The following Insurance & Reinsurance practice note produced in partnership with Daniel Martin of HFW and James Neale of HFW provides comprehensive and up to date legal information covering:
The Practice Note entitled EU/UK financial and trade sanctions for insurers outlines the sanctions applicable to insurers, the nature of those sanctions, the role of the FCA, and screening and due diligence for insurers to adopt.
This Practice Note looks more closely at issues relating to policy wording and in particular the effect of sanctions on insurance policies and the role of sanctions clauses.
Much of the focus of this Practice Note will be on the market standard wording, which is the Lloyd's Market Association 3100 clause (LMA 3100), which provides as follows:
‘No (re)insurer shall be deemed to provide cover and no (re)insurer shall be liable to pay any claim or provide any benefit hereunder to the extent that the provision of such cover, payment of such claim or provision of such benefit would expose that (re)insurer to any sanctions, prohibition or restriction under United Nations resolutions or the trade or economic sanctions, laws or regulations of the European Union, United Kingdom or United States of America.’
Because virtually every policy will include a sanctions clause, the primary focus of this Practice Note is on the issues which arise under a sanctions clause; we do consider at the end of the Practice Note the scenario where there is no sanctions clause.
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