The Lloyd’s Market Association (LMA) has released a new model clause, LMA5670 – General Sanctions Financial Crime Documentation Clause, aimed at strengthening compliance efforts among re/insurers and brokers amid increasingly complex and fast-moving sanctions regulations.
The clause introduces a contractual requirement for re/insureds to provide documentation upon reasonable request. This obligation is intended to support situations where compliance-related documentation is required after the inception of a policy, reflecting the dynamic nature of sanctions enforcement.
The LMA5670 clause provides contractual rights for re/insurers and brokers to access documentation from re/insureds when needed to confirm that coverage does not conflict with sanctions or financial crime regulations.
It also includes provisions to reduce administrative strain on re/insureds by limiting requests to information that is reasonably required, accessible through best efforts, and not beyond their control.
The clause includes a mechanism for contract discharge if the re/insured fails to cooperate appropriately. This aligns with recent expectations set by UK regulatory authorities and is intended to offer legal clarity in instances of non-compliance.
Arabella Ramage (pictured above), legal and regulatory director at the LMA, said the clause responds to the increasing compliance demands facing the market due to sanctions legislation.
“It provides clarity and contractual certainty for all parties, while ensuring that compliance obligations can be met without unnecessary disruption. Importantly, it also recognizes the critical role of brokers in the compliance chain, giving them the tools they need to act responsibly and effectively,” Ramage said.
The LMA noted that the clause is structured to operate alongside existing model sanctions clauses, including LMA3100A and LMA3200. Both clauses were updated following consultation with legal experts and market participants. The revisions focused on improving their enforceability in cross-border contexts, including jurisdictions where prior versions posed legal challenges.
The release of LMA5670 is also consistent with the association’s wider efforts to reduce complexity in regulatory compliance and enhance competitiveness within the Lloyd’s market. The LMA has been advocating for a more agile framework for financial and technical reporting, recommending reforms that would reduce the volume and frequency of submissions.
The initiative also aligns with the LMA’s broader 2025 agenda, which includes a focus on digitization and data standards. The association is promoting the expanded use of Core Data Records to facilitate standardized information exchange and support automation across underwriting and compliance processes.
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