Lebanon: Ministry takes position on Beirut port blast insurance compensation
Source: Middle East Insurance Review | Jan 2021
The Insurance Control Commission (ICC) is urging insurance companies to settle claims related to the 4 August Beirut port blast for the most vulnerable insured clients, without waiting for the findings of a judicial investigation into the destructive explosion, according to a statement posted on the website of the Ministry of the Economy and Trade.
The statement noted that some insurance companies have already taken the initiative to pay the claims of affected policyholders without waiting for the official investigation report which would reveal the cause of the blast. Insurers have said that these payouts are mainly to small policyholders and those in need.
The ICC, which is a part of the ministry, said, “This initiative reflects the strong relations between insurance companies and their clients in addition to the vital socioeconomic role that the insurance sector plays in Lebanon.”
Furthermore, the ICC urged insurers to pay a proportion of the cash compensation in US dollars in order to be “fair and transparent”.
The ICC’s periodic monitoring report of insured losses from the explosion showed that there were 14,921 submitted insurance claims as of 13 November, with the corresponding insured losses estimated at $1.1bn based on the official exchange rate of the Lebanese pound against the US dollar, said a bulletin item in ‘Lebanon This Week’ published by Byblos Bank’s Economic Research & Analysis Department.
Insurers are waiting for the investigation findings because if it was to be ascertained that the blast was a result of a terrorist attack or an act of war, compensation from insurers would be limited to policyholders who hold terrorism, political risk or war damage cover. M