With Lloyd’s syndicates due to lose their EEA passporting rights on 31 December 2020, on 25 November the English High Court sanctioned a Part VII transfer of all policies (or parts of policies) insuring EEA risks from the syndicates to Lloyd’s Insurance Company, Brussels (‘LIC’).
From the end of the year, all EEA claims on Lloyd’s policies will be the responsibility of LIC. The Part VII scheme also transferred binding authorities and TPA contracts relating to EEA risks from the syndicates to LIC. As LIC will be wholly reinsured by the syndicates in respect of the transferred business, one innovation in the scheme is to convert all of the applicable syndicates’ external reinsurance into retrocessions of the syndicates that reinsure LIC with the intention of preserving reinsurance cover for the transferred risks. The full reasons for the decision of Snowden J to sanction the scheme are expected to be available shortly.