Financial Institutions Insurance
Dhaman offers Arab and foreign financial institutions (FI’s) a whole range of insurance products that cover their project and trade finance activities related to the Arab World. These insurance products are offered through Dhaman’s two insurance schemes; Investment Guarantee and Export Credit Insurance; both designed to serve Dhaman’s ultimate mission for the region’s economic and social development. To accomplish its developmental role, Dhaman has been partnering with, and still seeking, FI’s from different parts of the world in order to promote the flow of Arab and foreign investments into the Arab countries, and to support export of Arab goods and services over the world while enabling Arab countries to import strategically and developmentally sound commodities, goods, machinery and equipment needed by national economies.
The insurance products offered by Dhaman cover the losses that financial institutions may incur in case of failure of the obligor (financed investors, importers, LC issuing banks…) to honor his financial obligations.
- Commercial risks:
– Protracted default
- Political risks:
– Transfer restrictions
– War and civil disturbances
– Confiscation, Expropriation and Nationalization
– Public and governmental Entities default of payment
Arab and Foreign financial institutions are eligible to Dhaman insurance coverage subject to satisfaction of the following conditions:
- Financed projects to be hosted in Arab countries
- Exported goods/services to be of Arab origin
- Imported strategic goods, equipment can be of non- Arab origin
- Insured FI & the obligor have no ownership or joint management relationship (unless exceptionally granted strictly for regulatory purposes)
Dhaman, continuously, works on simplifying its insurance procedures to meet the requirement of financial institutions operations.
Specific Procedures for LC Confirmation Insurance:
- Legal Documentation – Master Insurance Policy
- Enquiry stage, by sending email message with relevant transaction details
- Obtain Internal Approvals; Offer by Dhaman & acceptance by the Insured party
- Formal Insurance Application to be sent by the Insured party along-with an LC Copy
- Insurance Decision to be issued by Dhaman upon verifying eligibility conditions
- Declaration of utilization/shipment under the LC to be made by the Insured.
- Annual contractual renewal of master policy
- Risk materialization:
– Claim process
– Waiting Period
– Compensation process
The procedures for insurance of other instruments are as follows:
- Insurance Application: the interested FI submits an application that includes the detailed information pertaining to the finance operation to be insured, the application forms are available on this website.
- Issuance of the Insurance policy: on the lights of the provided information, the collected data on the obligor and the risks assessment results, Dhaman defines the value and the conditions of insurance of the proposed finance operation. Dhaman offers the applicant FI an insurance quotation, once accepted the insurance policy is be issued.
- Notification of risk occurrence: The insured FI notifies Dhaman with the defaulted dues, whether the obligor was an LC issuing bank, an importer or an investor. Dhaman compensates the insured FI according to the insurance policy conditions.
- Compensation payment: Dhaman pays a compensation to the insured financial institution within a period ranging between one to six- months. The compensation rate ranges between 80% to 100% of the value of the incurred loss.
Financial institutions insurance policies
Dhaman offers a set of insurance policies that satisfy project and trade finance varied practices:
- Export Credit Insurance Scheme:
– L/C confirmation insurance policy
– Buyers Credit Insurance policy
– Factoring insurance policy
- Investment Guarantee Scheme:
– Investment loan insurance policy
– Leasing insurance policy