Export Proceeds Insurance Policy

Concept of Coverage

Commercial Risks

• Importer bankruptcy/insolvency.
• Failure or refusal to pay despite the exporter fulfilling contractual obligations.
• Unjustified refusal to take delivery of shipped goods.

Non-Commercial (Political) Risks

• Sudden cancellation/non-renewal or restriction of import licenses.
• Wars, revolutions, or public disturbances in the importer’s country.
• Confiscation or governmental measures in the importer’s country or a transit country leading to seizure/confiscation of goods.
• Discriminatory exchange rates or restrictions on transferring the exporter’s foreign-currency proceeds by authorities.
• Transit disruption risks.

Types of Coverage

• Comprehensive Export Proceeds Policy

Covers export proceeds against both commercial and non-commercial risks.

How it works

1. The exporter signs a sales contract with the importer.
2. The exporter signs an insurance contract with the Company and pays the premium.
3. The exporter ships the goods and notifies the Company of the shipments.
4. If a buyer fails to pay, the exporter files a claim and the Company compensates up to (90%) of the contract value.
5. The Company recovers the full amount from the buyer and then pays (10%) to the exporter.

Key benefits

• Protecting the balance sheet from commercial and non-commercial losses.
• Improving capital adequacy and reducing non-performing assets.
• Supporting business growth.
• Helping structure compliant financial facilities.
• Improving metrics aligned with BIS-related standards.
• Encouraging flexible payment methods such as (CAD) and (D/A), improving competitiveness.

• Specific Export Proceeds Policy

Covers specific export transactions against commercial and non-commercial risks.

How it works

1. Sales contract is signed.
2. Insurance contract is issued and premium is paid.
3. Goods are shipped and shipments are reported.
4. In case of non-payment, compensation up to (90%) of the contract value.
5. Recovery from the buyer, then (10%) is paid to the exporter.

Issuance requirements (first-time)

1. Electronic export contract (Ministry of Trade).
2. Export contract between exporter and importer.
3. Valid commercial license.
4. Exporters & importers registry.
5. Chamber of Commerce membership certificate.
6. Company form (7Sh).
7. Financial statements for the last three years (if available).

Claims procedure

1. Written notification within (30) days of the event.
2. Disclosure of any recovered amounts/other compensation related to the loss.
3. Authorization for the Company to take necessary recovery actions upon claim notification.

• Export Proceeds Policy for Importer’s Bank Risk (Documentary Credits)

How it works

1. The importer submits an LC application.
2. The issuing bank issues the LC to the exporter’s bank.
3. The exporter applies to the Company to insure the LC.
4. If the issuing bank fails to pay, the exporter’s bank files a claim and the Company pays (90%) of the loss.
5. The Company recovers from the issuing bank and then pays (10%) to the exporter.

Note: The brochure indicates reinsurance arrangements and specialized expertise in export proceeds insurance.