Lloyd's Market Association Bulletin
LMA23-016-DP | 02 May 2023
Publication of Oil Price Cap Endorsements for Political Risk and Credit Business
LMA Members may be aware that the members of the G7, the European Union and Australia (together, the "Price Cap Coalition") have agreed to implement a prohibition on the maritime transportation of certain oil and oil products originating in or consigned from Russia, from a place in Russia to a third country or from one third country to another. The prohibition extends to the provision of financial services, including (re)insurance, in pursuance of or in connection with an arrangement whose object or effect is the maritime transportation of Russian oil and oil products.
Further to the Marine Cargo and Hull Oil Price Cap endorsements published recently, the LMA has today published two further model endorsements:
- Political Risks (LMA5612) for “PR” coded business as appropriate
- Credit (LMA5613) for “CR, CF and FG” coded business as appropriate
The endorsements have been published with a placement/pre-inception attestation (Appendix 1) and a claims attestation (Appendix 2).
LMA5612 - Appendix 1 Political Risk - Placing Attestation
LMA5612 - Appendix 2 - Political Risk Claim Attestation
LMA5612 Political Risk Oil and Oil Products Cap Price Notice Endorsement
LMA5613 - Credit Risk - Appendix 1 Placing Attestation
LMA5613 - Credit Risk - Appendix 2 Claim Attestation
LMA5613 - Credit Risk Oil and Oil Products Cap Price Notice Endorsement
The endorsements are intended to be used in conjunction with a general sanctions clause such as LMA3100 and combined with appropriate record keeping. (Re)insurers have to consider the particular reinsured, type of coverage and all other circumstances surrounding the particular contract concerned but in general this model wording should assist (re)insurers in demonstrating compliance with the requirements stipulated by the EU, US Treasury and OFSI in respect of (re)insurance placements.
Whilst the LMA recommends use of the appropriate endorsement and attestation clauses as best practice, Managing Agents may prefer to solely use the attestations in combination with a sanctions clause (e.g. LMA3100).
All LMA model clauses are purely illustrative and are published and distributed for the guidance of Lloyd’s managing agents, brokers and other market participants. All contracting parties are free to agree to different conditions/amend the model clauses as they see fit; the LMA does not protect its intellectual property rights over model clauses. It is for underwriters to decide whether or not any contractual language is acceptable on any given risk. The clauses are available on the Lloyd’s Wordings Repository (LWR).
Head of Technical Underwriting