08 August 2016
Brexit: Passporting and equivalence implications for the UK insurance sector
The implications of Brexit for EEA authorised insurers, reinsurers and intermediaries, including those currently authorised in the UK, will largely depend on the legal agreements governing the basis of the UK’s future relationship with the EU. Although these are subject to negotiations, there are some certainties in the UK's favour: a respected regulatory system, the likelihood of securing Solvency II equivalence, and an environment of conservative capital management – all of which make the UK a stable and competitive participant in global insurance markets.
Access to the Single Market for UK authorised insurers, reinsurers, and intermediaries and to the UK market for those authorised in the rest of the EEA will continue until the lapse of the two year exit period following a notification under Article 50 of the Treaty of the Economic Union (TEU) or at an earlier date agreed between the UK and the EU. Article 50 now looks unlikely to be triggered until at least the end of 2016.
Before exit and before the necessary legal agreements are agreed, uncertainty will remain. This briefing note sets out a preliminary view on the potential longer term position in the insurance sector and the factors for insurers to take into account in their contingency planning.Download