Oman Chamber of Commerce and Industry (OCCI) has welcomed last week’s announcement by the Capital Market Authority (CMA) pertaining to the establishment of a special ‘Catastrophe Fund’ to compensate individuals, homeowners, and businesses for damages caused by natural calamities and adverse weather events.
In a statement, Shaikh Abdullah Salim al Salmi, Executive President – CMA, said the Authority – which also regulates the insurance sector in the Sultanate – is weighing plans for an exclusive pool of funds to help settle claims arising out of natural disasters.
The announcement came on the anniversary of Tropical Cyclone Gonu which had swept over the Sultanate in June 2007 causing widespread disaster to infrastructure, businesses and homes. Dozens of lives were lost as well. This event caused more than one billion dollars in losses.
Responding to the announcement, Murtadha bin Mohammed Jawad Ibrahim al Jamalani (pictured), Chairman – OCCI’s Finance and Insurance Committee, said: “We welcome the long outstanding project for establishing a Fund to compensate the victims of natural catastrophes. In fact, the Chamber has long advocated for a Disaster Fund ever since Tropical Cyclone Gonu hit the Sultanate in 2007. The CMA has now finally responded positively to our call.”
Speaking to the Observer, Al Jamalani said the specific mechanisms of operating the proposed fund will hopefully be presented by CMA representatives at the next meeting of OCCI’s specialised Finance & Insurance Sectors Committee.
“We have our own ideas about how a Natural Catastrophe Fund is operated and managed, its scope and coverage, and how it should be funded in the first place. But we would like to hear from the regulator first about its vision for the fund.”
A conference call hosted by OCCI’s Finance and Insurance Committee last week also reviewed the CMA’s recent decision to mandate insurance firms to shoulder the testing and treatment costs of insured policyholders afflicted with the novel coronavirus causing COVID-19. Senior representatives of the Oman Insurance Association were in attendance at the virtual meeting and briefed the members about the CMA circular to insurance companies in this regard.
“We agreed to work with the CMA in resolving certain technicalities arising out of its directive to insurers to cover COVID-19 treatment costs. For example, insurance firms would welcome some regulatory guidance on how COVID-19 claims can be settled when the medical policies do not specifically offer any coverage against the coronavirus.
As COVID-19 claim settlements are not part of the Corporate Social Responsibility (CSR) obligations of insurers, some clarity is required with regard to the category of reserves under which this expense falls under. We hope both sides – the regulator on the other hand, and the insurance industry, on the other, can work amicably in resolving these issues.”
Al Jamalani stressed however the insurance sector’s robust commitment to supporting the Omani government’s national endeavour in containing the pandemic, as well as mitigating the cost burden on the Ministry of Health and the public health sector.
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