Economy, Business And Markets

IG Raises Limit for Iran Fall-Back Cover

IG Raises Limit for Iran Fall-Back Cover IG Raises Limit for Iran Fall-Back Cover

The International Group (IG) of protection and indemnity clubs has obtained an increased limit of €100 million ($112 million) for its Iran “fall-back” cover, the group announced on Friday.

The International Group has bought “fall-back” cover for the 2016/17 policy year, which is designed to respond to reinsurance recovery shortfalls that would result from the inability of US-domiciled reinsurers on the Group General Excess Loss reinsurance program and Hydra reinsurance program to make payments due to the continuing application of US primary sanctions against Iran.

The organization protects more than 90% of the world’s crude carriers against risks, which include spills. Iran has been using Kish P&I, backed in part by the government, for shipping insurance.

The new limit is an increase of €30 million from the initial figure. The group also secured underwriters’ agreement to a second full reinstatement of cover.

“The group remains of the view that the limitations of the fall-back cover, while mitigated to an extent by the increase in limit and the additional reinstatement, mean that it does not provide a long term solution to members’ needs, “ reads a statement on Japan P&I website.

The group therefore continues to engage with the US administration to find a solution to the ramifications for P&I insurance of continuing application of US primary sanctions, and a further report will be made in due course.