Non-Payment Protect

This policy is for lenders and financing parties providing climate-transition capital and seeking protection against non-payment. Typical insureds include multilateral development banks, commercial banks, investment funds, insurers, and specialist financiers holding green or sustainability-linked loans, prepayments, receivables, or trade instruments. The policy is designed for transactions where use of proceeds supports transition activities, or where repayment terms are linked to measurable sustainability KPIs, as set out in the schedule.

The policy applies to banks, traders, investment funds, corporates, export credit agencies (ECAs), and multilateral institutions.

The covered instrument is the credit agreement or receivable, such as a loan, prepayment, or contracted payment obligation.

Our green credit policies cover: (1) Buy-to-hold green and blue bonds/loans (covers the lower of nominal value or purchase price; excludes bond wrapping or coupon payments); (2) Loans benchmarked against sustainability- linked KPIs (KPIs must be measurable and strong (no ‘greenwash’); excludes high-emitting obligors, e.g. oil companies); (3) Financing supporting climate transition projects (includes carbon-credit generation, clean-power generation, green industry development); (4) Default by a bank under an LC/SBLC, as well as obligor default under the counter indemnity; (5) Underlying contracts or projects (must support the climate transition); (5) Obligors that drive transition or maintain high ‘E’ ratings.

The policy covers the risk that the obligor does not pay amounts due under the insured instrument, such as a loan, prepayment, or receivable. This typically includes failure to pay scheduled principal, or other defined payments, after any contractual grace period. Cover can be structured around specific payment dates, tenors, and obligor events, as set out in the policy schedule, terms, and exclusions.

As this is an insurance policy there are some requirements of the insured, but per Basel rules, these are in the control of the insured.

Yes. The policy can be customised through co-insurance, allowing multiple insurers to share risk on agreed terms, limits, and pricing

The policy triggers when the debtor fails to meet their pre-agreed repayment schedule.

The policyholder is the party with the insured credit exposure, typically a multilateral development bank, commercial bank, investment fund, or other financing entity. The policyholder is named in the schedule and is the insured party entitled to claim for non-payment under the covered loan, prepayment, or receivable, subject to policy terms.

A claim is triggered when the obligor fails to pay a scheduled amount due under the insured loan or credit agreement, and that non-payment continues beyond any contractual grace period stated in the policy schedule. The insured must evidence the due amount, the payment default, and satisfaction of any policy conditions, such as notice requirements, mitigation steps, and any waiting period before loss is crystallised.

The policy pays a cash settlement for the insured amount that remains unpaid under the covered contract, subject to policy terms.

Limits are customer and loan dependent, but typically up to USD $10 million for any one risk.

Oka can write for terms of up to 10 years.

The policyholder submits a claim with the underlying instrument, payment schedule, and evidence of non-payment. Oka assesses the obligor’s default status, confirms any applicable grace or waiting periods, and verifies the outstanding insured amount. Once confirmed, Oka pays the insured loss in cash, subject to limits and terms.