Japan - Open Market Model
The Open Market Model provides simpler arrangements for underwriting Japan risks controlled from outside Japan and for issuing local Japan policies.
Lloyd’s underwriters are currently permitted to underwrite risks located in Japan on a direct basis in a number of classes. In accordance with Japanese regulations, all direct risks (other than aircraft, marine and travel packages) require a local policy to be issued. For Lloyd’s market participants that policy issuance can be arranged through Lloyd’s Japan Inc. (LJI), a wholly owned subsidiary of Lloyd’s, which acts as a local Coverholder for managing agents. Lloyd’s underwriters who do not issue a local policy through LJI will require a local fronting arrangement.
The “Japan Open Market Model (OMM)” allows brokers and underwriters to transact the relevant Japan risks in the Lloyd's underwriting room, following the same process as for other open market business. It provides a compliant mechanism for writing multi-territory risks with a Japan element.
Brokers and underwriters will benefit from flexible placement options and reduced operational complexity.
The arrangements outlined in the guidance note can be used for all Japan domestic risks, which:
- Are Japan risks controlled outside Japan; and
- Are within one of the classes noted as “available for open market model” in Appendix 1 and the products licensed in Japan by LJI.
To qualify as a “Japan risk controlled from outside Japan” both of the following conditions must apply:
- The head office or ownership of the Japan entity/risk is outside of Japan; and
- The insurance purchase decision is taken outside of Japan.
See the downloads below for further information. The material below reflects updated procedures and guidance as at December 2019. This now reflects the updated charging arrangements for use of the Open Market Model.
For all comments and questions, please contact: