Featured Product

    PRA Issues Statement on ACPR Response to EIOPA Brexit Recommendations

    November 12, 2019

    PRA published its statement on the response of ACPR to EIOPA recommendations for the insurance sector, in the light of Brexit. ACPR announced that it does not intend to comply with the sixth recommendation of EIOPA on insurance policies originally sold in the UK by UK insurers to policyholders now resident or established in France. As per the ACPR statement, to make use of the French Run-Off Ordinance, UK insurers must have appropriate passports to carry out business in France in place at UK exit day.

    The EIOPA recommendation states that "where a policyholder with habitual residence or, in the case of a legal person, place of establishment in UK concluded a life insurance contract with a UK insurance undertaking and afterward the policyholder changed its habitual residence or place of establishment to a EU 27 member state, competent authorities should take into account in the supervisory review that the insurance contract was concluded in the UK and the UK insurance undertaking did not provide cross-border services for the EU 27 for this contract." ACPR cannot comply with this recommendation, taking into account the French regulatory and case-law provisions determining that, in the case mentioned in the recommendation, the place of the risk, initially located in UK or Gibraltar, is modified and is now situated in France. Accordingly, this must be covered by insurance entities authorized to exercise in France under Article L 310-2 of the Insurance code. 

    In a Brexit without agreement context, the Brexit Ordinance allows undertakings in the UK and Gibraltar operating in France before the Brexit date, via the European passport, which have not envisaged or finalized a contingency plan on that date, to pursue contracts subscribed before Brexit in extinctive management, until termination. Such contracts cannot be renewed or give rise to the issue of new premiums, which, however, does not prohibit the payment of mandatory premiums payable by the subscriber under the contract. This Ordinance would also apply to contracts subscribed with UK or Gibraltarian insurance undertakings by policyholders whose habitual residence or place of establishment is located in the UK or Gibraltar, and moving thereafter to France, before contract termination, provided that the insurance undertakings are, on the date of a Brexit, authorized to exercise in France by means of the European passport for freedom of establishment or freedom to provide services. Therefore, UK and Gibraltarian insurance undertakings affected by this situation are invited to proceed to passporting notifications to their home competent authorities in the coming weeks and before Brexit date, to benefit from French Brexit Ordinance regime.

    This regime would allow them to continue honoring their contracts covering policyholders having moved or moving to France after Brexit date. In response to this, PRA and FCA encourage firms to seek legal advice and consider any risk arising from ACPR approach to affected policyholders as soon as possible. This should include consideration of whether a firm may wish to have any passports to carry out business in France in place prior to exit day to enable the use of the French Run-Off Ordinance. When considering passporting applications, insurers should look to submit applications only for classes of business they have previously written or currently write. Firms wishing to apply for passports should complete all relevant questions on the cross-border services notification form, along with the additional information required under paragraph 3.2.1 of the Decision on the collaboration of the insurance supervisory authorities (EIOPA-BoS-17/014).

     

    Related Links

    Keywords: Europe, EU, UK, Insurance, Brexit, Gibraltar, Passporting Regime, Brexit Ordinance, PRA, FCA, ACPR, EIOPA

    Related Articles
    News

    APRA Updates Validation and Derivation Rules in September 2020

    APRA updated the lists of the Direct to APRA (D2A) validation and derivation rules for authorized deposit-taking institutions, insurers, and superannuation entities.

    September 24, 2020 WebPage Regulatory News
    News

    EC Proposes Frameworks for Crypto-Assets and Operational Resilience

    EC adopted a package that includes the digital finance and retail payments strategies and the legislative proposals for regulatory frameworks on crypto-assets and digital operational resilience.

    September 24, 2020 WebPage Regulatory News
    News

    ECB Publishes Opinion on Proposals to Amend Securitization Framework

    ECB published an opinion (CON/2020/22) on proposals for regulations amending the securitization framework of EU, in response to the COVID-19 pandemic.

    September 24, 2020 WebPage Regulatory News
    News

    FCA Consults on Regulation of International Firms in UK

    FCA is consulting on its approach to the authorization and supervision of international firms operating in UK.

    September 23, 2020 WebPage Regulatory News
    News

    MAS Amends Notice on Capital Adequacy Requirements of Banks

    MAS published amendments to Notice 637 on the risk-based capital adequacy requirements for reporting banks incorporated in Singapore.

    September 23, 2020 WebPage Regulatory News
    News

    FCA to Begin to Move Firms to New Data Collection Platform RegData

    FCA announced that it will move firms to RegData from Gabriel in the coming months in stages, based on the reporting requirements of firms.

    September 23, 2020 WebPage Regulatory News
    News

    ISDA Expects IBOR Fallbacks to be Effective by End of January 2021

    ISDA issued a letter to regulators to flag that it now expects the supplement to the 2006 ISDA Definitions and the Interbank Offered Rate (IBOR) Fallbacks Protocol to be effective around mid- to late-January 2021.

    September 23, 2020 WebPage Regulatory News
    News

    APRA Reviews Repayment Deferral Plans, Identifies Best Practices

    APRA has concluded its review of the comprehensive plans of authorized deposit-taking institutions for the assessment and management of loans with repayment deferrals.

    September 22, 2020 WebPage Regulatory News
    News

    ESAs Assess Risks to Financial Sector After COVID-19 Outbreak

    ESAs (EBA, EIOPA, and ESMA) published the first joint report that assesses risks in the financial sector since the outbreak of the COVID-19 pandemic.

    September 22, 2020 WebPage Regulatory News
    News

    BoE Confirms Withdrawal of COVID Corporate Financing Facility

    BoE and HM Treasury confirmed that the COVID Corporate Financing Facility (CCFF) will close for new purchases of commercial paper, with effect from March 23, 2021.

    September 22, 2020 WebPage Regulatory News
    RESULTS 1 - 10 OF 5836