FCA and PRA urge UK insurers to build on post-Brexit plans

Written by Adam Cadle

22/10/2020

The FCA and the PRA have sent a letter to the CEOs of insurance providers in the UK concerning their contingency plans once the Brexit transitional period finishes in 2021.

In the letter, both regulatory bodies said it is “imperative” that insurance firms “continue to build on their preparatory work to ensure that they are ready for a range of scenarios at the end of the transition period”.

Parliament has also legislated for a Part VII “saving provision” which will provide two years from the end of the transition period for “parties to obtain a UK court order sanctioning the transfer of insurance business”, the regulators said.

“It will apply where that insurance business transfer scheme is already underway at the end of the transition period and has met two conditions: payment of the regulatory fee and approval of an independent expert.”

The FCA and PRA warned that the mutual recognition framework part of the Solvency II Directive will not apply to business transfers sanctioned by the UK courts after 31 December 2020.

In such cases, recognition will be based on national regimes in each European Economic Area (EEA) jurisdiction.

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