Leumi Proposes Unemployment Insurance Policy

Bank Leumi has applied for permission from the government regulator to expand its insurance offering include unemployment coverage to employees and the self-employed, Globes reported on Wednesday, citing informed sources.

Bank Leumi reportedly asked the Capital Market, Insurance, and Savings Authority for its approval “to be an owner of a credit insurance policy for the bank’s customers,” to provide a breathing space if they become unemployed in regular credit payments, “to enable customers to bridge the gap in the time required to find other employment.”

The insurance will be aimed at protecting a bank customer who is an employee; or, if self-employed, the bank will provide a solution for termination of activity due to economic difficulties for a still-unspecified period.

The current proposal calls for claims to be paid in a single payment based on the amount of credit used by the customer on the date when unemployment began.

Bank Leumi’s regulation department explained: The need for this insurance has become very clear in recent years, following the increase in household credit and the lack of an insurance solution from the National Insurance Institute for the self-employed.

“Few households in Israel do not need credit at some stage… At the same time, in most cases, the regular salaries of households are used as the primary resource for repaying the credit that they take in order to supply basic needs.”

Accordingly, Bank Leumi seeks to be a “policy owner,” which will enable it to offer customers said insurance under commercial terms to be set, pending approval by the capital market regulator.