Trinidad and Tobago requested help from IAIR members on Continuing Guaranty Bonds.
Members from the USA, Singapore, Australia, Canada, UK and South Africa provided thorough and relevant responses in respect of their models of continuing guaranty bonds and other requirements for bonds. All models have given relevant and necessary insight into functioning and mature bankruptcy systems which will be seriously considered in the formulation of our policy.
The most common basis for the calculation of a bond is the value of assets, with the exception of Australia and USA. There is no provision for bonds in Australia. However, the variation of bonds in the USA model is based on different types of bankruptcy that requires Trustees to invest funds of the estate at institutions on a predetermined list to provide a maximum, reasonable net return. Knowledge of this concept as an alternative to the current guaranty bond requirement will be an important consideration for legislative reform.
The UK model also provided insight in the role of Regulatory Bodies (RBs) in monitoring Trustees which we will include in our Outreach Initiative to ensure that RBs are aware of the work of Trustees who are, by statute, required to have membership in specified RBs.
I would again like to extend my gratitude to all IAIR members who shared their wealth of knowledge and experience to our request for information on “continuing guaranty bonds”, that will help bridge this gap in our bankruptcy and insolvency system.
Karen Seebaran-Blondet, Supervisor of Insolvency
Andrea Ragbir, Trustee and Regulatory Affairs Officer