14 August 2015
Insurance Act prompts wide-scale wordings review
The Lloyd’s Market Association (LMA) has announced that it has now completed an initial review of the Lloyd’s Wordings Repository (LWR), to flag up model wordings that may need amendment in light of the new Insurance Act. The Insurance Act 2015 received Royal Assent in February 2015 and is due to come into force on 12 August 2016.
The LMA has completed a search of the LWR, using target words designed to identify wordings containing terms that may be affected by the Insurance Act. Several hundred ‘hits’ on the LWR have been flagged for review. (NB There are over 4,000 model wordings recorded on the LWR). 373 wordings are considered ‘high risk’, meaning they contain terms which will need to be reviewed, and many will require amendment. A number of the flagged wordings are older clauses, and any that have been superseded, or fallen out of use, can be withdrawn.
A detailed review of the flagged wordings will now be undertaken by the LMA’s underwriting committees and the LMA Wordings Forum. Redrafting will be undertaken by business panels, the Wordings Forum or with the aid of external counsel.
The sectors with the most wordings to review are Aviation, International Liability, Financial Institutions and ‘cross-class’ clauses.
David Powell, Non-Marine Manager at the LMA, who is leading the project, said: “The LMA is continually reviewing and updating wordings. However, this is the largest review of model wordings in the Lloyd’s market since the LWR was created in 2006. With our members’ help we will be working through the lists of flagged wordings, and ensuring that the clauses are brought in line with the Insurance Act, ready for use in 2016.”
Further due diligence work will also be carried out in relation to wordings not picked up in the initial search.
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Notes to Editors
For further information please contact:
James Milne, Communications Manager
Lloyd’s Market Association
T 0207 327 8405
T 020 7623 2368
About the Lloyd’s Market Association (LMA)
Formed in 2001 and located in the heart of the Lloyd’s Building in the City of London, the Lloyd's Market Association represents the interests of the Lloyd’s underwriting community. All underwriting businesses at Lloyd’s are members, together managing gross premium income of around £26 billion per annum.
For more information visit: www.lmalloyds.com