Article 3(1) of the RAO extends the meaning of the term “contract of insurance” for regulatory purposes, so as to bring within the purview of insurance regulation under FSMA a range of other contracts, some of which are patently not contracts of insurance as a matter of common law. This Report is concerned with one such inclusion, which (subject to certain qualifications) brings “fidelity bonds, performance bonds, administration bonds, bail bonds, customs bonds or similar contracts of guarantee” within the scope of insurance regulation. It is unclear exactly which contracts fall within this description.
In the context of these enduring issues of legal uncertainty, the FMLC established a Working Group to consider the uncertainties created by the phrase “similar contracts of guarantee” and the components associated with that phrase as set out in Article 3(1) of the RAO, and make recommendations on how such uncertainties may be mitigated.
Available as: PDF.
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