28 June 2016 Insurance

Brexit will have little impact on US activities of re/insurers

The UK’s decision to exit from the EU will have little immediate impact for re/insurers domiciled in both the UK and in EU member states from a US insurance regulatory perspective, according to Thomas Dawson, a New York-based partner at transatlantic law firm Drinker Biddle.

“Insurers already listed by US regulatory bodies to write insurance on a surplus lines basis are unaffected by the Brexit vote. The ability to write reinsurance in the US market has always been open to reinsurers worldwide - subject to collateral requirements,” he said.

“Relaxation of those collateral requirements—the still-evolving ‘certified reinsurer’ status—is open to reinsurers domiciled in approved jurisdictions (the UK, France, Germany, Ireland and Switzerland among them) —and so is unaffected by the Brexit vote.

“The future impact of the Brexit vote remains to be seen of but many in the industry will be monitoring progress of ongoing US-EU ‘covered agreement’ negotiations with the expectation that the UK Government will seek to begin bilateral ‘covered agreement’ US-UK talks, either standalone or as part of a wider trade agreement.

“Industry will also be watching with great interest as commercial innovation in the London Market—with respect to traditional products, ILS/capital markets developments, use of blockchain technology, etc - may now proceed without having to conform to EU-wide norms.”

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