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Insurers urged to make sufficient preparations to ensure service continuity upon Brexit

Written by Adam Cadle

EIOPA has issued an Opinion on service continuity in light of the withdrawal of the United Kingdom from the European Union.

The Opinion is addressed to insurance undertakings and national supervisory authorities and underlines the importance of sufficient preparation so that undertakings can continue to service contracts following the UK’s withdrawal from the European Union and prevent insurance activities without authorisation.

EIOPA urges insurance undertakings to take necessary steps in good time to ensure service continuity. Steps will depend on the particular situation of the affected undertaking. They may include, for example, the transfer of contracts of UK undertakings with policyholders in the EU27 to an insurance subsidiary established in an EU27 Member State; the transfer of insurance contracts of EU27 undertakings with UK policyholders to an insurance subsidiary established in the UK; the establishment of a third country branch in the UK or in the EU27 Member State of the policyholder; Page 2 of 2 and, for UK undertakings in the legal form of a European company, the change of domicile of the company to an EU27 Member State.

In particular, insurance undertakings are advised to have contingency plans for the eventuality that there is no political agreement between the EU and the UK at the date of withdrawal. Supervisory authorities are also recommended to take appropriate steps to ensure that insurance undertakings are adequately prepared and have, for example, conducted realistic impact assessments and developed adequate contingency plans, allowing sufficient time to implement the plans.

EIOPA will monitor, in close cooperation with national supervisory authorities, the development and implementation of the contingency plans.

EIOPA chairman Gabriel Bernardino said: “It is essential that insurance undertakings consider all eventualities, including the possibility of no political agreement at the date of withdrawal. I call on all insurance undertakings and national supervisors to plan effectively and take the necessary steps in good time to ensure that policyholders and beneficiaries are not exposed to unnecessary uncertainty regarding the status of their contracts. To facilitate cooperation and the exchange of information EIOPA established a high-level cooperation platform for supervisory authorities on Brexit-related topics.”

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