A second Brexit contract continuity clause has been published by the International Underwriting Association (IUA).
The association in June issued a policy clause to help companies manage insurance contracts as the UK leaves the European Union and this has now been followed up with a supporting document for when risks are underwritten on a subscription market basis.
The original Brexit clause allows a risk to be placed with both a UK domiciled insurer and a “contingent” EU-based insurer, said the IUA, which represents international and wholesale insurance and reinsurance companies operating in or through London.
In the event of any Brexit difficulties, this contingent insurer will step in and fullfill any policy obligations that the original carrier is no longer able to cover. It can now be adapted, by use of the new clause, to accommodate risks placed with multiple insurers.
“In the event of a no-deal Brexit companies will fall back on their own individual contingency plans for a continuation of their services to clients. These plans are well advanced and IUA members are working hard to ensure market disruption is kept to a minimum,” said Chris Jones, director of legal and market services at the IUA.
“Contract continuity, however, is a key concern and it is vital that companies are able to fulfil commitments to clients whatever the outcome of Brexit negotiations,” Jones added.
“Our policy clauses are designed to address this issue and support firms as they prepare for the UK’s future outside the EU.”
Both the original IUA Brexit clause (reference IUA 09-077) and the new clause (reference IUA 09-078) are freely available from the IUA’s clauses website (www.iuaclauses.co.uk).
As with all IUA clauses, their use is not compulsory and firms are free to adopt and adapt its provisions as they see fit.
Source: International Underwriting Association (IUA)
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