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For UK and European companies, Brexit was a huge issue, beset with uncertainty and confusion, particularly at the political level. But then along came the pandemic, which easily topped Brexit for uncertainty and confusion. Brexit is done, apparently, but there are still many issues to be dealt with, not least in the financial services sector.
So is Brexit still an issue for UK and European companies when it comes to their insurance programmes, or has this issue largely been resolved? It appears that insurers, certainly the big players in the global programme market, were quick to ensure that they had operations in each camp and were able to make arrangements to ensure multinational customers weren’t unduly affected. Words like seamless, continuity, integrated and transparent were liberally used by insurers to reassure customers that all would be well.
And by and large it seems to have worked. Brokers and others report that insurers have ensured a smooth transition. As Daniel Trautner, head of Aon Global, commercial risk solutions, health solutions and affinity, explained: “At this moment in time, the industry has reacted well and Brexit has been managed well on both sides of the English Channel. However, regulations will almost certainly change and this means that there can be no complacency and firms will need to ensure that they manage any current and future cross-border regulatory issues in the best way they can to provide protection and assurance for their clients.
Karen Jenner, portfolio director, business development, TMF Group noted that the insurance market has been preparing for this for some time, with insurers setting up branches to deal with the regulatory changes and facilitate cross-border insurance most effectively post-Brexit. “From an IPT perspective, the UK leaving the EU causes less issues for European insurers writing into the UK than for those UK insurers without European subsidiaries to facilitate [Freedom of Services] policies,” she said.
Some other minor areas may cause concern, according to Jonathan Drake, partner, regulatory, compliance and investigations, DWF Law. “Brexit continues to highlight some particular specific cross-border insurance issues but these are largely technical ones and my sense is that Brexit has largely been resolved from the perspective of cross-border insurance programmes. However the ongoing dialogue over the future of UK/EU financial services generally may give rise to further issues,” he said.
And Monica Karmasin, senior client development manager at Axco, pointed out that passporting rights and Freedom of Services (FoS) policies aren’t the only important considerations when building multinational programmes. “We have become accustomed to considering the implications of transferring – or processing – personal data on a cross-border basis, and ensuring compliance with the EU GDPR post-Brexit,” she said.
Insurers response
As for insurers, the vast majority began planning for this long before the politicians came to any sort of decisions. “Most insurance companies and clients have established or, like AIG, already executed a plan to ensure a smooth transition post-Brexit,” said Karen Jury, UK head of multinational, AIG. “The most recent challenges faced by clients deal with using their European captive to write directly into the UK, as they would have to apply for a specific licence post-Brexit, with capital and other requirements. The alternative is to use a fronting partner in the UK.”...
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