Insurance

What's happening?

The withdrawal of the UK from the EU (Brexit) had important ramifications for the global insurance industry. It seems likely from political statements and HM Treasury’s review of Solvency II that we will see some strategic regulatory divergence between the UK and the EU in the years to come.

At the end of the Brexit transition period, UK insurance undertakings lost their “EU passport”, by which they were authorised to provide insurance services in the EU.

What next?

• Branch offices now need local authorisation, and can only conduct business in the Member State which has granted the authorisations. Full subsidiaries established and authorised in an EU27 state operate as EU insurance undertakings and are subject to EU rules. Many UK insurance intermediaries have established an EU-authorised intermediary with a UK branch (known as ‘reverse branching’).
• Lloyd’s has established a European insurance company in Brussels (Lloyd’s Insurance Company S.A) - those wishing to bind EEA risks need approval from Lloyd’s Brussels.
• Many insurers have restructured their European businesses and/or set up subsidiaries or branches in an EU27 country to address some of these issues.
• Affected policies were transferred on 30 December 2020 from Lloyd’s London to Lloyd’s Europe by a Part VII FSMA insurance business transfer. Claims made under transferred policies cannot compliantly be administered out of the UK post-Brexit. Some practical complexities arise, particularly where a dispute resolution process had been initiated before 30 December 2020.

How we can help

Our pan-European team of lawyers can advise you on complex insurance law issues post-Brexit.