Major players in the UK insurance industry are calling for “urgent progress” on post-Brexit transition plans, warning their government to stop “over-complicating” matters and “get on with it”. Meanwhile, the UK regulator has said it is unlikely to overhaul Solvency II rules after Brexit.
Speaking at a dinner event in London last night, where guests included regulators and politicians, Huw Evans, director general of the Association of British Insurers (ABI), said the terms of a transition period should and could be agreed now. They should not be left as part of the final exit agreement or as a bargaining chip in negotiations, he added.
“A transitional agreement only reached at the 11th hour as part of horse trading over the final agreement will be of no value to businesses that have had to implement contingency plans by then instead. We need a straightforward transitional and we need it now,” Mr Evans said.
He noted that the ABI hoped a transitional deal would be confirmed before Christmas 2017, with a final version ready a month later, but progress has stalled.
“Since then, we seem to have gone backwards with, at times, our own government seeking to overcomplicate a deal by putting extra demands on the table such as extra restrictions on EU citizens,” Mr Evans said. He stressed that businesses and regulators need a transition agreement to manage the scale of change involved in Brexit.
“My message to the government and MPs tonight is simple: ‘please, get on with it’,” said the ABI’s director general.
The British Insurance Brokers’ Association (BIBA) has also spoken out on the urgency of transition plans. According to reports, BIBA said the insurance sector needs immediate certainty on the issue.
The Treasury Committee published a report on Brexit transitional arrangements on 14 December 2017. In a response to the report, the government said this week it wanted to reach political agreement with the EU on transition at the March meeting, adding that the EU has put mandates in place to forward transition agreements with the UK.
The government also agreed that during an implementation period, the UK and EU will have access to markets under the same EU rules and regulations.
“The committee is pleased that the overall framework for transitional arrangements recommended in this report has largely been accepted by the government. Businesses are now crying out for the certainty of having a transition period secured,” Ms Morgan said.
However, she was critical of the government’s outlook for a future relationship between the UK and EU, post-Brexit transition. “Key questions remain unanswered and details are in short supply. ‘Canada plus plus plus’ is not a basis for long-term decision making,” she said. Ms Morgan added that businesses cannot begin to understand the impact of regulatory change, as recommended by the government in its report, until they know the detail. “Brexit uncertainty for businesses still looms large,” Ms Morgan said.
“In the absence of clarity, they will have no choice but to prepare for the one eventuality that they can understand: the worst-case scenario of a trade relationship based on WTO commitments,” continued the MP. This is a scenario that the Treasury Committee warned would prompt relocation of jobs and businesses from the UK to mainland Europe.
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