Iran: AIG subsidiary makes exit in face of sanctions
Source: Middle East Insurance Review | Dec 2018
American International Group (AIG) is exiting business activities in Iran that came with a subsidiary it acquired and which now butt up against the sanctions against Iran that have been reimposed by the Trump administration, reported Reuters.
Validus Holdings, a Bermuda-based reinsurer that AIG acquired for $5.56bn in July, is winding down coverage it provides to shipping companies that transport cargo to and from Iran, according to an AIG filing in November.
Validus subsidiaries based outside the US provide the Iran-related insurance, which includes coverage for vessels, war, cargo and liability, AIG said. The company is also exiting some reinsurance policies involving Iran.
Income from Iran-related insurance is minimal, AIG said.
In May, US President Donald Trump withdrew the US from a 2015 nuclear deal between Iran and six major powers designed to stall Iran’s nuclear weapons programme and ordered sanctions reimposed on Tehran.
The first tranche of sanctions that took effect from 7 August prohibit Iran’s purchase of US dollars and precious metals, and are part of a move to cut the country off from the international financial system. On 5 November, the US reimposed a second round of sanctions targeting Iran’s oil, insurance, banking and transportation sectors. The sanctions also apply pressure on non-US companies to prevent them from doing business with Iran. M