Theresa May’s confirmation in mid-January that the UK will leave the single market following its departure from the EU seems to signal that UK (re)insurers and intermediaries will lose their passporting rights, and with it the ability to access European markets without further authorisation. It is too early to say whether a bespoke deal might be agreed which will enable access to continue in one or both directions, or the form that this access might take, but European regulators have wasted no time in seeking to attract UK (re)insurers and intermediaries to their jurisdictions.
It is understood that the Maltese, Irish and German regulators have spoken to UK (re)insurers and/or intermediaries about redomiciling to their jurisdictions, although it is believed that at least some of the contact with the European regulators has been initiated by the (re)insurers and intermediaries in question. Representatives of the Malta Financial Services Authority visited London this month to meet with interested parties, the Central Bank of Ireland has confirmed that it is speaking to UK-based insurers about establishing subsidiaries in Ireland, and BaFin has launched a dedicated contact form for companies that are interested in moving to Germany. For as long as the UK remains part of the EU, UK (re)insurers can undertake an insurance business transfer, effect a cross-border merger or convert into a Societas Europaea (SE) and migrate the SE into another EU state. It is likely that these methods, which in many respects compare favourably to the process of establishing and obtaining authorisation for a subsidiary in another EU state, will be lost following the UK’s final exit from the EU. It is therefore no surprise that some (re)insurers and intermediaries have decided to act now, and no surprise that European regulators are making an effort to attract their business.
Although many aspects of the UK’s exit from the EU remain unclear, it would be wise for (re)insurers and intermediaries to consider contingency plans now.