Russian sanctions: what the UK’s sanction regulations mean for the insurance market
Sanctions on doing business with Russian companies are having a profound effect on the UK’s insurance sector. So what are the implications of the current regulations for insurers?
In a chaotic and uncertain environment, the response from the global community to the Ukraine crisis has been encouragingly swift. Many countries have followed up their condemnation of Russian aggression with a range of practical measures, including sanctions. The aim of these has been to present a unified front that isolates Russia from the global financial and economic system.
How effective this approach will be in the long run remains to be seen. But the imposition of sanctions is already having an impact – not just on Russian financial interests, but on UK businesses too. Our own industry has also been impacted, with institutions such as Lloyd’s of London warning of potentially sizeable losses.
What do the UK’s sanction regulations mean for the insurance market?
Before we look at specific measures, it is important to underline that all UK insurance companies have a legal and regulatory requirement to comply with our country’s sanctions regime targeting Russia. There are penalties in place for those who don’t – including unlimited fines.
But what about the sanctions themselves? Currently, some of the UK’s sanctions against Russia have specific implications for the insurance industry. For example, legislation is now in place to prevent Russian aviation or space businesses (both goods and technology) from using UK-based insurance or reinsurance services, either directly or indirectly.
A rapidly changing picture
Significantly, there is also plenty of room in that legislation to expand the range of Russian industries that are prohibited from accessing the UK’s insurance and reinsurance sector.
Most recently, we’ve seen reports that the marine insurance sector could be next. And even without specific sanctions targeted against marine insurance for Russian firms, companies like the Russian state-controlled firm Sovcomflot PJSC are already unable to insure their tankers because they are on the UK sanctions list.
The UK’s sanctions in this area will have a serious impact on Russia’s ability to do business effectively, as we are world leaders in insurance and reinsurance. This is a rapidly evolving and fluid situation however, with new developments all the time. For the latest updates we recommend visiting the UK Government’s own site, here
If you would like to speak to one of our experts today about the potential implications of sanctions for insuring your business, just call us today on 01274 515 747 or email us at email@example.com