Summary: Pursuant to a legislative requirement, GAO reported on the Export-Import Bank's (Eximbank) export credit insurance program, specifically the: (1) need for government involvement in export credit insurance; (2) need to employ an agent to administer the program; and (3) efficiency and effectiveness of using the Foreign Credit Insurance Association (FCIA) as Eximbank's agent.
GAO found that FCIA: (1) insured $3.4 billion, or less than 2 percent, of U.S. export sales in 1986; and (2) had an estimated cumulative loss of $360 million at the end of fiscal year 1986. GAO also found that: (1) although the availability of export credit insurance will not have a significant effect on increasing export sales, it may be useful as a means to ensure that U.S. exporters have a stable and reliable supply of insurance; (2) after the program incurred large losses in the early 1980's, FCIA continued to perform as a cost-reimbursed servicing agent, but no longer assumed any risk on insured transactions; (3) FCIA initiated actions to improve its operations, reduce costs, and provide more responsive service; and (4) although Eximbank could assume FCIA functions, FCIA expertise and overall performance support its continued role as Eximbank's agent.
