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Uncertainty surrounding new Mexican surety product remains


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Nigeria

October.06.2014

Six months prior to the launch of the new seguro de caución surety product, under Mexico's insurance and finance law, firms in the sector are expressing concern over the lack of certainty surrounding the legislation.

The sector is concerned with the lack of clarity regarding how the new product should be presented in the market, said Mario Sentíes, director of Mexican surety firm Sentíes & Chauvet, according to local paper El Economista.

Specifically, a policy has yet to be created that outlines how the product works and demonstrates the benefits of such coverage to companies such as state oil firm Pemex and utility CFE.

Global reinsurer Swiss Re echoed these sentiments, saying in a press release that companies which intend to specialize in seguros de caución had many challenges to overcome before releasing the product, such as the development of a master policy.

Under the insurance and finance law, which comes into effect in April 2015, seguros de caución can only be offered by specialized companies, with the result that existing surety firms must change legal status in order to offer the product.

The insurance product constitutes a new form of guarantee, which will compete with surety bonds, and is intended to encourage innovation and broaden the range of products and coverage available to the public.

Article Credit: Bnamericas

Updated 4 Years ago
 

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Tags:     Mexican Surety     Mario Sentíes     El Economista

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