Number 21 October 2013

News

Afnity

Insurance broker specialising in corporate protection

www.nchib.co.uk

Multi-national Insurance - Compliance can be taxing!

Tailored Solutions
Welcome to this edition of Afnity, which is designed to keep you informed of developments within Finch Insurance Brokers and address topics which we you hope you nd of interest. Finch is a specialist multi-national broker, and the environment that international businesses are exposed to with regard to the purchase of insurance is changing fast and poses some serious challenges. Over the coming months we will be highlighting some of these, and in the autumn we will be hosting a series of client seminars to address some of the key issues. If you would like more information on any of the subjects raised, the team at Finch will be delighted to discuss with you the impact on your business, and how we can tailor a programme of insurance to protect your balance sheet and your reputation. Mike Latham Group Managing Director So what has changed? Very simply most factors that could impact insurance purchased in respect of risks outside of the UK - local insurance law, taxation regimes, emerging wealth, commercial and cultural practice.

You want to contact us

Manchester Tel: 44 (0)161 228 1466 / Fax: 44 (0)161 228 0979 Halifax Tel: 44 (0)1422 323 713 / Fax: 44 (0)1422 348 403 SHEFFIELD Tel: 44 (0)114 303 3335 / Fax: 44 (0)161 228 3045 info@nchib.co.uk www.nchib.co.uk

Local Insurance Law

For most multi-national businesses and their insurance advisors, little has changed for many years. Insurance for foreign interests would usually be provided using a mix of global and local policies. This strategy would be founded on an understanding of where there was a requirement to purchase insurance locally in accordance with local laws and customs from a locally authorised insurer (admitted), and those countries where insurance could be provided under a policy written in the UK in respect of risk resident overseas (non-admitted). For the latter category, many businesses and brokers relied on the fact that whilst local law required locally admitted insurance, it was rarely enforced. Today there is a surge in local enforcement driven by the pursuit of tax. Non-compliance can result in some signicant corporate and personal local nes, and also the recovery of tax monies against insurance premiums and claims payments. Continued

Taxation
It seems that every tax authority around the world is doing all that it can to maximise tax revenues against a background of austerity and an uncertain economic climate. In some countries e.g. The Netherlands, this is simply through the imposition of a signicant increase in insurance tax. In others, it is by targeting local subsidiaries of foreign companies. In Brazil there is little culture of buying commercial or personal insurance, in part because of the lack of litigated claims, and also because it represents a luxury expense. However, enforcement authorities in Brazil recognise that a UK company will typically buy insurance in respect of its interests resident in the country, and will seek evidence of locally admitted insurance, so that they can ensure local compliance and recover tax monies owed.

Emerging Wealth
Particularly among the BRIC nations, there is an emerging class that is educated, well paid and has an increasing awareness of the protection and also means of redress afforded by the law. This has resulted in an increase in claims litigation where it was once unknown. Of particular concern to a UK multi-national, is the rise in the number of cases brought against Directors and Senior Managers personally in respect of wrongful acts in the course of their employment leading to Directors & Ofcers Liability insurance claims. Here the existence of locally compliant insurance is a business essential, and not surprisingly has attracted the attention of external stakeholders (shareholders, institutions, private equity funders etc.).

Commercial & Cultural Practice

For the same reason there is much greater scrutiny on international claims payments. Historically, there was a good chance that the transfer of claims monies from the UK would go unnoticed when it arrived overseas. Now, those monies may be stopped, seized, incur insurance tax and local corporation tax, and trigger action for a breach of local insurance law. Certainly examples exist of a local ne exceeding the amount of the claims payment. Further, local tax authorities may deem that premiums paid under a nonadmitted insurance programme are not tax-deductible as a business expense. The single biggest change we have seen has been in the terms of contract that are incumbent on our clients as they operate around the world. Customers in particular are doing more to eliminate risk and reduce cost by passing liability down the line, and making increased demands of the insurances that you are required to have in place in respect of the provision of products or services under that contract. Some very subtle changes in wording are having a profound impact on the insurance required to support them, involving often additional insurance coverage and cost.

