Iran sanctions: “Fall-Back” Reinsurance - update 10 March 2016

Iran sanctions

Published: 10 March 2016

Members will be aware from the International Group Circular published on February 2016 (in particular paragraph 10), that the International Group has been seeking both interim and long term solutions to the continuing application of US primary sanctions to US domiciled reinsurers participating in the Group's reinsurance arrangements.

The International Group continues to work on "fall-back" reinsurance protection to cover this default risk, for which it has now obtained the approval of the US authorities, and the Group's brokers are currently in the process of placing corresponding reinsurance cover outside the US markets.

Due to reinsurers' compliance procedures, it is taking some time to put this cover in place but it is hoped that this will be completed shortly. Once this cover is in place, clubs will then be able to confirm cover for non-certificated as well as certificated liabilities towards, or incurred by, Iranian interests (other than SDN's or liabilities arising out of prohibited trades). Members will be kept informed of developments.

The fall-back cover will have a lower limit and more restrictive terms than the main Group reinsurance programme and should only be seen as a short term solution.

The International Group will continue to engage with the US authorities for the purpose of securing a comprehensive long term insurance solution to meet all shipowners' needs.