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Marian Boyle, partner and head of Sullivan’s UK insurance and disputes practices, has co- authored ITFA’s guidance note on "Regulatory Requirements and Market Practices for Legal Opinions in Credit Insurance" published today by ITFA’s Documentation Working Group, of which she is a member.

The paper summarises the results of a survey of ITFA members in relation to market practices in obtaining legal opinions when using credit insurance as credit risk mitigation (CRM) under relevant Basel Capital Accord rules and the legislation that implements it. The results were presented at the ITFA Insurance seminar in Paris in June 2023.

The paper also provides guidance on the regulatory requirements for external legal opinions, the scope of enforceability opinions, the extent to which certain aspects are addressed by independent legal opinions or by other means, including a bank’s own policies, the use of generic opinions and the frequency of updates. 

It provides commentary on the different approaches between banks for reasons beyond regulatory interpretation, such as a bank’s familiarity with the credit insurance product and how frequently it uses the credit insurance market.

Available to ITFA members here (log in required), the note will be a useful reference point for bank users of credit insurance when tackling the subject of regulatory legal opinions.

For further information about use of legal opinions when using credit insurance as unfunded CRM under relevant Basel capital rules and implementing legislation, please contact Marian Boyle.