Lloyd's Market Association Bulletin

LMA20-018-AC | 29 April 2020

The latest version of the Joint LMA/Clyde & Co Guidance on Consumer Wordings is available to download from the LMA website, and contains a Document Revision/Change History section to identify the key amendments/updates.

Consumer Wordings Guidance v6.0

The guidance has been updated to acknowledge the expansion of the remit of the Financial Ombudsman Service with effect from 01 April 2019. Small and medium-sized enterprises, which have an annual turnover of less than £6.5m and one of either a balance sheet of less than £5m or fewer than 50 employees, are now considered to be ‘eligible complainants’.

The guidance has also been updated throughout to include various suggestions and recommendations for how to improve the “readability” of a policy wording, thereby increasing the customer’s understanding of the coverage provided.

At the time of its initial publication (version 1.0, 27 April 2015), the LMA advised that the guidance would undergo a periodic review process by the LMA and would, therefore, remain subject to amendment/update when required (e.g. due to change/update in relevant legislation/regulation etc.). The guidance was last re-published on 29 March 2019 (version 5.0) and reflected that Lloyd’s Minimum Standards changed from 01 January 2019 and included reference to the FCA’s Finalised Guidance (FG18/7), particularly under Appendix 10 relating to the Consumer Rights Act 2015.

The document is published as general guidance, intended to assist managing agents with the practicalities of drafting new consumer products and/or adapting existing commercial wordings to produce consumer versions. Whilst not an exhaustive list of all the issues to consider, the guidance identifies the key features of, and salient clauses within, a policy document/wording that need to be addressed for a consumer policy to meet current regulatory requirements and identifies, where appropriate, the applicable underlying regulation. Example clauses are also provided, where applicable. 

Any queries on the guidance may be addressed to: