May 14, 2003 by Canadian Underwriter
Export Development Canada (EDC), a Crown corporation, has agreed to provide reinsurance backing on surety bonds for exporters issued by St. Paul Guarantee Insurance Company.
This is the first time EDC has provided surety quota share reinsurance, in this case for up to US$200 million in additional capacity. The treaty is part of EDC’s mandate to provide trade finance and risk management services to Canadian exporters.
The treaty is “an innovative addition to the scope of surety assistance EDC provides to the Canadian exporters,” says Kevin O’Brien, EDC vice president of contract insurance & bonding.
The agreement will immediately help about 50 companies currently buying surety bonds on their U.S. business from St. Paul. However, both EDC and St. Paul expect other companies to take advantage of the capacity.
EDC has been working with St. Paul for a decade to provide accounts receivables insurance for Canadian companies’ export and domestic sales.