Lloyd’s of London has stopped insuring marijuana industry firms of any kind due to conflicts between federal and state laws over their legality.
In a May 29 memo addressed “Dear Colleague,” obtained by Insurance Journal, Lloyd’s Director of Performance Management Tom Bolt wrote to U.S. Syndicates that the company has considered various requests with respect to insuring marijuana or marijuana related businesses, either medicinal or recreational in the United States, and has determined that it no longer will support insuring marijuana operations of any kind until the drug is formally recognized by the U.S. government as legal.
“Any policies of this type that are currently in force should not be renewed and no new business should be written. Existing quotes issued before today should be notified to your Syndicate Underwriting Performance account executive who will consider on a case by case basis whether the quote may be honoured,” Bolt wrote in the memo.
Lloyd’s confirmed the London insurer’s exit through the following statement to Insurance Journal, which contains similar language to the original memo:
“Currently, marijuana is listed as a Schedule 1 drug under U.S. federal law, which means that it is not legal for sale. In addition, cash generated from the sale of marijuana may implicate federal Anti-Money Laundering laws. Nevertheless, a number of states have passed laws that permit the sale of marijuana for medicinal purposes and additionally a smaller number allow its sale for recreational purposes.
Source: Insurance Journal