International property and casualty insurer ACE said that insurance managers of European multinational corporations (MNCs) should be aware of 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 shows 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 €187bn worth of goods and services to the US each year.
“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,” said Suresh Krishnan, general counsel, multinational client group at ACE.
“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 difference in conditions or difference in limits (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 a report on the issue, entitled
‘Structuring multinational insurance programmes: Challenges and solutions for international companies with US exposures.’
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