Every answer and its explanation appears here once you have finished the path. Each one then links to the matching glossary entry, where the concept is set out in full with its worked example.
1. What third state do sanctions create, which insurance does not model?
The loss covered, acknowledged, and unpayable
Insurance knows two states, covered and not covered, and builds all its tools on them: reserving, litigation, reporting. An acknowledged loss nobody can perform fits no box and is therefore handled badly everywhere, which is the real cost of this situation. Prescription, named by another answer, is a fearsome consequence of that state rather than the state itself: it runs while everyone waits in good faith, and that is precisely what turns a temporary block into a permanent loss.
Glossary entry →2. French insurer, French insured, settlement in euros. The bank closes the file after a compliance review. What does that teach about payability?
That payability does not follow the parties' nationality but the chain executing the payment: the reinsurance panel, the currency and the clearing bank bring in other jurisdictions
Treating the problem as nonexistent because everyone is French is the first error, and it loses months. A reinsurance panel mostly subject to another law, a correspondent bank, a clearing house: the payment crosses jurisdictions the contract never named. Blaming the bank for exceeding its role ignores that it carries its own liability and has no reason to take it on for a third party. Changing currency sometimes moves the problem and does not remove it, since the reinsurance panel stays where it is.
Glossary entry →3. The policy excludes cover to the extent that payment would expose the insurer to a sanction. Which half-sentence decides the file's fate if the regime lifts in three years?
The one saying whether the clause extinguishes the cover or merely suspends its performance
A clause that extinguishes leaves no claim once the regime lifts; a clause that suspends leaves the claim intact and merely defers performance. Three years later the two wordings therefore give opposite results on the same facts, and the whole amount depends on it, not a fraction. The applicable law, invoked by another answer, obviously matters, but it serves to interpret the clause, it does not replace what the clause says. Litigating the clause's scope rather than its nature would be fighting on the wrong ground.
Glossary entry →4. What are the three steps required, and in what order?
File for a specific license, interrupt prescription against the insurer, and negotiate recharacterizing the clause into a suspension while the insurer still acknowledges the cover
The order is not decorative. The license is applied for at once because the process takes months and a dated refusal beats open-ended uncertainty. Prescription is the only risk in the file the insured can remove alone, and it runs while everyone waits in good faith for the administrative answer: that is how a claim is lost without any party behaving badly. And recharacterization is negotiated only while the insurer still acknowledges the cover, because that is the only moment the insured has something to trade. Waiting for the regime to lift combines all three errors at once.
Glossary entry →5. In political risk, what is distinctive about a sanction compared with other lines?
It can cause the loss and block the indemnity, so waiting for the regime to lift is never a neutral wait
Elsewhere a sanction is an obstacle external to the loss. Here the sanctioned state's retaliation is often what expropriates, so the same regime sits both at the origin of the loss and across its settlement. Waiting then becomes a decision rather than an abstention: prescription runs, and if the clause extinguishes instead of suspending, nothing will remain to claim on the day it lifts. Believing the sanction always comes after the loss is exactly the assumption this module dismantles, and confining it to American law ignores the European and UN regimes producing the same effect.
Glossary entry →