News Middle East13 Sep 2020

Oman:Regulator directs insurers to extend loan cover to beyond age of 70 for retirees

| 13 Sep 2020

Omanis above 60 years of age will have their loan repayment periods rescheduled to their benefit, while borrowers aged 70 and above will still be eligible for health insurance, because of the effects of the COVID-19 pandemic, the Capital Market Authority (CMA) has announced.

This is in accordance with a government circular which said that loans can be adjusted for people above 60, in line with their retirement pensions. The decision came after discussions between the Central Bank of Oman and CMA to help those Omanis who had been asked to retire from government employment after having completed 30 years of service, reported Times of Oman.

According to the circular, 70% of government employees were expected to retire after completion of 30 years of employment in the public sector.

The CMA directive followed discussions about the difficulty of rescheduling the loans of the retirees in accordance with the government circular. This is because insurers provided cover for loans to pensioners up to 60 years of age.

According to the Oman News Agency, it is noteworthy that the insurers demonstrated assent to cooperate and extend insurance coverage for death and disability beyond 70 years of age 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 a new insurance policy if the loan amount is not increased, but to be treated as an extension only.

Insurance coverage on the life of borrowers is to protect the parties from risks, such as death or disability preventing the borrower from work and payment of monthly loan instalments and therefore default in payment of the loan, in addition to its importance to the financing entities for preservation of wealth and sustainability of the business.

 

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