We are pleased to announce that following our increased workload in the region ADVANTA has opened a regional office in Sub-Saharan Africa. Manuel Rebelo will be heading the team and will be responsible for coordinating our existing network of associates in the region. We present in this issue an interesting article on the consideration of carbon credits in the adjustment of business interruption claims. Furthermore, our construction team continues to develop and herein makes a contribution on the interpretation of Design Cover for tunnelling risks and Sue & Labour cover in CAR policies. We also include news of our cocktail party held in Miami to mark the launch of our first office in the USA.   George Viar Director Following an invitation in February this year from both the Munich Re and Swiss Re in Mexico, separate detailed presentations illustrated by case studies were made for Design Cover for Tunneling Risks and Sue & Labour for CAR Risks. As hoped for, the subjects elicited concentrated and prolonged audience participation. During the discussions many aspects of Design Cover/Exclusion that had previously been assumed to be axiomatic in nature and straight forward in application, were seen upon closer examination of sample design wordings (Munich Re, DE, LEG) to be subjective in interpretation and ambiguous in the event of dispute. Similarly, with respect to cover for Sue & Labour within a CAR Policy, commencement and termination of cover, were either inconspicuous or entirely absent in most of the wordings examined. The understanding of the trigger: Imminent risk of physical loss or physical damage that is the direct result of a peril insured against… ...could be subjective when considered in relation to the Insured's general obligation to take bona fide all necessary measures, to protect the insured Contract Works. In addition to these issues, there is also that of 'jurisdiction', the determination of which could impose laws with an overriding effect on the Policy cover. It was generally concluded that, in relation to international construction risks, current CAR wordings for 'Design Cover/Exclusion' and cover for 'Sue & Labour' could be improved by further definition of terms and, where possible, a fuller understanding of the cover provided by both Insurers and Insured. David McGhie can be contacted at dmcghie@advantaglobal.com.   David McGhie Director The Kyoto Protocol offers countries an additional means of meeting their Green House Emissions (GHE) reduction targets by way of three market-based mechanisms: 1) Emissions trading – known as "the carbon market". 2) Clean Development Mechanism (CDM), which can earn tradable Certified Emission Reduction Credit (CER). 3) Joint implementation (JI). CDMs are related to projects, which generate power through a clean source of energy, such as solar, wind, hydro, or any other source that makes Industrial Plants more efficient and reduces their GHE. Presently, we estimate there are more than 540 projects in Latin America, most of which are in Central America and in countries such as Brazil, Mexico and Chile, that account for some 70% of all CDM projects in the region. http://cdm.unfccc.int/Projects/MapApp/index.html. The saving of 1 ton of CO2 equals 1 CER. For further information on how CER's are calculated and traded please visit the United Nations Framework Convention on Climate Change - www.unfccc.org. The difference from a CDM project to other Green Power Generation project lies in their financial model in that, in addition to their conventional revenue streams from actual energy sales to the public grid and fixed income from installed and available capacity ratings, they will also receive revenue from trading CER's through specialized brokers in the open Carbon Credits Market, such as the London-based, European Climate Exchange (ECX), the Chicago Climate Exchange, Nord Pool, PowerNext, the European Energy Exchange and others in India, China, etc. From an accounting or financial point of view, the company, which owns the CDM project will not only have the physical fixed assets (machinery, equipment, structures and/or buildings) but also the intangible, but highly tradable, assets of the generated CER's. They will appear as assets in the balance sheets and could be sold at any time for the benefit of that company. Most accountants agree that they could be classified as Goods or Fixed Assets in view of the fact that they are a readily tradable commodity. The following issues remain relevant for suppliers of CER's: 1) Whether CER's can be classified as Goods or Services for tax purposes. 2) Whether the sale of CER's to overseas buyers would qualify as an export of Goods or Services. In May 2007, PricewaterhouseCoopers (PwC) and the International Emissions Trading Association (IETA) released a survey that provided the following conclusions: » 29% of participants accounted for self-generated CER's as inventory upon generation, at an allocated cost of production. » 13% recorded the CER's as intangible fixed assets, at fair value. » 29% did not recognize the CER's unti they were actually traded. » 29% applied other considerations. Conclusions: » Entities or Insured's, possessing CER's, currently have no clear financial accounting guidance to follow. » No transparency in the market due to the worldwide variance in accounting methods. » Lack of a uniform accounting system makes it difficult to compare financial statements fairly between projects, complicating assessment of a loss insurance claim i.e. under a BI Cover Policy. Francisco Javier Guardia can be contacted at jguardia@advantaglobal.com.   Francisco Javier Guardia Miami Office As part of our commitment to strengthening our presence in Africa we were pleased to offer a seminar in Luanda, Angola last March this time to ENSA - Empresa Nacional de Seguros de Angola, the leading multi-line Insurance Company in the market. The event was attended by ENSA representatives from several areas of the company from claims to underwriting. The main focus of the seminar was Fire Insurance and related perils covering pre and post loss assessment. Particular emphasis was given to the risk analysis and evaluation of complex risks as well as the handling process of fire claims supported by case studies. This was followed by a site visit to a paper processing plant. Our involvement in the market is growing: we are handling some complex claims and have been nominated on important insurance programmes; mainly in the Construction, Energy and Power sectors. Furthermore, the ADVANTA Energy team will be giving a presentation with the title "Technical Adjustment of Oil and Gas Claims: challenges in a multicultural insurance context" in the context of the upcoming Angola International Oil & Gas Conference & Exhibition on 7th – 9th May. ADVANTA delivers seminars tailored to the specific needs of the insurance industry worldwide. Feel free to contact us to discuss your requirements. Manuel Rebelo can be contacted at mrebelo@advantaglobal.com.   Manuel Rebelo Portugal Office Our Miami office held their first cocktail party on 9th February in South Florida's major financial district. Numerous players in the Miami Insurance and Reinsurance Market enjoyed the opportunity to network and meet colleagues with extensive Latin American regional influence. Our new team of engineers that comes to strengthen our specialist offering in the region was introduced to the market. We are excited to announce the opening of a new ADVANTA hub office for the Sub-Saharan Africa region headed up by Manuel Rebelo da Silva. Manuel has forged a reputation in Africa for a number of years working on many claims and giving numerous presentations. Manuel will coordinate and develop the ADVANTA associates in the region and we wish Manuel and his team the very best of success! If you require any information on our offices, associates or key personnel please do not hesitate to contact me. Debra Schneider can be contacted at dschneider@advantaglobal.com. Manuel Rebelo da Silva can be contacted at mrebelo@advantaglobal.com.   Debra Schneider Group Operations Manager Wakefield House 41 Trinity Square London EC3N 4DJ - United Kingdom Tel + 44 (0) 20 7702 4000 Fax + 44 (0) 20 7702 4005 www.advantaglobal.com newsletter@advantaglobal.com EUROPE Denmark, Germany, Greece, Portugal, Spain, United Kingdom AMERICA Argentina, Brazil, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, El Salvador, Guatemala, Honduras, Mexico, Miami, Peru, Venezuela MIDDLE EAST Israel, Jordan, Turkey, UAE AFRICA Kenya, South Africa, Tanzania ASIA India, Indonesia, Singapore