On 5 March 2018, Insurance Europe, the European (re)insurance federation, published an updated version of its paper which explains the consequences of Brexit on existing insurance contracts and proposes government-level solutions for dealing with these issues.
Many of the consequences of Brexit are now widely understood, such as the loss of passporting rights and the potential difficulty which a UK (re)insurer will have paying claims of European policyholders after Brexit (and vice versa). The updated paper therefore focusses on the solutions to these issues.
The paper’s key messages are that:
- a transition period is required to allow (re)insurers’ Brexit plans to be completed, as the amount of work which is needed to prepare for Brexit is too great to be completed by March 2019.
- “Grandfathering” is needed for certain types of business, particularly for portfolios where the UK assets and liabilities cannot easily be split from the EU assets and liabilities, and for long-term (re)insurance contracts where a portfolio transfer is not impossible or would be too expensive.
The paper also identifies that the European Council’s negotiating directives require the European Commission to negotiate an agreement that allows any goods placed on the market before Brexit to continue to be available after that date, and calls for a similar treatment for cross-border services to be considered and agreed as soon as possible.
For more information on Brexit solutions for (re)insurers and intermediaries, see our briefing here: http://www.hfw.com/Insurance-and-reinsurance-Brexit-considerations.