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Export Development Canada, a government-owned lender and insurer, stopped writing new policies to protect Canadian parts makers in the event of a bankruptcy filing by Chrysler.
A spokesman for the Ottawa-based insurer, Phil Taylor, said by e-mail on Monday that the export Development Canada would honor existing insurance policies covering debt for Chrysler suppliers, customers today, but that should not be they can increase their reach and that new policies were not being written.
“The change was based credit account,” he said. “We have to balance our mandate with our credit decisions.”
EDC decision that gives them the loan is known, can create problems for small and medium-sized parts makers, said Gerry Fedchun, president of the Automotive Parts Manufacturers’ Association, a trade group.
Mr. Fedchun said Canadian parts makers are disproportionately dependent on Chrysler, which has several plants in the Northern States, as well as two large factories in Ontario.

“The fact that EDC is not the issue of new things tells us that this situation is very, very, very seriously,” said Mr. Fedchun. “Because they are a government-backed bank, they are more tolerant of risk.”

Lenders generally require that small and medium-size parts makers purchase insurance against the possibility that their customers will not pay the outstanding bills because of bankruptcy.

Export agency provides parts plants sold to the Canadian carmakers because most vehicles assembled here are shipped to the United States.

In the current economic climate, said Mr. Fedchun, the agency has become almost the sole source of insurance claims. Several policies still available from other subscription, he said, come with premiums as high as 10 percent, far above the margins of typical parts makers.