Changing times, changing needs. Amid the uncertainty surrounding the UK’s departure from the European Union, an insurer has responded by unveiling a ‘Brexit continuity clause’.
In case passporting rights are lost, XL Catlin’s insurance operations in London will be armed with the clause, which mirrors standard London Market continuity clauses.
Intended to be included in policies written by Catlin Insurance Company (UK) Ltd (CICLUK) and XL Catlin’s Syndicate 2003 at Lloyd’s, the clause makes XL Insurance Company SE (XLICSE) an additional party to the policy from inception as a contingent insurer.
Subject to regulatory approvals, XLICSE – the main insurance company platform for XL Group within Europe and Asia – is moving to Dublin, while the two London-based entities will remain in the UK. XLICSE has Societas Europaea status and can move to Ireland without a court-sanctioned portfolio transfer.
“If post-Brexit a policy’s performance becomesimpermissible in whole or in part and cannot be amended to enable CICLUK or the Syndicate 2003 to perform it permissibly, XLICSE (assuming that XLICSE has moved to Dublin within the time period expected) will automatically and seamlessly be contractually obliged to perform it or any part of it, assuming it can do so permissibly,” said XL Catlin. “If XLICSE cannot perform the policy, only then is it automatically cancelled with a pro-rata return of premium (subject to no claims having been notified).”
XL Catlin insurance firms provide property, casualty, professional, financial lines, and specialty insurance products worldwide.
“Our innovative clause offers significant advantage by minimising the risk that policies will be cancelled, by making XLICSE a contingent party to the policy,” commented Paul Greensmith, UK country leader & director of London Market wholesale at XL Catlin.
“Effectively, XLICSE will act as a back-up.
“A political solution may yet be forthcoming that ensures polices can be performed post-Brexit, but in the absence of one we believe this clause gives our clients and brokers the certainty they expect and deserve from their insurance partner.”