accounts receivable insurance fund

 

General Overview:

GLN has established an AR Fund for the benefit of its members. Effective 1st January 2006, this Fund is mandatory for all new members. This Fund works in conjunction with GLN's Amber Alert system.

AR Fund Overview:
The AR Fund is owned by participating GLN Members to the extent of their contributions. The funds are administered by the “AR Fund Committee” (currently consisting of Klaus Delle of Detraco/Germany, Greg McKay of Triways/Australia and Roy Stapleton, GLN President), are not considered income by GLN, are maintained in a separate bank account and are not co-mingled with membership fees. GLN will NOT charge a fee for administration of the AR Fund. A full accounting will be given to Members at the Annual Conference.

Although originally established to cover only issues of bankruptcy/insolvency, effective October 2009, the AR Fund has been expanded to protect GLN members against bad/delinquent debts from other GLN members arising after that date and can be used at the discretion of the AR Insurance Fund Committee for other situations and to guarantee up to $5,000 to facilitate initial business between members (whether Platinum or not)

The Annual AR Fund fee and the aggregate amount of the coverage are subject to change.

AR Fund Operation:
The AR Fund is self-funded with an annual fee of USD 500 per annum and, effective October 2009, contributions are capped until further notice at USD 2,500 per participating member. Those participating in the AR Fund are referred to as “Platinum Members” and indicated clearly noted on the Member Directory. Non participating members cannot utilize the A/R fund.

Payments into the AR Fund are refundable to participants upon leaving GLN as defined below after a 90-day period to ensure that all possible debts to/from GLN Members have been settled. The amount refunded will reflect the amount paid into the fund less a proportional deduction for any claims made against the fund.

AR Fund Coverage:
The maximum amount that will be paid out in any single incident is an aggregate amount of USD 30,000.

In order to receive payment from the AR Fund, the recipient must agree to sign any future recoveries of the debt over to the AR Fund and to fully cooperate with GLN in instituting collection and/or legal recovery of such debt.

Exclusions from AR Fund Coverage:
Claims will only be considered if the Amber Alert rules stated above have been followed. The non-reporting of delinquent debts will make them ineligible for recovery under the AR Fund

Claims will only be considered when invoiced under the Company Name that was signed on the initial GLN Membership Agreement at the time of membership. Further, only invoices relating to the offices/cities that are registered will be eligible to participate in this fund i.e. if a company only registers its Hong Kong office but has several other offices in China, only invoices covering freight originating from their Hong Kong office will be considered as eligible.

If one office is a paid registered then only that office can apply to AR Fund. Those members who have offices not registered can become eligible for future access to AR Fund by paying $200.00 for each office and be part of the fund process. It is noted that when some members applied they could not register some cities due to our rules of 3 per city maximum. But was felt prudent that those companies like Triways USA, Altius Spain who registered and paid for all their offices are at an unfair advantage when others register one office. This decision levels the playing field. You do not have to register your other offices but be reminded, if a member goes bankrupt, only the offices paying into fund can claim (Office where physical paperwork transaction took place).

Claims will only be considered if incurred when invoiced while the claimant is a GLN Member i.e. from date of enrollment (funds received by GLN) on a "go-forward" basis until termination of membership.

If any of the claiming members are also member of another network with AR Fund coverage, the claim against the GLN AR Fund will be reviewed after payments made by the other network.

It must be fully understood that the AR Fund is primarily for bad debts rather than operational errors. Claims will not be accepted – unless approved by the AR Fund Committee - to cover non-conformance with service levels, shipments of personnel effects, shippers/consignees connected with Internet mail services such as E-Bay, lost or damaged cargo, invoices covered by a member’s Errors and Omissions Insurance or other insurance coverage, 3rd party damages, currency exchange fluctuations, goodwill payments, illegal transactions, legal fees, interest, etc.

Additional Use of the AR Fund:
As all GLN Members have been pre-qualified, in order to avoid members requesting that freight charges be pre-paid/cash from other GLN members, the AR Fund will indemnify each member up to $5,000. This applies to both Platinum and Regular Members.

 

Revised: October 2009