Lloyd’s European network integration process completed
Lloyd’s announced the transfer of Lloyd’s Italian branch to Lloyd’s Insurance Company (LIC), completing the integration of the European network into LIC, a post-Brexit move aimed at consolidating Lloyd’s European operations.
The UK’s exit from the European Union meant that UK insurers like Lloyd’s were no longer able to underwrite EU risks directly from London. In order to secure its access to European markets after Brexit, Lloyd’s created Lloyd’s Insurance Company (Lloyd’s Europe)an insurance and reinsurance subsidiary based in Brussels.
According to the announcement, when Lloyd’s Europe was established in 2018, Lloyd’s has agreed with regulators to integrate the European network into LIC within a reasonable time frame. Most European Lloyd’s entities were integrated into LIC in 2021.
Alongside the announcement of the transfer of Lloyd’s Italian branch to LIC, Lloyds also announced the introduction of a new fee for services provided to distributors by Lloyd’s Italian office from 1 November 2022.
Lloyd’s said: “As part of this transition, Lloyd’s is taking the opportunity to replace the ‘Italian Tax’ (an additional charge of 0.75% of gross written premium levied on business administered by Lloyd’s Italian office ) with a new service fee model from November 1, 2022. The new service fees will be paid by local distributors.
“The new pricing model reflects the many unique market services that Lloyd’s Italy provides to Italian coverholders, open market correspondents and agents, including: policy production and issuance, premium collection, IPT payment and production of public tenders,” Lloyd’s added.
Under the new model, service recipients (local distributors in Italy) will only pay for the services they use, Lloyd’s explained.
Fees charged to local distributors for the services include a flat rate for use of the Mocha/DoPrint platform – €1,000 for Coverholders; €500 for correspondents and free market agents; a volume-based policy commission of €1 per section/line of business for issuing the policy; and a fee of €1,000 per section/line of business for public tender policies with a premium equal to or greater than €25,000.00. For premiums below €25,000.00, a policy charge of €1 per section/line of business will apply for policy issuing services.
Lloyds said it is working with all local coverholders, open market correspondents and agents to update their agreements to include service charges.