PRA tells UK insurers to seek legal advice regarding Brexit

The Prudential Regulation Authority has issued recommendations to British insurers so that they may continue to cover policyholders living in France after Brexit.

On Thursday 31st October, the European Insurance and Occupational Pensions Authority published member state responses to its February 2019 recommendations for the sector relating to the UK’s departure from the EU.

The French Prudential Supervision and Resolution Authority has indicated that it does not intend to comply with EIOPA’s Recommendation 6, relating to insurance policies originally sold in the UK by British insurers to policyholders now resident/established in France.

As a result, the French regulator invited the UK and Gibraltarian insurers involved to submit passport applications to the relevant authorities before Brexit date, to benefit from the French Brexit ordinance.

This would allow these firms to continue covering policyholders residing in France after Brexit.

The PRA, alongside the FCA, encourages firms to seek legal advice and to consider any risks to affected policyholders as soon as possible.

“This should include consideration of whether you may wish to have any passports to carry out business in France in place prior to exit day to enable the use of the French run-off ordinance,” the PRA added. “When considering passporting applications, insurers should look to submit applications only for classes of business they have previously written or currently write.”

The date of the UK’s exit from the EU is still uncertain, though a Conservative victory in the December election would mean his October 2019 Brexit deal is likely to be ratified.

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