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Risk Locator FAQs

Explore our questions and answers to assist market participants when using the Risk Locator tool.

What is the ‘Reference (User Choice)’ field?

This is a free text field. Please add your own reference i.e. UMR, slip number, name of risk, etc. Your search will be saved to your private ‘Enquiry History’.

What if I cannot find my Class of Business?

If you are unable to find a relevant class of business in the drop down list you may need to amend your choice of Market Classification.  If you still cannot find a relevant class of business you may need to select a close match, i.e. an appropriate alternative. If there is no appropriate alternative please contact LITA for guidance.

What if there is more than one class of business covered by the policy?

The Risk Locator tool is only designed to identify possible regulatory and tax territories of risk for individual classes of business.  For instance, in relation to a two section Market Reform Contract covering ship’s hull and ship’s liability you will need to enter the details separately, as the criteria used to establish the location of risk for hull may differ to that for liability dependant on the territories involved.

What constitutes an insured’s residence?

As a general guide for individuals living in a territory for one year or more usually indicates habitual residence.  However territories may apply specific rules and where these are known they will be set out in Crystal.  In the absence of specific rules the general rule may be adopted.  If there are multiple insureds covered by a policy all relevant countries of residence should be entered into the Risk Locator.

What if my policy covers multiple insureds with multiple risks?

The Risk Locator tool may not be able to identify the correct risk location(s) where multiple insureds and multiple risks are entered at the same time as it will not be able to distinguish which risks relate to which insureds. This limitation emphasises the need for users to consult the linked Crystal content to ensure that they are confident that a regulatory and/or tax liability arises.

What constitutes an insured’s place(s) of business or ‘business establishment’?

European Union (EU) legislation defines the term business ‘establishment’. Outside the EU the term is not so well defined, so in the absence of specific territory definitions, it is appropriate to follow the EU approach.

An establishment may include but not exclusively limited to: 

  • branches of companies and representative offices, including offices managed by the businesses’ own staff
  • manufacturing and other types of business operations, e.g. mines, wells, platforms or other industrial/commercial sites

If there are multiple establishments covered by a policy all relevant countries should be entered into the Risk Locator.

Is it correct that the Risk Locator result has returned more than one territory for regulation and tax?

Yes. There are several reasons why more than one territory’s laws, regulations and tax rules may apply to a contract, including:

  • contradictory and overlapping regulatory and tax rules
  • multiple risks insured and/or multiple insureds covered
  • involvement of intermediaries

If the regulatory rules of more than one territory apply then the risk must be arranged, reported and funded for in accordance with the rules of each territory.

Similarly, if the contract is subject to more than one tax regime then taxes should be paid in accordance with each territories rules.

If regulatory rules around the construction of a contract apply with contradictory effect a common sense approach is necessary. The contract must provide appropriate protection to the insured.

Is it correct that the risk location is different for regulation and tax?

Yes. It is possible for the territories of regulation and tax to be different as they derive from different rules and legislation.

Is it correct that the result has returned no risk location?

Yes. In some instances a risk will fall outside of all territories regulatory and/or tax rules. In these cases no tax should be due but for regulatory purposes a common sense approach is necessary to ensure the policy provides the appropriate protection for the insured.

How does the Risk Locator work in conjunction with Crystal?

The Risk Locator only determines the territory, or territories, in which a risk may be subject to regulation or tax - it does not provide details of Lloyd’s licenses or the tax rates / exemptions applicable to risks. There are links from the Risk Locator Tool results page to the detailed information held on Crystal. Please consult these pages to ensure the correct regulatory and tax treatment is applied to a policy.