Insurance of the risk of non-repayment of export credit extended to residents

Eximgarant of Belarus has developed a specialized insurance product for pre-export financing: credit insurance covering the risk of non-repayment (default) and/or delayed repayment (arrears) of export credit extended to resident entities, including leasing companies. Financing is provided by commercial banks and the Development Bank to replenish working capital and fulfill obligations under an export contract or international leasing agreement.

This insurance provides coverage for losses sustained by the financing bank in the event of the borrower’s non-performance of its repayment obligations under the credit agreement with respect to the return of the principal loan amount within the timeframes specified in the credit agreement, as a consequence of the borrower’s bankruptcy or insolvency.

Financing is offered in EUR and USD at Commercial Interest Reference Rate (CIRRs); in RUB, at a rate not less than 2/3 of the Key Rate set by the Central Bank of the Russian Federation; in BYN, at a rate not less than 2/3 of the Refinancing Rate set by the National Bank of the Republic of Belarus; and in CYN, at a rate not less than the 1-year Loan Prime Rate (LPR) set by the People’s Bank of China.

The conclusion of an insurance agreement provides the bank with security against the entire outstanding principal loan amount, thereby obviating the need for the policyholder to undertake a prolonged debt recovery proceeding.

The procedure of interaction:

1.       Conclusion of an export contract;

2.         Conclusion of a credit agreement;

3.       Conclusion of an insurance contract;

4.       Production and supply of products as stipulated in the export contract;

5.       Рayment by the foreign buyer for the supplied products;

6.       Non-repayment of the loan by the borrower;

7.       Payment of the insurance compensation, transfer of the right of claim to Eximgarant of Belarus;

8.       Submitting a claim against the foreign buyer.

The list of documents required for the conclusion of an insurance contract:

·        Application for insurance contract conclusion;

·        Insured’s title documents;

·        The credit agreement and security agreements related to the obligations under the credit

·        The borrower’s title and financial documents.

Procedure for the Insured to follow upon the occurrence of an accidentthat may constitute an insured loss under the terms and conditions of the insurance policy.

Upon the occurrence of an insured accident, the policyholder is obligated to submit the following documents no later than 30 calendar days from the end of the waiting period:

·     A copy of the insurance contract (insurance policy);

·     Documents proving the occurrence of the insured accident and the amount of the loss.

·     Documents confirming the Insured’s expenses for taking reasonable and available measures under the circumstances to reduce potential losses.

·     A written explanation from the borrower regarding the reasons for non-repayment of the loan.

·     A certified copy of the court’s ruling in the event of the borrower’s bankruptcy.

·     Any other documents necessary for establishing the occurrence of the insured accident and the amount of the Insured’s losses.

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