SERV’s capital consists of the net assets on its balance sheet. It comprises risk-bearing capital (RBC), core capital (CC), the compensation reserve (CR) and net income (NI).
Transactions of particular significance are exports with material economic, social, environmental, developmental or other foreign policy implications. The Federal Council may give SERV instructions on the insurance of such export transactions (art. 34 SERVG and art. 28 SERV-V).
SERV defines exposure as the commitment plus the sum insured of insurance and guarantee commitments in principle (ICP).
SERV defines loading as its earned premium minus the average expected annual loss. Loading is required to calculate economic viability.
SERV defines earned premiums as the portion of insurance premiums that is recognised as income and that covers the risk assumed in the current financial year.
Under letter of credit confirmation insurance, SERV insures letters of credit which serve to pay export receivables of Swiss exporters. The bank confirming the letter of credit is thus protected against default of the bank issuing the letter of credit. The maximum cover ratio is 95 per cent.
SERV’s premium tariff includes provisions regarding premium policies, types, amounts, surcharges, discounts, collection and reimbursement. The premium tariff is approved by the Federal Department of Economic Affairs, Education and Research (EAER) and reflects the OECD rating and the principle of economic viability (art. 16 SERV-V).
A SERV insurance commitment in principle (ICP) means that the insurance policy will be written as requested unless there are material changes in the circumstances or legal position (art. 7 SERV-V). Applicants can request an ICP before concluding the export transaction. ICPs are generally valid for six months.
The framework of obligation is the maximum insurance obligation assumed by SERV. It must be approved by the Federal Council and currently stands at CHF 16.0 billion.
SERV defines commitment as the total of all maximum loan amounts (including the insured interest) multiplied by the cover ratio for all written insurances and guarantees (IP).