19 May 2016 Insurance

EU legislation to remain whatever EU referendum outcome

An insurance adviser has said that most of the EU legislation that affects the insurance industry is likely “here to stay” whether the UK leaves the European Union or not in the referendum taking place next month.

Charles Portsmouth, director at insurance adviser Moore Stephens, said: “The UK as a whole and the insurance industry in particular are likely to want to retain access to EU market with a new trade deal.

“The UK insurance sector owes its world-leading status partly to its strength on the European stage and a major part of the UK industry’s revenues comes from Europe. To preserve these lucrative ties and be able to sell cross-border, UK-based insurers are likely to find they still have to comply with EU regulation.

He added: “In short, there are no simple answers to predicting what the world would look like on 24 June if the UK votes to leave the European Union. However, much EU legislation affecting the insurance industry is likely to be here to stay, whatever the referendum outcome.”

Portsmouth also said that in reality, a wholesale rollback of regulatory pressures originating from the EU after a ‘leave’ vote is unlikely.

“Major European-level initiatives such as Solvency II have already been incorporated into UK law; they are an integral part of the system in this country,” added.
Portsmotuh’s comments come after John Nelson, chairman of Lloyd’s of London, spoke out in favour of staying in the EU this week.

At Lloyd’s annual general meeting, Nelson said there would be “financial consequences” for the industry if the UK left the EU.

Nelson also said that many of the assertions are being made by those, who have “little up to date working knowledge of trade relationships and agreements”– something which he said his team at Lloyd’s are involved in globally, every day of the week.

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