British insurers hope for ‘equivalence’ in Brexit deal
The Association of British Insurers (ABI) is welcoming the prospect of a Brexit deal that includes a regulatory equivalence regime for financial services with the EU enabling mutual market access.
An equivalence regime would mean that the EU recognises the financial services standards and their enforcement in the UK as equivalent to the EU. In theory, both parties would remain free to set their own standards and market access as long as regulatory outcomes are broadly the same. The EU has developed an equivalence approaches for financial services with Japan, the US and Canada.
“It is vital for our industry’s customers that we have an orderly withdrawal process and transition period and any progress towards that is welcome,” said Huw Evans, ABI director general. “Regulatory co-operation is very important and must follow from any political agreement. We are pleased to see today’s commitment to assessing equivalence as soon as possible,” Evans said.
For the UK, there is, however, the risk that the country loses control over the its regulatory framework.
“The crucial longer-term test is whether our future relationship with the European Union avoids our world-leading insurance & long-term savings sector becoming a rule-taker. It remains far too early to judge whether we will be able to avoid that fate.”
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