06 August 2003
OPIC to Offer Terrorism Insurance to U.S. Businesses Abroad
Step aimed at strengthening support for U.S. direct investment, agency's head says
A U.S. agency has started to offer stand-alone terrorism insurance for U.S. companies in countries for which similar private sector insurance is not readily available.
In a July 31 news release, Overseas Private Investment Corporation (OPIC) President Peter Watson said the new "more cost-effective" service will boost support for U.S. direct investment abroad.
OPIC noted that previously, terrorism coverage was only available under its broader political violence coverage.
Following is the text of the release:
OPIC Press Release
July 31, 2003
OPIC OFFERS STAND-ALONE TERRORISM INSURANCE TO PROTECT U.S. BUSINESSES OVERSEAS
WASHINGTON, D.C. -- The Overseas Private Investment Corporation (OPIC) announced today that it will offer stand-alone terrorism insurance to support the international war against terrorism and further protect American businesses abroad. Previously, terrorism coverage was only available under OPIC's broader political violence coverage.
"Unfortunately, American businesses increasingly have become potential targets for terrorist activities overseas," OPIC President and CEO Dr. Peter Watson said. "By offering stand-alone coverage for companies whose main insurance concerns are terrorist-related," Dr. Watson continued, "we can provide a more cost effective product that will help to continue supporting foreign direct investment in these areas."
OPIC's terrorism insurance will cover violent acts with the primary intent of achieving a political objective, undertaken by individuals or groups that do not constitute a national or international armed force. In addition, coverage will include protection against threats posed by weapons of mass destruction. OPIC will offer tenors of up to 10 years and will cover countries for which private sector insurance is not readily available.
Watson noted that in January 2002, Congress passed the Terrorism Risk Insurance Act of 2002 (TRIA) to ensure the continued availability of terrorism insurance domestically. "OPIC's new product will do the same for insurance of American projects abroad, which TRIA does not cover," he said. "We will also work with the private sector by reinsuring sabotage and terrorism coverages for U.S. corporations and U.S. lenders and by filling the gaps in coverage currently available."
OPIC was established as an agency of the U.S. government in 1971. It helps U.S. businesses invest overseas, fosters economic development in new and emerging markets, complements the private sector in managing risks associated with foreign direct investment, and supports U.S. foreign policy. Because OPIC charges market-based fees for its products, it operates on a self-sustaining basis at no net cost to taxpayers.
OPIC's political risk insurance and financing help U.S. businesses of all sizes invest in more than 150 emerging markets and developing nations worldwide. Over the agency's 32-year history, OPIC has supported $145 billion worth of investments that have helped developing countries to generate over $11 billion in host-government revenues and create over 680,000 host-country jobs. OPIC projects have also generated $65 billion in U.S. exports and created more than 254,000 American jobs.
(Distributed by the Bureau of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)
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