The Financial Regulatory Authority (FRA) has directed life insurance companies operating in the Egyptian market to look into the credit standing of insurance applicants who wish to buy policies with high insured sums.
The credit checks are to be made through licensed credit agencies, reported Amwal Alghad, citing the FRA.
The Authority explains that this is in case a client’s income or profession/job is not commensurate with the value of the insured amount or the premiums he has to pay. Also, in the event of doubt regarding the legitimacy of the insurance application, life insurers have to check whether the insurance applicant is included in the negative list or not.
This instruction is set out in a circular issued by the FRA as part of risk management standards in underwriting individual insurance operations.
The Authority also points out the necessity of inquiring whether the insurance applicant has other insurance policies, to ascertain the extent of his financial commitments.