President Obama and Raul Castro announced the restoration of diplomatic relations between the US and Cuba at the end of 2014, more than 50 years after an economic embargo was placed on the island nation and diplomatic ties were severed. For the first time in recent history, it appears that relations between the two countries are becoming amicable. New trade and travel regulations have been passed as well as the restoration and reopening of embassies in Havana and Washington. It is important to note that the economic embargo is yet to be lifted, though, as the US Congress has maintained a strong opposition to this step.
New regulations have created opportunities in life, health, and travel insurance for authorized travelers. Authorized travel includes family visits, educational opportunities, government work, and journalistic endeavors among others. Companies subject to US jurisdiction are now authorized to issue travel policies for individuals ordinarily residing outside of Cuba who travel to or within Cuba. This includes the servicing of those policies, such as payment of claims and emergency medical services.
While travel-related policies are the only ones available to US carriers at the current time, it has given insurers and brokers alike a peek into a potential new market of the future.
With all of the sudden changes in this fast-evolving situation, instability has to be expected, with the insurance sector being no exception. Currently, insurers face a litany of challenges, including a Cuban population that puts insurance relatively low on their list of priorities. Also, as stated before, the US Congress must lift the economic embargo for full insurance activities to occur. Nonetheless, insurance carriers are realizing that in Cuba, along with travel insurance, the insuring of the agriculture and hotel industries will be sizeable opportunities.
So, as the two governments continue to restore full diplomatic and economic relations, it becomes ever more important that carriers, brokers, and the insured are aware of the regulations and protocols when it comes to insurance in Cuba. Once the economic embargo is fully lifted and a client wants to move in, carriers and brokers alike can’t afford to be lagging behind.
Read more for an outline of important characteristics and developments of the current Cuban insurance industry, including compulsory coverages, market participants, and admitted/nonadmitted insurance operations.