21 February 2019
EIOPA recommendations offer some clarity for the Insurance sector in case of a Hard Brexit
On Tuesday 19 February 2019, the European Insurance and Occupational Pensions Authority ("EIOPA") issued Recommendations for the insurance sector if the United Kingdom ("UK") withdraws from the European Union (EU) without a withdrawal agreement. The Recommendations are addressed to National Competent Authorities ("NCAs") and apply on a 'comply or explain' basis, with two months given to explain non-compliance. In line with previous EIOPA recommendations, we anticipate that Member States will comply.
UK insurers have for a long-time been calling for clarity as to their ability to service existing contracts after Brexit, with EIOPA only acting after some national governments, including Germany, France, Spain, Italy and Ireland, began to put their own laws in motion and started to deviate from the tightly controlled Brexit withdrawal negotiation process.
Tuesday’s Recommendations are broadly speaking helpful for UK insurers but the situation for the UK intermediaries that introduce the vast bulk of risks into the London market and for EU based insurers who seek to source EU business via UK intermediaries remains uncertain.