New US sanctions are likely to prevent the use of a Lloyd’s of London IT platform for any Iran insurance, adding to difficulties for European insurers providing cover for the country, reported Reuters.
European insurers, reinsurers, brokers and shipping firms have been winding down Iranian business as the US re-imposes sanctions on insurance and reinsurance from 4 November after it withdrew in May from a nuclear deal with Iran.
Lloyd’s and other European insurers provided marine, energy and trade credit cover for Iran after the US lifted so-called secondary sanctions in January 2016 after the nuclear deal between world powers and Iran was reached in 2015. The EU also lifted sanctions in January 2016.
Lloyd’s Chairman Bruce Carnegie-Brown told Reuters the re-imposition of sanctions meant insurers “probably” would not be able to process Iran-related business through the Lloyd’s platform, partly owned since last year by US firm DXC.
“You can do it through Lloyd’s through other settlement mechanisms outside DXC, it’s just more complicated and more expensive to do it that way,” he said.
A Lloyd’s spokeswoman said it had advised insurance syndicates “to consider obtaining legal advice before engaging in Iran-related activities, to assess and mitigate their sanctions risk”.
DXC provides data processing and other back office services to Lloyd’s and other London insurers through two firms, XIS and XCS, that are jointly owned by DXC’s British subsidiary Xchanging, Lloyd’s and the International Underwriters’ Association.
The US Treasury’s Office of Foreign Assets Control (OFAC) recently revoked licences which had allowed foreign subsidiaries of US firms to trade with Iran.
Lloyd’s insurers and brokers with Iran business included Chaucer, Ed Broking, RFIB and UIB, sources told Reuters. M