The legal nature of surety bond has long been a subject of endless argument while has not yet been developed a clear conclusion，the reason is that the Chinese insurance law has not classified the ‘guarantee business’ into the scope of business which Chinese insurance companies are permitted to carry out，whereas the market has huge demand of this kind of business，consequently the Chinese insurance companies creatively introduce a series of “surety bond” products to meet the rapidly rising demand of the market for guarantee business. In fact，it will not trigger any theoretical obstacles with the existing Chinese insurance law to expressly permit insurance companies to carry out guarantee business as the insurance companies’ scope of business，instead it is the effective approach for China insurance industry to meet the market demand in a straightforward，reasonable and productive way，moreover from the legislature perspective it is the inevitable choice to scientifically constitute the Chinese insurance companies’ business scope，thus fundamentally resolve the controversial understanding of the legal nature of surety bond and settle the relevant dispute. China insurance industry is capable of well managing the risks that arise from conducting guarantee business.