The Lloyd’s Market Association (LMA) has published two updated sanctions suspension clauses to assist underwriters in meeting regulatory requirements, building on previous work to provide clarity as a result of trade restrictions affecting Iran. 

The new wordings follow the 2010 introduction of LMA3100, since adopted extensively by insurers and reinsurers internationally. That clause clarifies that insurers can’t provide a benefit under their policy where this would lead them to breach sanctions in the UK, US or European Union. 

The clause has stood the test of time when it has been challenged, but a recent French Court of Appeal case indicated that an update should be considered where the clause is being used in civil law jurisdictions. 

The result of consultations is the release of LMA3100A and LMA3200 to provide enhanced choice for underwriters across both common and civil law jurisdictions. 

The LMA also received feedback on the need to consider sanctions from other jurisdictions, such as Australia. In response, it has added model language in a guidance note to facilitate straightforward modification of the clauses to incorporate other jurisdictions as appropriate. 

“These updates are designed to enhance and give underwriters options for dealing with sanctions across jurisdictions,” Legal Director Arabella Ramage said.