Chubb Corp.,
CNA Financial,
Liberty Mutual Group and Navigators group were all subpoenaed by New York’s financial-industry regulator last week as part of an ongoing probe into industry compliance with trade sanctions against Iran.
According to an anonymous Bloomberg source, the four insurers were asked to provide documentation of compliance with the laws that prohibit them from doing business with Iran. They were also asked to identify any instance in which they invoked those sanctions to refuse claim payouts.
The subpoena was issued by New York’s Department of Financial Services, led by Benjamin Lawsky. The subpoenas come one year after Lawsky and the DFS issued similar subpoenas to European carriers after learning some firms issued coverage protecting trades made with Iran.
Spokespeople for both CAN and Chubb confirmed their companies were complying with the DFS investigation. Mark Greenberg, spokesman for Chubb, added that the carrier’s policies “contain trade sanction exclusions that bar coverage for prohibited exposure under applicable sanctions laws.”
According to the Bloomberg report, all four insurers may have marine-cargo policies related to global trader Glencore Xstrata Plc and the Iranian metals trade between 2010 and 2013. Non-US affiliates of Glencore Xstrata sold as much as $163 million in metal oxides and agricultural goods to Iranian state entities, according to a Securities and Exchange Commission filing.
DFS is attempting to discern whether these activities violated the law. The group has the power to issue fines and rescind licenses from banks and insurance companies found to be operating illegally. In recent weeks, the DFS has made headlines for issuing record fines against insurers for various wrongdoings—including a $20 million fine to
AXA’s US unit.
Subpoenas are legal demands for information and do not signal wrongdoing by the carriers involved.
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