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Commercial Risk

Successfully Maintaining Global Compliance

The Baldwin Group
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Updated: May 1, 2025
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11 minute read

Key considerations and insights

As companies pursue opportunities in global markets, remaining compliant at the local, national, and international levels is a critical component of sustainable growth. To face the unique challenges of operating across geographic boundaries, businesses need to develop a thorough understanding of political dynamics, cultural nuances, and regional customs that shape the regulations of markets they wish to enter.

While adhering to the regulations of one country is a significant undertaking in and of itself, the complexities of compliance multiply when you bring additional countries’ regulatory environments into the fray. Regulatory risk is dynamic, which is why it is critical for companies to understand local norms and requirements and align operations and insurance portfolios accordingly.

To successfully expand operations across international borders, organizations should take steps to meet compliance obligations, understand insurance implications, and navigate workforce needs in the distinct geographies in which they establish operations. Fortunately, deploying the right resources and leveraging strategic partnerships can put companies in an optimal position to successfully navigate the maze of global compliance.

Understanding compliance risks

Organizations need to build a strategy aligned with regulations that apply at both the local and international levels to achieve global compliance.

International regulations are legal rules, norms, and standards that apply between sovereign states, typically stemming from formal, binding agreements like treaties. Local regulations are unique to specific countries, and depending on the country, its states, municipalities, and cities may each have their own distinct compliance requirements.

For example, countries that are a part of the European Union (EU) must meet certain standards to be able to join, and then adhere to trade policies, product standards, data regulations, human rights criteria, and more. In addition, the EU’s member states also have their own national laws. If you own a company in the United States and are planning to expand operations to Ireland, you will need to comply with both the EU’s and Ireland’s regulations.

An organization’s compliance burden is deeply contingent on how it operates at the local level. Navigating complex and diverse regulations across different countries presents several challenges, since organizations need to implement a compliance framework that accounts for these key aspects:

  • Entity setup
  • Taxes 
  • Financial reporting
  • Environmental standards
  • Data privacy
  • Employee classification
  • Labor laws
  • Compulsory employee benefits
  • Insurance requirements

Companies working toward achieving and maintaining global compliance often face significant challenges from many directions, including:

  • Geopolitical dynamics
  • Exposure to bribery and corruption
  • Sanctions and fines for noncompliance
  • Cybersecurity threats
  • Language barriers and cultural nuances
  • Keeping up with regulations
  • Cost of building compliance program

Insurance and compliance, in focus

Insurance plays a critical role in helping companies with global operations manage regulatory exposures, supporting compliance efforts in several ways.

Insurance as a risk mitigation tool

Many countries require companies maintain specific types of insurance to meet local regulatory standards. As a risk transfer mechanism, different coverages can help cover costs associate with noncompliance. While insurance cannot cover all regulatory fines (especially those related to criminal acts), it can help with coverage for civil penalties, fines, and other expenses associated with non-compliance in certain areas.

Additionally, insurance companies often offer risk management services to help businesses identify, assess, and mitigate compliance risks. These services might include audits, training programs, and policy development to ensure that the company is meeting its regulatory obligations. In some cases, insurers may provide access to legal or compliance specialists who can guide global companies through the complexities of regulatory changes and evolving compliance landscapes.

Maintaining insurance compliance

It’s important to note that though insurance is a valuable risk mitigation tool, maintaining a compliant insurance strategy also has its own risks. Across jurisdictions, each has its own insurance regulatory requirements, tax implications, and market practices. Key insurance compliance considerations for organizations with global operations include the following.

