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    Edwards Wildman’s Jeff Etherington Addresses Iran Sanctions Adding Pressure on Reinsurers

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    Jeff Etherington, a New York-based partner in Edwards Wildman's Insurance and Reinsurance Department, commented on how as the US exerts new sanctions pressure on the Islamic Republic of Iran, reinsurers also face added pressure to police their own activities and those of ceding insurance companies in Reactions. In the article, "Iran Sanctions Add Pressure on Reinsurers," [insert article link below] Etherington said, "If a reinsurer wants to take the most risk adverse and compliant posture it can then it does need to do more about understanding what its ceding companies are doing, to insure that they are not supporting Iran’s shipping or its petrochemical industry. So I do think that simply having a clause that says ‘we won’t reinsure claims that are prohibited under sanctions regimes’ may not be enough anymore, because merely providing the reinsurance for insurance that insures an Iranian ship builder is a violation, whether or not you ever pay any claims. So you know if we were asked by a client we would probably talk to them about the potentially broad application and the need to think about whether the traditional approach, which is usually covered in an endorsement to a reinsurance agreement, are sufficient.” According to Etherington, reinsurers should take the new sanctions rules seriously and immediately inform their underwriting staff of the new regulations and make them aware of the minute details of the new sanctions regime. Etherington added, "Companies ought to immediately bring in their underwriters and their claims managers and refresh them on sanctions and the new broad reach of the sanctions so that they will catch anything new because it is a bit broader than it was before, that’s a step that they should take immediately. As to the kind of almost forensic analysis of existing programmes and treaties, obviously I don’t think someone can do that immediately I do think though that it probably makes sense to start formulating policies about sanctions that are part of an underwriting manual or a claims adjustment manual, to carry forward prospectively. Those types of things will help anybody threatened with sanctions."

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