Orange Group | FAQ
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What is a surety bond?

A surety bond is a contract in which the guarantor (surety) financially guarantees to an obligee (beneficiary: contractor or authority) that the supplier or contractor (principal: SME, contractor, supplier or other) will act in accordance with the terms established by the bond.
A surety bond is a secondary contract that guarantees compliance with the obligation that is determined in the main contract.

Which authorities regulate Mexican Sureties?

Mexican sureties are controlled by National Commission of Insurance and Surety (Comisión Nacional de Seguros y Fianzas), which is a deconcentrated agency of the Public Treasury Secretary (Secretaría de Hacienda y Crédito Público)

How much does a surety bond cost?

Will depend on the size of the contract, plus an additional net premium, rights, issuance cost, VAT.

What is required in order to acquire a Surety Bond?

As a Natural Person
Submit an original document and two copies to the agent for its inspection.
  • Source document
  • Application-contract
  • Interview form
  • Authorization of the consult from the bureau of credit
  • Official I.D.
  • Proof of residency
  • Taxpayer identification number
  • Recovery guarantees
  • Unique Population Registry Key
  • Last’s year Annual Tax Return, Fiscal year-end statement, and last financial statement (optional)
  • Proof of income and/or related assets
As a Legal Person
Submit an original document and two copies to the agent for its inspection.
  • Source document
  • Application contract
  • Interview form
  • Authorization of the consult from the bureau of credit
  • Official I.D.
  • Proof of residency
  • Taxpayer identification number
  • Recovery guarantees
  • Last year’s Annual Tax Return, fiscal year-end statement and last financial statement (optional)
  • Proof of income and/or related assets
  • Alta de Hacienda Tax original registration
  • Powers
  • Articles of Incorporation
  • Company’s CV
  • Audited financial statements
All these documents are essential to underpin that the principal has the sufficient moral, technical, legal and economical capacity.

Is it cheaper to acquire a bond directly with the Surety than with a broker?

The cost is the same; but you can get a special rate with the broker, and with a more personalized and efficient service.

Is it necessary to constitute real estate guarantees?

If you are a company with a proven financial solvency, the exception of a real estate guarantee could be considered. However, for bonds with a payment obligation, such as leases, alimony or tax nonconformities, the real estate guarantee is necessary.

What are the types of Surety bonds?

  • Fidelity bond
  • Non-criminal judicial bond
  • Administrative bonds
Administrative bonds:
a) Construction and suppliers’ bonds: guarantee the fulfilment of different obligations generated by the recruitment of Works or assets and services acquisition.
The construction and suppliers’ bonds are the following:
  • Bid bond
  • Advance Payment bond
  • Performance bond
  • Good quality and hidden vices bond
b) Tax bonds: Used before tax authorities and guarantees the fulfilment of obligations related to imports, taxes, rights, fines.
The most common are:
1.-Fiscal nonconformity: guarantees the payment if the nonconformity result presented is adverse for the principal.
2.-Payment agreement: guarantees payments in the instalments that have been agreed upon provided that the party under bond recognized his debt.
  • M.S.S, from labour management contributions
  • INFONAVIT, from contributions
  • A.T, from federal taxes and customs duties
3.- Customs bond: Import or export tax according to the Customs Code
c) Lease bond: Guarantees the payments of assessments under a rental agreement.
This could be:
  • For personal property, equipment, machinery
  • For real estates
d) Other administrative bonds: Guarantee the fulfilment of different obligations.
Some types are:
  • Permits and concessions: Guarantees the fulfilment of different obligations that derive from permits and concessions granted by the Federal, State or Municipal Government to.
  • Permits: Raffles and draws, developments.
  • Concessions: Verification centres, satellite communication, Notaries and customs brokers.
  • Ticketing: It guarantees the fulfilment of the obligations assumed by Travel agencies, as established in the Contracts of Mercantile Commissions, concluded with national and international airlines or land transportation lines. It guarantees the delivery of the ticketing’s product, in time and manner.

