Page 111 - DMGT546_INTERNATIONAL_TRADE_PROCEDURE_AND_DOCUMENTATION

International Trade Procedures and Documentation

Notes Premiums calculated on the projected turnover are payable in four quarterly installments.
However, the facility of monthly payment of premium can also be granted on a case-to-case
basis.
At the end of the year, if the premium payable on the basis of the actual turnover is less than the
premium paid on the basis of the projected turnover, the excess amount paid will be carried
forward to the next policy period which could be adjusted in the premium for the first quarter of
the renewed policy. In case the policy is not renewed, and if the difference between premium
paid and premium payable is more than 10%, the same will be refunded, subject to marginal
adjustments.

Did u know? If the premium payable on the basis of the actual turnover exceeds the projected
premium by not more than 10%, the excess premium need not be paid and if it exceeds by
more than 10%, only the excess of the premium over 10% needs to be paid.

5.5.3 Small Exporter’s Policy

This is another version of the Standard Policy, aimed at encouraging small exporters to obtain
and operate the policy. It is issued to exporters whose anticipated export turnover for the period
of one year does not exceed ` 50 lakh. The salient features of this policy that set it apart from the
Standard Policy are:

Small Exporter’s Policy is issued for a period of 12 months.
Premium payable is determined on the basis of projected exports on an annual basis,
subject to a minimum premium of ` 2000 for the policy period.

No claim bonus in the premium rate is granted every year at the rate of 5%.
Shipments need to be declared quarterly.
Small exporters are required to submit monthly declarations of all payments remaining
overdue by more than 60 days from the due date.
For shipments covered under the Small Exporter’s Policy, ECGC will pay claims to the
extent of 95% where the loss is due to commercial risks, and 100% if the loss is caused by
any of the political risks.

The normal waiting period for claims under the Small Exporter’s Policy is two months.
In order to enable small exporters deal with their buyers in a flexible manner, following
facilities are allowed:
(i) A small exporter may, without prior approval of ECGC convert a D/P bill into
D/A bill, provided he has already obtained suitable credit limit from the buyer on
D/A terms.
(ii) Where the value of this bill is not more than `3 lakh, conversion of D/P bill into
D/A bill is permitted even if the credit limit on the buyer has been obtained on D/
P terms only, but only one claim can be considered during the policy period on
account of losses arising from such conversions.
(iii) A small exporter may, without prior approval of ECGC, extend due date of payment
of a D/A bill provided a credit limit on the buyer on D/A terms is in force at the
time of such extension.

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