A New York regulatory investigation of Lloyd’s for possible violations of Iran sanctions law has led to a government request for files of an internal probe by the insurer, a person familiar with the matter said.
Superintendent Benjamin Lawsky asked the insurers about their procedures to avoid violations of the Iran Freedom and Counter-Proliferation Act of 2012, according to a letter from the department.
Lawsky has now asked for details on a Lloyd’s probe, which was triggered by his initial request for information, said the person, who asked not to be identified because the matter isn’t public. Lloyd’s disclosed to Lawsky’s office on July 30th that it has contracts with two firms, Glencore Xstrata and Trafigura Beheer, that were linked to alleged shipments of aluminum to Iran, the person said.
“Reviewing all aspects of managing agents’ performance is part of the day-to-day role of overseeing the Lloyd’s market,” Matt Drage, a Lloyd’s spokesman, said in a statement. “This includes conforming with all applicable international sanctions, which we have always done.”
The DFS said in the June 25th letter that it learned that several insurers issued coverage that applied to trades made with Iran, including one policy issued by a group of European domiciled companies. The policy and the resulting claim payment “would likely violate the IFCPA,” the DFS said, referring to the act.
Ron Klug, a DFS spokesman, declined to comment on the probe.
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