Ordinance n°2019-75 published on 6 February 2019 which will come into force in case of a Hard Brexit confirms that British insurers operating in France under a European passport will be able to service contracts made prior to Brexit even if they lose their passporting rights upon Brexit being effective.
Enacted pursuant to the law of 19 January 2019, which enables the French government to enact measures in preparation for the withdrawal of the UK from the EU without an agreement being reached under article 50 of the European Union Treaty, the ordinance confirms that these insurers can continue to perform any such insurance contracts. However, insurers will not be able to renew these policies nor issue new premiums: any renewed contracts would be void. Interestingly, this nullity cannot be relied upon against the policyholder, the insured, or a beneficiary of the policy.
The ordinance therefore protects insureds against the effects of the loss of the European Passport as underlined in the Report to the President of the French Republic in support of the Ordinance: “the ordinance validates the mere performance of contracts that does not involve the issuance of premiums".
The text also clarifies the powers of the French Regulatory body (ACPR) in relation to acts committed before Brexit by entities falling within the scope of its powers at the date of the infringement. ACPR proceedings will not be invalid for the sole reason that the entity’s licence is no longer recognised in France. The ACPR may also initiate sanction proceedings post-Brexit for acts committed before Brexit.
Finally, the ordinance specifies that the ACPR remains in charge of ensuring, after Brexit, compliance with French rules by contracts concluded before Brexit under the freedom to provide services or the freedom of establishment where performance of these contracts continues after Brexit, in so far as French rules are applicable (bearing in mind that the main supervisory role lies with the British regulatory bodies).
This ordinance therefore provides useful clarification in anticipation of a Hard Brexit, on an issue that was strongly debated on the basis of the existing provisions of the French insurance code. It will also give UK insurers some comfort that they will not be breaking French law by continuing to service insurance contracts written in favour of French insureds.