Lloyd's Market Association Bulletin

LMA18-010-AC  |  14 February 2018

Consumer Wordings Guidance v4.0

The latest version of the Joint LMA/Clyde & Co Guidance on Consumer Wordings is available to download from the LMA website, and contains a Document Revision/Change History page to identify the key amendments/updates.

Consumer Wordings Guidance v.4.0

The updated guidance includes:

  • Introduction – includes reference to the FCA’s Smarter Consumer Communications Initiative.  
  • Updated section on Data Protection in respect of the General Data Protection Regulation (GDPR) scheduled for transposition into UK legislation on 25 May 2018.  
  • Other Documentation - updated in respect of Insurance Product Information Documents (IPIDs) replacing Key Facts for consumers (following FCA Policy Statements 17-21 and 17-27 in December 2017).  
  • Update to Appendix 5 in respect of the July 2017 FCA Undertaking relating to “unfair contract terms”.
  • Addition of Appendix 14 entitled “Insurance Distribution Directive (IDD)”.

At the time of its initial publication (version 1.0, 27 April 2015), we advised that the guidance would undergo a periodic review process by the LMA and, therefore, remain subject to amendment/update when required (e.g. due to change/update in relevant legislation/regulation etc). The LMA re-published the guidance on 27 July 2015 (v1.1) following the publication of the LMA’s Guidance on the Insurance Act 2015, again on 13 January 2016 (v2.0) following implementation of the Consumer Rights Act 2015 and also on 30 November 2016 (v2.1) to provide guidance regarding the Enterprise Act 2016 and the Third Party (Rights Against Insurers) Act 2010. The previous guidance issued (v3.0) was published on 19 April 2017 with updates including FCA rules on "renewal transparency".

The document is published as general guidance, intended to assist managing agents with the practicalities of drafting new consumer products and/or adapting existing commercial wordings to produce consumer versions. Whilst not an exhaustive list of all the issues to consider, the guidance identifies the key features of, and salient clauses within, a policy document/wording that need to be addressed for a consumer policy to meet current regulatory requirements and identifies, where appropriate, the applicable underlying regulation. Example clauses are also provided, where applicable. Any queries on the guidance may be addressed to:

 Lloyd's Market Association Clyde & Co LLP 
 Alison Colver
 Ian Plumley
 Head of Wordings  Partner
 alison.colver@lmalloyds.com  ian.plumley@clydeco.com
 Steve Morrell  Matthew Ditchfield
 Head of Regulatory Affairs  Associate
 steve.morrell@lmalloyds.com  matthew.ditchfield@clydeco.com

Alison Colver
Head of Wordings