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Addressing the Underwriting Challenges around Brexit
The final shape of the UK’s deal with Europe following the country’s exit from the European Union in 2019, and its impact on insurance and reinsurance contracts, remains somewhat unclear. Supported by the LMA where appropriate, the Corporation of Lloyd’s has been leading the charge on the regulatory and operational work that is needed to ready the market for Brexit. A great deal of hard work has been put into the establishment of Lloyd’s Insurance Company Europe (Brussels) that will, now that regulatory approval has been granted, be able to underwrite business from 1 January 2019.
Work has continued apace at the LMA to ensure that underwriters are as informed and prepared as possible to continue underwriting European business as seamlessly as practicable once Brexit takes place.
The LMA’s underwriting team is well aware of the concerns of underwriters who, we are acutely aware, need clarity on many practical issues to be able to underwrite European business with effect from 1 January 2019.
All market participants at the business end, including brokers and coverholders, are beginning to focus upon more specific, practical questions about how business will be conducted from January 2019.
To this end, the LMA has a practical list of work-in-progress items where the market needs both technical documentation and factual information.
Two Old Library Underwriting Forums were held during July to which the market’s underwriters were invited so as to hear from the Lloyd’s Brexit team, who will be on hand to respond to additional questions.
The Forums addressed a number of issues that we are working on. This includes the regulatory backdrop of everything that has to be in place before underwriting can begin: for example Lloyd’s Brussels Market Reform contract and updated guidance, TOBAs, model consortia agreement, a new set of coverholder certificates, translation of documents, GDPR, Complaints procedure and IPID.
The focus was on what’s different for underwriters to existing underwriting of European business: for example rules on brokers
and intermediary licensing, claims, the role of PPL, Structured Data Capture and DA SATS, rules on solicitation and coverholders/MGAs writing cross-border or worldwide.
This all constitutes a huge amount of work - on top of the day-to-day business of the LMA.
Special thanks must go to the LMA wordings team, led by Alison Colver, which has been working tirelessly to address these vital issues on behalf of our members.
Brexit raises many uncertainties for our marketplace, and the LMA is listening to the concerns of underwriters and seeking ways to practically address the issues that Britain’s exit from the EU raises.
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