24 Nov 2014

Government outlaws insurance for ransom payments

Know what the average price for a foreign hostage is these days? £1.7 million.

Know how much Islamic State made from such ransom demands in the last year? An estimated £28 million, although none of it came from the UK.

Everyone knows it doesn’t pay kidnappers. Trouble is other countries do and so inflate funding to organisations like Islamic State, already rolling in money.

Today Theresa May outlined a plan for a new law, to clarify as she put it, the legal responsibilities of British based insurance companies.

To provide insurance or reinsurance cover for ransom payments to terror organisations will be outlawed.

When I asked her what impact this might have on payments and on other European countries she sidestepped the question by simply saying this is all about clarification.

There are already laws in place criminalising any form of terrorist financing.

But the Home Office argues it does not explicitly bar insurance companies from compensating for such payments.
Militant Islamist fighter uses a mobile to film his fellow fighters taking part in a military parade along streets of Syria's northern Raqqa province

So laws are needed to prevent such firms ‘inadvertently’ providing cover to meet ransom demands.

How does a company do that ‘inadvertently’ I ask myself?

But this new law is also born out of the Government’s frustration that other European countries quietly and behind the scenes sanction such payments when faced with the reality of the tragic consequences if they don’t.

The aim the Home Office says is to discourage making payments on the basis the money won’t be reimbursed.

I wonder what effect that may have on British families.

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