  • Local regulatory requirements – Different countries have mandatory insurance requirements for certain risks, and non-compliance can lead to fines, penalties, or suspension of operations. Additionally, some jurisdictions require companies to purchase insurance policies issued by locally licensed insurers, known as admitted insurance. Some countries might not allow companies to use non-admitted insurance unless the insurer has a license to operate locally, and using non-admitted insurance where prohibited can lead to regulatory violations or claims denial.
  • Premium allocation and taxation – Global insurance programs often involve the distribution of premiums across multiple countries, and there are tax requirements for both country specific and global policies. Misallocating premiums or failing to follow local tax regulations can result in penalties.
  • Claims handling and legal jurisdictions – Some countries require that a locally licensed insurer handle and settle claims. If claims are processed outside the country, the company may be noncompliant, and claims payouts could be delayed or denied.
  • Cultural nuances and coverage obligations – Different jurisdictions have unique cultural attitudes and regulatory requirements for risk management and insurance. For instance, labor laws may require insurance coverage for specific employee benefits, such as disability insurance or maternity leave coverage.
  • Licensing and broker regulations – Brokers managing global insurance programs must be licensed in each country where they operate. Additionally, when working with a local partner, companies should ensure that the local entity is licensed to carry out certain tasks.

Local vs. global insurance program

To achieve a compliant insurance strategy on a global scale, organizations need to evaluate whether a local insurance program, a global insurance program, or a blended approach addresses their needs and long-term growth objectives. Local and global programs each have benefits and downsides, and companies should leverage a strategic, tailored approach that’s aligned with its distinct exposures and risk appetite.

Local insurance program

A local insurance program involves purchasing insurance policies within each country where your company operates. Since coverage is managed by local insurers or branches of multinational insurers, this may help you adhere to local regulations.

Pros

  • Compliance with local regulations – Meet specific country laws and minimize the risk of non-compliance penalties.
  • Tailored coverage for local needs Can provide access to region-specific endorsements or extensions.
  • Faster claims handling – Locally processed claims minimize delays caused by time zones, language barriers, or unfamiliarity with local procedures.
  • Local relationships –  Stronger relationships with local brokers and insurers may yield better service, pricing, and understanding of market specifics.

Cons

  • Higher administrative complexity –  Managing multiple policies across various regions can be resource-intensive.
  • Coverage gaps or overlaps – Without centralized oversight, there may be inconsistencies, gaps, or overlaps in coverage.
  • Cost inefficiency – Smaller policies in each jurisdiction may not benefit from economies of scale or global premium discounts.
  • Limited access to global expertise – Local insurers may not have the same level of resources as global insurers.

Global insurance program

A global insurance program consolidates coverage across all countries into a single, centralized policy issued by a global insurer, and complemented by local policies where needed (fronting policies).

Pros:

  • Centralized oversight – Simplifies management of insurance across multiple jurisdictions and helps ensure consistent coverage and limits globally.
  • Improved coverage consistency – Provides a coordinated approach to managing global risks and can help minimize coverage gaps.
  • Access to multinational insurer expertise – Global insurers bring specialized knowledge of international risks and compliance.
  • Streamlined claims process – Global programs often provide centralized claims reporting and settlement processes, reducing delays.

Cons:

  • Compliance risks – Non-admitted coverage may violate laws in countries where local policies are required, and navigating tax implications in each jurisdiction can be complex
  • Complexity of local regulations – Ensuring local compliance while operating a global program requires expertise in regulatory requirements, which may increase administrative burdens
  • Claims delays in some jurisdictions – Claims under a master policy may take longer if they need to be coordinated across borders, and if the global policy is noncompliant with local regulations, this can delay disbursement of benefits to claimants.
  • Limited local customization – Standard global insurance policies may fail to address localized risks or address all unique local risks effectively.

Choosing the right insurance strategy

Developing the right insurance strategy for global operations is contingent upon several variables, and one size doesn’t fit all. The nature of operations, expansion plans, regulatory considerations, cost structure, claims management process, workforce needs, and risk appetite are all factors you’ll need to weigh as you build an insurance program aligned with global operations.  

Many companies adopt a blended approach, combining the strengths of local insurance and global insurance programs. A global master policy can minimize administrative burdens and deliver consistency in coverage across countries while locally admitted policies can help you comply with local regulations and address country-specific exposures.

Workforce needs and employee benefits

Workers’ needs play a critical role in shaping the design and deployment of a global insurance program. As organizations operate in diverse geographic, cultural, and regulatory environments, they must also carefully consider how their insurance program meets employees’ needs while remaining cost-effective.

