- Insolvency of the obligor.
- Failure or refusal of the obligor to pay on due date.
- Currency inconvertibility and transfer restrictions imposed by the obligor's country.
- Expropriation, confiscation or government intervention in the business of the obligor.
- War or civil disturbance in the obligor's country
- Protects balance sheet against losses due to commercial/non-commercial risks.
- Reflects capital adequacy. Minimizes non-performing assets.
- Enhances business volume.
- Helps in structuring Shariah compliant financial facilities.
- Reflects better Bank of International Settlement (BIS) insolvency ratio
- Banks/Financial Institutions domiciled in Member Countries.
- Banks/Financial Institutions domiciled in Non-Member Countries. Owned not less than 50% by the IDB or by Member Country.
- Goods having at least 30% value added from one or more Member Countries.
- Banks/Financial Institutions offering Shariah compatible products.
TENOR OF COVERUp to 7 years
HOW IT WORKSDocumentary Credit Insurance Policy (DCIP)
- Importer arranges issuance of L/C.
- The issuing bank issues an LC to the exporter's banks.
- The exporter's bank applies to ICIEC to insure the LC.
- In case of non-payment by issuing bank, the exporter's bank submits claim and ICIEC pays compensation (90% loss).
- ICIEC recovers from the issuing bank and pays 10% back to the exporter’s bank.
Bank Master Policy (BMP)
- The exporter's bank concludes an insurance contract with ICIEC and pays premium.
- The bank provides Islamic financing to the exporter with the purchase contract as a security.
- In case the buyer fails to pay, the bank files a claim with ICIEC, which indemnifies the bank up to 90% of the loss.
- ICIEC recovers from the buyer and returns the 10% share to the bank.