INVESTMENT INSURANCE

As a rule, outward investment indicates complicated and time consuming projects, during which investors are exposed to risks quite different from the risks inherent in the domestic market.

These risks are a sign of force majeure and are not under control of the investor; nevertheless they can severely jeopardize the existence and performance of the investment (war, civil unrest, natural catastrophes, expropriation, conversion restrictions etc.).

Advantages of such an insurance policy are:

•sharing of risks outside of investor's influential area,•facilitated entry into risky foreign markets,•a long-term obligation of SID Bank for insurance even in case of worsened situation in the host country,

•possibility of favourable long-term financing,

•many Bank participation in preparation of investment project and advising in the selection of instruments of insurance against risks,•mediation in case of complications and disputes with the host country of the investment,•repayment of claimsForms of investment eligible for insurance:

•equity: funds invested by investor in investment company or other movable or immovable property, which are expressed in monetary value and are the investor's contribution into the investment company,

•shareholder's loan: granted by a parent company to its subsidiary/investor, with a 5-year or longer repayment period, and

•non-shareholder's loan: funds/loan granted by a financial institution to investment company with a majority ownership share of a Slovene investor.Equity insurance and insurance of shareholder's loan

Equity insurance is insurance of funds invested by a Slovene investor into the project company abroad. This can include founding of a new company (including joint investments), purchase of an existing company or increase in capital of a company. The investor can also invest funds in the form of long-term loan (shareholder's loan).

Insurance policy usually covers a "package" of risks, with an option of custom-made choice of insurance coverage with regard to type of risks as well as coverage level of each risk. This is a 90% coverage, where 10% stands for own share of the investor (meaning that the policy holder to assumes the risk amounting to 10% of sum insured).

Sum insured is the amount of investment the investor wants insured. Investor can include in insurance just a portion of investment, as a current sum insured. The portion of investment not included in the first period of insurance, or for including future undistributed profits, can be included in the insurance in the form of reserved sum insured, for which the policy holder pays only a portion of premium charged for the current sum insured.

Insurance of non-shareholder's loanWhen issuing a non-shareholder's loan, SID Bank insures funds/loan granted by a financial institution to the investment insurance company with a majority ownership share of a Slovene investor.

Risks

The investors can insure their investments at SID Bank against the following non-commercial risks:•war and civil unrest,•expropriation and other forms of dispossession,•conversion and/or currency transfer restrictions,•termination of agreements by the host country of the investment,•refusal of protection of the law,•natural catastrophes.Financial institutions can insure their non-shareholder's loan to Slovene investment company abroad also against commercial risks of:•debtor's insolvency,•failure of repayment of a loan.

[source: http://www.sid.si/credit-and-investments-insurance/investment-insurance]

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