Russian Companies Authorized to Offer Marine Insurance Coverage for Tankers

India has approved three Russian insurers (Alfastrakhovanie, Sogaz, VSK) to provide marine insurance for oil tankers carrying Russian crude, mitigating the impact of EU sanctions. This approval facilitates Russian oil imports amid the EU's ban on insurance and shipping services for tankers carrying Russian oil. The insurers offer protection against loss or damage to ships, cargo, and other liabilities, including pollution and wreck removal expenses. The authorization is valid until February 2025 (except Ingosstrakh, which is valid until February 2029). The move reflects India's strong economic and defense ties with Russia and ensures stable global energy markets.

Three Russian companies have received approval from the Indian government to provide marine insurance cover to tankers, according to a Directorate General of Shipping order.

The three Russian companies are Alfastrakhovanie PCL, Sogaz Insurance and VSK Insurance. Earlier, Russia's fourth largest insurer Ingosstrakh had received approval from the government to provide marine insurance cover to oil tankers..

The approval will facilitate tankers carrying Russian crude oil to India amid a ban imposed by the European Union on insurance, trade finance, and other maritime services by EU companies for carrying Russian crude oil to any location.

The approval to Alfastrakhovanie PCL, Sogaz Insurance Co and VSK Insurance is valid till February 20, 2025, while approval to Ingosstrakh is valid till February 20, 2029.

Marine insurance cover provides protection against loss or damage of ships, cargo, terminals and other liabilities arising out of transport of crude oil.

Earlier this month, two senior US treasury officials visited India to urge New Delhi to maintain the implementation of the oil price cap aimed at limiting profits to Russia, while also promoting stable global energy markets.

Following Russia's February 2022 invasion of Ukraine, the G7 nations, the European Union, and Australia jointly implemented a price cap. This cap prohibits the utilisation of Western maritime services, including insurance, flagging, and transportation, for tankers transporting Russian oil priced at or above USD 60 per barrel.

In 2023, Russia emerged as India's top oil supplier. India has strong economic and defence ties with Russia.

In shipping, third-party liabilities arising from operating ships such as oil pollution, wreck removal and damage to port property are commonly referred to as protection and indemnity (P&I) insurance.

Currently, such third-party risks are insured with the International Group of Protection and Indemnity Clubs (IG Clubs), a 13-member group based in London that provides liability cover to about 95 per cent of the world's ocean-going ships by capacity (tonage), placing a USD 1-billion limit on individual claims that involve pollution damage and wreck removal.

The Merchant Shipping (Regulation of Entry of Ships into Ports, Anchorage and Offshore Facilities) Rules, 2012, which took effect from April 2012, makes it mandatory for foreign ships of 300 gross tonnage or more, entering the country's port to hold a valid third-party liability cover against maritime claims. A DGS official said that VSK Insurance, Alfastrakhovanie, Sogaz Insurance, and Ingosstrakh safeguard Russian interests, including Russian ships and cargo transported on other vessels. These companies are classified as non-International Group (IG) PNI entities.

Backed by the Russian National Reinsurance Company, a wholly-owned entity of the Russian Government, these insurers boast robust financial support and stability.

This backing underscores their reliability and reinforces their ability to honour insurance claims promptly and effectively, the official said. Recognizing their credibility and capability, the Government of India, through the Directorate General of Shipping, has granted authorization to these entities under the Port Entry Rules of 2012, the official added.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)