New fund to help companies that can’t afford insurance payments

Muscat: A new emergency insurance fund has been set up by the Capital Markets Authority to help companies that are unable to provide insurance payments to their employees.
A statement from the CMA said : “The fund shall assist the parties in the event that the company fails to meet its obligations.” The same is highlighted under Article seven of the guidelines for the fund: the finances for this fund will come from four sources. A fee of 0.25 percent will be levied from life and family insurance policies, with the money earned from this fee going towards the fund. In addition, a one percent fee will be placed on general insurance policies to provide more sources of money for this fund.
The CMA will also invest the money present in this fund to generate returns on them, while donations, grants and other resources that have been sent to the fund will also be added to this, once determined by the fund board.
“The fund controls the procedures for the disbursement of aid to the concerned parties,” added the CMA.
“A company that has failed to meet its obligations to the parties must provide the Committee with the following: a statement of valid insurance policies, a statement of the value of claims for outstanding insurance policies, and a statement of the names of the parties whose insurance dues have not been paid in whole or in part.”
In addition, the CMA said that companies in question must “disclose the values of liquidation of life insurance and family insurance linked to investment, as well as any other documents or statements required by the committee.”
Article 16 of the Emergency Insurance Fund guidelines also highlight the purposes for which money from the fund can be provided to companies. The CMA said, “Priority in granting assistance from the Fund shall be in the following order: blood money claims and injuries to individuals, physical claims of individuals, claims of government agencies, claims of companies and institutions for insurance policies whose risks have not been reinsured outside the Sultanate, claims payable to agencies and vehicle repair workshops and claims for insurance policies reinsured outside the Sultanate after the fund has received compensation from reinsurers.”
In addition, the total amount of assistance provided for claims incurred by a single company shall not exceed 30 percent of the money available to the fund, according to Article 17, while in case there is a deficiency of funds in more than one company, the total assistance provided by the fund shall not exceed 60 percent of the fund’s available monies.
However, this limit can be crossed, according to Article 18, in the case of requests related to assistance over blood money and injuries over motor insurance policies. In this case, the fund will reimburse 100 percent of the value for these requests.
The CMA added, “All liabilities and expenses incurred by the parties under insurance policies shall be deducted from the amounts of assistance due to them. The fund may recover what it has provided to a party if it is proved that it is not eligible for assistance, or that it has provided misleading data, or has received more than the assistance owed to it.”
The organisation said, “The Fund may refer to the company in the amounts paid to it in order to assist the parties if the company has funds at a later date.”
Commenting on this, a financial analyst in Oman said the move was good for those companies that found it difficult to make ends meet, saying, “Unfortunately, the current economic situation means many companies are finding it hard to meet their financial obligation. The move from the government in many ways acts as a safety net for these companies who can breathe a bit easier, knowing that the authorities are there to support them when they need it most.