{
  "id": "clause-finc",
  "type": "clause",
  "languages": {
    "en": {
      "id": "clause-finc",
      "lang": "en",
      "type": "clause",
      "title": "Financial Interest Cover (FINC) Clause",
      "shortDefinition": "The FINC clause indemnifies the parent company of an international programme for the diminution in value of its interest in a subsidiary that suffers an otherwise covered loss in a country where non-admitted insurance is prohibited.",
      "synonyms": [
        "FINC",
        "Financial Interest Clause"
      ],
      "linesOfBusiness": [
        "International programmes"
      ],
      "jurisdictions": [
        "Global"
      ],
      "tags": [
        "Compliance",
        "International programmes"
      ],
      "relations": {
        "relatedTerms": [
          "clause-non-admitted"
        ],
        "partOf": [],
        "appliesTo": [
          "cov-property-all-risks"
        ],
        "regulatedBy": [],
        "relevantFor": [],
        "insurableVia": [],
        "mitigatedBy": [],
        "comprises": [],
        "alternativeTo": [],
        "complementedBy": []
      },
      "attribute": null,
      "profile": null,
      "coverageProfile": null,
      "clause": {
        "kind": "extension",
        "origin": "international-programme",
        "favours": "insured",
        "negotiability": "negotiable",
        "standardWordings": []
      },
      "legalBasis": [],
      "standards": [],
      "reviewStatus": "expert-reviewed",
      "reviewedBy": "Guido Hesse, Hesse Group Holding AG",
      "lastReviewed": "2026-09-04",
      "version": "0.1.0",
      "updated": "2026-09-03",
      "generated": {
        "by": "cursor-agent/claude-sonnet-5",
        "at": "2026-09-03T00:00:00.000Z"
      },
      "verified": [
        {
          "by": "human:ghesse",
          "at": "2026-09-04T00:00:00.000Z",
          "method": null
        }
      ],
      "staleAfter": null,
      "url": "https://hgh.ch/lexikon/en/knowledge/clause/financial-interest-cover-finc-clause/",
      "alternateUrl": "https://hgh.ch/lexikon/de/wissen/klausel/financial-interest-cover-finc/",
      "body": "## Purpose\n\nWhere a subsidiary is located in a country that prohibits non-admitted insurance, the master policy cannot cover it directly, and a local policy is often unavailable. The Financial Interest Cover (FINC) clause closes this gap by insuring not the subsidiary itself but the parent company's financial interest in it: if the subsidiary suffers a loss that would otherwise be covered under the master policy, this is treated as a reduction in the value of the parent's interest, for which the parent is indemnified.\n\n## Effect and limits\n\nIndemnity flows only to the parent company in the country where the master policy is held, not to the local subsidiary; transferring funds onward to the subsidiary can trigger its own tax and regulatory consequences and must be checked in advance. FINC does not replace local claims handling, premium collection or tax settlement functions of an admitted policy and remains legally untested in many jurisdictions.\n\n## Negotiation and practice\n\nFINC clauses are usually negotiated as a fallback alongside, not instead of, local policies, particularly where a market temporarily does not permit local underwriting. In layered programmes it must be clarified whether all participating insurers support the clause, as it otherwise fails to operate consistently across a tower structure."
    },
    "de": {
      "id": "clause-finc",
      "lang": "de",
      "type": "clause",
      "title": "Financial Interest Cover (FINC)",
      "shortDefinition": "Die FINC-Klausel entschädigt die Muttergesellschaft eines internationalen Programms für die Wertminderung ihrer Beteiligung an einer Tochtergesellschaft, wenn diese in einem Land mit Non-Admitted-Verbot einen sonst gedeckten Schaden erleidet.",
      "synonyms": [
        "FINC",
        "Financial Interest Clause"
      ],
      "linesOfBusiness": [
        "Internationale Programme"
      ],
      "jurisdictions": [
        "Global"
      ],
      "tags": [
        "Compliance",
        "Internationale Programme"
      ],
      "relations": {
        "relatedTerms": [
          "clause-non-admitted"
        ],
        "partOf": [],
        "appliesTo": [
          "cov-property-all-risks"
        ],
        "regulatedBy": [],
        "relevantFor": [],
        "insurableVia": [],
        "mitigatedBy": [],
        "comprises": [],
        "alternativeTo": [],
        "complementedBy": []
      },
      "attribute": null,
      "profile": null,
      "coverageProfile": null,
      "clause": {
        "kind": "extension",
        "origin": "international-programme",
        "favours": "insured",
        "negotiability": "negotiable",
        "standardWordings": []
      },
      "legalBasis": [],
      "standards": [],
      "reviewStatus": "expert-reviewed",
      "reviewedBy": "Guido Hesse, Hesse Group Holding AG",
      "lastReviewed": "2026-09-04",
      "version": "0.1.0",
      "updated": "2026-09-03",
      "generated": {
        "by": "cursor-agent/claude-sonnet-5",
        "at": "2026-09-03T00:00:00.000Z"
      },
      "verified": [
        {
          "by": "human:ghesse",
          "at": "2026-09-04T00:00:00.000Z",
          "method": null
        }
      ],
      "staleAfter": null,
      "url": "https://hgh.ch/lexikon/de/wissen/klausel/financial-interest-cover-finc/",
      "alternateUrl": "https://hgh.ch/lexikon/en/knowledge/clause/financial-interest-cover-finc-clause/",
      "body": "## Zweck\n\nWo eine Tochtergesellschaft in einem Land liegt, das Non-Admitted-Deckung verbietet, kann die Masterpolice sie nicht direkt versichern, und häufig fehlt es an einer lokalen Police. Die Financial-Interest-Cover-Klausel (FINC) schliesst diese Lücke, indem sie nicht die Tochtergesellschaft selbst, sondern das finanzielle Interesse der Muttergesellschaft an ihr versichert: Erleidet die Tochter einen Schaden, der unter der Masterpolice sonst gedeckt wäre, gilt dies als Wertminderung der Beteiligung der Mutter, für die diese entschädigt wird.\n\n## Wirkung und Grenzen\n\nDie Entschädigung fliesst ausschliesslich an die Muttergesellschaft am Sitz der Masterpolice, nicht an die Tochtergesellschaft vor Ort; eine Weiterleitung des Geldes an die Tochter kann eigene steuerliche und regulatorische Folgen auslösen und ist vorab zu prüfen. FINC ersetzt keine lokale Schadenregulierung, keine Prämieninkasso- und keine Steuerabwicklungsfunktionen einer admittierten Police und ist rechtlich in vielen Rechtsordnungen nicht abschliessend erprobt.\n\n## Verhandlung und Praxis\n\nFINC-Klauseln werden meist als Rückfalllösung neben – nicht anstelle von – lokalen Policen verhandelt, insbesondere wenn ein Markt kurzfristig keine lokale Zeichnung erlaubt. Bei mehrschichtigen Programmen ist zu klären, ob alle beteiligten Versicherer die Klausel mittragen, da sie sonst in einer gestaffelten Deckungsstruktur nicht durchgängig wirkt."
    }
  }
}