Churches Cooperative Credit Union and Insurance Company of the West Indies (ICWI) sign an agreement allowing Churches to offer insurance coverage to micro sector borrowers under a Personal Accident Plus policy to be underwritten by ICWI. Seated from left, Churches General Manager Basil Naar and ICWI President Paul Lalor engage in conversation. Janyce Robinson, assistant general manager for Credit Administration and Operations at Churches stands in the background. - Contributed

Insurance Company of the West Indies (ICWI) will underwrite a new policy, Personal Accident Plus, that Churches Cooperative Credit Union plans to offer borrowers, a deal sealed March 22 by the chief executives of the two financial institutions.

The credit union will offer insurance coverage for medical expenses, as well as accidental death and disability benefits to subscribers to its micro loans, as well as continued repayment of the loan for up to a year.

Eventually, coverage will also be extended to other borrowers, the credit union said.

"This is the start of something great," said Paul Lalor, president of ICWI, in a release issued Monday on the signing of the agreement with Churches' boss Basil Naar at the credit union's Kingston headquarters.

Churches told Wednesday Business that borrowers who subscribe to the policy will pay a premium of "less than $600 per month."

According to Waldon Wright, manager of Churches' Micro Enterprise Unit, which has responsibility for the administration of the product, borrowers would have 24-hour protection in the event of an accident resulting in inability to work.

Monthly repayment

Outlining the specifics, Wright said coverage provides for the monthly repayment of the micro finance loan for up to 12 months.

In addition, the ICWI Personal Accident Plus offers a $50,000 to $100,000 payment for medical expenses, and in the event of death, $500,000 to $1million payable to the insured's beneficiaries.

Coverage under the policy extends to the expiry of the loan, or whenever the loan is paid off. As at March 31, 2007, the credit union had 101 micro loans on its books, approved since May 2006, valued at about $7.3 million. However, only 94 of the loans have been disbursed, totalling $6.49 million, Churches' said.

The typical micro loan is capped at $200,000 - or $100,000 for first time borrowers - but Churches says its loans in this category average $69,074.

"We look forward to rolling this out to our general membership on a phased basis," said Wright.