ZATCA clarifies the VAT treatment of insurance policies purchased by financial institutions to mitigate risks in real estate lending. While life insurance is exempt, portfolio insurance is subject to the 15% standard rate. The circular defines the financial institution as the Customer for VAT purposes when it directly contracts with insurers, allowing for input tax recovery based on the institution's proportion of taxable supplies. It further clarifies that such insurance constitutes a business cost and not an onward or nominal supply to borrowers, unless a separate charge is levied. This circular supports the implementation of Article 49.