New York's financial regulator has asked 20 non-U.S. reinsurers whether they conducted business with entities linked to Iran, as part of a review of these companies' ability to comply with a new U.S. sanctions law that becomes effective Monday.
The New York's Department of Financial Services wrote to the companies after learning that three insurers had issued coverage that applied to trades with Iran, according to a copy of the letter seen by Reuters. The three firms could not be identified.
The letter from Superintendent Benjamin Lawsky's office, dated June 25, was sent to companies including Swiss Re AG (SRENH.VX), Lloyd's of London LOL.UL and Hannover Re (HNRGn.DE).
The New York regulator also asked the reinsurers to provide details regarding any business they have done with Switzerland-based commodities giants Glencore Xstrata PLC (GLEN.L) and Trafigura TRAFGF.UL that will continue after Monday.
The letter cites news reports that Glencore and Trafigura had supplied thousands of tons of alumina to an Iranian firm that provided aluminum to Iran's nuclear program.
Glencore declined to comment on the letter. A Trafigura spokeswoman said in a statement to Reuters that the company is compliant with national and international law where applicable.
A Glencore spokesman had said in May the company broke no regulations and did not violate the sanctions.
A Swiss Re spokesman confirmed the company had received a letter from the New York regulator requesting information regarding its international trade controls. "They want to know what controls are in place to ensure compliance with U.S. sanctions on Iran," he said.
He added that the company is aware of its legal obligations and has controls in place to ensure its compliance.
Lloyds of London said in an e-mailed statement, "Lloyd's will comply with any applicable sanctions, as it always has done."
The world's third biggest reinsurer, Hannover Re (HNRGn.DE), declined to comment directly on U.S. developments.
"Hannover Re is strictly compliant with the sanctions implemented by the European Union and the United Nations," a company spokeswoman said.
Financial services firms, including insurance and reinsurance companies, are prohibited from providing services to companies that do business with Iran under the Iran Freedom and Counter-Proliferation Act of 2012 (IFCPA), signed by President Barack Obama in January.
The act and other sanctions are aimed at making it hard for Iran to sell oil and limiting funds for its nuclear program, which some in the West believe is being used to develop weapons. Iran says the program is purely for civilian purposes.
Any violation of the IFCPA will prohibit a company from engaging in any business in the United States, and U.S. financial firms may be prohibited from making loans or issuing credit to it.
The regulator also asked the companies to explain all their policies and procedures to ensure compliance with the new law and identify all lines of business which may be subject to sanctions under the law.
(Reporting by Karen Freifeld in New York, Jonathan Gould in Frankfurt, Martin de Sa'Pinto in Zurich and Tanya Agrawal in Bangalore; Additional reporting by Chris Vellacott and Chandni Doulatramani; Editing by Miral Fahmy, David Holmes and Don Sebastian)