Brexit will undoubtedly have an impact on the insurance sector. The extent of the impact will depend on the negotiations between the UK Government and the EEA. An important question is whether the passporting system will be continued. This system allows UK insurers, reinsurers and insurance intermediaries to underwrite insurance policies and provide insurance services in the EEA and EU insurers, reinsurers and intermediaries to conduct insurance business in the UK.
In the scenario where the UK would leave the EU without a transitional arrangement (“hard Brexit”), the Belgian government wishes to protect insurance clients and to allow the execution of contracts concluded prior to Brexit.
In order to safeguard the business of insurance companies and insurance intermediaries working with (UK) underwriting agents, the Brexit Act also creates the category of ‘underwriting agent’, in line with the existing regimes in the UK and in the Netherlands.
Underwriting agents will be required to register with the FSMA as insurance intermediaries. They will be subject to the same registration conditions as insurance brokers (the strictest regime), and to the same conditions for carrying out the activity than other intermediaries (including new rules of conduct resulting from the transposition of IDD).
Insurers, reinsurers and insurance intermediaries who want to continue to have access to the UK or to the EEA market will need to consider:
As the scenario of a hard Brexit is approaching quickly, we recommend that insurance businesses engage now in an exercise of identifying issues and considering options related to Brexit.
In a recent FSMA Communication regarding the consequences of Brexit on the provision of investment services and performance of investment activities, the FSMA invites the companies concerned to act very carefully with their analysis. For the FSMA it is therefore not realistic to consider that all things can remain equal notwithstanding Brexit.
If you have any questions, send us an e-mail (email@example.com)
or contact Sandra Lodewijckx, + 32 2 787 90 33 or firstname.lastname@example.org
or Hugo Keulers, + 32 11 26 00 40 or email@example.com