Further to our article earlier this week, the UK has now put into law last week’s anticipated sanctions concerning access to the UK aviation insurance market, with the new regulations coming into effect from 17:00 on 8 March 2022.
These broadly mirror those previously announced by the EU, preventing the direct or indirect provision of insurance or reinsurance in relation to aviation or space goods and technology to persons connected with Russia or for use in Russia. There is a specific but limited carve-out for UK-Russia passenger or cargo flights that are not for the purpose of changing ownership of the aircraft (or its components, such as engines) or the aircraft’s operator. But in practice, there are currently no commercial flights operating directly between the UK and Russia.
As envisaged by the government statement, these new regulations will have an immediate impact and UK insurers and reinsurers will therefore be considering their positions in respect of existing policies; to determine which are caught by the wording of these new regulations and which, if any, remain in place. Should cover have ceased, effective 17:00 on 8 March 2022, questions will also undoubtedly arise as to whether any potential claims crystallised in advance of this date. In any event, payment of any such claims while these new regulations remain in force may also be difficult.
We are following these developments very closely and advising clients on relevant issues. Should you require any further advice or information on this subject, please contact Anna Anatolitou or Gillie Belsham, or your usual contact at Ince, who will be happy to assist.
"This means cover is withdrawn on existing policies and UK insurers and reinsurers will be unable to pay claims in respect of existing policies in these sectors."