When building an employee benefits strategy, you’ll need to determine which benefits are government-provided and government-mandated, as well as which benefits your company will voluntarily provide that may help with talent acquisition and retention.

With your global employee benefits strategy, consider the following:

  • Addressing local labor laws and mandatory benefits – Countries mandate specific benefits for employees encompassing components, such as health insurance, wellness programs, paid time off, pension contributions, maternity/paternity leave, sick leave, unemployment insurance, workers’ compensation, and more. There are specific variations depending on the country, and no two countries have the same employee benefits requirements.
  • Customizing benefits to meet regional preferences – Employees in different regions have varying cultural expectations regarding benefits, so a one-size-fits-all approach my fail to address these needs. This can result in reduced employee engagement and increased turnover.
  • Assessing claims process and benefit disbursement – Local policies usually work on a reimbursement basis, which can be a financial burden for employees. However, when benefits come from outside the country, it typically takes longer for employees to receive them when they file a claim. With global policies, noncompliance with local insurance laws may also lead to delays in benefit disbursement, encumbering beneficiaries.
  • Accounting for workforce demographics – Insurance needs vary widely across demographics, with age, gender, and family shaping workforce preferences. Your global benefits strategy should provide flexible options to accommodate diverse demographics.
  • Aligning insurance with occupational hazards – Workers in hazardous industries (e.g., construction, manufacturing) may require specialized insurance, such as additional workers’ compensation, critical illness, or accidental death and dismemberment coverage.
  • Ensuring adequate coverage for expatriates – Expatriates and internationally mobile employees require tailored insurance solutions, including comprehensive health insurance with global coverage, and evacuation and repatriation insurance in case of emergencies.
  • Providing accessible insurance services – Cultural sensitivity is key when you’re choosing insurers and deploying benefits. You want to provide materials in the local language and offer multilingual support. Additionally, digital access to insurance portals, mobile apps, and claims systems ensures workers can easily access and manage their benefits.
  • Managing cost expectations – In some regions, employees expect benefits to be fully employer-funded, while in others, cost-sharing is common.Companies also need to find a balance between offering competitive benefits while managing costs across markets with differing economic conditions.
  • Fostering equity across borders – Employees in different countries may compare benefits, leading to perceptions of inequity if benefits are significantly better in one location than another. Companies may want to determine a set of core benefit offerings they wish to offer across all regions, and tailor as needed for local markets.

Mobilize the right resources

By leveraging the right resources, tools, and strategies, your organization can build a compliant, cost-effective, and culturally aligned global insurance strategy. The Baldwin Group’s International Center of Excellence has proven expertise navigating the complexities of building out insurance programs that support your ventures as you expand to different parts of the world. Acting as an extension of your team, we’ll learn your organization and present viable options tailored to your risk appetite, workforce needs, and geographical footprint.

A partnership with us provides reliable guidance, trusted resources, and market reach that help you stay focused on pursuing growth. Our clients gain access to:

  • Global networks and local market expertise
  • Assistance with structuring admitted and non-admitted insurance solutions
  • Support with compliance, premium allocation, and claims handling
  • Local insurers in countries where admitted insurance is mandatory
  • Comprehensive assessment of global regulatory risks and workforce needs
  • Flexible solutions and strategies that scale with your growth
  • Resources that help you maintain global compliance as regulations evolve
  • Standardized solutions, customized as needed for regional/cultural needs
  • Benchmarking capabilities to optimize insurance program

Delivering specialized solutions

One of our clients purchased an individual expatriate medical policy through a large, global insurer for an employee that would be overseas for over six months. We recommended this solution because of the depth and breadth in coverage that the global policy was designed to provide.

However, the employee in question would be working in Switzerland, and the terms of her Swiss visa required she obtain a locally admitted health insurance plan. This meant that the global policy she purchased to meet the medical insurance requirements of the visa wouldn’t suffice.

To ensure that she had the necessary coverage, we engaged a local broker partner in Switzerland who helped us find a solution that satisfied the visa requirement.

Navigate global markets, confidently

When you pursue new opportunities around the world, our experts help simplify the complexity of global compliance, connecting you to solutions that safeguard your success, wherever your ventures might take you.


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