Business as usual for re/insurance industry post-Brexit
It will be largely business as usual for the re/insurance industry during the Brexit transition period and attention will focus on the details of the future trade deal that is due to come into force next year, according to Ivor Edwards, a London-based partner at international law firm Clyde & Co.
“There is limited expectation that passporting rights will be maintained under a freedom of service agreement but hope that market access arrangements based on equivalence will be agreed quickly,” he said.
“However, this is not a cause for concern. The London market has been fully preparing for a hard Brexit scenario and the vast majority of UK carriers have set up subsidiaries in the EU location they believe best supports their business and their clients’ interests going forward. These subsidiaries have already begun renewing 2020 business, so the industry is well prepared for the post-Brexit world. That is not to say that there won’t be teething problems. Regulators will be on the front foot and it will take time for things to bed down.”
He added that EIOPA has provided non-binding guidance on how business should be conducted, but there is already evidence that the French and German regulators will decide their own course of action and many EEA regulators already have a differing approach.
“Fortunately, there is the transition period where the status quo is maintained, which will allow time to ease a market dislocation on this scale,” said Edwards. “Perhaps the final concern is regarding jurisdiction. Will UK judgements be enforceable in the EU? Will lack of certainty cause disputes or litigation to be delayed or speeded up in order to try and deal with matters that are in dispute before the transition period ends? Court guidance suggests it may be necessary to commence proceedings suddenly where delay ‘might prompt forum shopping in other jurisdictions’ but also that there will be flexibility. Companies should take advantage of these arrangements while they can.”
