International insurance program

A group present in thirty countries cannot rely on a single policy bought at headquarters: many states require risks located on their territory to be insured by a locally licensed insurer, and prohibit direct cover from abroad. The international program meets this constraint with a two-level architecture. Local policies, issued by insurers licensed in each country, often members of the same network, cover subsidiaries under local law and practice. A master policy, bought by headquarters, sets the group's terms and limits, and supplements local policies through difference in conditions and difference in limits clauses, where local cover is narrower or lower. Where the master policy cannot lawfully indemnify the subsidiary, a financial interest clause allows the parent to be indemnified for the loss in value of its shareholding. The program also has a tax dimension, premium taxes being due country by country, and a cash dimension, premiums and claims flowing through a fronting network. Its compliance is now a supervisory topic in its own right.