Lloyd's Market Association
LMA
The Lloyd’s Market Association (LMA) represents the interests of the Lloyd's community, providing professional and technical support to our members.
ID: 860493237366-08
Lobbying Activity
22 Feb 2022
The Lloyd's Market Association (LMA) exists at the very heart of Lloyd's, a world-leading global marketplace for complex risk where solutions to challenges are delivered every day. All 51 Lloyd's managing agencies, who write approximately £36 billion of premium per annum, and all Lloyd's members agents, are members of the LMA.
We represent our members' interests to organisations including governments, regulators, and the market's central supporting body, the Corporation of Lloyd's.
Opening Comments
1. We welcome the amendment of Article 506 in the revised CRR and its mandated review of the eligibility and use of insurance as credit risk mitigation, noting its importance not just to our European members but to European banks and their ability to provide financing of the global economy.
2. Similarly, we appreciate the continued engagement with the European Commission, the European Banking Authority (EBA), and other relevant stakeholders in discussing the treatment of credit risk insurance within the CRR and Basel III framework.
3. We would emphasize that additional data has been gathered that is relevant to the treatment of credit risk policies under Basel III, but was not available to be considered by the EBA when it issued its Opinion in March 2020. We would stress the importance of reviewing this data, as it evidences the views put forward by Associations and firms as to the exemplary performance and reduced risk posed by insurance products in this context. The IUA has worked with ITFA, ICISA, LMA, the International Association of Credit Portfolio Managers (IACPM) and others in collecting this data that validates banks’ reliance on credit risk policies as effective credit risk mitigation.
4. With this context, we have provided views on why the nature of credit risk insurance products warrants specific recognition of their unique characteristics in light of their reliable performance as an effective credit risk mitigant and regulated priority treatment of banks as policyholders. In addition, we have made suggestions as to how the review process outlined in Article 506 could be improved.
Please see attached document for our views on Credit Risk Insurance Products and the Review Process.
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