LMA Sanctions Clauses LMA3100A, LMA 3200
Facilitating a better future
March 2024
Jawdat Khurshid KC – 7 King’s Bench Walk
Arabella Ramage - LMA
Yannis Samothrakis – Taylor Wessing
DJ Wolff – Crowell & Moring
Housekeeping
We would like to remind everyone that the content of this presentation is for information and guidance only. The opinions and views expressed by the speaker today are their own and do not necessarily represent the views, policies, or positions of the LMA. The LMA does not accept any liability for any actions taken or reliance upon the content of this presentation.
The views expressed also do not represent legal guidance to the participants who should take their own legal advice on any particular scenario/fact pattern discussed.
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LMA3100A and LMA3200
LMA3100A - Sanctions Limitation Clause
No (re)insurer shall be deemed to provide cover and no (re)insurer shall be liable to pay any claim or provide any benefit hereunder to the extent that the provision of such cover, payment of such claim or provision of such benefit would expose that (re)insurer to any sanction, prohibition or restriction under United Nations’ resolutions or the trade or economic sanctions, laws or regulations of the European Union, United Kingdom or United States of America.
LMA3200 - Sanctions Suspension Clause
It is a condition of this (re)insurance, and the (re)insured agrees, that the provision of any cover, the payment of any claim and the provision of any benefit hereunder shall be suspended, to the extent that the provision of such cover, payment of such claim or provision of such benefit by the (re)insurer would expose that (re)insurer to any sanction, prohibition or restriction under any:
a. United Nations’ resolution(s); or
b. the trade or economic sanctions, laws or regulations of the European Union, United Kingdom or United States of America.
Such suspension shall continue until such time as the (re)insurer would no longer be exposed to any such sanction, prohibition or restriction.
How to use this slide layout:
LMA3100A and LMA3200
Amended guidance published
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Scenario 1
Policy issued to non-sanctioned entity. During course of policy, the entity becomes sanctioned. Claim arises during the period of the sanctioned activity
LMA Sanctions Clauses LMA3100A, LMA 3200
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Scenario 2
Policy issued to non-sanctioned entity. During course of policy, the underlying activity is sanctioned (e.g. policy is entirely related to shipping to Russia)
LMA Sanctions Clauses LMA3100A, LMA 3200
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Scenario 3
Policy issued to non-sanctioned entity. During course of policy, there is an activity that is sanctionable and/or prohibited (e.g. a shipment to Iran for a global policy)
LMA Sanctions Clauses LMA3100A, LMA 3200
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Scenario 4
Policy issued to non-sanctioned entity. A loss occurs during the period of the sanctioned activity. However, a claim for the loss is made after activity is no longer sanctionable
LMA Sanctions Clauses LMA3100A, LMA 3200
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Scenario 5
Policy issued to non-sanctioned entity. Claim occurs related to activity that was not sanctioned at the time the claim occurs, claim agreed prior to sanctions prohibiting the activity in question coming into effect. However, prior to payment, the payment becomes prohibited. How do you treat payment?
LMA Sanctions Clauses LMA3100A, LMA 3200
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Scenario 6
An insured entity becomes a sanctioned entity immediately prior to inception of a policy
Part of coverage is sanctioned prior to inception of policy
How do the clauses work?
LMA Sanctions Clauses LMA3100A, LMA 3200
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How is this affected by time bar?
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