06 September 2019

Commercial Risk Europe: Experts say buyers will enjoy contract and claims certainty post-Brexit

Experts have told insurance buyers in Germany to expect contract certainty and claims to be paid post-Brexit, as insurers and regulators have stepped up to the plate to solve potential problems.

The experts were speaking during a panel debate at the GVNW Symposium, entitled ‘London’s burning’. It took place as Brexit was thrown further up in the air by new UK Prime Minister Boris Johnson’s plans for exiting the EU being dealt a heavy blow in Parliament.

With the UK parliament in continued gridlock, Praveen Sharma, managing director of Marsh’s insurance regulatory and tax consulting practice, said he is proud to be part of an industry that effectively dealt with Brexit before the politicians.

He said the insurance industry quickly assessed that the politicians wouldn’t necessarily come to its rescue in time to ensure continuity for customers. It therefore acted and is ready to deliver for clients, he assured buyers gathered for the symposium in Munich.

“The global insurance industry has, where needed, set up operations in EU 27 countries. In short, we are good to go,” said Mr Sharma. “Clients have contract certainty and continuity of cover,” he added.

Henning Schaloske, who heads Clyde & Co’s German office in Duesseldorf and the firm‘s German insurance practice, said it is “clear that claims will continue to be paid post-Brexit”. He said this has come about because it was in everyone’s interest – insureds, insurers, brokers and regulators.

Mr Schaloske believes insurance contracts will remain valid and enforceable even if there is a hard Brexit. In addition to UK-based insurers setting up in EU 27 countries, there have been various regulatory agreements to ensure that insurance contracts are valid and claims will be paid after Brexit, added the lawyer.

There has been the Multilateral Memorandum of Understanding between UK regulator the Prudential Regulation Authority (PRA) and the EU 27 via the European Insurance and Occupational Pensions Authority, to help ensure it is business as usual. There have also been individual agreements between the PRA and ten other European regulators, including Bafin in Germany, to deliver continued cooperation and certainty for customers.

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