13 Surety, Fidelity, and Financial Guarantee Bonds by Richard S. Skewes*      A reinsurance treaty is the written document describing the agreement reached between insurer and reinsurer. The reinsurance protection provided by the treaty should enable the insurer to prudently operate in the market segment of its choice. If the treaty is to operate efficiently, it must be specifically tailored to support the insurer's goals for the insurance line involved, as well as the insurer's perception of the risk inherent to the product line. Whenever the goals or perception of risk for a particular line have changed, the wording of either the insurance or reinsurance product should also change to accommodate those new goals or perceptions. In this respect, reinsurance for surety, fidelity, and financial guarantees does not differ from reinsurance for other insurance lines.      This chapter will discuss how the evolution of the perception of risk for surety, fidelity, and financial guarantee bonds has been reflected in the reinsurance contract wording. SURETY Characteristics and Classes      Surety is not insurance. This has been the claim of surety underwriters for decades, and some even cling to that belief today. David Porter, in the preface to his text Fundamentals of Bonding, A Manual on Fidelity, Surety, describes surety as fascinating and different from other insurance lines.      It is fascinating, chiefly because in no other insurance field is the human element so preponderant and so decisive. It is, in fact, this element that largely determines the outcome of both underwriting and production, for better or worse.      That is why bond underwriting and production make necessary a realization of human potential. And that is also why those . . . *Vice President, General Reinsurance Corporation, 695 E. Main Street, Stamford, CT 06904. An autobiography follows the chapter.