Marine insurers face myriad local compliance regulations when providing cover for international cargo operations, Dave Matcham, chief executive of the International Underwriting Association has warned
Speaking at the International Union of Marine Insurance (IUMI) annual conference in Hong Kong, he highlighted the importance recognising relevant rules in each port at which a vessel calls. A non-compliant programme could potentially result in claims disputes, fines and reputational damage.
“For an insurance policy to be compliant, it is essential that it accommodates all the different country-specific regulations where it is to apply, ” commented Mr Matcham. “Such laws can differ not just from country to country, but also state by state within certain jurisdictions.”
Using research supplied by insurance information provider Axco, Mr Matcham described a fictional sea voyage calling at various international ports to illustrate the compliance challenges faced by underwriters. He described local differences in non-admitted insurance, compulsory insurance requirements, taxes and local market practices.
The presentation also discussed the Trade in Services Agreement (TiSA), a proposed international trade treaty that has the potential to reduce local restrictions for marine insurers writing global placements. TiSA is supported by more than 50 countries which together account for over three quarters of global trade in services.
Mr Matcham added: “Marine insurers often face some very complex compliance issues, including, for example, understanding local market practices which are accepted but not explicitly spelled out in regulations.
“Marine and energy business is international with many arguments supporting the case for unrestricted cross-border trade. IUMI backs efforts to reduce the compliance burden and its political forum will be outlining its support by submitting position papers to the negotiating parties.”
About the IUA
The International Underwriting Association of London (IUA) represents international and wholesale insurance and reinsurance companies operating in or through London. It exists to promote and enhance the business environment for its members.
The IUA’s London Company Market Statistics Report shows that premium income for the company market in 2012 was £17.993bn with a further £6.232bn controlled by London but written elsewhere. These results are based on a comprehensive survey of 62 companies and give an overall intellectual and economic premium total of £24.225bn for the London company market.