IUMI warns on sanctions as the blacklist grows, By James Brewer in Hong Kong
The International Union of Marine Insurance is calling on insurers and reinsurers to ensure they apply a clear policy with regard to political and economic sanctions that are in force.
Measures from sections of the international community have intensified over the last year, with many applicable to named companies and individuals associated with Russia and Iran. Experts have warned that the details of sanctions regimes are changing almost day by day and are hard to keep up with.
Frédéric Denèfle, a member of the legal and liability committee of IUMI, said: “There is a need for (re)insurers to not only have a sanction clause in place but also internal processes and guides to identify any business under sanctions in order to avoid it.”
In addition, IUMI is reminding insurers and reinsurers that they need to comply with all sanctions and monitor changes carefully.
Market practitioners say that the sanctions terms are placing a sometimes considerable burden of compliance and therefore expense on individual underwriting operations, which have to check the controlling entities and shareholders, and the standing of individuals within their counter-parties, to ensure they abide by new rules put in place by the European Union, the US and other jurisdictions.
To date it is believed there have been no penalties or other actions against insurers or reinsurers, although there is reported to be one investigation going on in New York into an instance of business that might violate sanctions.
Members of IUMI, in its 140th year, are gathering in Hong Kong from 21-24 September at the Intercontinental Hotel, Kowloon, for the organisation’s annual conference themed Building Expertise for a Changing World.