Brexit: the implications for insurers
A withdrawal of the UK from the EU, whenever and however it happens, will have important ramifications for the global insurance industry. At present, given the uncertainty over what form Brexit might take, many (re)insurance sector companies have been forced to assume, and prepare for, a “hard Brexit”, ie one with no transition period or agreed relationship come March 2019. The PRA (the UK prudential regulator) has requested that firms plan for all eventualities, and submit their contingency plans to the PRA.
EIOPA (the European Insurance and Occupational Pensions Authority) issued an opinion on 21 December 2017 looking at issues which will arise upon the withdrawal of the UK from the EU, and on 08 February 2018, the European Commission issued a Notice to Stakeholders highlighting “certain legal repercussions which need to be considered when the United Kingdom becomes a third country”. Subject to any withdrawal agreement and/or transitional arrangements, these include that:
- UK insurance undertakings will lose their “EU passport” by which they are authorised to provide insurance services in the EU. This may affect the ability of UK insurance undertakings to continue to perform obligations and services even under contracts concluded pre-Brexit.
- Branch offices will need local authorisation, and will only be able to conduct business in the Member State which has granted the authorisations. Full subsidiaries established and authorised in an EU27 state will still be able to operate as EU insurance undertakings, and will be subject to EU rules.
- We look at the implications in more detail in our briefing note Brexit : the implications for insurers. Lloyd’s has established a European insurance company in Brussels - those wishing to bind EEA risks after Brexit will need approval from Lloyd’s Brussels. Many insurers have restructured their European businesses and/or set up subsidiaries or branches in an EU27 country to anticipate the risk of ‘no deal’, and/or an ongoing relationship with the EU27 beyond the transition period which does not allow ‘passporting’ or its equivalent.
See our briefings below for more information.
Our analyses of the impact of Brexit on Dispute Resolution, Data Protection, Employment, Financial Services and Tax may also be of interest.
This document (and any information accessed through links in this document) is provided for information purposes only and does not constitute legal advice. Professional legal advice should be obtained before taking or refraining from any action as a result of the contents of this document.