Regulatory Alerts2017-01-01
Circular No. (279/2017) Requirements for Borrowers' Life Insurance
The Palestine Monetary Authority issued Circular No. (279/2017) to clarify the life insurance requirements for borrowers under its Responsible Lending Instructions. The circular permits banks to waive the life insurance mandate only if borrowers provide 100% cash collateral and sign a written declaration accepting full responsibility for the decision, while strictly prohibiting the release of such collateral until the loan is fully repaid. Additionally, the circular explicitly forbids waiving life insurance requirements for any facility or financing once the remaining repayment term falls below 48 months.
Palestine Monetary Authority
PALESTINE MONETARY AUTHORITY
Circular No. (279/2017)
To all banks operating in Palestine Date: Wednesday, November 29, 2017
Subject: Requirements for Borrowers' Life Insurance
In light of numerous inquiries from banks regarding the life insurance requirements for borrowers stipulated in Responsible Lending Instructions No. (2016/02) dated 01/05/2016, please be advised of the following:
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Exemption from the life insurance requirement for borrowers is permitted in exchange for 100% cash collateral, provided that borrowers sign a written declaration confirming their consent and accepting responsibility for their decision, with the explicit condition that the cash collateral hold remains in place until the loan is fully repaid.
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The life insurance requirement for facilities/financing shall not be waived after a period has elapsed since their disbursement and the remaining repayment term has decreased to less than 48 months.
Market Conduct Department Palestine Monetary Authority
Ramallah - Palestine P.O. Box 452 | Tel: +970 2 2415250 | Fax: +970 2 2415310 | Tel: +970 2 2415250 | Fax: +970 2 2415310 | Ramallah - Palestine P.O. Box 452 Gaza - Palestine P.O. Box 4026 | Tel: +970 8 2825292 | Fax: +970 8 2844487 | Tel: +970 8 2825292 | Fax: +970 8 2844487 | Gaza - Palestine P.O. Box 4026 Email: info@pma.ps | Email: info@pma.ps