Part VII Transfer Update
The scheme effective date for the transfer of EEA policyholder business from Lloyd’s to LIC has been extended.
As a consequence of Brexit, current EEA passporting is expected to cease at the end of the transition period on 31 December 2020. The Part VII process will transfer certain policies from the Members to Lloyd’s Insurance Company S.A. (Lloyd’s Europe) in Brussels.
Unless specifically excluded, the policies (or parts of policies) to be transferred under the proposed transfer are those where all or part of the risk underwritten at Lloyd’s is located in an EEA state or where the policyholder is resident in the EEA (“EEA Policies”). Post-Brexit, these policies, or part policies, cannot be managed from the UK without breaching legal or regulatory requirements. The proposed transfer will ensure that EEA policies can be compliantly managed after Brexit, including in relation to the all-important payment of claims.
Following ongoing discussions with Managing Agents, wider market consultation and in the context of the overall programme plans, overall programme plans, Lloyd’s has taken the decision to delay the Part VII scheme effective date. This decision has been made to enable the market participants, Lloyd’s and Lloyd’s Insurance Company S.A. (LIC) to be ready and to give the maximum amount of time available for the successful implementation of this substantial and complex Part VII transfer.
The Sanctions Hearing is now scheduled for 18 November 2020 and therefore the Scheme Effective date will move from 29th October to 30th December 2020.
This delay to the Part VII transfer will not affect LIC’s ongoing ability to continue writing new EEA business.