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Written by: Huang Weilun
2020-08-09 19:57
Last update date: 2020-08-09 20:00The US Treasury Department announced earlier that it would sanction 11 Chinese and Hong Kong officials including Chief Executive Carrie Lam. Recently, it has been circulating online that the insurance company AXA sent a letter to its customers, referring to the new exclusion clause "Sanctions Liability Limitations and Exclusion Clauses." AXA replied that since 2015, relevant clauses have been added to the policy contract in phases, and the letter is to inform customers that this clause will be added to the policy.
The reporter checked online information and found that exclusions in the "Limits on Sanctions and Exclusions" are not uncommon. For Chinese-funded China Taiping Insurance, similar exclusions also appear in the policy. Some people in the insurance industry said that the purpose of the relevant clauses to prevent activities including "money laundering" has always existed in insurance policies and is not new.
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According to the sanctions imposed by the United States, Americans and companies are not allowed to have any money, services or products dealings with the sanctioned persons’ assets, companies, or individuals in the United States. In other words, insurance services may also be affected.
Recently, there has been a letter circulating online from AXA to policy customers. The content stated that an exclusion will be added, namely the "Sanctions Liability Limitation and Exclusion Clause", which will take effect in the policy from the renewal date. The letter means that if the insurance provided by AXA and any compensation payments or benefits are paid, the company may be subject to any sanctions, bans or restrictions imposed by the United Nations, or subject to trade or economic sanctions by the European Union, the United Kingdom or the United States, or violate the European Union. Under the laws of the United Kingdom or the United States, the company shall not be deemed to provide any insurance and shall not be liable for any compensation or benefits.
It has been circulated online that AXA has added a new "limitation of sanctions and exclusions." (Online picture)
AXA replied that, like many insurance companies, in accordance with industry standards and the recommendations of the Hong Kong Federation of Insurance Companies, from 2015 onwards, “limitations of sanctions and exclusions” will be added to policy contracts in phases to help combat terrorist financing, Financial sanctions and other related laws and regulations, the relevant letter is to inform customers that the insurance policy will be added to this clause.
Similar clauses for different companies and insurance policies
Looking at the online information, in fact, "Sanctions Limitations and Exclusion Clauses" are not uncommon. AXA's home insurance exclusion clause has related provisions; HSBC's domestic helper comprehensive insurance also has relevant provisions. In addition, such clauses are not limited to foreign companies. A critical illness insurance of China Taiping Insurance also has similar clauses.
A critical illness insurance of China Taiping Insurance also has the same terms (screenshot of China Taiping website)
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The terms were originally intended to combat "money laundering" and other activities.
International Professional Insurance Consulting Association President Luo Shaoxiong said that European and American insurance companies are worried about underwriting sensitive areas and people. If the risk is high, they may refuse to cover. Similar terms are not the first time. The original intention includes combating " Mainland companies also have similar terms for activities such as money laundering. He pointed out that insurance companies have the right to add new clauses, which are described as "additions or subtractions." Insurance companies and policyholders also have contract termination clauses, which can be terminated when necessary. He also said that in the past in Hong Kong, insurance companies also refused to underwrite due to high risks. For example, the office of a member of Parliament was repeatedly destroyed, and the insurance company was reluctant to renew the insurance.
Regarding the U.S. sanctions, the Insurance Regulatory Authority said yesterday (9th) that it would closely monitor the repercussions of the sanctions and believe that the industry should fully consider the legal, business and commercial risks they have to face, which involve complex operational matters and vary in degree. The structure, scale and business combination of the company, the intermediary itself and its overseas subsidiaries vary. The China Insurance Regulatory Commission stated that it expects that customers will be treated fairly and transparently when relevant companies formulate any countermeasures.
AXA Insurance
