POLITICAL RISK INSURANCE — MIGA's GUARANTEES PROGRAM (ENGLISH VERSION)

• Jurisdiction: Derecho Internacional

MINING LAW & INVESTMENT IN LATIN AMERICA
(April 2003)
CHAPTER 17A
POLITICAL RISK INSURANCE — MIGA's GUARANTEES PROGRAM (ENGLISH VERSION)
Patricia Veevers-Carter, Regional Manager
Multilateral Investment Guarantee Agency
Washington, D.C. USA

Partial Powerpoint Presentation

Omitted From Electronic Version

MIGA's Guarantee Program

Overview of the Program

Value-Added

Program Highlights

Coinsurance and Reinsurance

Environment for PRI

Guarantees Program

• Provides political risk insurance to protect investors and financial institutions from non- commercial risks

• Provides mediation services of disputes between investors and countries

• Can provide coverage up to $200 million per project and up to $690 million per country

• MIGA's strong claims payment ability based on agency's financial strength and its preferred creditor status

Types of Coverage

• Currency transfer restriction and inconvertibility

• Expropriation

• War and civil disturbance

• Breach of contract (including wrongful call of Performance Bonds)

Investors choose which combination of the four types of cover to purchase

Currency Transfer Restriction and Inconvertibility

Protects against losses arising from

• Inability to convert local currency into forex for transfer outside the host country

• Excessive delays in acquiring FOREX

Currency depreciation not covered

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Expropriation

Protects against losses arising from

• Nationalization and confiscation

• Creeping expropriation

• Partial expropriation (limited coverage)

Non-discriminatory measures not covered

War and Civil Disturbance

Protects against losses arising from:

• Damage/disappearance of tangible assets due to war or civil disturbance (including revolution, Insurrection, coups d'état, sabotage, and terrorism)

• Business interruption when investment is a total loss

Breach of Contract

Protects against losses arising from:

• Breach or repudiation of a contract with the investor

• Non-enforcement of an arbitration

• Wrongful call of Performance...