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Lloyd’s pledges to honour claims in event of 'hard' Brexit

October 09, 2018

Lloyd’s has committed to paying “all valid claims” even if Britain exits the European Union without a transitional deal in place.

In a statement, Lloyd’s said that it is working on transferring all European Economic Area (EEA) business to its Lloyd’s Brussels subsidiary – which is authorised to write all EEA risks from 1 January 2019 - before the end of 2020 via a Part VII transfer.

“In the event that the UK leaves the European Union before then with no transition or implementation period, Lloyd’s underwriters will continue to honour their contractual commitments including the payment of valid claims,” the statement said.

The Corporation said that it expects European regulators to support this approach as it “goes to the heart of treating customers fairly.”

“In the event that it does not, Lloyd’s will direct its underwriters, or take such other steps, to ensure that contractual commitments are met in full whilst the transfer is being completed,” it said.

It added that it has the “full support ” of the UK’s Financial Conduct Authority (FCA).

The announcement comes just days after outgoing Lloyd’s CEO Inga Beale told the BBC that the Corporation was accelerating its Brexit contingency plans, which include contract transfers to its new subsidiary in Brussels, due to a growing concern that the UK will leave the European Union in 2019 in a ‘no-deal’ scenario.