Retail Credit Insurance

What is a RETAIL CREDIT INSURANCE ?

Credit Insurance is a HEDGE made by banks, Financial Institutions and Traders against credit losses.

It provides PROTECTION for the repayment of loans made by Banks, financial institutions or traders, following the borrower’s insolvency or PAYMENT DEFAULT.

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Retail Credit Insurance Cover

Car Loans
Personal Loans
Credit Cards
Consumer Loans

Advantages To The Insured

Provisions

When granting retail loans, provision rates shall be considered as Corporate, due to the fact that Insured will then be bearing the Insurance company’s risk instead of the individual’s debtor risk(Basel 2)

Reserves

When coming to defaults, the insurance company will Indemnify the Insured before reaching 90 days of defaults. Consequently the Insured will not be bound to hold reserves on defaulted debtors after reaching 90 days of defaults (Basel 3).

No Worry About Legal Aspects:

The Insured will save all managerial and legal cost after the 90 days of default, considering that collection and legal actions will then become the insurance company’s responsibility.

Policy Issuance

Insured will fill a proposal form Related to Types of Loans he wishes to insure.
Insurance Company will study the proposal form and provide the Insured with an offer.
Insured accepts the offer.
Insurance Company Issues the poli

Underwriting

Insured sends loans applications to Insurance Company (Daily).
Insurance Company sends appraisal document Accepting Or Rejecting the Application (Daily).
Insurance Company sends a report of all accepted applications (Monthly).
Insured returns the report stating executed Loans. (Monthly).
Insurance Company issues invoice on executed Loans (Monthly).
Insured settles the premiums (Monthly).

Claims

Insured provides the Insurance Company with a list of delayed customers (weekly).
Insured provide the Insurance company with a Claim Declaration and supporting documents (when default reaches 60 days).
Insurance Company accepts and settles the claim, either by settling the due amounts and substitute the defaulter with commitment to settle undue installments on due dates. OR settles all the remaining amount of the loan after deducting the interest on the remaining period.
Insured will transfer the subrogation rights on accepted claims to the Insurance company and provide it with a power of attorne

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