Indian insurance companies have stopped providing insurance cover to goods-- mainly crude oil-- imported from Iran.
Domestic insurers, including New India Assurance (NIA), United India Insurance and reinsurer GIC Re confirmed they have stopped providing insurance cover for Iranian cargoes, reports The Indian Express citing insurance sector officials.
“Indian general insurers have stopped giving any cover for Iran oil cargo since 8 May and no existing cover is valid beyond 4 November,’’ said an official.
Public sector insurers rely on reinsurance from India’s only reinsurer GIC Re, which in turn depends on reinsurance companies in both Europe and the US to hedge risk. European and US reinsurers are wary of the risk of breaching sanctions. Without the backing of global reinsurers, Indian insurance companies will find it difficult to manage the risk.
India is the second biggest buyer of Iranian crude after China, and without insurance coverage to protect their plants, the country’s refineries may have to cut down their imports from Iran earlier than anticipated.
In May, the US said it plans to re-impose some sanctions against Iran starting in August, with full sanctions in place by November, after withdrawing from a 2015 nuclear accord with Iran. The first US sanctions on Iran will start on 6 August and a second set will begin on 4 November
Meanwhile, Iran is offering to insure oil cargoes to India in the face of the impending US sanctions, industry sources said