1. WELCOME TO PHARMEXCIL MEMBERS FOR PRESENTATION ON E. C. G. C
WELCOME TO PHARMEXCIL MEMBERS FOR PRESENTATION ON E.C.G.C. POLICY SCHEMES
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2. ECGC : AN OVERVIEW Established on 30th July 1957 Board of Directors
Ministry of Commerce
Authorised Capital Rs.1000 crore
Paid-up Capital of Rs.600 crore (Proposed Rs.800 crore)
5 Regional Offices, 51 Branches
Registered with IRDA on
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3. ECGC OVERALL PERFORMANCE 1957 TO 2005
PREMIUM INCOME RS CRORE
CLAIMS PAID RS CRORE
RECOVERIES MADE RS CRORE
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4. PRINCIPLES OF CREDIT INSURANCE
Principle of Co – Insurance
Principle of spread of risk
Principle of good faith
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5. SHORT TERM SCHEMES Standard/Turnover Policy
Specific Shipment/Buyerwise Policy
Single/Multibuyer Exposure Policy
Consignment Exports Policy
Software Exports Policy
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6. RISKS COVERED Buyers Risks Insolvency Protracted Default
Contract Repudiation
Bank Risks
Insolvency of the Bank
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7. RISKS COVERED (CONT.) Political Risks Inconvertibility
Contract Frustration
Contract Cancellation
Import Restriction
Shipment Diversion
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8. RISKS NOT COVERED Commercial / quality disputes
Buyer’s failure to obtain necessary import authorization before shipment
Insolvency/default of any agent of exporter or collecting bank
Risks covered by General Insurers
Exchange rate fluctuation
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9. PRODUCT FEATURES Turnover – based Premium structure
Standard/Turnover Policy
Specific Shipment/buyer-wise Policy
Consignment Exports Policy
Exposure Based Premium Structure
Single Buyer Exposure Policy
Multibuyer Exposure Policy
Software Exports Policy
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10. STANDARD/TURNOVER POLICY
Policy Period – One/Two years
Wholeturnover Concept with exclusions
Percentage of Cover – 90%
Important Obligations
Shipment Declarations along with premium
Credit Limit on buyers
Overdue Declarations
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11. STANDARD/TURNOVER POLICY (CONT.)
Turnover Discount
No Claim Bonus – Maximum 60%
Discretionary Limit
Waiting Period for Claims
Documents for Claims
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12. OTHER OBLIGATIONS Extension in due date Resale to alternate buyer
Conversion of terms of payment
Reshipment of the goods
No discount to original buyer
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13. EXPOSURE – BASED POLICY
Concept
Incidence of premium
Credit Limit
Submission of monthly declarations
Premium and claim on loss limit
Loss limit/Aggregate loss limit
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14. EXPOSURE – BASED POLICY (CONT.)
Other Features
Coverage of all types of terms of payment
No cover for Restricted Cover Countries and Defaulted buyers
Risks covered – same as Turnover based policy.
Premium – Upfront Qtly on LL/ALL
5% discount on Annual Upfront Premium
Percentage of cover – 80/90%
Report of overdues/claim – same as of Standard Policy.
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15. CONSIGNMENT POLICY
Consignment Export (Stock-holding Agent Policy (CEP)
Global Entity policy (GEP)
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16. FEATURES OF CONSIGNMENT POLICY
Combination of Risks Covered – Stock holding Agent
Commercial risks on both stock-holding agent & ultimate buyer with political risk for entire period
Commercial risks on the ultimate buyer with Political risk for entire period
Commercial risk on stockholding agent only with political risk for the entire period; and
Only political risk for the entire period
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17. CONSIGNMENT POLICY (CONTD)
Combination of Risk covered – Global Entity
Commercial risks on ultimate buyers only with political risk for the entire period
Only Political risk for the entire period
If the Global entity is an associate company with less than 49% share holding when both the units are joint stock company, then
Insolvency of the Global entity and commercial risk on ultimate buyers with political risk for the entire period
Insolvency of the global entity with political risk for the entire period.
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18. Features of Consignment policy (Cont.)
Anticipated commercials risks are
a) Insolvency of the buyer / stock-holding agent
b) Breach of contractual obligation
c) Default in remitting sales consideration
d) Misappropriation of stocks by the agent
Premium for quarterly / monthly shall be paid in advance before issue of the policy
Monthly shipment statement before 15th of subsequent month
Percentage of cover 80/90%
Discretionary limit on ultimate buyer
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19. Other Schemes Software Projects & IT Enabled Services Policy
Overseas Investment Insurance
Transfer Guarantee
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20. THANK YOU Large Exporters Branch 2nd Floor Dalamal House
Nariman Point,
Mumbai
Tel N /3780/ /0482
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