FRA issues controls to regulate underwriting of credit insurance policies
Updated 1/18/2023 12:59:00 PM
Arab Finance: The Financial Regulatory Authority (FRA) has issued a new bundle of rules to regulate the underwriting of credit insurance policies to enhance levels of financial stability, according to a statement on January 16th.
The new controls oblige the credit granting entities with a compulsory bearing rate of 25% of the value of the loan or credit facilities in case the risk materializes.
"This is to urge issuers to prepare adequate credit studies before granting credit, which supports the achievement of financial stability for insurance companies, which also requires the availability of professional cadres with competence and technical ability, whether with regard to underwriting or compensation in this type of insurance coverage," the statement said.
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