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27 July 2018Insurance

IUA unveils new contract continuity clause for 'no-deal' Brexit

The International Underwriting Association (IUA) has published a new Brexit contract continuity clause with a supporting document for when risks are underwritten on a subscription market basis.

In June, the association issued a policy clause to help companies manage insurance contracts as the UK leaves the European Union.

The original Brexit clause allows a risk to be placed with both a UK domiciled insurer and a ‘contingent’ EU-based insurer. In the event of any Brexit difficulties, this contingent insurer will step in and fulfil 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," said Chris Jones, director of legal and market services at the IUA. "These plans are well advanced and IUA members are working hard to ensure market disruption is kept to a minimum.

“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. Our policy clauses are designed to address this issue and support firms as they prepare for the UK’s future outside the EU.”

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More on this story

13 July 2018   The re/insurance industry has offered a mixed reaction to the publication of the UK Government's white paper on Brexit this week, with some commentators calling it a step in the right direction but others stressing that it does not resolve the key issue of contract continuity and doubt remains as to whether UK insurers will remain licenced to pay claims in a few EU countries without an agreement in place.
23 May 2018   The International Underwriting Association (IUA) has established a new cyber group dedicated specifically to consider the concerns of reinsurers.