NMU Brexit placement solution17th June 2020
Whatever form Brexit ultimately takes, our aim is to deliver a solution that allows brokers to continue trading with us with as little disruption as possible. That’s why, like Lloyd’s, we got ahead of the game and implemented our Brexit solution from 1 January 2019.
To accommodate EEA risks, Lloyd’s established a European subsidiary in Belgium, Lloyd’s Insurance Company SA (LIC), which is authorised and regulated by the National Bank of Belgium and capitalised according to Solvency II rules. LIC has the same financial ratings as Lloyd’s. Underwriters at Lloyd’s are therefore able to put down Lloyd’s and LIC stamps, as applicable. All risks underwritten by LIC are reinsured back to the same Lloyd’s Syndicates in London against whose LIC stamps they are bound. Some UK risks can also be underwritten by LIC; but most UK risks and all non-EEA risks will continue to be underwritten by Lloyd’s Syndicates. NMU has authority to issue policies against both Lloyd’s security and LIC security, as applicable. The primary consideration in determining where/how to place business will be the domicile of the policyholder(s). For some classes, the location of insured property may also be a factor. When offering terms, we will be clear about the applicable underlying security.
Changes You May Have Noticed
Some policies are now backed by LIC security rather than Lloyd’s. For complex placements, it is sometimes necessary to split UK/EEA and non-UK/EEA exposures between Lloyd’s security and LIC security. Which elements are backed by which security is clearly shown on policy documents, and the premium is split accordingly. Where new or updated TOBAs are required, we are contacting brokers directly about this.
Lloyd’s has given a commitment to honour claims and is proposing to transfer certain historical EEA insurance policies to Lloyd’s Brussels. The proposed transfer will not change terms and conditions of any policy, except that Lloyd’s Brussels will become the insurer and Data Controller in respect of the transferred policies. Further information about the proposal (including whether it could affect your pre-transfer position), which policies are transferring, your rights and what you need to do can be found at lloyds.com/brexit-transfer For new business, our parent company, Munich Re Specialty Group (MRSG) has set up a new subsidiary in Dublin, Munich Re Risk Solutions Ireland Ltd (MRRSI), which started trading in early 2020. After the end of the Brexit transition period, MRRSI will allow non-Lloyd’s brokers having the necessary (post-Brexit) permissions/ authorisations to continue to have a placement route into LIC for EEA business.
Should you have any questions, please contact your local NMU underwriter.
Published 23rd November 2018. Last updated 17th June 2020.