9 recommendations

Furthermore, the recommendations provide guidance on the application of relevant legal provisions with regard to cross-border insurance of UK insurance undertakings. The nine recommendations range from the authorization of third country branches, the lapse of authorization, the cooperation between the national competent authorities, and the communication to policyholders and beneficiaries to distribution activities. The recommendations include:

Orderly run-off: Without prejudice to policyholder rights to exercise an option or right in an existing insurance contract to realise their pension benefits, the NCAs should prevent that UK undertakings conclude new insurance contracts or establish, renew, extend, increase, or resume insurance cover under the existing insurance contracts in their jurisdiction as long as they are not authorized for such insurance activities under Union law.
Portfolio transfer: Provided that it was initiated before the withdrawal date, the NCAs should allow the finalization of portfolio transfer from UK insurance undertakings to EU27 insurance undertakings.
Change in the habitual residence or establishment of the policyholder: If a policyholder with habitual residence or, in the case of a legal person, place of establishment in the United Kingdom concluded a life insurance contract with a UK insurance undertaking and afterwards the policyholder changed its habitual residence of place of establishment to a EU27 Member State, the NCAs should take into account in the supervisory review that the insurance contract was concluded in the United Kingdom and the UK insurance undertaking did not provide cross-border services for the EU27 for this contract.

"Besides the fact that UK insurance undertakings have taken appropriate measures for most the cross-border insurance into the EU27, there is a residual amount of business that would become unauthorized when the United Kingdom leaves the European Union," according to Gabriel Bernardino, chairman of EIOPA. To ensure the protection of policyholders and beneficiaries concerned national supervisors have to ensure consistent supervisory actions and to cooperate closely and effectively."

Special Reports /

EU and UK reach agreement over no-deal Brexit insurance rules

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