Finch Insurance Brokers is a specialist in the provision of multi-national insurance services, offering the support of professional in over 70 countries. For more information on how we can help you establish the weaknesses that may exist and achieve global insurance compliance, contact Anthony Horton 0161-242-4340 or e-mail anthony.horton@finchib.co.uk

International Pooling of Employee Benefits

As the process of globalisation continues to change the way in which multi-national companies operate, so too in the area of employee rewards HR managers have to nd ways to provide consistent benet programs for their globally diverse workforces. More and more multi-national companies are responding by adopting global employee benet strategies. Multi-national pooling can facilitate these strategies by proving support through partner insurers to source and place the products required by both headquarters and regional locations. This enables multi-national companies to provide for, control and coordinate the insurance needs of their employees safe in the knowledge that local requirements are being met by local experts. While the high level co-ordination and control offered by multi-national pools is invaluable to many HR managers, there is, in the current economic climate, a far stronger imperative for considering pooling. Companies with 3 or more overseas operations can benet from placing local group life, disability and health insurance schemes within a multinational pooling network.

This can enable them to gain from any favourable claims experience worldwide by receiving a regular international dividend, which can be as high as 15% of premiums paid. This approach can also produce discounts on ongoing premiums, favourable underwriting terms for small units of employees and benet enhancements by leveraging employers international presence.

For more information, contact Saira Chambers 0161-242-4322 saira.chambers@fincheb.co.uk

Insuring a Property Overseas?

Insuring your overseas holiday home can seem more complicated than insuring your UK property. Each country has its own different laws, regulations and practices in place, as well as differences in insurance policies. In addition, there could be language problems in understanding a complex insurance document either written in a foreign language or poorly translated. And should the worst happen: Are you condent that you would be able to navigate your way through the process of making a claim?

What about coordinating with the insurance professionals sent to inspect your property or dealing with the local trades people required to rectify any damage? Can you be sure that the policy you have bought would stand up to the test and cover your loss? Expert guidance and advice at a time of crisis is critical. Would you prefer to receive guidance from a personal contact you have met, or have spoken to in your native language?

Finch Private Clients can assist you with any specific needs at home or abroad, contact Karen Watterson 0161 242 4335 karen.watterson@finchib.co.uk

new appointments
Shefeld Ofce is very pleased to report the arrival of three new members of staff conrming our determination to become a force to be reckoned with in the South Yorkshire and East Midlands area.

Andrew Selby is a former professional rugby player and stockbroker who joins us from a national IFA as an employee benets consultant. Andrew has spent the last 3 years working with corporate clients helping them develop their employee benets packages particularly focussing on pension schemes that meet Auto Enrolment obligations. You can contact Andrew at andrew.selby@ncheb.co.uk Emma Thornton has been appointed as an Account Executive and brings with her a wealth of knowledge about the needs of local business and has an excellent reputation for creating and developing professional client relations based upon integrity and trust. She has over 20 years experience in the insurance industry, having worked for both local and national organisations, advising clients who range from small, local companies to large corporations with complex general insurance needs. You can contact Emma at emma.thornton@nchib.co.uk David Westcott has also been appointed as an Account Executive and joins us from a national insurance broker and brings with him a wealth of knowledge in Corporate Risk Management and Transfer. He is particularly good at gaining a thorough understanding of a companys risk prole, using this understanding to design and place insurance programmes that are tailored to a companys individual needs and requirements. He places great emphasis on providing clear and concise advice, allowing clients to make conscious, informed decisions regarding risk retention and mitigation. You can contact David at david.wescott@nchib.co.uk

our offices
Manchester Halifax SHEFFIELD

Fifth Floor Steam Packet House 70-76 Cross Street Manchester M2 4JG

Fourth Floor Suites 5 & 6 K Mill Europa Link Dean Clough Shefeld Halifax S9 1XZ HX3 5AX

Finch Manchester Fifth Floor Steam Packet House 70-76 Cross Street Manchester M2 4JG Tel: 0161 228 1466 Halifax Ofce Fourth Floor K Mill Dean Clough Halifax HX3 5AX Tel: 01422 323 713 Authorised and regulated by the Financial Services Authority www.nchib.co.uk www.verlingue.com