Q Who are Technical & General Company S.A.? Are they a bank or an insurance company?
A. Technical & General Guarantee Company are not a bank or insurance company. We are a
private surety company who specialise in commercial guarantees

Q. What is the financial strength of Technical & General Guarantee Company?
A. To augment the financial strength of the company quota share reinsurance has been secured for the benefit of Technical & General Guarantee. This reinsurance is is underwritten by AmTrust International. AmTrust enjoy A rated security. These arrangements have been put in place by Lloyds London Brokers, Kinetic Insurance Brokers Limited.

Q. Do Technical & General provide guarantees for investment programs?
A. No

Q. Can Technical & General provide references?
A. Yes, once a specific transaction is under negotiation.

To help answer your questions please find below some information that might be of help

Surety can take on many names and forms and is possibly older than banking; surety was
probably the forerunner to modern insurance.

Performance bonds, surety retention bonds, performance guarantees, rent guarantee, retention
release bond, deferred payment guarantee, advance payment guarantee, bid bonds, tender bid
bond, trade credit guarantee, bailiff services bond, court guarantees, legal expenses guarantee,
trade credit guarantee, rolling purchase guarantee, leasing guarantee, lease surety, media
guarantee, gap guarantee, non construction guarantee, maintenance guarantee, contract
guarantee, contract surety, completion guarantee.

Where one party, either an individual or a corporate body makes an important promise to
another party which has predominantly financial implications, then it very often necessary that
another, independent entity stands behind that promise to ensure that it is kept. This is a surety
or a guarantor. If the original promise is not kept then the surety or guarantor will step in and
make good on the original promise. This "making good" may be either, in the form of cash, or
by fulfilling the original obligation such as providing goods, which had been promised, for
example or by completing a building project. A guarantee is not a source of funds; it is a way
of ensuring that a commercial obligation is met.

1. Available from banks, insurance companies and as private surety from private surety providers
or corporate sureties.

2. Banks might charge less because they are fully secured.

3. Private Sureties usually charge a flat rate regardless of the time exposure whereas the Banks
and insurers charge a rate per annum. Thus for longer periods the difference in cost is not
marked or even beneficial.

4. Banks treat bonds as 'Use of Facility' i.e. Bank facilities will be reduced by the value of any
Bonds issued by the Bank, not the case with private surety.

5. Banks in general will only write 'On Demand' bonds whereas Insurers and private sure ties will
insist on 'Conditional' bonds i.e. the beneficiary has to show that the guaranteed contracting party
is in breach of contract before the surety will pay (a much healthier situation). Most private surety
refuse to issue on demand surety bonds or guarantees.

6. The security requirements of both Insurers and private sureties vary according to the strength
of the guaranteed company.

7. Bank rates vary between say 0.5% on Bond Value to 3.5% on Bond Value (per annum)
whereas Insurers and private sureties will charge between say 2.5% and 10% on Bond Value as
a flat charge (Correct at the time of writing).

8. The Bond wording can vary considerably but we can meet virtually any requirement other than
'On Demand' or bank guarantee.

The construction industry is a major user of surety bonds and guarantees. These sureties are the
main protection against financial failure and are provided by banks, insurance companies private
and corporate sureties.

These guarantees are issued under seal and are known as Bonds.

Bonds are tripartite agreements whereby in return for a fee the surety gives an irrevocable undertaking to pay a sum of money to the beneficiary UNLESS the party being guaranteed
(contractor) fully performs his contractual obligations in which case the bond ceases to be
of effect.

Bond are written for specific purposes:

Bid Bonds
These provide a guarantee that a tendering party will enter into performance of a contract
if his bid is successful - i.e. he will not withdraw (through insolvency or otherwise) causing
delay and expense to the project. Tendering parties are often asked to include the cost
of such a bond in the price of their tender. Bond value is usually between 1% and 5% of
Contract Value.

Advance Payment Bonds
These protect the Beneficiary against loss where prepayments have been made - usually
in respect of materials for incorporation in the works. Bond values will be the same as the
payment made - reducing in line with performance by the contractor.

Performance Bonds
These are the commonest form of Bond and provide for payment to the Beneficiary in the event
of failure of the contractor to perform his contractual obligation.
In the great majority of cases the failure to perform will be the result of insolvency- very
few Bonds are called as the result of poor workmanship.
Performance bond value is most often 10% of the Contract Value but this can be increased
to 15% or even 25% in circumstances where the beneficiary perceives a greater dependence on
the performance of a particular contractor.

Retention Bond
These retention bonds are given on behalf of contractors in exchange for the release of retention
monies from the employer or main contractor. The value will equal the monies so released -
usually around 2.5% or 3% of Contract Value.

BOND PROVIDERS
The Banks will provide Bonds for their customers. Banking rules require that financial guarantees
are treated as part of the customer's bank facility and thus the issue of each bank guarantee
reduces the borrowing available.

Bonds do not represent particularly attractive business to Banks or their customers because of
the restriction they place on lending.

Insurance Companies and Corporate Sureties
A relatively small number of insurance companies write bonds for the Construction industry.
Bonds must be distinguished from insurance policies - the surety writes bonds having satis-
fied himself so far as he can, that there is no risk attaching to the transaction. The insu-
rance underwriter on the other hand seeks to identify a known risk and to charge a good
price for carrying that risk.

Thus, when conducting bond business Insurers adopt the same criteria as the banks.
However the insurers and private sureties will never have the same level of knowledge
of the customer's affairs - or the level of security enjoyed by the Banker.

For this reason Insurers and private sureties will charge between 3% and say 10% on
Bond Value. This charge is usually a flat charge regardless of the period of the Bond
(as opposed to the Bank's annual charge).

Security
Insurers and corporate sureties will always rank behind the banks in term of the security
available to them. These bond providers will look for deeds of counter indemnity from their
clients and where the net value of the firm is modest or where the firm is under control of
one or a few main shareholders, seek personal counter Indemnities from the directors or
shareholders. Insurers and also private sureties look for tangible security or cash backing
for counter indemnities.

On Demand and Conditional Bonds
In general only the banks will issue on demand bonds i.e. where the guarantee is uncondi-
tional and the amount is fixed. With this type of bond the beneficiary does not have to give
evidence of the extent of his loss to call for payment of the bond. Banks prefer this type of bond
as there cannot be any dispute about whether to pay or how much (this is a little like paying cash
for an unseen and not required item).

Insurers and Private Sureties have an opposite approach and will seldom, if ever, agree to an
On Demand Bond. These providers insist the bond wording includes conditions (insolvency or
breach of contract) that determine if the bond can be called, the amount payable is a measure
of loss suffered by the beneficiary.

Bond Wording
The providers usually prepare the actual bond documents, however the employer or main
contractor may well have a preferred wording, which is released to the tendering parties for
them to obtain the agreement of their bond providers. It is unfortunate that, even through
insurers associations have adopted standard preferred wording and the construction asso-
ciations have published model forms there are some beneficiaries who require use of their
own individual wordings. As a result a good deal of time and correspondence is devoted to
the negotiation of terms acceptable to both providers and beneficiary. The most accompli-
shed, adept and even handed authors of bond wording are clearly the private surety com-
panies who frequently act as a bridge or arbiter between the two parties making them the
perfect third party and the ideal bond provider.