According to the above provisions, the function of an independent guarantee is that the debtor fails to perform its payment obligations when the payment is due. When a creditor claims rights from a financial institution on the basis of a written payment commitment document issued by a financial institution independent of the basic transaction relationship, the financial institution will unconditionally pay him a certain amount or a maximum amount as long as the creditor can provide a written document indicating the payment due event.
One view is that a guarantee insurance contract is similar to an independent insurance policy. First of all, insurance companies are non-bank financial institutions and have the main qualification to issue independent letters of guarantee. Secondly, ensure that the insurance contract is independent of the basic trading relationship and has independence. Furthermore, the triggering condition of insuring against an insured accident is that the debtor fails to fulfill the payment obligation of repaying the principal and interest due. Moreover, when the beneficiary (creditor) claims from the insurance company, he needs to provide a written document stating that the payment is due and the debtor has not fulfilled the contract. Finally, after reviewing the above-mentioned documents, the insurer shall bear the responsibility of independent claim settlement, and shall not use the defect of the effectiveness of the basic transaction relationship as a defense, nor refuse to pay compensation on the grounds that the creditor has other preferential ways of payment, but unconditionally pay the creditor a certain amount or a maximum amount.
On the other hand, although the guarantee insurance contract and the independent letter of guarantee are independent of the basic contract, they are not comparable. First, they are published by different subjects. Although insurance companies can also issue letters of guarantee as non-bank financial institutions, the applicable legal and regulatory requirements at this time have exceeded the scope of the insurance law; Secondly, these two situations are different. Guarantee insurance is mainly applicable to consumer loan business, while independent guarantee is generally applicable to international trade, generally involving foreign factors. Third, their business models are different. When issuing a letter of guarantee, the applicant can be required to pay all the deposit in advance, but the insurance has strict rate supervision, and the business operation and business start-up process are different. Letter of guarantee is a kind of credit service, which is essentially different from guarantee insurance. Finally, independent guarantees generally require payment at sight.
To sum up, the rights and obligations between the parties to a surety insurance contract are similar to those between the parties to an independent letter of guarantee, but the determination of the nature of the surety insurance contract depends on the people's court and the arbitration institution to make a case-by-case judgment according to the agreement between the parties until the judicial interpretation of the insurance law makes clear provisions on this issue.