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).
Keywords: Europe, EU, UK, Insurance, Brexit, Gibraltar, Passporting Regime, Brexit Ordinance, PRA, FCA, ACPR, EIOPA
Previous ArticleBoE Publishes Draft of Version 1.1.0 of Form AS/FV Taxonomy
The European Banking Authority (EBA) published the final draft regulatory technical standards specifying and, where relevant, calibrating the minimum performance-related triggers for simple.
The European Central Bank (ECB) is undertaking the integrated reporting framework (IReF) project to integrate statistical requirements for banks into a standardized reporting framework that would be applicable across the euro area and adopted by authorities in other EU member states.
The Basel Committee on Banking Supervision met, shortly after a gathering of the Group of Central Bank Governors and Heads of Supervision (GHOS), the oversight body of BCBS.
The International Organization of Securities Commissions (IOSCO) welcomed the work of the international audit and assurance standard setters—the International Auditing and Assurance Standards Board (IAASB)
The European Banking Authority (EBA) has been awarded the top European Standard for its environmental performance under the European Eco-Management and Audit Scheme (EMAS).
The Monetary Authority of Singapore (MAS) set out the Financial Services Industry Transformation Map 2025 and, in collaboration with the SGX Group, launched ESGenome.
The Bank of England (BoE) published a Statistical Notice (2022/18), which informs that due to the Bank Holiday granted for Her Majesty Queen Elizabeth II’s State Funeral on Monday September 19, 2022.
The French Prudential Control and Resolution Authority (ACPR) announced that the European Banking Authority (EBA) has updated its filing rules and the implementation dates for certain modules of the EBA reporting framework 3.2.
The European Central Bank (ECB) published a paper that examines how credit rating agencies accepted by the Eurosystem, as part of the Eurosystem Credit Assessment Framework (ECAF)
The Australian Prudential Regulation Authority (APRA) announced reduction in the aggregate Committed Liquidity Facility (CLF) for authorized deposit-taking entities to ~USD 33 billion on September 01, 2022.