International frameworks on business and human rights : a study on insurance companies

Rahman Ferdous: International frameworks on business and human rights : a study on insurance companies. In: Jog-erkölcs-kultúra : értékdilemmák és identitások a jogrendszerekben, (10). pp. 113-121. (2020)

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In modern world, corporate entities have their culture and morality and are criticized for unethical practices. The global initiatives of the UN Global Compact 2000, the OECD Guidelines for Multilateral Companies 2011 and the UN Guiding Principles on Business and Human Rights 2011 (UNGP) formulated the corporate practice in human rights and sustainable development. These non-binding instruments form the moral code for both manufacturing and service sector corporates as a part of soft international law. The corporates covenant to avoid infringement of the human rights from every sphere of their business under the second pillar of the UNGP and its principle 11. This presentation argues the prospects and the incentives of insurance companies in performing the covenants efficiently under its legal framework. The larger is the size of the business, the business is more complex and eventually there is more possibility of impact on human rights. The larger is the size, the higher the risk is, thereby the greater requirement of insurance. The service diversity of insurance sectors gives more leverages on the insured to monitor and prevent any impact on human rights. The insurer may apply this leverage on risk assessment and underwriting customized insurance policy to ensure more human rights sensitive provisions. The ‘utmost good faith’ principle obliges the insured to give ‘full disclosure’ as a part of due diligence process under the UNGP and allows the insurer to monitor the business practice of the former and any human rights violation therein. Finally, implementation of human rights through the vast network of re-insurance ensures smooth operation as well as accountability. Thus, the duty to disclosure is further imposed on the insurer to ensure the double layer monitoring system over the insured by the insurer and over the latter by the re-insurer. Adherence to these initiatives makes the insurer more compliant corporate citizen. Insurance companies have financial incentives while acceding the initiatives as their business get expansion with the same. As the larger number of companies from different sectors are connecting with these initiatives, they also oath to do business with other compliant companies including taking insurance. Insurance business connects people through their social insurances. Solidarity with these initiatives attracts the individuals as social solidarity creates the mutual empathy between the client and the insurer. Despite the prospects and incentives, the major challenge is the short tenure of insurance contracts except life insurance which makes the leverage limited. The insurance contract being executory and contingent in nature, gives indirect control over the insured. Hence, the insurance companies accepting these instruments need to be more vigilant to implement their covenants thereunder.

Item Type: Book Section
Journal or Publication Title: Jog-erkölcs-kultúra : értékdilemmák és identitások a jogrendszerekben
Date: 2020
Volume: 10
ISSN: 2063-3807
ISBN: 978-963-306-722-2
Page Range: pp. 113-121
Series Name: Szegedi Jogász Doktorandusz Konferenciák
Language: English
Event Title: Jog-erkölcs-kultúra : értékdilemmák és identitások a jogrendszerekben (2019) (Szeged)
Related URLs:
Uncontrolled Keywords: Emberi jogok - nemzetközi jog, Biztosításügy
Additional Information: Bibliogr. a lábjegyzetekben ; összefoglalás angol nyelven
Subjects: 05. Social sciences
05. Social sciences > 05.02. Economics and business
05. Social sciences > 05.05. Law
Date Deposited: 2022. Mar. 25. 11:52
Last Modified: 2022. Mar. 31. 08:40

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