Oman - CMA Directs insurers to extend coverage beyond 70 years
Wednesday, 09 09 2020, Category: Insurance and Reinsurance, Country: Oman
The Capital Market Authority (CMA) has followed up with concern the discussions about the difficulty of rescheduling the loans of the retirees in accordance with the Diwan Circular No. 6/5/2020 in line with their retirements pensions as the loans were covered until 60 years of age as per the applicable regulations for the importance of the insurance coverage for the borrowers and financiers.
CMA and the Central Bank of Oman (CBO) considered the possibility of offering incentives and adequate flexibility for the loans of the Omani employees who retired under the Diwan Circular which instructed to retire not less than 70% of the Omani employees working for the government units whose service term is 30 years.
Hence, CMA directed the insurance companies to extend the insurance coverage to 70 years for the loans of those affected by the Circular.
It is noteworthy that the insurers demonstrated consent to cooperate and extend the insurance coverage for death and disability up to 70 years for borrowers and to consider the borrowers on specifying the new insurance premium and not to charge additional amounts or administrative fees, and for individual cases not to deem the extension of the coverage for the retirees affected by the Circular as new policy if the loan amount is not increased, but to be treated as extension only.
Insurance coverage on the life of borrowers is essential element to protect the parties from expected risks, such as death or disability preventing the borrower from work and payment of monthly loan installments and therefore default in payment of the loan, in addition to its importance for the financing entities for preservation of wealth and sustainability of the business.