EIOPA Urges Insurers to Prepare for End of Brexit Transition
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.
Related Links
Keywords: Europe, EU, UK, Insurance, Solvency II, Brexit, IDD, Insurance Contracts, Brexit Transition, Equivalence Regime, Authorization, Group Supervision, EIOPA
Featured Experts
Adam Koursaris
Asset and liability management expert; capable modeler; risk and capital specialist
Cassandra Hannibal
IFRS 17 subject matter expert; actuary; risk management and capital projection specialist
Jerome Ogrodzki
Insurance asset and liabilities modeling specialist; stochastic modeling expert
Previous Article
EC Decides to Prolong and Adjust State Aid Temporary FrameworkRelated Articles
Regulators Fine Goldman Sachs for Risk Management Failures
FCA and PRA in the UK, FED in the US, and the authorities in Singapore have fined Goldman Sachs for risk management failures in connection with the 1Malaysia Development Berhad (1MDB).
Canada Hosts International Conference of Banking Supervisors
BCBS announced that OSFI and the Bank of Canada hosted the 21st International Conference of Banking Supervisors (ICBS) virtually on October 19-22, 2020.
FCA Proposes More Measures to Help Insurance Customers Amid Crisis
FCA proposed guidance on how firms should continue to seek to help customers who hold insurance and premium finance products and may be in financial difficulty because of COVID-19, after October 31, 2020.
EBA Issues Opinion to Address Risk Stemming from Legacy Instruments
EBA issued an opinion on prudential treatment of the legacy instruments as the grandfathering period nears an end on December 31, 2021.
ESRB Publishes Non-Bank Financial Intermediation Risk Monitor for 2020
ESRB published the fifth issue of the EU Non-bank Financial Intermediation Risk Monitor 2020 (NBFI Monitor).
HM Treasury Publishes Policy Statement Amending Benchmarks Regulation
HM Treasury announced that the new Financial Services Bill has been introduced in the Parliament.
APRA Initiates Action Against a Bank for Liquidity Compliance Breach
APRA announced that it has increased the minimum liquidity requirement of Bendigo and Adelaide Bank for failing to comply with the prudential standard on liquidity.
PRA Consults on Implementation of Certain Provisions of CRD5 and CRR2
PRA published the consultation paper CP17/20 to propose changes to certain rules, supervisory statements, and statements of policy to implement elements of the Capital Requirements Directive (CRD5).
US Agencies Finalize Rule to Reduce Impact of Large Bank Failures
US Agencies adopted a final rule that applies to advanced approaches banking organizations and aims to reduce interconnectedness in the financial system as well as to reduce contagion risks associated with the failure of a global systemically important bank (G-SIB).
US Agencies Finalize Rule on Net Stable Funding Ratio Requirements
US Agencies (FDIC, FED, and OCC) adopted a final rule that implements the net stable funding ratio (NSFR) for certain large banking organizations.
