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

    EBA Proposes Standards for IRRBB Reporting Under Basel Framework

    The European Banking Authority (EBA) proposed implementing technical standards on the interest rate risk in the banking book (IRRBB) reporting requirements, with the comment period ending on May 02, 2023.

    January 31, 2023 WebPage Regulatory News
    News

    FED Issues Further Details on Pilot Climate Scenario Analysis Exercise

    The U.S. Federal Reserve Board (FED) set out details of the pilot climate scenario analysis exercise to be conducted among the six largest U.S. bank holding companies.

    January 17, 2023 WebPage Regulatory News
    News

    US Agencies Issue Several Regulatory and Reporting Updates

    The Board of Governors of the Federal Reserve System (FED) adopted the final rule on Adjustable Interest Rate (LIBOR) Act.

    January 04, 2023 WebPage Regulatory News
    News

    ECB Issues Multiple Reports and Regulatory Updates for Banks

    The European Central Bank (ECB) published an updated list of supervised entities, a report on the supervision of less significant institutions (LSIs), a statement on macro-prudential policy.

    January 01, 2023 WebPage Regulatory News
    News

    HKMA Keeps List of D-SIBs Unchanged, Makes Other Announcements

    The Hong Kong Monetary Authority (HKMA) published a circular on the prudential treatment of crypto-asset exposures, an update on the status of transition to new interest rate benchmarks.

    December 30, 2022 WebPage Regulatory News
    News

    EU Issues FAQs on Taxonomy Regulation, Rules Under CRD, FICOD and SFDR

    The European Commission (EC) adopted the standards addressing supervisory reporting of risk concentrations and intra-group transactions, benchmarking of internal approaches, and authorization of credit institutions.

    December 29, 2022 WebPage Regulatory News
    News

    CBIRC Revises Measures on Corporate Governance Supervision

    The China Banking and Insurance Regulatory Commission (CBIRC) issued rules to manage the risk of off-balance sheet business of commercial banks and rules on corporate governance of financial institutions.

    December 29, 2022 WebPage Regulatory News
    News

    HKMA Publications Address Sustainability Issues in Financial Sector

    The Hong Kong Monetary Authority (HKMA) made announcements to address sustainability issues in the financial sector.

    December 23, 2022 WebPage Regulatory News
    News

    EBA Updates Address Basel and NPL Requirements for Banks

    The European Banking Authority (EBA) published regulatory standards on identification of a group of connected clients (GCC) as well as updated the lists of identified financial conglomerates.

    December 22, 2022 WebPage Regulatory News
    News

    ESMA Publishes 2022 ESEF XBRL Taxonomy and Conformance Suite

    The General Board of the European Systemic Risk Board (ESRB), at its December meeting, issued an updated risk assessment via the quarterly risk dashboard and held discussions on key policy priorities to address the systemic risks in the European Union.

    December 22, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8699