In a recent communication, EIOPA urged the insurance sector to complete its preparations for the end of the Brexit transition period on December 31, 2020. After this date, all EU primary and secondary law will no longer apply to the UK, including the Solvency II Directive and the Insurance Distribution Directive. The insurance sector needs to be prepared for the consequences of UK and Gibraltar insurance undertakings becoming third-country undertakings and no longer benefiting from the Solvency II authorization to provide services in EU. As informed by EC to stakeholders in a July notice, the sector also needs to be prepared for other legal repercussions concerning insurance contracts, insurance disclosure, and group supervision.
EIOPA urged the insurance sector to finalize preparations and implement suitable and realistic contingency plans in advance of the end of the UK transition period. EIOPA expects insurance and reinsurance undertakings to have measures in place to prevent insurance activity without authorization and ensure service continuity of cross-border business, as specified in the EIOPA Opinion issued in 2017, to minimize the detriment to policyholders and beneficiaries. EIOPA also reminds insurance undertakings and insurance intermediaries of their duty to inform customers about the possible impact of the withdrawal of the UK from the EU on insurance contracts. EIOPA will continue to monitor the preparations of the sector and in particular the development and implementation of contingency plans. The previously agreed Memoranda of Understandings on cooperation and information exchange concluded by EIOPA, and all national competent authorities of the European Economic Area with competencies in the insurance sector, with BoE in its capacity as the Prudential Regulation Authority and with FCA remain valid and will come into effect on the date the European treaties and secondary legislation have ceased to apply in the UK.
Keywords: Europe, EU, UK, Insurance, Solvency II, Brexit, IDD, Insurance Contracts, Brexit Transition, Equivalence Regime, Authorization, Group Supervision, EIOPA
Previous ArticleEC Decides to Prolong and Adjust State Aid Temporary Framework
HKMA has published a circular that sets out the regulatory and reporting treatment for loans that participating authorized institutions may grant to eligible borrowers under the 100% Personal Loan Guarantee Scheme.
ECB published the results of the assessment of internal models that banks use to calculate risk-weighted assets for credit, market, and counterparty credit risks.
PRA published a statement on the regulatory treatment of retail residential mortgage loans under the Mortgage Guarantee Scheme, or MGS.
FCA is consulting, via CP21/7, on the second phase of proposed rules to introduce the UK Investment Firm Prudential Regime (IFPR).
HM Treasury and BoE announced the joint creation of a Central Bank Digital Currency (CBDC) Taskforce to coordinate the exploration of a potential central bank digital currency in UK.
EIOPA published an opinion to set out its expectations on the supervision of the integration of climate change risk scenarios by insurers in their Own Risk and Solvency Assessment (ORSA).
EC published the Implementing Regulation 2021/622 that lays down implementing technical standards for reporting of the minimum requirement for own funds and eligible liabilities (MREL).
BCBS has set out the strategic work priorities, as part of its the work program for 2021-22.
Bundesbank published two circulars on AnaCredit reporting requirements. Circular 27/2021 covers changes to the reporting of branches, additional attributes to be reported for investment funds from August 01, 2021, and updates to the list of international organizations.
PRA published the policy statement PS8/21, which contains the final supervisory statement SS3/21 on the PRA approach to supervision of the new and growing non-systemic banks in UK.