There is a lot of pervasive uncertainty regarding the topic of sanctions. Those responsible for compliance are forced to operate in a fluid, rapidly-changing sanctions environment where there is often a lack of clarity and transparency regarding certain crucial aspects of legislation and policies.

These challenges are often compounded by a lack of dialogue between policy-makers and industry practitioners. The unexpected consequences of legislation mean that there is significant exposure to risk for insurance industry stakeholders. However, while industry experts have much to contribute in terms of identifying potential problems with proposed laws and regulations, in most cases, there is an absence of regular communication.

At present, it seems there is little engagement between industry practitioners and policy-makers in the early stages of developing sanctions-related legislation. Exchange and communication is more conducted on an ad hoc fashion rather than in a regular and systematic way. As a result, the relationship is largely reactive in nature with companies forced to cope with changes in sanctions legislation on short notice.

Even though there is on all sides a perceived need for an exchange of information regarding sanctions, at the same time, there seems to be no consensus or clarity regarding the type of information which is being regarded as relevant within the insurance and reinsurance industries.

One solution would be to offer policy-makers an institutionalised opportunity to engage with the financial services industry on the subject of sanctions with the aim to improve mutual understanding regarding sanctions-related challenges. Regular forums of dialogue involving representatives of both parties would facilitate a better understanding of the relevant the issues at hand.

This would contribute to the effective implementation of sanctions in the insurance sector by addressing directly the risks and challenges faced by industry practitioners, particularly those working in the areas of risk management and compliance, and facilitating a dialogue between all the main stakeholders involved on how best to cope with these challenges impacting everyday business.