WEDNESDAY, MAY 14, 1980
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EXPORT CREDIT CONTINGENT LIABILITY INCREASED
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THE LEGISLATIVE COUNCIL TODAY (WEDNESDAY) PASSED A MOTION TO INCREASE THE MAXIMUM CONTINGENT LIABILITY OF THE EXPORT CREDIT INSURANCE CORPORATION FROM $2 000 MILLION TO $2 500 MILLION.
ACTING FINANCIAL SECRETARY, THE HON DAVID JEAFFRESON, SAID THE CORPORATION'S ADVISORY BOARD HAD UNANIMOUSLY ADVISED MAKING THE INCREASE AS THE EXISTING STATUTORY LIMIT MIGHT BE REACHED SHORTLY.
+FAILURE TO RAISE THE LIMIT WOULD RESULT IN THE CORPORATION HAVING TO TURN AWAY FURTHER BUSINESS, HE SAID.
MR JEAFFRESON EXPLAINED THAT THIS MAXIMUM LIABILITY WAS A THEORETICAL AMOUNT AND WOULD NEVER LIKELY TO BE AT RISK AT ONE TIME.
+ THE CORPORATION ESTIMATES THE ACTUAL AMOUNT PRESENTLY AT RISK AT ANY ONE TIME AT $950 MILLION, HE SAID.
SINCE THE COUNCIL HAD AGREED TO AN INCREASE FROM $1 750 MILLION TO $2 000 MILLION THREE YEARS AGO, HE SAID, THE CORPORATION'S LIABILITY UNDER CONTRACTS OF INSURANCE HAD RISEN BY $441 MILLION AND AT THE END OF LAST MONTH (APRIL) STOOD AT $1 934 MILLION.
+ THE CORPORATION NOW SERVICES 1 102 POLICIES AND PROTECTS EXPORTS ON CREDIT TERMS TO VIRTUALLY ALL HONG KONG'S MARKETS. THE EXPORTS INSURED BY THE CORPORATION AMOUNT TO APPROXIMATELY $3 500 MILLION IN THE LAST FINANCIAL YEAR,+ HE SAID.
MR JEAFFRESON ADDED THAT INCREASES IN THE CONTINGENT LIABILITIES THE CORPORATION WAS ASSUMING WERE BROUGHT ABOUT BOTH BY THE CORPORATION ISSUING NEW POLICIES AND BY INCREASES IN THE VALUE OF INSURABLE BUSINESSES CARRIED OUT BY EXISTING POLICY HOLDERS,
AT PRESENT, CONTINGENT LIABILITIES ARE INCREASING AT THE RATE OF ABOUT $40 TO $50 MILLION EACH QUARTER.
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