The Central Bank of Ireland has published a special edition of its Intermediary Times newsletter containing important information relevant to Irish insurance intermediaries in relation to service continuity post-Brexit (the "Newsletter").
The Central Bank reminds Irish insurance intermediaries passporting into the United Kingdom (UK) to take the necessary steps
- to prevent conducting insurance mediation activities without registration and
- to ensure service continuity with regard to insurance contracts mediated before the date of the UK's withdrawal from the European Union on 30 March 2019, or on the expiry of any agreed transition period (the "Withdrawal Date").
The message from the Central Bank applies similarly to all UK-registered intermediaries passporting into Ireland. The Central Bank points out that the UK will become a third-country after the Withdrawal Date and accordingly Irish insurance intermediaries will no longer be able to provide services in the UK on the basis of their current registration (and vice-versa from the perspective of a UK intermediary passporting into Ireland).
Proposed Temporary Permission Scheme
In the Newsletter, the Central Bank refers to the UK Government announcement from December 2017 that, if necessary, it will legislate for a temporary permission scheme for firms passporting into the UK (including Irish registered insurance intermediaries). The receipt of a temporary permission would enable a firm to undertake new business within the scope of its permission and fulfil existing contracts with UK customers for a period of time after the Withdrawal Date, while seeking full authorisation in the UK. Some details of the proposed temporary permission scheme are available on the website of the UK's Financial Conduct Authority (FCA) here.
The Newsletter sets out necessary steps which the Central Bank expects all Irish registered insurance intermediaries passporting into the UK to undertake with regard to their Brexit contingency planning as follows:
- assessing the impact of Brexit on their business, including the impact on service continuity of insurance mediation contracts concluded by way of freedom of establishment and freedom to provide services;
- developing contingency plans that set out measures to prevent insurance mediation activity without registration and to ensure service continuity after the Withdrawal Date (taking account of the FCA's proposed temporary permission scheme); and
- implementing necessary measures to prevent insurance mediation activity without registration and to ensure service continuity by the Withdrawal Date.
The Central Bank states that it is incumbent on Irish insurance intermediaries passporting into the UK, and UK intermediaries passporting into Ireland, to take the action required to prevent conducting insurance mediation activity without registration and ensure service continuity regarding insurance contracts mediated before the Withdrawal Date. The Central Bank encourages relevant intermediaries who are considering applying for registration in the UK to complete the FCA's online survey in advance of the closing date of 11 May 2018.
We understand that the Central Bank has written directly to Irish insurance intermediaries on the same topic outlining its views as described in the Newsletter.
To access the Newsletter, please click here.