Commitment and Contingencies

3 Months Ended

Sep. 30, 2011

Commitments and Contingencies Disclosure [Text Block]

NOTE-10 COMMITMENTS AND CONTINGENCIES

(a) Operating lease commitments

The Company is committed under various non-cancelable operating leases with fixed monthly rentals, due through September 2015. Total rent expenses for the nine months ended September 30, 2011 and 2010, was $365,097 and $294,316, respectively.

As of September 30, 2011, the Company has future minimum rent payments due under various non-cancelable operating leases in the next four years, as follows:

Years ending September 30:
2012	$	406,406
2013		291,882
2014		264,330
2015		252,623
Total:	$	1,215,241

(b) Guarantees

As of September 30, 2011, the Company has 629 surety and tendering guarantees outstanding. If the Company’s customers fail to complete their performance obligation in a timely manner so that the Company is obligated to pay on its guarantees, the Company would have the maximum potential amount of future payments of approximately $197,478,742 (RMB1,264,219,409) in total.

Provision for guarantee losses reflects the Company’s best projection of defaults and the Company believes that it is more likely as a result of loss events that have occurred through September 30, 2011. However, the uncertainty in macroeconomic factors and the uncertainty of the effect of any current or future government actions to the global economic crisis make forecasting of default rates increasingly imprecise. The Company regularly reviews actual guarantee loss claims experience to determine if any necessary adjustments may be recognized to the reserve in the period in which those differences arise or are identified. For the nine months ended September 30, 2011 and 2010, the Company experienced no actual claims for guarantee loss. At September 30, 2011, the Company has accrued $1,479,703 on the provision for guarantee losses for any potential claims.

SINO ASSURANCE INC. 10-Q