As a rule, only investments flowing into developing countries are eligible. Whereas only one scheme explicitly requires the existence of a bilateral agreement with the host country as a precondition for insuring a project' many schemes strive to safeguard their exposure through general bilateral investment protection agreements between home and host countries.
Assistance to the development of the host country by promoting investments, promotion of the home country's exports or its access to raw materials, as well as promotion of mutually advantageous economic relations, are basic objectives of the national schemes. While some schemes concentrate on one or more of these targets, others strive, with varying priorities, to integrate all of them. All schemes operate under the auspices of their respective governments. Most are required, or at least expected, to operate on a self-sustaining financial basis.
Since the early 1970s some private insurance underwriters have started to issue policies to cover noncommercial risks for firms operating in developing countries.
The capacity of private insurers has increased significantly. The private insurers were successful mainly by making their programmes complementary to national insurance schemes. Despite some disadvantages of private insurance - higher premiums (up to 5 percent) and shorter period of coverage (one to three years) -- it provided coverage that could not be obtained under the national schemes because of their restrictions (for example' host-country ceiling and limitation to new investments by nationals).
To overcome the weaknesses of national and private insurance programmes for noncommercial risk, international or multilateral investment insurance systems have been considered repeatedly since the early 1960s. The Inter-Arab Investment Guarantee Corporation was established to insure investment from Arab member states in other Arab member states.