The UK Government has confirmed that it intends to bring in further sanctions targeted at the provision of insurance and reinsurance services for Russian companies.
Going forward, Russian companies in aviation and space industry will be prevented from access to UK insurance sector, in a move that will “severely limit” Russia’s access to the global insurance and reinsurance market, the UK says.
The legislation marks the latest in a plethora of economic sanctions brought against Russia following its invasion of Ukraine, which has been widely condemned by Western leaders.
Through its Lloyd’s and London Market, the UK is among the most important insurance hubs globally, and the Government intends to leverage this position to put further pressure on Russian businesses and to isolate Russia’s economy from the international financial system.
The specialist Lloyd’s marketplace has already publically said that it is backing sanctions against Russia and is proactively engaging with the British Government and international regulators.
Also worth noting, Bermuda – one of the other largest global re/insurance hubs – has confirmed that UK sanctions will be applicable in Bermuda, due to its status as an Overseas Territory.
Bermuda Premier David Burt stated yesterday that the Bermuda Civil Aviation Authority was already reviewing sanctions in coordination with stakeholders to ensure it is operating in full compliance with the new UK rules, so it seems probable that the newest round of insurance sanctions will also be adhered to by the jurisdiction.
“The Bermuda Civil Aviation Authority is carefully reviewing sanctions in coordination with other stakeholders to ensure that they and relevant entities which it regulates are in full compliance with the applicable sanctions whilst maintaining its safety oversight obligations,” Burt said.
“While the Bermuda Civil Aviation Authority continues to review sanctions, there is no question that the number of aircraft on the Bermuda Aircraft Registry utilized by Russian air operators will be greatly impacted.”
Rating agency AM Best has warned that Russia’s invasion of Ukraine will likely have significant fallout in the capital markets, impacting the entire industry in the short-to-medium term, and has turned negative on a number of Russian re/insurance companies already, alongside S&P.