KUALA LUMPUR, Dec 8 (Bernama) -- The Cuepacs demand to exempt housing loan repayment for civil servants certified with permanent total disability for housing loans approved before 1995, cannot be entertained, said the Treasury Department.
In a statement here on Tuesday, it said insurance companies could not entertain the demand as the insurance policy taken did not cover permanent total disability.
"The permanent total disability policy was only offered by insurance companies effective Aug 1, 1995, and thus, only housing loans approved after that date are entitled for the coverage," it said.
On Nov 22, Cuepacs had asked the government to write off housing loans taken by civil servants who were medically boarded out during service.
Cuepacs secretary-general Ahmad Shah Mohd Zin said that currently, only those who had taken loans after Aug 1, 1995, need not repay the balance if they were unfit to continue working.
Those who took the loans earlier had to continue paying because their insurance covered only death and fire, but not permanent disability.
Treasury circular No 6/95 requires every housing loan borrower to take up the fire and MRTA insurance to protect government interest and enable the recovery of loans disbursed, in the event of death or fire.
The permanent total disability is an additional coverage offered by the insurance companies as a result of competition amongst themselves.