Credit insurance is protection provided by an insurance party to a commercial bank / financial financing institution for the risk of the debtor’s failure to pay off loans or loans provided by commercial banks / financial financing institutions.
Credit Criteria Guaranteed Credit Insurance
Credit criteria that can be guaranteed in credit insurance are as follows:
- Loans are based on healthy, reasonable and generally accepted credit norms
- In accordance with the Manual for Granting Credit from SE Bank Indonesia
- The debtor has a business license that is determined by the authorized party and does not conflict with applicable law.
- The debtor is not in the process of bankruptcy or has been declared bankrupt .
- Debtors do not have credit arrears classified as doubtful credit quality.
Risk Guaranteed and Unsecured Credit Insurance
Risk Guaranteed Credit Insurance
- The debtor does not repay the credit when the credit concerned has matured with the provisions that the debtor’s business is no longer running.
- The debtor is stated as being unable to pay the debt (insolvent) and for that reason must fulfill one of the following matters:
- The debtor is declared bankrupt by the competent District Court
- The debtor is subject to liquidation based on the decision of the competent court and for this purpose a liquidator has been appointed.
- Debtor, as long as not a Legal Entity is placed under forgiveness.
- Debtor escapes / disappears / no longer exists.
- A credit withdrawal occurs before the credit period ends, specifically for loans with a period of more than two years, provided that the credit withdrawal meets one of the following conditions:
- Intended to prevent or reduce the occurrence of greater losses if the credit is continued.
- Caused by a discrepancy or deviation by the debtor on the provisions in the credit agreement.
- Other risks agreed between the insured and the guarantor as set forth in the Cooperation Agreement or Joint Agreement.
Unsecured Risk Credit Insurance
- Nuclear reactions, radioactive touches, radiation and atomic nuclei reactions that directly or indirectly affect and result in debtor business failures regardless of how and where they occur.
- Losses suffered by the debtor caused by the risks that must be covered the insurance coverage in the loss insurance with a full or minimum value equal to the principal credit.
- One political risk occurs that directly or indirectly influences and results in the debtor’s business failure to pay off his credit.
- Legal actions taken by the Government against the debtor and or business of the debtor which directly or indirectly affect and result in the debtor of the bank being unable to repay the credit.
- Natural disasters.
- Errors / omissions made by banks / financial financing institutions.