By Ron Doyle

At Millennium, we have noted all of the major credit insurance underwriters experienced unprecedented levels of claims in 2008. The forecast for 2009 indicates that the trend will continue or even worsen, prompting us to provide our customers with the following guidelines to protect their policies. (Before following this advice, please check with your own ICBA broker.)

In these circumstances, it is critical to ensure that you understand your obligations under the policy and are complying with them.

• Buyers will be experiencing tighter cash flows. If they do, they may request that you either extend the terms of payments or even agree to PAYMENT PLANS for existing receivables. Such arrangements must be approved by the underwriter on the policy. If you are approached for a payment plan, contact Millennium before agreeing to it.
• Overdue accounts will increase during this period; it is critical that Overdue Reports are completed each month and filed on time. If you have any questions, contact Millennium.
• Claims must be filed in a timely manner as set out in each underwriter’s policy. Understand the deadlines and ensure claims are filed as soon as possible.
• If premiums are being paid in installments or by declaration, make sure they are up to date.
• Do not release shipments to buyers that are seriously overdue or who have amounts outstanding beyond the Maximum Extension Period in your policy.
• Regularly up date the information in your buyers’ credit files. Shorten your review cycles.
• Review the criteria for approving buyers under the Discretionary Credit Limit in your policy.

Each underwriter has terms and conditions of coverage that vary from one policy and one country to another. The foregoing points are general and apply to most policies. However if you are unclear as to any conditions in your policy, please contact your own ICBA broker.

(Ron Doyle is a founder of Millennium Credit Risk Management –credit and political risk insurance specialists – www.mcm.ca. ICBA is the world’s largest team of independently-owned, specialist trade credit insurance brokerages. Partners combine local service with global coordination to provide credit and political risk insurance solutions for multinational companies.)