[040810.EN.SEA] Lloyd's Creates Sanction Clause

(LONDON) London's marine insurance market has created a clause ensuring underwriters do not breach sanctions due in part to Western measures against Iran, a senior Lloyd's Market Association (LMA) official said on Monday.

Marine underwriters in London have been looking at ways to deal with the growing raft of Iran-related measures as well as a US executive order on a Somali group.

'Underwriters have taken steps to ensure they do not contravene the sanctions. One of the ways of doing that is to write carefully the allowed business using an appropriate exclusion or limitation clause,' Neil Roberts, a senior technical executive with the LMA, told Reuters.

'They have put together a clause with US legal thinking which is now available for use. This is designed to try and address any sanction prohibition or restrictions which will come out under United Nations resolutions or trade and economic sanctions from the EU, UK or the US.'

Mr Roberts said the consequences for underwriters would vary but added that due diligence needed to be demonstrated.

'It is helpful to have evidence that you have included a clause that says there are instances where we cannot provide cover, and there are instances where we cannot pay claims because of circumstances beyond our control,' he said.

The London marine insurance market plays an influential role in the global marine insurance industry. The LMA represents the interests of all underwriting businesses in the Lloyd's market. -- Reuters

Source : BT-Reuters, 04.08.10.