Brokers, buyers and insurers are being urged to consider compliance issues when structuring multinational insurance programmes for the marine market.
The acceptance that specialist marine risks could only be bought in specialist markets is diminishing as global insurers emerge and as regulators seek greater protection for their own local markets, according to a report by Ace Insurance.
“Buyers, brokers and insurers should not be lulled into thinking that, just because compliance issues have traditionally had a lower profile in marine insurance, they do not need careful consideration in our increasingly globalised world,” Suresh Krishnan, general counsel for Ace’s multinational client group and Kenneth McKenzie of DAC Beachcroft’s global group in London stated.
The report stated alongside the purchase of typical marine cover, specialist knowledge and cover is likely to be required for specific types of cargo such as refrigerated or temperature sensitive cargo; pharmaceutical products; high value consumer and luxury goods, hi-tech equipment, large or heavy equipment requiring specialist handling; bulk commodities and petrochemicals.
The specific regulatory status of the marine policy depends upon the contractual relationship between the consignor, consignee and any other parties contractually involved in the shipment as well as the broker and insurer in the placement of appropriate insurance.
“Multinationals face different local laws and regulations in each of the jurisdictions in which they do business, across the entire range of their operations,” Krishnan and McKenzie said.
“Insureds want consistency of cover and certainty that the insurer will be able to pay the insured in the event of loss without tax or regulatory issues. Equally, the insurer wants to know that it will not be breaking any local requirements, including those relating to payment of insurance premium tax, by issuing cover to an insured in any given location.”