfillment of the obligation of the main debtor (as happens in the surety), but to ensure the presence of a solvent subject in the creditor able to keep it free from any default.