Recap of Issues Resulting from Brexit

Thu Dec 17 2020

Dear Member,

With a no-deal or extension, the United Kingdom will no longer be a part of the EU’s Single Market and Custom’s Union from 31 December 2020. With this in mind, we would like to recap members on the key issues that are likely to impact Brokers:

  • Dealing with UK Markets
  • Dealing with UK Clients
  • UK/NI Drivers Licence Exchange
  • Data Protection and Standard Contractual Clauses


Therefore, after 31 December, UK markets authorised by the FCA will no longer be permitted to passport into Ireland.

What does this mean?

 UK Markets (Insurers, MGAs, Wholesale Brokers etc)

Irish insurance intermediaries will no longer be permitted to place risks with UK based markets as UK markets will no longer be able to avail of the EU passporting regime. Many of these markets have set up separate legal entities in Ireland (or another EU member state) and will continue through their Irish/EU entity to conduct business as usual in respect of EU risks.   If these UK markets have not set up in the EU, brokers will have to find alternative markets.

Some UK markets have established an entity in another member state, and is authorised in that state, with a branch office in the UK.  The local governing laws of where the entity is established and authorised, will dictate how this may proceed.  The Central Bank of Ireland (if the registered office is in Ireland with branch address in the UK) would look at these situations on a case by case basis.

It should also be noted that if a Broker intends to place business with an EU Insurer, they must check that the Insurer’s passporting arrangements into Ireland are in place.  Refer the Central Bank Registers.

A significant number of Irish intermediaries place risks through UK wholesalers/MGAs in order to access certain insurance markets for particular risks.    A number of these UK wholesalers and markets have not relocated to Ireland or other EU member state.  If UK wholesalers/MGAs wish to continue to be involved in distribution activities for EU risks, placed with EU insurers, after the withdrawal date, they must be established and registered in the EU.  Under IDD they will not be permitted to place the risk otherwise.

For UK markets with clients in Ireland, existing legislation (Withdrawal of the United Kingdom from the European Union (Consequential Provisions) Act 2019) provides a run-off regime, which, subject to a number of conditions, will enable UK insurers and intermediaries that do not wish to be established in Ireland or other EU member state, to continue to fulfil contractual obligations to their Irish customers for a period of three years after the transition period ends. Therefore, after 31 December, they will be unable to write new insurance contracts for your Irish clients or renew existing ones.  It should be noted that a new piece of legislation, Withdrawal of the United Kingdom from the European Union (Consequential Provisions) Bill 2020, is being proposed which will extend the run-off period to 15 years.  It has passed through both Houses of the Oireachtas and awaits signature of the President.

 In summary

If the customer is EU based, then all parties in the chain, from intermediary, to MGA, to underwriter, are required to be regulated in the EU.  Irish based intermediaries including MGAs/Wholesale Brokers will no longer be able to place business with UK providers.  Brokers must ensure that any UK or Gibraltar based entities with which they place business are authorised in the EU. Insurance intermediaries in the EU including Ireland must only use the insurance distribution services of other EU registered Firms.

Brokers must take every precaution in preparing for the end of the transition period.  It is the responsibility of each member to ensure that all insurance undertakings or distributors, with which they engage, have or will have, the appropriate licensing/authorisations to underwrite/place EU risks for EU policyholders.


Equally Irish intermediaries with UK clients, must have in place the appropriate arrangements if they wish to continue to service their clients after 31 December. 

Temporary Permissions Regime and Financial Services Contracts Regime

Members, with clients in the UK that wish to continue to service them, are aware that they must register with the FCA (using their Connect system) by 31 December.  Once registered with the FCA they will under the UK Temporary Permissions Regime (TPR) be deemed to have permission to continue to service these clients on a temporary basis until the firm has completed the full application process with the FCA.  We understand the FCA has been in contact with all intermediaries that are registered to advise of their obligations and requirements.

If a Broker has already registered with the FCA to avail of the TPR and has since decided that this is the route that they no longer wish to pursue the broker must email the FCA before the 31 December and advise.  The Broker may be required at that time to register under FSCR.  The broker will be advised by the FCA of necessary steps to be taken.

If the intermediaries with UK clients do not apply for the TPR they will automatically be subject to the Financial Service Contracts Regime (FSCR) which was introduced by the UK Government to ensure existing contractual obligations not covered by the TPR can continue to be met. The FSCR will permit UK contracts entered into pre-31 December to continue to be serviced, so that it can wind down / run–off business in an orderly fashion.  No new business or renewals can be written under the FSCR.  The FSCR will apply for a period of 15 years for insurance contracts.

