Receivables Discounting

This advanced and unique plan offered by ICIC is based on a three-way agreement between the policyholder, ICIC and the financing bank.From a legal standpoint the financing bank purchases the receivables and all the insurance rights of the policyholder. The policyholder continues to work with his clients in the ordinary course of business.

This plan allows the policyholder to determine the characteristics of the discounting, including: the clients’ debts that will be included in the plan, the extent of the discount, its timing and the identity of the financing bank.
This plan offers policyholders significant advantages:

  • Increased working capital – the plan enables the policyholder to increase his bank financing beyond the regular credit limit at his disposal, as the bank relies mainly on ICIC’s credit insurance as a security.
  • Low financing cost – the cost of the discounting under this plan is determined by the policyholder and the financing bank, and is usually equal to and sometimes even lower than the interest rate the policyholder usually pays the bank (this is because ICIC is backed by first-rate reinsurers and is rated Aa3).
  • Reducing the “receivables” line in the balance sheet and improving financial ratios – On the accounting level, this plan enables policyholders to reduce the “receivables” line on the balance sheet and thus improve their financial ratios. Many companies, including publicly traded companies, find this very beneficial.
  • Regular work relations with clients – Under this plan, there is no need to inform the client regarding the sale of his debt, and collections opposite the client remain in the policyholder’s hands.

In certain situations, ICIC also conducts the receivables discounting plan with non-banking financing institutions, thereby assisting the policyholder to diversify his financing sources.

Deed of Authorization

This instrument is an irrevocable order by the policyholder to irreversibly transfer to the financing institution his right to receive insurance benifits from ICIC when an insurance event occurs. This enables the policyholder to increase the financing available to him to a certain extent.

Financing for Special Transactions

This plan is similar in nature to the receivables discounting plan outlined above, but refers to a special arrangement whose bank financing is possible thanks to ICIC’s insurance backing via a “promissory note discount policy.” This policy allows the bank to discount the client’s promissory notes, with the backing of ICIC’s credit insurance. This helps ICIC to provide solutions for international transactions, by combining insurance and financing, from the moment an order is placed until the client remits payment.

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