Master Trade Finance Insurance Policy
The Master Trade Finance Insurance Policy (MTFIP) covers the losses suffered by the insured bank resulting from non-receipt of all or part of the value of the insured trade finance instrument due to a credit or political risk materialization.
Dhaman pays up to 100% of the insured share/amount under the trade instrument.
Insured Risks
Credit Risks
Inability or failure, or refusal of the obligor bank to fulfill the payment The bankruptcy of the obligor bank
Political Risks
Currency inconvertibility and transfer restrictions Confiscation, Expropriation, and Nationalization Measures taken by the authorities of the issuing/obligor bank preventing the insured from obtaining his rights War and civil disturbances
Eligibility
Eligible Transactions
Export of goods and services of Arab origin. Import of goods and services of non-Arab origin by an Arab country from all over the world, provided the imported goods are developmentally sound for the importing Arab country, such as commodities, equipment, food, pharmaceuticals, etc.
Eligible Financial Institutions
Regional & international banks engaging in Arab-related trade finance activities. Conventional and Shariaa compliant banks.
Eligible Trade Finance Instrument
Eligible Trade Finance Instrument Confirmation of Letters of Credit, including Transferable Letters of Credit. Discounting under Avalized Draft and Bankers Acceptances. Short Term Trade Finance Loans. Post-Shipment Financing or Re-Financing associated with LCs. Irrevocable Reimbursement & Payment Undertakings (IRUs & IPUs). Purchase of Payment Obligations under different trade instruments. Sharia Compliant Financing Instruments such as Murabaha. Participation in Syndicated Loan Agreements covering the above-stipulated trade finance instruments such as LCs and ST trade finance loans.
Procedure
1
Issuance of the insurance policy
Signing of the Master Trade Finance Insurance Policy
2
The insured Bank sends an inquiry with all transaction details
Enquiry for insurance
3
Insurance Offer - Non-Binding Indication
Dhaman sends a Firm Insurance Offer or Tentative Non-Binding Indication
4
The Insured Bank sends a formal insurance application along with a copy of the instrument
Insurance application
5
Insurance decision
Dhaman issues an Insurance Decision for the underlying transaction
6
The Insured Bank sends a declaration of utilization upon shipment or draw-down
Declaration of utilization
7
Premium payment
The insured Bank pays the due insurance premiums
8
In case of default, claim, compensation & recovery processes are followed
Claim & compensation
End
Contact Us
Shaimaa M. Aldoussari Head of Financial Institutions Section
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