The Foreign Credit Insurance Association protects American businesses from non-payment in international trade deals where goods were sold on credit.
The Foreign Credit Insurance Association (FCIA) is a group of insurance companies which underwrite the foreign credit insurance sold by the Export-Import Bank of Washington DC. The Export – Import Bank, also known as the Ex/Im Bank, is an independent government entity that facilitates and encourages some international trade activity of American companies.
Some companies will usually have the opportunity to sell goods to buyers on a credit basis, meaning it may be paid on delivery or through financing arrangements, but this can be daunting if the company feels it will have no system of recourse if they have a problem collecting payment. With an international credit insurance policy, the company can ship the goods out without having to risk not getting paid.
The insurance will pay a majority of the money which was owed to the exporter, and the exporter is also able to obtain more favorable financing terms from domestic banks. The insurance is funded with premiums from other exporters, similar to the way the FDIC provides insurance using premiums from member banks.
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