EFIC is a self-funding statutory corporation, established in its current form on 1 November 1991 under the Export Finance and Insurance Corporation Act 1991 (the "EFIC Act") as a statutory corporation wholly-owned by the Commonwealth of Australia.

The EFIC Act charges EFIC with undertaking four key functions:

• to facilitate and encourage Australian export trade by providing insurance and financial services and products to persons involved directly or indirectly in such trade
• to encourage banks and other financial institutions in Australia to finance or assist in financing exports
• to manage the Australian Government's aid supported mixed credit program (a facility which has now been discontinued, although loans are still outstanding under it)
• to provide information and advice regarding insurance and financial arrangements to support Australian exports

EFIC operates primarily in that part of the market that is not served by the private market, the ‘market gap’. At the same time, EFIC is a self-funding organisation operating in accordance with commercial principles.

EFIC's obligations to third parties are guaranteed by the Australian Government. This guarantee has never been called. The Corporation attributes this success to the strong risk management framework that it has implemented for identifying, evaluating and managing risk.

Commercial Account

EFIC's legislation provides for two distinct platforms from which Australian exports can be supported. In the case of the Commercial Account, the risks underwritten are carried by EFIC as a corporation. Premiums and other fees are retained by EFIC and any losses are borne from EFIC's accumulated capital and reserves.

National Interest Account

In the case of the National Interest Account, the Minister for Trade can direct EFIC to enter into a facility, or give approval for EFIC to enter into a facility, if he or she believes that it would be in the 'national interest' to do so. If EFIC suffers loss in relation to a National Interest Account transaction, the Australian Government reimburses EFIC for the loss.

National interest transactions tend to involve:

• financial commitments which are too large for EFIC's balance sheet
• risks which EFIC considers are too high for it prudently to accept on its Commercial Account
• transactions which would be commercially acceptable if EFIC did not already have significant exposures to a country or entity