Banks, financial cos must be allowed to avail credit insurance: Irdai group

A working group formed by the insurance regulator to suggest changes in trade credit insurance guidelines has proposed that banks, factoring companies, and financial entities should be allowed to avail credit insurance to cover trade related transactions and loan default of sellers.

Trade credit insurance covers a seller against the risk of non-payment by its customers arising due to willful default or insolvency. The repaying capability of the customer depends on various macro and micro economic factors.

The regulator formed the working group after it received flurry of requests from various stakeholders for enhancing the scope of the cover and