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09 February 2018

Insurance Europe: How to avoid Brexit disruption to insurance customers

Insurance Europe published two position papers relating to Brexit. The first paper calls for a transitional arrangement that would help avoid a cliff-edge scenario. The second paper relates to the transfer of personal data between the EU/EEA and the UK post-Brexit.

Transitional arrangements needed in the Brexit context

Once the UK has left the EU, it will no longer be directly covered by the EU’s regulatory framework for financial services. This framework currently allows a substantial number of EU27-based consumers to access financial services products in the UK, and vice versa.

As there is no clear view of the future relationship between the EU27 and the UK yet, there is considerable uncertainty for businesses that offer cross-border contracts, and a significant risk posed to consumers. Insurance Europe strongly supports a transitional arrangement that would help avoid a cliff-edge scenario and allow insurers to fulfil their obligations to consumers on a cross-border basis.

A transitional arrangement is crucial to ensure there is business continuity until legal clarity on the future relationship is reached. Such an arrangement should ensure that the UK remains covered by existing EU law and the supervisory framework while the EU27 and the UK negotiate the future relationship.

In addition, once the final relationship between the EU27 and the UK has been decided, time must be allowed for insurers to adapt their contingency plans and to reorganise their business according to the new regulatory framework based on sound legal certainty. Such an arrangement should, among other things, allow sufficient time for insurers to apply for and receive third-country branch authorisation, or to set up subsidiaries.

Therefore, Insurance Europe urges both the EU27 and the UK to reach political agreement on the transitional arrangement as soon as possible, ahead of the Brexit date. It is likewise crucial that supervisors take similar actions to ensure consumers and businesses alike are not negatively impacted.

Consequences of Brexit on flows of personal data after Brexit

Post-Brexit, the UK will become a third country in relation to the EU and thus, transfers of personal data from the EU/EEA to the UK will no longer be allowed.

In order to avoid disruption for insurers and policyholders, Insurance Europe calls for maintaining the free flow of personal data from the EU/EEA to the UK post-Brexit by adopting an “adequacy decision” under the General Data Protection Regulation (GDPR).

An “adequacy decision” provides the highest level of legal certainty and the most comprehensive solution. In contrast, the other possible solutions provided by the GDPR are limited in their application and do not provide a high level of legal certainty and thus, they are not an appropriate solution.

Insurance Europe also calls the UK to recognise the EU’s data protection framework as adequate for data flows from the UK to the EU/EEA.

Insurance Europe urges the EU/EEA and the UK authorities to put in place these solutions as early as possible ahead of the Brexit date.

In case this is not achieved in time, a bridging interim measure must be put in place.

1st position paper

2nd position paper

© InsuranceEurope

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