Oman: CMA prepares insurers for standardised credit life insurance policy
Source: Middle East Insurance Review | Apr 2023
The Capital Market Authority (CMA) has organised a meeting to introduce insurers to the new standard credit life insurance policy.
With its goal of regulating the contractual relationship among the borrower, bank and insurance company, the CMA issued its decision on Standard Credit Life Insurance Policy in January 2023. The new policy aims to provide standard insurance coverage for borrowers’ life in case of death or permanent disability by obligating the insurance company to pay the outstanding balance of the loan.
The decision is in line with the CMA’s 2021-2025 strategic plan, contributing to a legal framework that protects the parties of the insurance process and building confidence among the contractual parties.
The new regulation shall be published in the Official Gazette and shall have effect after 60 days from the date of publication, which was 15 January 2023, said the CMA.
“The insurance policy aims at ensuring the protection of borrowers’ rights and providing them with social and economic protection,” said the CMA executive president Abdullah bin Salim Al Salmi.
“The policy clearly clarifies the rights and obligations of the stakeholders (the borrower, the insurance company and the finance entity) which will contribute to reducing disputes that could occur among the parties in case the risks become reality,” he said. This will eventually be reflected positively in reduced insurance costs.
In addition, the standard policy helps in the continuous cooperation and coordination between the regulatory and supervisory entities, particularly between the CMA and Central Bank of Oman, which enhances the confidence of the customers. M