Insurers urged to prepare for Brexit no-deal

The European Insurance and Occupational Pensions Authority (‘EIOPA’) – the EU’s regulator for the insurance industry – recently published an Opinion on service continuity in the absence of any trade deal between the EU and the UK.

Addressed to insurance undertakings and national supervisory authorities, the Opinion underlines the importance of sufficient preparation so as to continue to service existing contracts post-Brexit.

Although insurers will, no doubt, have given consideration to their post-Brexit options, EIOPA has spelt out the need to consider:

• the transfer of insurance contracts in the UK with policyholders in the #EU27 to subsidiaries established in a Member State
• the transfer of insurance contracts in the #EU27 with UK policyholders to subsidiaries established in the UK
• establishing a branch in the UK or, as the case may be, the #EU27 Member State of the policyholder
• changing the country of domicile for a UK-based EU company to an #EU27 Member State

Further, it is recommended that insurers have contingency plans in place for a no-deal.

Gabriel Bernardino, Chairman of EIOPA said: 'It is essential that insurance undertakings consider all eventualities, including the possibility of no political agreement at the date of withdrawal. I call on all insurance undertakings and national supervisors to plan effectively and take the necessary steps in good time to ensure that policyholders and beneficiaries are not exposed to unnecessary uncertainty regarding the status of their contracts. To facilitate cooperation and the exchange of information EIOPA established a high-level cooperation platform for supervisory authorities on Brexit-related topics.'   

What is apparent is that the post-Brexit insurance landscape remains uncertain and that insurers should not make any assumptions about the kind of trade deal that might be reached.

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