WEDNESDAY, MAY 19, 1982
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EXPI CREDIT INSURANCE CORPN GETS SUPPORT
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THE LEGISLATIVE COUNCIL TODAY (WEDNESDAY) APPROVED A MOTION TO INCREASE THE MAXIMUM CONTINGENT LIABILITY OF THE EXPORT CREDIT INSURANCE CORPORATION FROM $2 500 MILLION TO $3 000 MILLION.
IN MOVING THE MOTION FOR APPROVAL, THE ACTING FINANCIAL SECRETARY, THE HON HENRY CHING, SAID THAT SINCE THE LAST INCREASE IN MAY 1980, THE CORPORATION'S LIABILITY UNDER CONTRACTS OF INSURANCE HAD RISEN BY $424 MILLION, AND AT THE END OF APRIL 1982, IT STOOD AT $2 358 MILLION,
MR CHING SAID THE CORPORATION'S CONTINGENT LIABILITIES WERE INCREASING AT THE RATE OF APPROXIMATELY $50 MILLION PER QUARTER. +BUT THE RATE OF INCREASE COULD BE HIGHER IF, FOR EXAMPLE, THE CORPORATION ISSUES LARGE MEDIUM-TERM POLICIES, HE SAID.
IN THE CIRCUMSTANCES, HE SAID, THE CORPORATION'S ADVISORY BOARD CONSIDERED THAT THE EXISTING STATUTORY LIMIT MIGHT BE REACHED SHORTLY AND HAD ADVISED THAT THE MAXIMUM CONTINGENT LIABILITY SHOULD BE INCREASED TO $3 000 MILLION.
+FAILURE TO RAISE THE LIMIT COULD RESULT IN THE CORPORATION HAVING TO TURN AWAY FURTHER BUSINESS, + MR CHING ADDED.
EARLIER, THE SECRETARY FOR ECONOMIC SERVICES, THE HON DAVID JEAFFRESON, IN TABLING THE CORPORATION'S REPORT FOR 1980-81, SAID THE CORPORATION HAD MADE STEADY PROGRESS DURING THE YEAR AND HAD ACHIEVED AN INSURED TURNOVER OF $3 507 MILLION, A SLIGHT INCREASE OVER THE PREVIOUS YEAR.
PREMIUM INCOME INCREASED BY 12 PER CENT TO REACH $18 MILLION AND THE SMALL UNDERWRITING DEFICIT FOR 1979-80 WAS TURNED INTO A SMALL SURPLUS. DURING THE YEAR, THE CORPORATION ALSO SERVICED 1 113 POLICIES AND THIS HAD SINCE INCREASED TO 1 209.
*WITH THIS INCREASE IN BUSINESS, LIABILITY NOW STANDS AT $2 358 MILLION COMPARED WITH THE GOVERNMENT'S GUARANTEE OF $2 500 MILLION, + MR JEAFFRESON SAID.
THE CORPORATION'S INSURED EXPORTS FORMED ABOUT FIVE PER CENT OF HONG KONG'S TOTAL EXPORTS, COVERING MOSTLY TEXTILES,
ON THE RISKS SIDE, MR JEAFFRESON SAID FOR A NUMBER OF YEARS, THERE HAD BEEN INCREASING CLAIMS PAYABLE. IN 1980-81, CLOSE TO $13 MILLION WAS REQUIRED TO MEET AND TO PROVIDE FOR CLAIMS. THIS REPRESENTED 75 PER CENT OF GROSS PREMIUM INCOME AND WAS AN IMPROVEMENT OVER 84 PER CENT FOR THE PREVIOUS YEAR.
IN HIS SPEECH, MR JEAFFRESON ALSO PAID TRIBUTE TO THE COMMISSIONER AND STAFF OF THE CORPORATION. HE SAID THE VALUE OF EXPORTS INSURED BY THE CORPORATION SINCE 1975-76 HAD INCREASED BY 120 PER CENT.
+THE CORPORATION HAS NOW ACCUMULATED AN UNDERWRITING SURPLUS OF $6,1 MILLION. THE SIZE OF THIS SURPLUS INDICATES THAT THE CORPORATION HAS BEEN ABLE TO STRIKE A PRUDENT BALANCE BETWEEN EXPANSION OF BUSINESS AND EXPOSURE TO RISKS,+ HE SAID.
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