EDC to provide reinsurance for private credit insurers

Export Development Canada (EDC) will provide reinsurance for domestic receivables to Canada’s private credit insurers, allowing them to access up to Cdn$1 billion in capacity.AIG Commercial Insurance Canada, Atradius, Coface, Euler Hermes Canada, Executive Risk Insurance Services and The Guarantee Company of North America are the companies that will access the new capacity, an EDC release says.While the use of the new capacity will be determined solely by market demand, EDC’s Cdn$1 billion in reinsurance capacity could facilitate Canada’s private credit insurance providers to support up to Cdn$4 billion in transactions for Canadian companies, the release adds.The agreement was undertaken after changes to EDC’s legislation as a result of the federal government’s 2009 budget. In the budget EDC received a temporary two-year broadening of its mandate to undertake domestic financing and insurance. EDC’s domestic powers became law on March 12, 2009.“By collaborating with Canada’s private credit insurance providers, EDC’s capacity can be directly and immediately brought to Canadian companies where they already go for their domestic credit insurance needs,” said Pierre Gignac, senior vice president, insurance, EDC.“Insurance is a financing-enabling instrument that will play an important part in EDC’s plan to increase access to credit in the domestic market,” he added.