Iran Sanctions - Termination of “Fall-Back” Cover
In Notice to Members Nos 2 and 3 2016/2017 Members were advised of the arrangements made by the International Group Clubs to address the risk of reinsurance shortfalls for claims with an Iranian nexus falling within the Group's General Excess Loss and Collective Overspill programmes due to the effect of US primary sanctions. These included the purchase of a separate "fall-back" reinsurance programme.
The International Group has however recently announced the following changes to the Group's reinsurance arrangements:
"Placement of the International Group General Excess of Loss (GXL) reinsurance and Collective Overspill contracts and the Hydra reinsurance programme for 2017 have been completed. Due to the continuing application of US primary sanctions to the current participating US person/domiciled reinsurers, their lines on the contracts will not be renewed for 2017/18 and have been substituted with alternative capacity. As a result, the risk of a shortfall in US person/domiciled reinsurer contributions due to the current US primary sanctions has been removed, and there will be no need to renew the “fall-back” reinsurance programme beyond 20th February 2017."
Further details of the impact of Iranian sanctions can be found on the Club's dedicated webpage but any Member with questions concerning the impact of these measures and any other sanctions matters should contact the Managers.