LMA releases updated oil price cap clauses for hull and cargo

The Lloyd’s Market Association (LMA) has released revised clauses in response to the Oil Price Cap Coalition’s announcement of additional measures to reduce the possibility of circumvention of the oil price cap.

From what we understand, the release of updated hull and cargo endorsement and attestation clauses, LMA5610A and LMA5611A, are intended to be used on in-force and any new policies entered into after February 19, 2024 by underwriters subject to the requirements.

LMA has confirmed that the clauses are primarily amended to take account of the new requirements on underwriters to obtain per voyage attestations, as well as introduce an appropriate mechanism to request that their insured provides information on ancillary costs paid under any contract related to shipment of Russian oil/oil products.

An important factor to note, is that reinsurers are not required to introduce these provisions, but should continue to use an appropriate sanctions clause, LMA noted.

LMA3100, LMA3100A or LMA3200 are examples of sanctions clauses referred to by HM Treasury in their draft guidance.

“These updates are designed to help insurers to respond to the new requirements in a compliant manner taking into account the guidance issued by the regulatory authorities in the Oil Price Cap Coalition. The LMA remains committed to assisting insurers to respond to requirements in an increasingly complex regulatory landscape,” commented Arabella Ramage, Legal Director at the LMA.

In November 2023, LMA joined forces with the London and International Insurance Brokers’ Association (LIIBA) in an effort to lead digital transformation in Delegated Authority (DA) business with the introduction of computable contracts.

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