The ship insurer for Iran's biggest oil tanker fleet NITC is confident it would be able to pay Western ship industry claims in the event of accidents, despite new sanctions on financial dealings with Tehran, its deputy general manager told Reuters.
The U.S. sanctions bar financial institutions dealing with Tehran's central bank and have sparked concerns over how Iranian insurers with state links would be able to pay Western claims.
Privately-owned Kish Protection & Indemnity Club, the main insurer for NITC which has around 40 ships, relies on state-run Central Insurance of Iran as its reinsurer. Any claim made against it would likely have to go through a sanctioned bank.
That means a U.S. shipping company may not be able to receive insurance payments from Kish P&I if an accident occurs with an NITC tanker, leaving the U.S. firm potentially liable to hundreds of millions of dollars through no fault of its own.
"You cannot say that it's Kish P&I's problem because Kish P&I is ready to pay for the loss," said Ansari Dezfouli, the club's deputy general manager, in a telephone interview.
"We are doing our best to find a solution, a legal solution ... We will succeed in this," he said, adding that claims can take years to settle while sanctions may only be temporary. Kish has not faced any claims since it was formed last year.
Washington does provide room for business transactions with sanctioned entities on a case-by-case basis. It was unclear whether insurance claims would receive such an exemption.
While sanctions against hull and machinery insurance may be legitimate because they impact Iranian shipowners, Dezfouli said, sanctions against P&I insurance were unfair because they affect the crew, third parties and the environment.
If such an accident should occur, Dezfouli said the club may consider asking a member to pay damages upfront and be reimbursed later.
Although NITC's fleet does not operate in U.S. waters, they do travel through the same global sea lanes and stop at many of the same foreign ports as U.S. vessels.
"The financial restrictions currently in place in respect of proscribed institutions, organisations and individuals would seem to suggest that receiving payment from such entities would be difficult," said David Bolomini of the Group of International P&I Clubs, an association of customer-owned ship insurers that cover 95 percent of the world's tankers against.
"However, this is an issue of licensing and enforcement and therefore a matter for the authorities in the member states or states concerned."
Kish P&I club, which is not a member of the international group, was created by a group of Iranian shipowners shortly after European marine insurers withdrew coverage to NITC due to sanctions. U.S. lawmakers are considering adding NITC to its sanctions list.
The European Union has also imposed tough sanctions banning the transport, purchase and import into Europe of Iranian crude oil and petroleum products and related finance and insurance. That has forced India and other Asian shipowners dependent on European insurance to look for replacement coverage elsewhere, such as in China, Russia or the Middle East.
Dezfouli said Kish P&I has not been approached by foreign fleets for coverage, but it would like to eventually expand into the Asian market, Dezfouli said.
Source: Reuters