U.S. GENERAL COVER CONDITIONS
(LMA5058C, only to be used in conjunction with LMA Binding
Authority Agreements)
(Specific
provisions applicable to U.S. business, other than reinsurance, bound under this agreement. These U.S. General
Cover Conditions must be attached
to and form part of any binding
authority agreements (“Agreement”) in respect of U.S. business, including where
the Coverholder is based outside the U.S. Please note that Conditions section (1)(a),
(b), and (d) are not intended to apply to a Coverholder based outside
the U.S. but instead describe the laws and responsibilities applicable to the U.S. brokers through which the Coverholder must bind excess and surplus
lines business.)
To the extent that any provision in these U.S. General
Cover Conditions contradicts or is necessarily inconsistent with any provision in the Agreement into which they are incorporated, the U.S. General
Cover Conditions shall control.
TERRITORIAL EXCLUSIONS AND/OR LIMITATIONS
A)
New York State
No New York business
to be bound unless:
(i)
the Coverholder named hereon is, or accepts properly
exported business
from, an excess line broker licenced in the State of New York; and
(ii)
the business is properly
exported excess line (i.e.
surplus lines)
business, and
(iii)
if the Coverholder is a resident
or non-resident excess line broker
licenced in the State of New York, the Coverholder files with the Excess Line Association of New York (ELANY), at least ten business
days prior to exercising the binding authority, a signed copy of the written Agreement between
the Coverholder and Underwriters setting forth
all terms, conditions, and limitations of the binding
authority, including
the following:
(a)
a description of the kind or classes
of insurance which the Coverholder may bind;
(b)
the maximum
dollar limits for any policy which the Coverholder may bind and/or
a provision requiring
the risk to be submitted to Underwriters;
(c)
the maximum
policy period for which the Coverholder may bind;
(d)
the geographical limits
upon the exercise of binding
authority by the Coverholder;
(e)
the name and telephone number
of the principal contact
person for insurer(s); and
(iv)
the Coverholder files with ELANY a copy of any amendments to, or any notice of cancellation or termination of, the Agreement no later
than ten business
days after the adoption thereof; and
(v)
every certificate or other written
evidence of an insurance contract issued
under the Agreement
contains the following information:
(a)
description and location
of the subject
of insurance;
(b)
coverage provided (by kind/class and limits);
(c)
conditions of coverage
provided;
(d)
term (policy
period) of insurance;
(e)
gross premium;
(f)
name and address
of excess line broker;
(g)
name and address
of producing broker;
(h)
name(s) of insurer(s);
(i)
name and address
of insured; and
(vi)
the Agreement does not authorize the Coverholder to issue notice of cancellation of any insurance bound under the Agreement
except for the following:
(a)
non-payment of premium;
(b)
material increase in the hazard insured;
(c)
discovery of a material misrepresentation in the application for insurance; and
(vii)
the Agreement does not include
the authority to handle claims on insurance bound under the binding authority.
B)
Illinois
No insurance is to be bound on an admitted basis.
C)
Kentucky
No Kentucky business
to be bound on an admitted basis.
D)
US Virgin Islands
(a) Until 31/12/2021:
No insurance is to be bound under Lloyd's U.S.V.I.
licence covering
risks or property resident, located,
or to be performed in the U.S.V.I.
unless:
(i)
the Coverholder is licenced
through Underwriters' U.S.V.I.
Attorney-in-Fact as a U.S.V.I.
Lloyd's
agent to do business on behalf of Underwriters at Lloyd's, or
(ii)
if insurance
is bound through
a non-resident agent, such agent must be licenced as a non-resident agent by the U.S.V.I.
(b) From 1/1/2022
No new risks are to be bound on an admitted
basis. Coverage existing prior to 1/1/2022 may be renewed
until 31/12/2023.
(c) Surplus
Lines
No U.S.V.I.
surplus lines insurance
is to be bound unless the Coverholder is licenced
as, or accepts
properly exported business from, a surplus lines broker
licenced in the U.S.V.I.
E)
Texas
With respect to any Texas business,
Underwriters must reserve the duty of final underwriting review.
F)
New Jersey
No New Jersey
business to be bound unless:
(i)
the Coverholder named hereon is, or accepts properly
exported business
from, a surplus lines agent licenced
in the State of New Jersey; and
(ii)
if the Coverholder is a resident or non-resident surplus
lines agent licenced in the State of New Jersey,
prior to exercising the binding authority
in New Jersey,
the Coverholder files with the Commissioner of Insurance
of the State of New Jersey the written Agreement between the Coverholder and Underwriters setting forth all terms, conditions, and limitations
of the binding
authority, including
the following:
(a)
a description of the classes of insurance
for which the Coverholder has binding authority;
(b)
the maximum
dollar limitation on the binding authority
of the Coverholder for any one risk for each class of insurance
written by the Coverholder;
(c)
the maximum
policy period for which the Coverholder may bind a risk;
(d)
the geographical limits
upon the exercise
of binding authority by the Coverholder;
(e)
if the binding
authority is delegable by the Coverholder, a prohibition against
the delegation without
the prior written
approval of Underwriters;
(f)
a copy of any amendments to the Agreement and of any notice of cancellation or termination of the Agreement shall
be filed by the Coverholder with the Commissioner no later
than 10 days after adoption
thereof.
