XL Group Ltd., which does business as XL Catlin, said Monday it has introduced a contract continuity clause addressing the risk that contracts written by XL’s London-based entities prior to Brexit may become impermissible if passporting rights are lost due to the United Kingdom leaving the European Union.

The Hamilton, Bermuda-based company said in a statement that the clause is intended to be included in insurance policies written by Catlin Insurance Co. (UK) Ltd., (CICLUK) and XL Catlin’s syndicate 2003 at Lloyd’s of London.

XL Catlin said these two entities will remain in the UK after XL Insurance Company SE (XLICSE) – the main insurance company platform for XL Group within Europe and Asia – moves to Dublin, Ireland, subject to regulatory approvals.

Moving XLICSE is simplified by the entity’s status as a Societas Europaea, XL Catlin said, which means it can continue as the same legal entity and move to Ireland with relative ease (and without a court-sanctioned portfolio transfer) to the benefit of XL Catlin’s business, its clients and to brokers. The move also means that XLICSE’s policies do not need to rely on the clause.

On Sept. 19, XL Group Ltd. said it would move XL Insurance Co. S.E., its principal European Union insurer, to Ireland from the United Kingdom this year in response to Brexit.

The clause mirrors standard London Market continuity clauses, XL Catlin said, with some key differences.

Among other things, the clause makes XLICSE an additional party to the policy from inception as a contingent insurer with the aim of providing continuity of cover for clients.

If, post-Brexit, a policy’s performance becomes impermissible in whole or in part and cannot be amended to enable CICLUK or the Syndicate 2003 to perform it permissibly – XLICSE-assuming that XLICSE has moved to Dublin within the time period expected – will automatically be contractually obliged to perform it or any part of it, assuming it can do so permissibly.

If XLICSE cannot perform the policy, only then is it automatically cancelled with a pro-rata return of premium, subject to no claims having been notified.