There has been a significant amount of work undertaken by various market entities regarding the development of suitable model clause language to enable Managing Agents and Insurers to meet the requirements to identify, quantify and manage exposure to cyber as set out by the PRA. Additionally, for Managing Agents there is the requirement of the Lloyd’s Cyber Mandate per Lloyd’s bulletin Y5258 which was bought into scope for Aviation from 1st January 2021 onwards by the subsequent bulletin Y5277.
Accordingly, the Aviation Committee has worked with the Aviation Insurance Clauses Group (AICG) and other market associations, committees and companies to develop a Suite of Software Clauses. Details about this suite may be found in the following links (These documents are also available via the Lloyd’s Wording’s Repository :
Full Circular AV2020-014 including attachments
The LMA Aviation Committee has submitted this Suite of Software Clauses to the AICG for their consideration with a request for them to be published with an AVN prefix. The Aviation Committee will continue to work with the AICG to develop suitable model AVN prefixed clauses.
The AICG received numerous responses to Consultation Draft 56 and after much deliberation it was agreed that an alternative Suite of Cyber Incident Clauses would be developed and published as Consultation Draft 58. The AICG CD58 document may be found here:
AICG Consultation Draft 58
The Aviation Committee responded to CD58, confirming broad support for the approach, however there were numerous drafting points which were felt to be in need of attention prior to the suite being published. The Aviation Committee response to CD58 may be found here:
Aviation Committee response to CD58
Further to the ‘Dear CEO’ letter from the PRA confirming the requirement for insurers to ‘identify, quantify and manage’ all cyber risks and the Lloyd’s Bulletin Y5258 confirming the Lloyd’s Cyber Mandate, the Aviation Committee developed a Suite of Software Clauses which was submitted to the AICG for consideration. The submission paper may be found here:
Original submission paper to the AICG
The AICG reviewed the clauses within this submission and after some minor drafting amendments published Consultation Draft 56 for the market’s consideration. The AICG CD56 document may be found here:
AICG Consultation Draft 56
The LMA Aviation Committee prepared the below paper which includes information regarding the background to a submission made to the AICG as a proposed response for the Aviation Market to the PRA’s communication with the insurance market regarding cyber.
The following paper includes all appendices.