Acknowledgements Note iii viii INTRODUCTION CHAPTER 1 THE PURPOSE OF EXPORT CREDIT INSURANCE Preliminary questions Confidence in exporting Competitive advantage Sources of information Trade expertise Bank finance Credit insurance The exporter's silent partner The effectiveness of an export credit agency 5 5 7 7 7 7 B 8 8 8 CHAPTER2 NEEDS AND CONSTRAINTS Feasibility study Financing feasibility studies Key issues fora feasibility study First steps Constraints to exporting Control over exported goods 10 10 11 11 12 12 13 V Lifting constraints Export promotion Mutual confidence between exporters and the government Export finance staff The role of government Coverage Risk sharing: the co-insurance principle Forecasting premium income Financial viability CHAPTER 3 ESTABLISHING THE EXPORT CREDIT AGENCY lmporting experience Expertise Staffing plan Administrative staff Marketing and sales staff Accounts and finance Claims Training CHAPTER 4 LEGAL INFRASTRUCTURE AND FUNDING Applicable laws Statutory requirement Supervisory boards Parent bodies Capital requirements Capital structure Building up of reserves for claim payments CHAPTER 5 MAiN PRODUCTS AND POL/C/ES OFFERED New products Breadth of cover to be offered Cover against commercial risks Cover against political risks Exclusion clauses 13 14 14 15 15 16 16 17 17 19 20 20 20 21 24 26 27 27 29 29 30 30 30 31 31 32 34 35 36 36 38 40 -- vi Summary of exclusions Pre-shipment and post-shipment insurance cover Types of insurance policies Short-term post-shipment Short-term pre-shipment Transit risk (whole turnover) Export consignment stock (whole turnover) Special lines of credit Summary CHAPTER 6 EXPORTS OF CAPITAL GOODS Special export contract insurance Terms of payment Cover as an aid to finance Harmonization with OECD rules on ECA credit Risks involved in special contracts Amount of loss Guarantees tor banks - the deficiencies of insurance A comprehensive guarantee tor the individual exporter, including working capital support ( CHAPTER 7 SUPPORTING DOCUMENTATION lntroduction Contracts Widely used standard conditions Letters of agreement Transfer authorizations Conclusion CHAPTERB ASSESSMENT AND MANAGEMENT OF RiSK Definition of risk Types of risk covered in credit insurance Evaluation of risks Evaluation of the foreign buyer's risk Evaluation of political risks 40 41 42 44 44 45 46 47 47 48 49 49 50 51 52 53 53 54 56 56 57 57 58 59 60 61 61 61 62 62 63 vii Currency of payment Role of reinsurance How it works Other risk management techniques 64 64 65 67 CHAPTER 9 FEE STRUCTURE Categorization of risks Assessing premium rates on commercial risks Categorization of countries Public- and private-sector risks Public sector Private sector Duration of cover CHAPTER 10 CLAIMS AND RECOVERY IMPLEMENTATION Claims Procedures Control Enforcement Litigation Arbitration Mediation Direct action Recovery not reported Maintaining wider partnerships 68 68 69 71 72 72 73 73 74 74 76 77 77 77 78 78 79 79 80 APPENDICES /. il. /il. iV. V. A SELECTION OF SL/DES FOR PRESENTATION AND TRAINING EXAMPLES OF LEGISLATION: AUSTRALIA AND ZIMBABWE EXAMPLES OF POL/CIES: AUSTRALIA, THE UN/TED KINGDOM AND ZIMBABWE DOCUMENTARY CREDIT USEFUL ADDRESSES VI. SMALL GLOSSARY OF THE MAiN TERMS USED iN CREDIT INSURANCE POLICIES 85 107 151 199 203 213