On Jan. 22, OMN CMA issued decision on uniform policy for insurance.
OMN CMA published its Decision No. K/4/2023, dated Jan. 15, 2023 providing for a new uniform type of insurance policy form for insurance, on the life of all borrowers.
Overview of Policy
Uniform policy includes defined terms, general conditions, date of policy effectiveness.
Also, required documentation and medical records, requirements for compensation in the event of death, permanent partial disability, and permanent total disability.
In the event that compensation amount exceeds the remaining loan, the difference will be paid to the insured or his heirs; insured must keep electronic records of documents.
Provisions also relate to insurance premiums, payments, claims, and exclusions.
Effectiveness
Decision is effective 60 days after the date of its publication in the official gazette.
Jan. 25, 2023 Press Release
On Jan. 25, 2023, OMN CMA issued a press release on the new Standard Credit Life Insurance Policy and specified the basic benefits, the conditions, as well as exclusions.
This type of policy was created as a result of Decision 4/2023 of OMN CMA, published on Jan. 22, 2023, providing standard insurance cover for borrowers, to cover loans.
The insurance is designed to pay out in case of either death or permanent disability, thereby obligating the insurance company to pay the outstanding balance of the loan.
The policy includes basic and optional benefits for cover, in addition to the exclusions.
These benefits can include death as a basic cover, permanent total disability or even permanent partial disability exceeding 75%, as a consequence of accident or sickness.
This accomplishes an economic dimension, enhancing the role of insurance in reducing credit risks in providing financial facilities to public, for real estate or personal finance.
The policy includes conditions and provisions to protect rights of all the parties such as compliance of parties to good faith on disclosing material facts related to health status.
It also provides legal remedies by calculating insurance premium as a single premium, determined at the commencement of a contract, maintaining the initial premium cost.
Such policies include five exclusions, including previously diagnosed illness was not disclosed, leading to disability or death in two years from the policy commencement.
May 2023 Suspension of Decision
On May 7, 2023, OMN CMA issuedDecision K/25/2023to suspend Decision K/4/2023.
Decision K/4/2023 on borrower life insurance policy is suspended until Oct. 11, 2023.
Suspension was published in the May 7, 2023 official gazette and is effective next day.
Jan. 7, 2024 Updates
On Jan. 7, 2024, OMN CMA issued Decision K/4/2024 to repeal Decision K/4/2023.
Insurance firms shall amend their agreement with banks in line with this decision.
Essential data and practices in borrower's life insurance contracts by insured or his representative related to insurance coverage are considered the basis for this contract.
Insured shall disclose any diagnosed medical condition (chronic, incurable diseases).
Insurer may request medical examination from the insured and shall pay remaining loan amount for medical conditions that insured has not disclosed as per appendix 1.
Listed conditions for policy's entry into force, death and total disability compensation.
Enumerated conditions in which the insured may request the cancellation of the policy.
Calculate insurance premium on single premium basis paid before policy effectiveness.
Specified condition that lead to death or disability excluded from policy's application.
Insured, beneficiary submit a claim form, copy of loan application signed by insured, his heirs, beneficiary, representatives by 365 days from death date or medical report.
Decision shall be published in the official gazette, and be effective as of Jun. 4, 2024.
Regulators
OMN FSA
Entity Types
Bank; CNSM; Ins; MG Orig
Reference
OG 1527, 1/7/2024; Dec k/4/2024, 1/4/2024; OG 1492, 5/7/2023; Dec K/25/2023, 5/4/2023; PR 1/25/2023; OG 1477, 1/22/2023; Dec K/4/2023, 1/15/2023;
