Insurance intermediates do not have an equivalence framework in place to allow for business continuity after the UK leaves the European Union, wrote Roy White, chairman of the London & International Insurance Brokers’ Association (LIIBA), in a letter to UK prime minister Theresa May.
In the letter, White said: “We have noted the proposals the government has made in its white paper for trade arrangements for financial services after UK leaves EU. However, we are concerned that any agreement to an “enhanced equivalence” regime will create uncertainty for insurance intermediaries. As you will be aware, there is no equivalence framework either under Insurance Mediation Directive nor Insurance Distribution Directive (IDD), which comes into force on 1 October. Clearly in the absence of an existing equivalence regime, enhancements will not work.”
The letter goes on to propose that the government seeks an equivalence regime akin to that enjoyed by investment managers under the Market in Financial Instruments Regulation. This allows firms to provide services to professional clients in the EU provided they are registered with European Securities and Markets Authority (ESMA). Investment firms do not need to have an establishment in the EU under this regime.
LIIBA CEO Christopher Croft continued: “Buyers of insurance must not be the unintended victims of Brexit. Major EU corporations could be faced with profound consequences post Brexit without access to London insurance. We need to find a way of maintaining client access to the specialty expertise in London that allows us to provide the cover that simply could not be sourced anywhere else.
“The government’s white paper provides a measured foundation from which the right future trade agreement for financial services can be built. We understand in general why that focuses on the existing equivalence regimes but our relevant directive – IDD – has no such concept. We are keen to work with the government to help find a workable way forward.”
LIIBA, Roy White, Theresa May, Brexit, Insurance, UK, Europe