§ Ms. HarmanTo ask the President of the Board of Trade what short-term insurance or reinsurance is offered by the Export Credits Guarantee Department to United Kingdom exporters to non-OECD countries to cover political risk; and if he will make a statement.
§ Mr. NeedhamSince December 1991, the privatised successor of the insurance services group of the ECGD has assumed responsibility for the provision to United Kingdom exporters of short term export credit insurance previously provided by the ECGD.
The new company currently sources over 90 per cent. of its reinsurance needs, for both commercial and political risk worldwide, from the private market. The ECGD participates in the company's reinsurance treaties so as to supplement the cover available from the market, thereby ensuring that the company's full needs are met. This transitional support will be available up to December 1994 in order to give time for the new company to arrange to source its full reinsurance requirements from the private market.
Quite separately, the ECGD provides the new company with 100 per cent. reinsurance of the risks, largely political, arising on certain high risk markets for which no capacity is being made available by the private market. This facility is not time limited and, subject to satisfactory financial performance, it will continue for as long as the Government consider it essential to meet the reasonable needs of United Kingdom exporters.
These arrangements are intended to ensure that United Kingdom exporters do not suffer any reduction in export credit insurance facilities as a result of the privatisation.