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Dáil Éireann debate -
Thursday, 9 Mar 1989

Vol. 388 No. 2

Written Answers. - Export Credit Guarantee.

72.

asked the Minister for Industry and Commerce the countries which this country at present covers with the export credit guarantee system; the products which are covered for each of the countries; and the amount of export credit insurance for each product in each country currently being covered.

73.

asked the Minister for Industry and Commerce if he will give details of Ireland's exposure to date under export credit guarantees; the amount paid out for each product; the names of the products; and the name of each country of destination.

74.

asked the Minister for Industry and Commerce if he will give details of the process of application for export credit guarantees; the basis on which applications are considered; and the limit of exposure, if any, in any given year.

I propose to answer Questions Nos. 72, 73 and 74 together.

The Insurance Acts, 1909 to 1988, enable the Minister for Industry and Commerce to assume liabilities in respect of export guarantees of up to a maximum of £500 million at any one time. At end February 1989, the maximum liability was approximately £300 million.

The export credit insurance and finance schemes are administered by the Insurance Corporation of Ireland plc (ICI) as agent of the Minister for Industry and Commerce. The insurance scheme assists exports of Irish goods and services worldwide by providing exporters with protection against non-payment by foreign buyers. The finance scheme provides access to export credit finance from banks at preferential interest rates.

Applications for export credit insurance and finance are made to ICI. In line with normal underwriting practice the degree and conditions of cover are determined by market conditions in the buyer country, by the buyer's creditworthiness, and by the terms of the contract being insured. Export credit insurance is available for all countries listed on a published country gradings schedule which is provided to all policyholders. Applications for insurance for exports to countries not on the schedule are considered on a case by case basis. Under the terms of the agency agreement with ICI, ICI are delegated authority to underwrite export credit insurance without reference to me. However, very large export contracts and contracts in markets not on the published country gradings schedule are referred by ICI to my Department for approval.

Insurance cover is provided by way of either a comprehensive policy or specific policy. The comprehensive policy is intended to cover either all or a significant proportion of an exporter's business and is suitable for an exporter dealing with a large number of buyers in several markets and selling on short term credit usually of up to one year duration. The specific policy covers individual one-off type contracts, typically involving capital goods, exported on medium term credit of up to five years. An exporter with a comprehensive or specific policy of export credit insurance may also obtain low cost export credit finance from their bankers. Access to such finance is made possible either by means of assignment of the exporter's insurance policy or by the provision of a guarantee to the appropriate bank.

Roughly £700 million worth of export turnover is insured annually under the scheme at present and to date approximately £5.25 billion of Irish exports have been insured under the scheme. There are about 450 companies employing some 40,000 people using the facilities available under the scheme.

Due to the large number of markets and products covered by the scheme, it is not possible to provide the detailed information sought in relation to the insurance cover in place by product and market. This information will vary from time to time according to the demand for cover in each market, the varying export orders and the varying credit periods. A single comprehensive policy covering a company's entire export turnover might cover 150 buyers in 15 markets. In addition ICI has, at present, approved credit limits in place for about 20,000 buyers in about 130 markets.

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