The first half of 2026 was a very busy and productive time for the LMA’s Legal and Regulatory team. We’ve engaged on a diverse range of topics across the market while continuing to support our colleagues in Underwriting, Claims, Operations, Finance and Risk and the LMA Academy.
Below, we’ve outlined the key successes and activities the team has worked on and delivered. While not exhaustive, this summary offers a snapshot of the impactful work supported in H1.
For further updates on our ongoing consultations and focus areas, access our monthly Legal & Regulatory Radar.
Geopolitical work
The Legal and Regulatory Team’s geopolitical work has been dominated by Iran, including:
Shipping: Following the outbreak of the Iran conflict, we dealt with various issues arising out of notices of cancellation across marine classes and worked to correct press and political misinterpretation that these represented a withdrawal of war cover. We addressed member, regulatory and press questions on reinstatement, Strait of Hormuz transits, consequential delay, grip of the peril, the DFC scheme and payments for transiting territorial waters. The Joint War Committee amended restricted areas, including US military bases, and we spoke at a London Risk Week event alongside Antares. The Legal Committee also heard from Richard Waller KC on potential legal issues arising out of the closure of the Strait.
International waters and shadow fleet: We considered the risk implications of US/UK appetite to board foreign-flagged vessels in international waters and options for scrapping unusable ‘shadow fleet’ vessels involved in Russian oil shipping, including through RUSI and other discussions.
Aviation: At the Aviation Hull War Committee’s request, the LMA issued LMA5703 stating that underwriters could reasonably treat the resumption of Middle East operations after airspace closures as a material change of risk under LSW555D. LIIBA’s Aviation Committee has challenged this position. The LMA also reminded leaders of duties to inform followers of contractual changes and obtained legal advice from the top 10 aviation jurisdictions on automatic termination.
Sanctions: We received advice from Richard Neylon and John Kimbell KC on sanctions and terrorism issues linked to toll payments for Strait transits and they presented a webinar on the subject to the market. The LMA continues to work with Lloyd’s on sanctions and licensing changes, aiming to minimise divergence between US, UK and EU regimes. Key issues include changes to the Russian oil price cap, US sanctions on Iranian oil and Venezuela sanctions, and the practical implications of an increasingly fragmented sanctions landscape.
Tolls: We assessed the insurance implications of toll payments for Strait transits and engaged extensively with OFAC and OFSI on their interpretation. Following the sanctions event (above), we worked with Jawdat Kurshid KC to produce a clause supplementing the sanctions clause and discharging cover upon a toll payment being made. The clause and guidance were shared with OFAC and OFSI, and following consultation with insurers, brokers and regulators has been published.
War clause/five powers project: A CUO committee-led working group is considering how to improve certainty around the use of ‘five powers’ war clauses, where cover terminates on war between any two powers. The actual moment of termination is difficult to define when the ‘war’ is not ‘boots on the ground’. The work is expected to proceed in two phases:
- agreeing a clause wording and examples of what will, and will not, constitute war between the five powers, and assessing use of a suspensory mechanism rather than automatic termination;
- reviewing whether a more flexible mechanism, potentially involving an independent expert panel, could reduce disputes. Discussions continue with the market, LMG, reinsurers and brokers.
Other geopolitical work
Engagement has covered government backstops for war and NatCat exposures, insurance affordability and cyber insurance penetration in the SME market. On NatCat, we met EU Commission representatives to discuss options for closing protection gaps in Europe.
International engagement
Insurance Europe and Global Federation of Insurance Associations (GFIA) conferences: Arabella Ramage and John Levett attended the Insurance Europe annual conference and GFIA Spring General Assembly in Brussels in May, engaging with other national trade bodies 1:1 on geopolitical risk and local market issues.
RIMS: Arabella Ramage, with Gavin Williams from Starr, presented The Questions you did not Know to Ask: Insurance Across Jurisdictions, covering hazards and pitfalls in international placements.
Legal
Legal Committee: Katy Wilson of Ascot succeeded Rhic Webb of Aegis as chair, with Matthew Hunter of Asta and Alexandra Smith of QBE joining as new members. The committee has considered AI governance and lessons from Russian aviation litigation in the context of the Middle East conflict.
LIC Managing Agency Outsourcing Agreement: The Legal Committee considered LIC-requested amendments, many from the NBB. The final agreement will be distributed to the market in August.
Enhanced underwriting: We published ‘Navigating the risks of enhanced underwriting’ in the International Comparative Legal Guides (ICLG) to Insurance & Reinsurance 2026, covering additional risks in enhanced underwriting models. The chapter is available on the LMA website.
Product liability legislation: The Legal and Claims Committees had input into the LMA’s representations in relation to questions asked by the Law Commission on the potential reform of product liability legislation in the UK and in particular the incorporation of information technology/AI into products.
EU Retail Investment Strategy (RIS) watching brief: Proposed RIS amendments to the EU Intermediation Directive that could have affected third-country broker and carrier branches were deleted, but related work is expected in the IDD review from 2027. The Legal and Regulatory Committees will maintain a watching brief.
Trainees: Jay Desai joined the Legal Wordings Trainee Scheme and Dorottya Tornai qualified into QBE’s legal department. Current secondments are:
- Max Gross – Convex
- Muhammad Hammad – Munich Re Syndicate
- Daniella Olu-Davies – Aegis
Emerging Litigation Forum
- Shoosmiths presented key litigation trends for 2026, including AI implementation risks. A summary is available here.
