As uncertainty rises over the potential for Greece to exit from the euro currency, the Lloyd’s Market Association (LMA) has reissued its guidance and a model clause relating to the withdrawal of a country from the eurozone.
An LMA bulletin, sent to all Lloyd’s managing agents late last week, focused on three specific documents:
•guidance on the settlement of premiums and claims if a country redenominates its currency
•a model “contract continuity clause” designed to enhance certainty that an insurance contract will continue in the event of a country’s eurozone exit
•a paper prepared jointly with Clyde & Co exploring the impact on an insurance contract of one or more countries switching currencies from the euro.
The guidance includes a checklist of points for Lloyd’s managing agents to consider relating to governing law, jurisdiction, location of the parties, contract denomination plus example clauses. According to the LMA, the association’s aim is to minimise risks in the event of an exit by encouraging policyholders and carriers to include appropriate clauses in order to safeguard their intentions.
Kees van der Klugt, LMA’s director, legal and compliance, said: “This guidance was originally issued in 2012 but, with the rising level of uncertainty over Greece’s future in the eurozone, we feel there is real benefit in reminding the market of this guidance.”
Guidance is available at lmalloyds.com/eurozone
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