FCA Consultation – Their Approach to International Firms

Meanwhile, The FCA has published a Consultation Paper (CP 20/20) which sets out their general approach to firms providing or seeking to provide financial services that require authorisation in the UK. Brokers Ireland made a submission with emphasis on the requirement not to be established in the UK if providing services to UK based clients.  Given the substantial economic and geographical ties between Ireland and the UK, the loss of the current passporting regime will greatly affect our membership, particularly brokers who are located in border counties and have to date been transacting business on a freedom of services basis.

The proposed authorisation process, whereby, a physical presence is required for authorisation will pose a significant barrier for entry for these Brokers who are typically SME businesses.  The economies of scale for most of our members will not justify the establishment of a branch. Brokers Ireland will keep you informed.


The National Driver Licence Service (NDLS) issued a final reminder to anyone resident in Ireland with a UK / NI driving licence to exchange their licence now, as their UK/NI licence will not be valid to drive here after 31 December 2020.

While the UK has left the EU, a transition period was agreed that allowed for the exchange of driving licences to continue. That transition period ends on the 31st of December 2020. If the UK/NI licence holder is resident in Ireland, the NDLS have stated that the licence will no longer be valid in Ireland after this date.

Members should be cognisant of insurability and UK licences. It is up to insurers as to what position they adopt with an insured that still has a UK licence. it is possible that some drivers who still have UK licences may not be in a position to obtain quotes from some insurers.  There is no market wide agreement yet on this. Brokers Ireland requested more information from insurers. We will keep members up to date on responses.

If not done so before now, Brokers may wish to contact their clients which fall under this category advising of the situation.  It is vital that your clients have a valid driving licence and that they are legally allowed to drive in Ireland by exchanging a UK licence for an Irish driving licence.

Affected clients should make an application to the NDLS as soon as possible.  It should be noted there may be delays caused by a last-minute increase in applications, plus extra demand on the service due to Covid-19.

See NDLS for further information.


Are you, or your data processors, transferring personal data to the UK? 

Brokers should be mindful of where their data is being transferred, particularly, if it is currently being transferred to the UK.  If there is a No Deal Brexit, the UK will become a third country in relation to the EU and the transfer of personal data from the EU/EEA to the UK will be subject to the conditions governing third country data flows.

Examples of transfers of personal data:

  • The Insurer with whom brokers are placing business are transferring the data to the UK (e.g. their storage facility is based in the UK)
  • Outsourced HR/IT/Payroll functions to a UK based firm
  • Storage of data in the UK on a server or on the cloud (which would include Back office suppliers/EDI quote engine providers)
  • Use of marketing company based in the UK (or with storage facility in the UK) to send marketing communications to a customer database.

What this means in practice is that, in order to comply with GDPR rules, if an Irish business is transferring, or intending to transfer, personal data to the UK it will need to put in place specific safeguards to protect the data in the context of its transfer and subsequent processing.   The GDPR provides several solutions which allow the transfer of personal data from the EU/EEA to a third country. One such safeguard includes the use of “Standard Contractual Clauses” (“SCCs”).

Brokers should ensure, operationally, transfers are conducted and managed in a way that ensures personal data is at all times protected to the level expected by the GDPR and that the obligations assumed by the parties under the terms of their SCCs contract are in fact discharged in practice.

The Broker will always be the Data Controller (exporter of the data).  There are two types of SCCs;

  1. Data Controller (exporter) to Data Controller (importer). This would be used between the broker and the insurer that processes the data in the UK.  Both parties are Data Controllers.  The insurer imports the data and transfers it to the UK (for storage or other processing).  If insurers, who transfer data to the UK, have not provided you with the SCC as yet, you should provide it to them.  See sample SCC here.
  2. Data Controller (exporter) to Data Processor (importer). This would be used where the broker uses other data processors, such as CRM/HR/IT/Payroll functions based in the UK or processors based in Ireland with cloud storage facility in the UK (Applied and OpenGI).  The onus is on the broker (being the Data Controller) to provide these data processors with the SCC.  See sample SCC here.  However, it is permissible to use an SCC created by a data processor such as your CRM provider if the clauses match, at a minimum the sample provided, and otherwise does not breach GDPR.

In October the European Court of Justice issued a judgement which stated in effect that it will be illegal to transfer data to the UK after 31 December as it allows unrestrained access by its intelligence services without any independent or judicial oversight.

Regardless, at a minimum, brokers as data controllers, have an obligation to ensure that GDPR appropriate safeguards are in place, such as the SCCs.   Although this does not resolve the UK oversight issue, it does provide some level of protection.

Brokers Ireland will advise members of any developments in this area.

Kind Regards

Elizabeth SmithWright

Head of Compliance


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