Change in Status of Insurance Written in the USVI By Underwriters at Lloyd’s of London
Recently, Lloyd’s made a decision to change the way it would operate in the U.S. Virgin Islands and two states in the U.S. For many years, Lloyd’s operated exclusively as a Surplus Lines insurer in 48 of the 50 states and the territories, with the exception of the USVI. In Kentucky, Illinois and the USVI, Lloyd’s has operated both as a licensed insurer and as a Surplus Lines* insurer. A little over a year ago, Lloyd’s made a decision to operate exclusively as a Surplus Lines insurer in all U.S. jurisdictions.
Underwriters at Lloyd’s will continue to underwrite insurance in the USVI, but only on a Surplus Lines basis, after a transition period that begins on January 1, 2022. The transition period will end on January 1, 2024 at which time all Lloyd’s insurance policies will be Surplus Lines. Since Virgin Islands law requires that automobile insurance is written by a licensed insurer, soon Lloyd’s will not be able to write primary automobile insurance in the territory.
To maintain availability of the automobile insurance products that we have developed with Lloyd’s underwriters over the last 20 years, we have worked with other licensed carriers to write policies at the same rates and with the same features as our auto policies previously underwritten by Lloyd’s. Certain underwriters at Lloyd’s remain involved in providing reinsurance for these policies.
*A Surplus Lines insurer is an insurer that operates in a jurisdiction with permission of the regulators, but does not hold a license in that jurisdiction. It is important to note that insolvency of a Surplus Lines insurer is not covered by the Virgin Islands Insurance Guaranty Fund.