Improving the Role of Eximbanks/ECAs in the OIC Member States
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ICIEC is an international organization, which was established in 1994 based on an agreement
among members of the Organization of the Islamic Cooperation (OIC) and as a member of the
Islamic Development Bank (IDB) Group. The main objective of ICIEC is to provide investment
and export credit insurance based on Shariah principles, also known as Takaful Insurance.
ICIEC’s activities are expected to boost exports and promote foreign direct investment within
individual member countries and ultimately contribute towards strengthening economic
relations among OIC countries.
As per the guiding principles of Takaful insurance, ICIEC maintains two funds for its operations:
a policyholders’ fund which is used for financing operational expenses and into which insurance
contributions and recoveries from paid claims are placed; and the shareholders’ fund which
includes paid-up capital and accumulated reserves and out of which deficits in the first fund can
be financed through a non-interest loan. Other governing principles include the distribution of
surpluses after accumulated reserves are five times the subscribed capital, and the exclusion of
insurance cover for goods prohibited under Shariah.
In 2013, ICIEC’s total exposure was USD 1,358 million, an 8 percent increase over the previous
year and almost double 2009 levels. While there was a slight decline in levels from 2009 – 2010,
which may be attributed to the Global Financial Crisis, the data shows an instant and significant
increase in 2011 exposure levels.
In 2013, ICIEC’s authorized share capital was over USD 600 million, while its capital base during
the same year was Islamic Dinar 144.9 million (equivalent to USD 217 million)9. ICIEC has 42
shareholders including the IDB and 41 member countries of the OIC. ICIEC’s governing structure
is closely linked with the IDB – the IDB’s Board of Governors, also serves as the governing board
for ICIEC. IDB’s Shariah committee, which is responsible for ensuring operational compliance
Shariah principles, is also responsible for supervising the operations of ICIEC.
ICIEC’s received Aa3 (stable) insurance financial strength rating (IFSR) in 2013.10 Factors that
contributed to this rating include shareholders’ ability and willingness to provide financial
support when needed, the entity’s unique insurance and reinsurance products, which are
Shariah-compatible, its regional expertise and experience and the management support it
receives from IDB.
ICIEC partners with a wide range of ECAs, private insurance companies, associations in export
credit insurance such as Aman Union, Berne Union and Prague Club, associations in Islamic
finance as well as multilateral and regional institutions including DHAMAN and Asian
Development Bank.
ICIEC provides various types of products that are tailored for a wide range of clientele including
trading institutions, investors, banks and financial institutions and ECAs. These products are
provided through four different programs:
i. Trade Credit Insurance Program: Through this program, export credit insurance and
reinsurance for OIC exports is provided, covering against non-payment due to
commercial (buyer insolvency and refusal to pay) and non-commercial (currency
9 Annual report 2013.
10 Moody’s affirms ICIEC’s Aa3 IFSR with a stable outlook.