LONDON--(BUSINESS WIRE)--ACE today alerted insurance managers of European multinational businesses to a potential need to reassess how they insure their US exposures as part of a global insurance programme.
The recommendation comes at a time when the US economy is showing increasing signs of durable recovery and the EU and US administrations are preparing to negotiate a new Transatlantic Trade and Investment Partnership. The US has long been the top export market for EU businesses and, once the new EU-US trade agreement is implemented, it is expected that EU companies could sell an additional €187 billion worth of goods and services to the US each year.1
Suresh Krishnan, General Counsel, Multinational Client Group at ACE said:
“There is often a perception outside the United States that US compliance issues associated with multinational insurance programmes are more cut and dried than they really are. Many insurance professionals outside the US continue to use a single global policy to insure US risks because they view it as a country where non-admitted insurance is ‘not prohibited’.
“Insurance managers may think the cover they have for US risks under a multinational insurance programme underwritten by a European carrier will be compliant and effective. But, whether as part of one global policy or a local policy supplemented with an excess DIC/ DIL programme, the reality can be very different.”
Responding to increased interest and awareness from European multinationals, ACE and international law firm Cozen O’Connor have published an in-depth report for insurance managers and brokers: “Structuring multinational insurance programmes – Challenges and solutions for international companies with US exposures”.
The report highlights that, although one global insurance policy may be used to insure US risks, a European insurer that is unlicensed or unqualified in the US may not be permitted to adjust or pay a claim within the US or to remit the necessary taxes, making the cover provided ineffective. In addition, unlicensed insurers that transact insurance or individuals who facilitate the transaction of such insurance business in a non-compliant manner put themselves at risk of fines, penalties and even the threat of criminal sanctions. The report then provides an analysis of how multinationals can best approach insuring their US exposures as part of a compliant global insurance programme.
Remy Massol, Multinational Director for Continental Europe at ACE, said:
“Whether it’s primary insurance or excess insurance, and whether it’s property and casualty risk or specialty classes like directors and officers liability or group travel and personal accident, procuring local US policies is prudent risk management practice. Additionally, understanding that DIC/DIL or umbrella insurance placed outside the United States to insure US risks may not allow the direct payment of claims locally is essential to implementing the right solutions.”
For more information, and to download the report, go to:
http://www.acegroup.com/eu-en/media-centre/ace-perspectives.aspx
ENDS
About ACE:
The ACE Group is one of the world’s largest multiline property and casualty insurers. With operations in 53 countries, ACE provides commercial and personal property and casualty insurance, personal accident and supplemental health insurance, reinsurance and life insurance to a diverse group of clients. ACE Limited, the parent company of the ACE Group, is listed on the New York Stock Exchange (NYSE: ACE) and is a component of the S&P 500 index.
Visit www.acegroup.com/eu
Contact:
Juliet Tilley, Communications Manager, EMEA at ACE
juliet.tilley@acegroup.com
Tel: +44 (0)20 7173 7793