Compliance of multi-national insurance programs

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Multi-national insurance programs

The arrangement and purchase of fully compliant multi-national insurance programs to protect operations at both local and head office level remains difficult and complicated. There are a myriad of specific laws and regulations in different countries around the world, some of which are straightforward and others are distinctly opaque and unclear. This can lead to uncertainty, unpredictability and ambiguity.

Inadvertent breach of these laws or regulations is often only identified on disclosure of the insurance contract to regulators or during litigation. The breach might render the insurance contract illegal or unenforceable, thereby exposing the buyer to an unexpected “uninsured” loss exposure. This may result in the loss being unpaid, as well as the possibility of fiscal or penal sanctions.

Regulatory requirements are a matter of fact in some territories and a matter of interpretation in others. The advice available is sometimes not consistent, can be contradictory and/or unreliable. Insurance buyers need claims certainty following a claim or loss, whether this is through a master policy and/or a local policy. Insurance buyers need access to consistent information, so that an informed decision can be made about the need and/or requirement to buy local cover.

This guide has been produced with the following purposes:

• Identify the issues that need to be addressed and the associated responsibilities in ensuring compliance of multi-national insurance programs

   

• Outline the importance, difficulties and the consequences of non-compliance of multi-national insurance programs and the availability of relevant data

   

• Present a checklist of questions that the insurance buyer should ask of the insurer and/or insurance broker to gain assurance on compliance concerns and responsibilities

   

• Describe the range of information available on the Axco 
  ‘Insight Risk Manager’ database developed specifically 
  to provide information to insurance buyers 

   

Structure of the guide

Part 1 of the guide considers the nature of multi-national insurance programs and the importance of the structure and risk management philosophy of the insured. Appendix A sets out a list of topics that need to be considered and it follows the structure of Part 2 of the guide. It describes the scope of the information available in the Axco ‘Insight Risk Manager’ database available as a membership benefit to Airmic members and considers the following:

• General country information
• Admitted and non-admitted insurances
• Insurance Contracts
• Premiums and premium payment
• Supervision and control
• Company registration and operating requirements

   

Part 3 describes the importance of roles and responsibilities. It also sets out the consequences of non-compliance, as well as a discussion of the practical operation of insurance market practices. Appendix B sets out a checklist of issues related to multi-national insurance programs that should be considered by insurance buyers. It considers issues that go beyond simple compliance by describing governance and administrative issues that insurance buyers will need to address, including:

• Pre-renewal information
• Placement structure
• Insurance contract
• Premium payment
• Claims notification / processing