ABSTRACT
This chapter examines Overseas Private Insurance Corporation's (OPIC) past efforts to transfer some of its functions to the private insurance industry. These efforts fall into three general categories: reinsurance, joint underwriting and parallel underwriting. OPIC provides war risk insurance, which protects the investor against losses incurred through revolution, insurrection, and war. The insurance rates established by developed states range from 0 for Portugal to 1.25 percent for Switzerland. One of the prerequisites of writing risk insurance is knowing that the risk in question is insurable—that is, that the probability of loss can be estimated, the appropriate premiums calculated, and reserves accumulated. Congress passed Public Law 93-390, the Overseas Private Investment Corporation Amendments Act of 1974, which makes clear the congressional intent concerning the role of the private insurance industry. OPIC argued to Congress that parallel underwriting raised many legal and regulatory issues and would entail a host of cumbersome administrative procedures.
