On May 22, 2008, Middle East Investment Initiative (MEII) signed a Memorandum of Understanding with the Overseas Private Investment Corporation (OPIC) and the National Insurance Company (NIC), based in Ramallah, outlining a partnership to develop and deploy Palestinian Political Risk Insurance (PPRI). This specialized insurance coverage will be designed to help local businesses mitigate risks due to possible political violence and trade disruption. This product will help Palestinian companies resume or expand their exports, generating additional business and promoting job creation. Critical support has been provided by AIG, Trio Foundation, The Portland Trust, Fried Frank, and individuals contributing on a significant level.
The risk insurance proposal was initiated by President William J. Clinton at the September 2005 Clinton Global Initiative (CGI) annual meeting, and was later advanced at the 2007 CGI annual meeting. From the onset, MEII and NIC played a critical role in the PPRI steering committee, which was guided by the Center for American Progress, AIG, and others. PPRI has received additional support from President George W. Bush, along with political and business leaders from the U.S., Europe, Israel, and Arab countries.
In the pilot stage, OPIC and MEII will reinsure NIC for up to $1 million in political risk insurance for the West Bank and Gaza, with NIC taking a component part of the initial risk. MEII will also provide critical technical support during this period, including providing guidance in areas related to monitoring, marketing, and underwriting, research into the possible reduction of supply chain risks and facilitation of the movement of goods, and technical training assistance. With MEII fundraising efforts, and increased OPIC partnership support in future rounds, PPRI is expected to grow to a $20 million fund, which could make possible exponential growth in Palestinian businesses, exports, and jobs.
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