Model State-Backed Cyber War Exclusion Clauses for Cyber Treaty Reinsurance

LMA5629 (Exclusion A) fully excludes losses arising from war and/or cyber operations.

LMA5630 (Exclusion B) excludes losses arising from war, cyber operations that are part of a war and/or cyber operations that cause major detrimental impact to a state.

This clause also includes a Difference In Conditions (DIC) provision that allows reinsurers to follow the underlying war and cyber war exclusion clause(s) (there may be a range of these in operation on the underlying book), provided that the underlying clause(s) comply with Lloyd’s requirements for Type 1-3 cyber clauses. In the event there are no applicable underlying cyber exclusions, or the underlying clauses extend coverage beyond Types 1-3, the exclusions in paragraph 1 would prevail and apply the existing Lloyd's requirements for Type 3 coverage, to aid compliance with the requirements of Y5381/Market Letter of 04 September 2023.

LMA5631 (Exclusion C) replicates Exclusion B, but also confirms, in paragraph 3, that the exclusion in paragraph 1 does not apply to losses arising under original policies incepted prior to 01 April 2024 on a Losses Occurring During basis. This clause should only be used for the first renewal following Lloyd's requirements becoming effective.

The model clauses can be amended in particular to be tailored according to underlying coverages. In all cases, members need to satisfy themselves as to whether they are meeting Lloyd's requirements.

Notes

As an ongoing service to the market, the LMA has reviewed a number of non-LMA clauses on behalf of members/other carriers with respect to their compliance with bulletin Y5381/Market Letter of 04 September 2023. These clauses are available to view on our website here.

Chris Mather
Senior Executive, Technical Underwriting
chris.mather@lmalloyds.com

David Powell
Head of Technical Underwriting
david.powell@lmalloyds.com