- Clyde & Co presented on recent litigation concerning social media addiction. A replay is available here.
Lawyers’ Forum: Kyle Moran and Alan Harrell of Phelps Dunbar presented on PFAS, toxic torts and public nuisance claims. Bob Haken and Will Reddie also presented on operational resilience following recent PRA policy statements.
Law and jurisdiction event: Harry Wright of 7KBW, Rani Noakes of 4 Pump Court and Katie Wilson of Ascot presented on the importance of law and jurisdiction in policies, available here. A US-focused follow-up is provisionally planned for 15 September.
FERN 3: Work has commenced in earnest on the review of FERN 3 aka the CPSA. We have engaged Clifford Chance in conjunction with the IUA to conduct a review of the draft contract.
Regulatory Committee
New members: Natasha Grasso (Berkley), Kevin Ball (Asta) and Natalie Dick (Riverstone) joined the committee in March, bringing new market perspectives.
International Forum: Simon French (Travelers) has taken over as chair for these sessions. Invites are now sent out as LMA bulletins so please sign up to attend these useful updates through the events page of the website.
Insurance Europe: The LMA has formally joined Insurance Europe, supporting our regulatory strategy and international influence. We are attending committees and reporting significant consultations through the Regulatory Radar.
Simplifying insurance rules: Following the FCA’s December 2025 policy statement, the LMA worked with members on market guidance, now published. We continue to lobby on the consumer definition and extra-territorial application of Consumer Duty, with further consultation expected in Q3.
PRA DyGIST: We supported risk colleagues on the PRA dynamic stress test, including Lloyd’s Market Day in February, and fed market reactions back to Lloyd’s and the PRA.
Non-Financial Misconduct: Following the FCA’s publication of updated guidance in December, the LMA coordinated with the IUA and LIIBA on a new webinar update to the market. This is available to rewatch here. We have also responded to the UK government consultation on use of non-disclosure agreements in employment disputes.
Operational Resilience: incident and material third-party reporting: March policy statements addressed several LMA concerns, but breadth and implementation remain issues. A working group is collecting views on proportionality and implementation costs.
Modernising redress and the Ombudsman Service: This work continues with more consultations released in Q1 alongside a policy statement. We are working with members of the RegCom and Conduct Committee on what work is needed in the application of these changes.
Lloyd’s Two Stage Complaints Process: The LMA supports moving from blanket Lloyd’s oversight to an outcomes-based approach focused on managing agent performance. Consultation ended in March, with implementation expected early next year.
Senior Managers and Certification Regime (SMCR): Phase 1 has gone live and phase 2 is expected for consultation later this year. The LMA is updating guidance and has circulated the FCA survey so managing agents can identify burdensome parts of the regime and support lobbying.
Saudi Arabia foreign reinsurer registration: The LMA worked with Lloyd’s international regulatory team to keep the market informed and requested an extension to the registration deadline. The deadline moved to the end of May and all managing agents are now registered. More information is available in Crystal+.
Financial Services Bill: We worked with the LMG and Lloyd’s on proposed changes to the draft bill to allow the PRA and FCA to rely on Lloyd’s for work such as on senior manager authorisation.
Other matters
Brazil: The LMA continues to work with local counsel on Brazilian regulatory changes. An amended Duty of Enquiry endorsement has been published, further endorsements are in development and we are working with Lloyd’s and the Brazilian insurance association on clause awareness and feedback.
India: Lloyd’s GIFT City platform in India went live in 2026 and the Lloyd’s multinational team also signed an agreement with a local fronting partner for use by the market on multi-national placements.
India have also begun the implementation of their mandatory Reinsurance placement platform ETASS Re.
The LMA is facilitating information sharing on these developments via our International Forum. Further information is available on Crystal +.
Cyber: We have created a simple modular SME product and are considering how cyber insurance can support key suppliers affected by cyber events. The SME product is being finalised.
Consultations: The LMA has reviewed and triaged 105 consultations and responded to 20, including The Mills Review into the long-term impact of AI on retail financial services:
- The European Commission Fighting online fraud – action plan
- The European Ocean Act
- CP25/37: Targeted clarifications of Handbook materials – FCA
- CP25/35: Quarterly consultation paper No.50
- European Commission: Climate Resilience Framework Consultation 2026
- CP25/33: Regulatory fees and levies: policy proposals for 2026/27 – FCA
- Product liability – law commission
- EU public procurement rules – revision
- Consultation on the Appointed Representative regime
- Ownership and Control Test in UK Financial Sanctions Regulation
- Complaints Handling at Lloyd’s
- Economic Crime Information Sharing
- CP 26/9: Modernising the Redress System
- Trade in a Turbulent World: How Should the UK Deploy Its Trade Instruments?
- HM Treasury Market Engagement Group
- Call for Evidence: Committee Inquiry – EU
- Call for Evidence: Committee Inquiry – US
- Targeted Consultation on the Competitiveness of the EU Banking Sector
- Microsoft Business Software and IT Services Market Investigation
The latest responses can be found on our website.
Arabella Ramage
Legal and Regulatory Director
Lloyd’s Market Association
Issued: 03 August 2026