G)
Pennsylvania
No Pennsylvania business to be bound unless:
(i)
the Coverholder named hereon is, or accepts properly
exported business
from, a producer who is licenced by the Insurance Department of the Commonwealth of Pennsylvania to place surplus
lines insurance; and
(ii)
if the Coverholder holds a resident or non-resident surplus lines licence from the Commonwealth
of Pennsylvania, prior to exercising the binding
authority in Pennsylvania, a written Agreement must be in force between the Coverholder and Underwriters setting forth the terms, conditions, and limitations governing the exercise of the binding
authority by the Coverholder, including the following:
(a)
a description of the classes
of insurance for which the Coverholder has binding authority;
(b)
the maximum
dollar limitations on the binding authority for any one risk for each class of insurance;
(c)
the maximum
policy period for which the Coverholder may bind a risk;
(d)
the geographical limits
upon the exercise of the binding
authority;
(e)
a prohibition against the delegation of the binding
authority by the Coverholder or, if the binding authority
is delegable by the Coverholder, a prohibition against delegation of the binding
authority by the Coverholder without the prior written approval
of Underwriters;
(f)
a provision in the following or substantially similar
language: "It is understood and agreed that all insurance placed
pursuant to this agreement on risks resident, located, or to be performed
in this Commonwealth, shall
be effected and written in accordance with Article
XVI of the Act of May 17, 1921,
P.L. 682, No. 284 (40 P.S. Section
991.1601-991.1625)";
(g)
a provision that cancellation or termination of the Agreement may not affect the validity of an insurance
binder or other instrument of insurance
executed by the agent prior to the date of the cancellation or termination; and
(iii)
the Coverholder maintains an executed copy of the written
Agreement between
the Coverholder and Underwriters in its office in Pennsylvania, or home office
if not applicable, and makes the copy available at all reasonable times for the examination by the Insurance Department without notice
for at least 5 years following
termination of the Agreement.
H)
California
No California business to be bound unless:
(i)
the Coverholder named hereon agrees that it shall:
(a)
not retain,
use, or disclose Personal Information for any purpose
other than on the Underwriters’ instructions from time to time when acting as a Service Provider or as otherwise
permitted by the California Consumer Privacy
Act (“CCPA”);
(b)
not sell, retain, use, or disclose Personal Information outside
of its business relationship with the Underwriters;
(c)
not enter into any contract with sub-contractors who will process
Personal Information directly or indirectly on behalf of the Underwriters without prior notification to the Underwriters, and the Coverholder shall
include in any such
sub-contract provisions in favour of the Underwriters which are equivalent to those in this section;
(d)
[at no additional cost,]1 at or before the time the Coverholder collects
Personal Information from the Consumer
on behalf of the Underwriters, provide to Consumers the [Lloyd’s CCPA Privacy
Policy]2 or a substantially similar privacy policy that has been approved
by the Underwriters;
(e)
[at no additional cost,] at the Underwriters’ request, provide an updated
CCPA Privacy Policy
to Consumers;
(f)
[at no additional cost,]
provide a toll-free phone number for Consumers to exercise their
privacy rights under the CCPA3 and one other method in accordance with the CCPA such as an email address or webform;
(g)
implement and maintain
a policy and procedures that are acceptable to the Underwriters to respond to Consumer privacy requests
and furnish such policy
and procedures to the Underwriters upon request;
(h)
upon receipt of a Consumer
privacy request, promptly
forward such request to the Underwriters and consult with the Underwriters regarding the response to the request;
(i)
[at no additional cost,] promptly
respond to and fulfil
Consumer privacy
requests on behalf of the Underwriters in accordance with the requirements of the CCPA, the Coverholder’s policy
and procedures for responding to Consumer privacy requests, and any instructions from the Underwriters; and
(j)
upon fulfilment of a Consumer
privacy request, update the Underwriters on the response and maintain
records of the response
as required by the CCPA and the Agreements.
“Consumer” for purposes herein
means a California resident, as defined
in Section 17014 of Title 18 of the California Code of Regulations, as that section read on September
1, 2017.
“Personal
Information” for purposes
herein means information that identifies, relates
to, describes, is reasonably capable of being associated with, or could reasonably be linked,
directly or indirectly, with a particular Consumer or household.
“Service
Provider” for purposes herein means (i) a legal entity
operated for the profit or financial benefit of its owners, (ii) that processes
information on behalf
of the Underwriters, and (iii) to which the Underwriters disclose
a Consumer’s Personal Information for a business purpose pursuant to a written contract
that prohibits the retention, use or disclosure of such information
1 Note that the model Binding
Authority Agreement already includes “at no additional cost” language.
2In conjunction with Lloyd’s and McDermott,
Will & Emery LLP, the LMA
has published LMA9191 as a model Lloyd’s CCPA Privacy Policy.
