an introduction Alan Franklin GBRM January 31 2017 AON Vancouver BC Canada Understanding risks is a prerequisite PRI covers many risks related to international investment ID: 793872
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Political Risk Insurance:an introduction
Alan FranklinGBRMJanuary 31, 2017AON Vancouver, BC, Canada
Slide2Understanding risks is a prerequisitePRI covers many risks related to international investment
Slide310 Categories of risk that can be covered1.Risks of a legal nature emanating from the host state actions2. Risks from the host state of actions that are not the result of laws or orders3. Risks
of a legal nature emanating from the failure of the host state to properly act
Slide410 Categories of risk that can be covered 4. Risks of a legal nature emanating from the home state or international community5. Risks of violence that are not controlled by the host
state
Slide510 Categories of risk that can be covered6. Economic risks such as strikes, work stoppages 7. Breach of contract by the host
state8. Failure by the host state to pay on sovereign obligations
Slide610 Categories of risk that can be covered9. Failure of the host state to pay an arbitration award10. State succession issues – State A issues a mining licence. State B takes over control of that territory of State A and State B does not recognize the actions of State A
Slide7Categories of risk that can be coveredThe risks in category 1 can be subdivided into illegal acts of the host state and legal ones Illegal generally means that they are against international law, particularly as set out in an international treaty, such as a bilateral investment treaty.This may matter to insurers
Slide8Categories of risk that can be coveredProtection of assets - factories, mines, power projects Protection of investors – their right to transfer funds out of the country, or hold their shares
Slide9Risk must be international a Canadian company doing business in Canada cannot obtain PRI but a Canadian company sets up a US sub for a Canadian project now has an international component
Slide10Issuers of PRI Insurance Commercial insurance companies are the largest group of PRI insurersExport Credit Agencies such as Export Development Canada, Ex-Im US Multilateral Agencies with development goals such as MIGA of World Bank, African Development Bank Inter-American Development Bank National Agencies with development goals eg OPIC in the US
Slide11QUESTIONS?Contact information: Alan FranklinGlobal Business Risk
Managementalanfranklin@gbrm.cawww.gbrm.ca