A bond must contain these characteristics:

In accordance with Article 166 of Ley de Instituciones de Seguros y de Fianzas, bond policies must include the following characteristics:
  1. The name and address of the Surety Company, principal and the beneficiary
  2. Principal’s obligations as established in the agreement
  3. Bonded amount, guaranteed amount, or the agreed compensation amount
  4. The beneficiary must prove to the Surety the breach of the obligation guaranteed. For bonds before the Federal Government, the Federal District, the States and the municipalities, it should be observed how was it planned in the regulatory and administrative applicable laws.
  5. The issuance date and its period of validity.
  6. Specific terms in accordance to the regulatory and administrative applicable laws.
  7. Signature of the representative of the Surety company.

What is the next step if I already fulfilled my obligation?

After fulfilling your obligation, you have to cancel the surety bond. And for this you need to submit any of the following options:
  • Letter from the Beneficiary where is specified that the obligation is over and satisfactorily fulfilled.
  • Document that proves the fulfilment of the obligation.
It is very important to cancel your bonds in order to make sure that the obligation is extinguished and to be able to free the bonding line.

If the principal does not hold up the obligation as established in the contract, how can I claim the bond?

  • The beneficiary may either demand the principal to fulfil the obligation or contact the Surety’s claim department.
  • As established in Article 279 of the Ley de Instituciones de Seguros y Fianzas, in order to begin a claim process, the beneficiary must submit a letter in writing, accompanied by the all the necessary documentation to prove its existence and demand the obligation guaranteed.
  • The written notification must contain:
    • Complaint date
    • The policy number
    • Bond’s Issuance date
    • Bond’s amount
    • Principal’s name
    • Beneficiary’s name, or duly authorized legal representative, if applicable
    • Address of the beneficiary, in order to receive notifications
    • Description of the obligation guaranteed
    • Reference of the source document (dates, number, etc)
    • An overview of the failure to comply the obligation and the amount that was originally demanded

What extinguishes the Surety obligations?

If a client lies, covers up or declares facts that have not occurred.

What happens if the Surety does not pay the compensation?

If you are right, and the surety owes you the compensation, do not quit and if you insist on it you may get to an agreement. Ask the Surety to answer you back in written so that you have proofs of their denial. Rely on us for these situations.

How can I change my insurances from one company to another?

Please communicate your concern to us with time and we will advise you for choosing the best option, whenever desire.

What is life insurance?

Life insurance provides a sum of money to your loved ones in the event of your death, allowing them to continue with their financial objectives and stability.

If I have health issues my insurance will be cancelled?

That is not a reason for a cancellation. The clue is that you always pay your insurance on time.

What hospital to choose?

This depends on the insurance company and the type of insurance contracted. We recommend you to call us for advice.

What is an uncovered insurance?

Is the period that you were uncovered for non-payment; it is important you’re you write down your due date as well as the renovation. We will be reminding you in advance.

Can I choose the doctor?

Depends on which insurance you have and if the salary rate adapts to your doctor’s fees.

Will my car insurance cover me if I was not driving when the accident happened?

Depends on the conditions stipulated in your insurance policy, but normally if the driver the day of the casualty was not the main one or he was under 25 years, you may not be covered. However, you can contact us, and we will try to find a solution.

I need to notify the insurance company if I travel with my car to the U.S. or Canada?

It is important that you share this information with us, so that we can check your coverages; these countries require a liability for third-party damages.

Do I need to buy a car insurance?

You need to contract at least the liability to third-parties coverage.

What is not covered by my car insurance?

Car insurance generally do not cover the following situations or events:
  • Driving under the influence of alcohol or drugs.
  • If you do not have a license, or it is expired
  • Driving more people than seat belts in your car.
  • To race or to compete.
  • Defects caused for normal wear.
  • Damages for the transportation of flammable, explosive or toxic substances that were not reported.

What do you mean with the “contents” in my house insurance?

It refers to all the furniture and the important objects you have when contracting the insurance. For example, furniture, wardrobes, household appliances, computers, sound systems and recording devices, stationary equipment, radiators, boilers, alarms, etc.
If you need any further information, please do not hesitate to contact us! It is very important to know what insurances you have. Contact us and we will support you!