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Lloyd?s Faces Campaign in United Kingdom Over Activities in Burma(BestWire Services Via Acquire Media NewsEdge) Lloyd?s is facing a public campaign in the United Kingdom over its activities in Burma, also known as Myanmar. The Burma Campaign UK, a human rights organization, has issued a report accusing Lloyd?s and two of its underwriters of supporting the Burmese junta through the provision of insurance services. In a report called ?Insuring Repression,? the Burma Campaign said foreign insurers are extending a ?financial lifeline? to the Burmese government through their coverage of multinational companies that do business in the country. ?Foreign businesses operating in Burma give the regime millions of dollars every day,? the report said. ?Without this money Burma?s brutal regime wouldn?t be able to finance the military machine that keeps it in power.? The report recalled the Burmese regime?s use of lethal force against peaceful demonstrators in September 2007 and its heavy military spending despite a lack of foreign enemies. ?Insurance companies around the world are vital to the Burmese regime,? said Johnny Chatterton, campaign officer for the Burma Campaign UK. Lloyd?s refused to comment on the report or to provide an official to be interviewed. But Lloyd?s did issue a statement. "A very small amount of reinsurance is written at Lloyd?s in Burmese shipping and aviation,? the statement said. ?We are unaware of any businesses at Lloyd?s defying international sanctions. If we discovered any underwriters breaching sanctions, we would take action immediately. "Unless there are official international sanctions in place, Lloyd's does not instruct the market where it can and cannot write business," the statement said. The Burma Campaign issued a ?shamed list? of 228 insurance organizations that it said would not reveal whether they offer insurance services to companies operating in Burma. Lloyd?s is on the Burma Campaign?s ?dirty list? of organizations that, the campaign said, ?have sold insurance to companies operating in Burma.? Two Lloyd?s insurers are also on the list, both, the campaign said, for providing insurance to an airline owned by the Burmese regime. They are Atrium Underwriting Group Ltd. and Catlin. Catlin declined to comment. Atrium did not respond immediately to a request for comment. The Burma Campaign has taken credit for changing the activities of some of the world?s largest insurance organizations in relation to Burma. By July 2007, the report said, 13 of the world?s biggest insurance organizations had stated they did not offer insurance to companies operating in Burma. The list, the report said, includes American International Group, Allianz, Aon, Aviva, Axa, ING, Munich Re, Scor, Swiss Re and Willis. The report noted that ?11 of the top 30 are prevented from [operating in Burma] by U.S. sanctions.? The Burma Campaign pointed to the sanctions in the United States, which is Lloyd?s biggest individual market. The rules are explained on the U.S. Treasury Web site. ?Generally speaking, the exportation of financial services to Burma is prohibited,? the Treasury says. This ban would cover ?the provision, directly or indirectly, to persons in Burma of insurance services, investment or brokerage services,? the Treasury adds. Insurance, Chatterton said, allows the Burmese regime ?to afford the weapons and guns and tanks and bullets that they use to stay in power, that they use to entrench their military rule.? According to Chatterton, the Ministry of Finance and Revenue in Burma has acknowledged the importance of Lloyd?s in providing reinsurance. Chatterton noted Lloyd?s admission that it does provide coverage into Burma. ?We can?t get an accurate estimate of the flow of insurance,? he said. All insurance in Burma must be placed through Myanma Insurance, which operates a monopoly that is protected by law, Chatterton said. Citing sources within Burma, Chatterton said the campaign estimates that the Burmese regime takes in about $5 million a year in premiums through Myanma Insurance. On top of this, Chatterton said, Myanma Insurance earns commissions, which he estimates at around 15%, by placing big-ticket insurance business on the international market. This cover is provided to foreign companies in Burma in such industries as oil and gas, timber, gems and exporting, he said. Apart from London, the Burma Campaign report said, insurance services are provided into Burma from Antwerp, Belgium; Singapore; Thailand; Germany; Bermuda; Japan and Malaysia. Chatterton said Lloyd?s has told the campaign that it will take no action on Burma until there are official United Nations sanctions in place. But this, he said, ignores the existence of the U.S. sanctions. The Burma campaign is also hoping that the European Union will impose sanctions on Burma. Sanctions against Burma should be ?carefully targeted? to hurt the regime rather than the Burmese population, which is mainly reliant on agriculture for its survival, Chatterton said. ?If the EU market and the U.S. market cannot sell insurance services to Burma, then those companies in Burma are going to have severe difficulty insuring and reinsuring their operations in the country,? Chatterton said. (By Robert O'Connor, London editor: [email protected]) Copyright ? 2008 A.M. Best Company, Inc. |