In the case of assignment, the original creditor (= assignor) assigns its receivable to a new creditor (= assignee). Assignment may also be referred to as cession.

Subsidiaries and affiliated companies of the policy holder on which the policy holder has a significant influence may be co-insured in the insurance contract. The contractual partner of the insurer remains the policy holder.

Insurance cover also means protection from loss. The scope of the cover, as the term indicates, refers to the scope of the insurance (protection from loss).

Suspension of cover
If suspension of cover comes into effect, new receivables are excluded from the insurance cover and existing receivables that are not insured cannot come under the insurance cover, even if the credit limit is no longer exhausted. Suspension of cover may come into effect, for example, through the maximum extension period being exceeded or the credit limit being cancelled by the insurer.

Cover of existing receivables
Cover of existing receivables refers to the inclusion under the insurance cover of receivables that arose before the start of the insurance contract.

This is an assessment of creditworthiness by the insurer.

Credit check application
If the discretionary limit is exceeded, the policy holder must instruct us to perform a credit check. The easiest and quickest way to do so is via Prisma Net or using the “Credit check request” form.

Credit limit notification
A credit limit notification is a notification from the insurer to the policy holder about whether a credit limit can be provided and, if so, the level of the credit limit.

Credit monitoring fee
The credit check fee is a sum payable per credit limit and per year for the initial credit check and ongoing credit monitoring of the buyers covered by the insurance.

Credit check fees apply if the insurer assesses certain companies for the policy holder.

Credit insurance covers all receivables of the policy holder arising from deliveries of goods and/or work or services at home and abroad. The credit insurer monitors the customers of the policy holder. If they fail to pay their invoices, the insurer indemnifies the loss.

The credit limit is the maximum amount up to which the insurer provides cover for receivables from customers of the policy holder.

Credit reports provide information about the creditworthiness of companies and are provided to the policy holder by a credit agency. Those credit agencies are specified in the insurance contract whose credit reports may be used by the policy holder under the discretionary facility. 

The credit term is the payment term that the supplier gives the buyer for payment of the supplied goods,
e.g. 30, 90 or 120 days on credit.

Maximum extension period
The period specified by the credit insurer within which the policy holder's customer (buyer) must actually pay the invoice in order for negative effects on the insurance cover to be avoided.

Maximum extension period exceeded
The maximum extension period is exceeded if the buyer has failed to pay by the end of the maximum extension period.

Creditworthiness refers to a company’s ability to repay its debts (commercial repayment ability) and the willingness to do so (willingness to pay).

Credit checking and credit monitoring
During a credit check, a company’s ability to pay is assessed either by the insurer itself or by a company contracted by the credit insurer. Customers of the policy holder for whom there is a credit limit are checked on an ongoing basis by the credit insurer and the information about such customers is updated. As a result, credit checking becomes credit monitoring.