International Political Risk Management: Meeting the Needs of the Present, Anticipating the Challenges of the Future (International Political Risk Management) (International Political Risk Management)

300 Pages·2007·0.99 MB·English

by  Theodore H. Moran

international
political
risk
management
NEEDS OF THE PRESENT,
CHALLENGES FOR THE FUTURE
Theodore H. Moran,
Gerald T. West, and
Keith Martin, Editors
MIGA
THE WORLD BANK GROUP
Multilateral Investment Guarantee Agency

International
Political Risk
Management
Needs of the Present, Challenges for the Future

International
Political Risk
Management
Needs of the Present, Challenges for the Future
Theodore H. Moran, Gerald T. West,
and Keith Martin, Editors
THE WORLD BANK
Washington, D.C.
© 2008 The International Bank for Reconstruction and Development / The World Bank
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Washington,DC 20433
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E-mail:[email protected]
All rights reserved.
1 2 3 4 10 09 08 07
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ISBN:978-0-8213-7001-8 eISBN:978-0-8213-7002-5
DOI:10.1596/978-0-8213-7001-8
Library ofCongress Cataloging-in-Publication data
Needs ofthe present,challenges for the future / Theodore H.Moran,Gerald T.West,
and Keith Martin,editors.
p.cm.-- (International political risk management;v.4)
Includes bibliographical references and index.
“Based on a symposium held November 5,2006,under the joint auspices ofthe
Multilateral Investment Guarantee Agency (MIGA) ofthe World Bank Group and the
Karl F.Landegger Program in International Business Diplomacy at the School ofForeign
Service,Geogetown University”--Preface.
ISBN 978-0-8213-7001-8
1. Insurance,Investment guaranty.2. Risk (Insurance) 3. Risk management--Political
aspects. I.Moran,Theodore H.,1943- II.West,Gerald T.1944- III.Martin,Geral Keith.
IV.MIGA-Georgetown University Symposium on International Political Risk Management
(2006 :Georgetown University)
HG4538.5.N44 2007
368--dc22
2007034298
Cover design:SerifDesign Group,Inc.
Contents
Preface ix
Abbreviations xiii
Introduction xvii
Yukiko Omura,Executive Vice President,Multilateral
Investment Guarantee Agency
Part One NEW PERSPECTIVES ON POLITICAL
RISK INSURANCE PRODUCTS
Overview 3
Theodore H.Moran and Gerald T.West,Editors
A BIT of Insurance 7
Kenneth W.Hansen,Chadbourne & Parke LLP
The Convergence of the Terrorism Insurance
and Political Risk Insurance Markets for
Emerging Market Risk: Why It Is Necessary
and How It Will Come About 13
Charles Berry,BPL Global
Commentary 37
David Neckar,Willis
Commentary 41
Edie Quintrell,OPIC
Discussion of New Perspectives on Political
Risk Insurance Products 45
Symposium Panelists and Participants
v
vi Contents
Part Two PRIVATE POWER PROJECTS IN EMERGING
MARKETS:NEW MODELS FOR FINANCING
AND RISK MANAGEMENT
Overview 53
Theodore H.Moran and Gerald T.West,Editors
Managing International Political Risk: Lessons
from the Power Sector 59
Erik J.Woodhouse,Program on Energy and Sustainable
Development,Stanford University
AES’s Experience in Developing Countries 87
Jeffery A.Safford,AES
Commentary 93
Barry Metzger,Baker & McKenzie LLP
Discussion of Private Power Projects in Emerging
Markets:New Models for Financing
and Risk Management 97
Symposium Panelists and Participants
Part Three THE CHALLENGE OF MANAGING REGULATORY RISK
Overview 107
Theodore H.Moran and Gerald T.West,Editors
Regulatory Takings Under International Law:
A Brief Legal and Practical Guide 115
Peter Charles Choharis,Principal,Choharis Global Solutions
Are You in Good Hands with Your Insurance
Company? Regulatory Expropriation and
Political Risk Insurance Policies 137
Mark Kantor,Attorney,Washington,DC
A Sword in a Stone: Problems (and a Few Proposed
Solutions) Regarding Political Risk Insurance
Coverage of Regulatory Takings 171
Frederick E.Jenney,Morrison & Foerster LLP,Washington,DC
Discussion of the Challenge of Managing
Regulatory Risk 189
Symposium Panelists and Participants
Contents vii
Part Four THE INTERNATIONAL POLITICAL RISK
INSURANCE INDUSTRY IN 2010
Overview 195
Theodore H.Moran and Gerald T.West,Editors
Past and Future Predictions for the Political
Risk Insurance Industry 201
John J.Salinger,AIG Global Trade & Political
Risk Insurance Company
How Will the Political Risk Insurance Industry Evolve
in the Next Three to Five Years? 209
Christina Westholm-Schröder,Sovereign Risk Insurance Ltd.
Looking Ahead: Will Political Risk Insurance Continue
to Play a Meaningful Role in the Global Investment
and Trade Environment? 215
Joanne Palmer,Director ofPolitical Risk Insurance,
Export Development Canada
The New Scramble for Commodities: Medium-Term
Trends in Political Risk Insurance 225
Greg Ansermino,Director,Standard Bank ofSouth Africa
Einstein and Cinderella 239
Julie Martin,Senior Vice President,Political Risk,Marsh
Discussion of the International Political Risk
Insurance Industry in 2010 245
Symposium Panelists and Participants
Appendixes
I Biographies of Authors 249
II Previous Volumes in This Series 261
III More about MIGA 269
Boxes
1 General Property Insurance Market War Exclusion 24
2 Legal Definition of“Rebellion” 24
3 T3 Act ofTerrorism or Sabotage 25
4 T3 War Risks Exclusion 25
Figures
1 Lloyd’s Premium Income for Investment Insurance by
Year ofAccount (Risk Code PR) 15
viii Contents
2 Ten-Year Overview ofLloyd’s Premium Income for
Stand-Alone Political Violence (Risk Codes TO WL TE TU 6T) 16
3 Incurred ofLoss Ratios for Lloyd’s Political Violence
Risk Codes by Year ofAccount 17
4 Contract Performance versus Project Performance 67
Tables
Annex 1 Project Details 85
1 OPIC Claims History 241