3 California Consumer Privacy Act (CCPA) requires
that insurers provide
a toll free contact number, for consumers to be able to exercise
their privacy rights. This is an obligation that Underwriters will need
to rely on their Coverholders for, so this
number should be provided by the Coverholder on behalf
of Underwriters. It is not required that the toll- free number be answered by a live individual.
for any purpose other than performing the services
specified in the contract, or as otherwise permitted
by the CCPA.
CONDITIONS
1.
With the exception of licenced
business in the US Virgin
Islands until 31/12/2023 (after which date the following
applies), the Agreement is conditional upon the Coverholder:
(a)
being and remaining
licenced to transact
business as an Excess/Surplus Lines Broker/Agent;
(b)
having paid the appropriate licensing fee for Excess/Surplus Lines Broker/Agents and having
complied with applicable State bonding
requirements for Excess/Surplus Lines Broker/Agents;
(c)
complying with all applicable laws and regulations respecting the placement
of insurance with non-admitted insurers
and the taxation of such placements; and
(d)
being responsible for the billing,
collection and remitting of applicable excess/surplus lines and other premium taxes,
unless
otherwise agreed with the Lloyd’s Delegated Authorities team in respect of conditions 1(a), (b), and (d) above.
2.
The Coverholder shall not enter or permit others to enter into premium finance
arrangements in the name of or on behalf of Lloyd's
Underwriters. If the Coverholder or any other party enter(s) into a premium finance arrangement in respect
of premium(s) for coverage
procured under this cover, the arrangements shall be solely in the name and entirely
for the account of the Coverholder or such other party and Lloyd's
Underwriters will not accept responsibility for any such arrangement(s).
3.
The Coverholder shall comply with any applicable unfair
claims settlement practice laws and regulations concerning claims
practices and adjuster licensing.
4.
No Group Scheme,
Association Coverage,
Master Policy or any other form of mass merchandising programmes shall be bound without the prior written approval of all subscribing Lloyd's Underwriters.
5.
The grant of authority
to bind insurances and issue documents evidencing insurances bound shall not be delegated by the Coverholder to any other person,
firm, company or any branch office.
If any authority(ies) or responsibility(ies), other than those previously described, is(are) delegated to a third party(ies), any such delegation must be in writing and the Underwriters must be a party to the written contract
of delegation to the third party(ies).
6.
Unless Underwriters specifically agree to the contrary
this binding authority will be automatically terminated in the event the Coverholder shall:
(a)
become the subject
of voluntary or involuntary rehabilitation or liquidation proceedings;
(b)
become the subject
of an action in bankruptcy;
(c)
make or propose
any composition with its creditors
or make any assignment for the benefit of its creditors or otherwise acknowledge its insolvency;
(d)
be merged
with, acquired by or otherwise absorbed by any individual, corporation or other business
entity or organisation of any kind unless agreed
in writing by the Underwriters;
(e)
being a partnership, be dissolved by agreement between the partners or by operation of law;
(f)
have any relevant licence to conduct business suspended, removed
or impaired by any order or decree
of any judicial or regulatory authority;
(g)
have imposed by a court of competent
jurisdiction the appointment of an administrator or administrative receiver or equivalent office holder;
(h)
have a receiver
or equivalent office
holder appointed for the whole or any part of the Coverholder's business.
7.
If the Coverholder shall fail to comply
with any of the provisions of the Binding Authority, Underwriters reserve the right
to cancel the Agreement at any time with immediate effect. The Underwriters shall
give written notice
of such cancellation and the Agreement shall
terminate at the date specified in the notice.
8.
In respect
of non-moveable property
business, the following
shall apply.
The Coverholder shall not wittingly
bind hereunder any U.S. Physical
Damage Insurance or Reinsurance, whether
renewal or new risk, effective
on or after the 1st January,
1959, covering:
(a)
Any interest covered by A.N.I. or M.A.E.R.P. (the Stock Companies’ and Mutuals’
atomic pools).
(b)
Nuclear reactor power plants including all auxiliary
property on the site.
(c)
Any other nuclear reactor
installation including
laboratories handling radioactive materials in connection with reactor installations, and critical facilities as such.
(d)
Installations
for fabricating complete
fuel elements or for processing substantial quantities of “special
nuclear material” and for reprocessing, salvaging, chemically separating, storing or disposing
of spent nuclear fuel or waste materials.
(e)
Installations
other than those listed
in (d) above using substantial quantities of radioactive isotopes or other products
of nuclear fission (the Coverholder may bind other interests using radioactive isotopes provided
the nuclear exposure
is not the primary hazard).
(f)
Property on the same site as a nuclear installation unless radioactive contamination is specifically excluded.
(g)
Any insurance
which covers radioactive contamination as a named hazard.
N.B. For the general guidance of the Coverholder the term “special
nuclear material” shall have the meaning given it in the U.S.A. Atomic
Energy Act of 1954 or any law amendatory thereof. In case of doubt the Coverholder should refer to Underwriters before binding
the risk in question.
LMA5058C
21 June 2021
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