The New York Department of Financial Services (DFS) has ordered Lloyd's of London to furnish the comprehensive details about the findings of its internal market investigation over the potential violations of the US sanction laws, while dealing with Iranian firms.
The DFS superintendent Benjamin Lawsky issued a notice to the specialist insurance market Lloyd’s on 27 August, media sources reported.
On 30 June, Lloyd’s informed the DFS that it has contracts with two firms, Glencore Xstrata and Trafigura Beheer, which are believed to ship thousands of tons of alumina to an Iranian firm that provided aluminum for Iran’s nuclear program.
A Lloyd’s spokesman said, "Reviewing all aspects of managing agents’ performance is part of the day-to-day role of overseeing the Lloyd’s market.
"This includes conforming with all applicable international sanctions, which we have always done."
Superintendent Lawsky has also asked 20 non-US reinsurance companies, including Lloyd’s, Swiss Re and Hannover Re, to submit a detailed report about their business relationships with the Iranian companies.
Previously, the officers at Lloyd’s said that the company operates as a market made up of over 50 independent businesses and not an insurance firm, and each business is accountable for the trading it executes.
Lloyd’s, which already has a ‘dedicated sanctions compliance team’ in place, said that it has been guiding the market on sanctions issues and reviewing compliance for over ten years.
Lawsky is investigating the reinsurers in order to decide that the companies have been obliging with the Iran Freedom and Counter-Proliferation Act of 2012, which prohibits financial services firms from offering services to companies that trade with Iran.