Germany to extend UK insurers passporting rights in event of no deal Brexit
As the clock ticks down on Brexit, Germany has adopted a provision to extend passporting rights for UK insurers if there is no deal.
The German legislator has put preliminary provisions in place to authorise temporary extensions to passporting rights for UK financial institutions including insurers for up to 21 months.
The European Insurance and Occupational Pensions Authority (EIOPA) said UK insurers will not be able to service existing insurance contracts after the lapse of their passporting rights if there is no-deal. The authority said regulators could “restrict the issuance of a new authorisation of these UK firms to the winding-up of existing business, thereby speeding up the authorisation procedure”.
EIOPA said national authorities should allow the finalisation of portfolio transfers by UK insurers without an authorisation post-Brexit long as the process was initiated before the withdrawal date.
Henning Schaloske, partner at Clyde & Co in Dusseldorf, said: “This is a welcome move by the German legislator to remove some of the uncertainty for both insurers and policyholders in the event of a no-deal Brexit, which is increasingly being seen as a very real possibility.
“The extension of passporting rights for up to 21 months post-Brexit is a significant development and should provide sufficient time for the resolution of outstanding contracts but it is important that regulators across the EU continue to work together in a spirit of cooperation to address issues relating to cross-border insurance."
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