The LMA’s recent bulletin, which was published on 2 October 2018, provided the Lloyd’s community and its members with: (i) new model clauses for EEA and non-EEA risks placed with Lloyd’s Brussels; (ii) suggested wording for “Brexit affected policies”; and (iii) treaty exclusion wording for outwards reinsurance placed with Lloyd’s Brussels.
New model clauses
The model clauses have been produced to reflect that Lloyd’s subsidiary in Brussels, which will be known as Lloyd’s Brussels, will be underwriting non-life insurance and facultative reinsurance risks from 1 January 2019. As a consequence, risks placed with Lloyd’s Brussels will have to be priced separately with this adjustment reflected in the MRC either by separate sections or splitting the MRC.
The LMA hopes the model clauses will assist its members with the “interlocking of policy limits and aggregate deductibles across the split / sectionalised MRCs”, which will be necessary for EEA and non-EEA risks placed with Lloyd’s Brussels from 1 January 2019.
The model clauses can be found here.
“Brexit affected” policies
The LMA has also produced suggested wording for “Brexit affected” policies, meaning those policies where coverage is:
- defined by reference to EU law and / or regulation; and / or
- defined in terms of reference to Europe or EU being within the Territorial scope
The suggested language also aims to clarify the position where ” any automatic coverages provided by the terms and conditions of the policy for entities acquired or established by the Insured should not apply, to the extent that, post Brexit, the Insurer is not permitted by applicable law or regulation to provide such coverage”.
The suggested language for each scenario can be found here.
Syndicates outwards reinsurance treaty exclusion
Wording LMA5338 (Treaty reinsurance exclusion amendment – Lloyd’s Brussels Business) has been developed by the LMA for use on syndicates’ outwards reinsurances and to amend the exclusion of treaty business on direct and facultative reinsurance when the risk has been underwritten on behalf of Lloyd’s Brussels.