Russia-Ukraine conflict: Verlingue stands by its clients
Russia-Ukraine conflict: Verlingue assists its clients facing the evolution of risks in these countries and their impact on insurance
The current geopolitical situation and the signing of a federal law by Russia prohibiting its local insurers from entering into any transactions with other insurers, reinsurers or brokers from so-called “hostile” countries, has an impact on many players in the sector.
The situation in Russia and the friendly republics
Russia and the friendly republics are excluded from the scope of international guarantees. Monitoring of international sanctions remains the guideline for most insurers.
In addition to Crimea and Belarus, the market is increasingly moving towards a firm and absolute exclusion of all of its clients’ activities in Russia. Thus, it will be impossible to insure any new activity in Russia or its allied states. Local policies, put in place under international programs, must/will be placed locally with Russian insurers and brokers, in accordance with local law.
As for international clauses (FINC), they can continue to be applied with certain insurers, on a case by case basis, after passing a “compliance clearance” which will be very thorough.
Very precise questionnaires are now required by insurers for these territories to verify that the Russian individuals and/or legal entities concerned are not subject to international sanctions, including those enacted by the US State Department and the UN, of course. As we all know, these sanctions are evolving, and Verlingue monitors them precisely in order to adapt its response in real time.
It shouldn’t be forgotten that when we talk about international sanctions against Russia and its allies, Russia also applies, in fact and by law, sanctions. The federal law for international insurers is certainly a first step.
The situation in Ukraine
The state of war changes the situation for insurers: insurers and other partners can in practice no longer operate in this country. International guarantees can continue to be applied in principle, but in reality, the positions of insurers are still very unclear on the practical applications.
As for the FINC clause, it can be activated for a risk hazard in Ukraine, in particular it can work for exports and permanent establishments. At a minimum, exported products can be covered. However, here again and as for Russia, monitoring the situation with the insurers remains the key.
We recommend validating any commercial approach with the insurers beforehand to avoid any ambiguity regarding the scope and nature of the guarantees that remain applicable.
Verlingue stands by its clients
Given the current context, Verlingue asks its clients to set up local policies on a purely stand-alone basis. Indeed, for Russia and its allies, including Belarus, it is strongly recommended to use insurers through brokers located outside the sanctions list. As for the financial aspect, such as premiums, adjustments will be made on a case by case basis.
In Ukraine, the situation will also be dealt with on a case-by-case basis, particularly with regard to the nature of the products and the local partners. This exceptional situation calls for a review of eligibility for guarantees.
Verlingue particularly recommends that its clients take enhanced measures to ensure vigilance and compliance with international sanctions.
Our teams are working hard to provide our clients with maximum clarity, fluidity and proximity during this complicated period!
For all information requests: email@example.com