Brexit – Commission’s notice on Withdrawal of the UK and EU Rules in the Field of Insurance/Reinsurance
Wed Feb 14 2018
NOTICE FROM BIPAR
Executive summary: European Commission’s notice to stakeholders on withdrawal of the UK and EU rules in the field of insurance/reinsurance – Significant uncertainty for insurance intermediaries offering cross-border contracts- Important risk posed to their clients – Inform your members
Please find attached a notice issued last week by the European Commission on the consequences of Brexit for insurance companies and insurance intermediaries.
It is today impossible to have a clear understanding of the future relationship between the 27 EU Member States and the UK. The uncertainty for insurance intermediaries offering cross-border contracts is significant. The risk posed to their clients is also important.
We therefore encourage you to inform your members, and in particular those who offer cross-border contracts, on the attached notice that focuses of the following legal repercussions which need to be considered when the UK becomes a third country (i.e. a country that is not member of the EU):
- Authorisation: UK insurance undertakings will lose the Solvency II authorisation to provide services in the European Union. Branches of UK insurance undertakings in the EU will need an authorisation in the EU Member States to be able to continue to do business.
- Insurance/reinsurance intermediaries registered in the UK will no longer benefit from their registration rights under the IDD and will therefore no longer be able to conduct business in the EU on the basis of their UK registration.
- Continuity of insurance contracts: The loss of EU authorisation may affect the ability of UK insurance undertakings to continue performing certain obligations and activities and ensure service continuity with regard to contracts concluded before the withdrawal of the UK from the EU. Concerned firms should assess impact and, in cooperation with the relevant national supervisors, identify and mitigate risks.
- Information disclosure : according to art. 17-25 of IDD (i.e. the articles dealing with information requirements and conduct of business rules), policyholders/customers should be informed about the impact on their rights and on the provision of insurance services that may emerge from the withdrawal of the UK, including the upcoming loss by the relevant intermediary (or undertaking) of its EU authorization.
