"Establishing a standardised template policy will help the market operate more efficiently, providing a tangible benefit to both clients and insurers."
- Joe Shaw IUA senior market services executive
The Loan Market Association (LMA) has described CRI as a “sophisticated” product that has a recognisable framework and boilerplate. LMA believes that this policy required the first-hand experience of the working party members which spanned across law firms, banks, brokers, insurers, and A2Z Risk Services.
Commenting on their own involvement as publishers, LMA has said that due to their “general recognition in the market as a provider of template loan documentation” LMA was “well placed to assist with this project.”
“We believe that this document will be extremely beneficial to new bank entrants in particular, and give well-deserved recognition to a product which is fast becoming a very valuable risk mitigation tool for lenders.”
Arabella Ramage, Lloyd’s Market Association legal director has said:
“Insurers in Lloyd’s and the wider London market have been embracing the expanding opportunity to support banking clients with individual credit insurance coverage. To support our members, and the insurers, we brought together experts from across the market to set down a baseline for the coverage we are able to offer.
“This is especially valuable since blocks of risk are often shared between insurers; it allows everyone to approach such risks from an agreed starting point.”
She continued: “We expect the CRI policy will encourage more insurance capacity (or supply) into the market. That said, the CRI policy is not a prescribed form that must be used. We have delivered it as a starting point for each policy which, in the strongest tradition of Lloyd’s and the London market, can be customised for each insurance case.”
Rampage also pointed out that such products “never stand still” and that Lloyd’s s look forward to working with other trade bodies on an ongoing basis for further refinements.
Meanwhile, Joe Shaw IUA senior market services executive has said:
“Credit risk insurance is an expanding sector, and many IUA members are keen to further their support for such coverage.”
This is the first time that the Loan Market Association has produced an insurance policy document.