Trade insurance is insurance for overseas transactions (exports, investments, loans) conducted by Japanese companies. The trade insurance system covers the risks of war, expropriation, restrictions on foreign exchange transactions, and long-term, large-value transactions that private insurance usually cannot cover, and has a strong character as a public service.
In Japan, however, the business has been transferred to Nippon Export and Investment Insurance (NEXI) since 2001, based on the Trade Insurance Law. In Japan, however, the business has been transferred to Nippon Export and Investment Insurance (NEXI) since 2001, based on the Trade Insurance Law. NEXI was initially an independent administrative institution, but is now a joint stock company wholly owned by the Japanese government (see Chapter 2 of the Trade Insurance Law), and is positioned as a special company under the Trade Insurance Law.
There are two main types of accidents covered by trade insurance: those caused by force majeure, such as bans on foreign currency exchange, restrictions on foreign currency remittance, restrictions or bans on imports, or war, and those caused by the responsibility of the contracting party, such as bankruptcy or default of the contracting party.
Different underwriting policies and standards are established for the types of transactions and indemnities to be covered, depending on the country risk and financial condition of the counterparty.
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