Energy and marine underwriters are likely to be impacted by the EU’s decision this week to introduce new sanctions designed to stop Turkey drilling off the coast of Cyprus, according to specialist law firm Elborne Mitchell.
“We’re in the midst of renewal season, and energy and marine underwriters would be well advised to think about their potential exposure in the region. If the Turkish government doesn’t change tack, then we are likely to see the EU name individuals and entities who will become subject to those sanctions.” comments Andy Stevenson, partner at Elborne Mitchell.
“Underwriters in these sectors in particular should be asking: do they have all the information they need from insureds and cedants? Is cover priced appropriately and when is the premium payable? Are insurers’ sanctions exclusions in place and fit for purpose? As we’ve seen in recent weeks, things move fast with sanctions and it pays to be prepared.”
The EU announced this week that it has frozen the funds and economic resources of persons responsible for or involved in drilling activities in the Eastern Mediterranean which have not been authorised by the Republic of Cyprus.
It comes on the back of a volatile few weeks for sanctions in the region after the US imposed sanctions on Turkey on 15 October, only to reverse the decision after just eight days. The US House of Representatives subsequently passed the Protect Against Conflict by Turkey Act, signalling a groundswell of political support for the reintroduction of further sanctions.
“Although it’s not currently front page news, you can see that Turkey is being lined up for EU and US sanctions unless the government changes its behaviour and re/insurers ought to be aware of that and keep a close eye on the situation,” added Mr Stevenson.