ITFA Guidance Note on Regulatory Requirements and Market Practices for Legal Opinions

The Documentation Working Group commissioned a survey of ITFA members on market practice surrounding banks’ approaches and requirements 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 findings were presented at the ITFA Insurance seminar in Paris in 2023. 

The Documentation Working Group has produced this guidance note on the regulatory requirements on legal opinions and on market practices as informed and supported by the survey results.

The note addresses 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. 

There are differences in 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.

The note provides detailed commentary on these different approaches and will be a useful reference point for bank users of credit insurance when tackling the subject of regulatory legal opinions.

The document can be found here » Insurance (itfa.org). Should you have any questions, kindly email us on info@itfa.org.