Specialist re/insurance market Lloyd’s aims to write facultative reinsurance and non-proportional excess of loss (XoL) treaty reinsurance on Lloyd’s Brussels paper from 1st January 2019 across all markets in the EEA.
In the event that the UK does not secure Solvency II reinsurance equivalence in 2019, it will be ready to process the remaining treaty reinsurance business through Lloyd’s Brussels from 1 st January 2020, Lloyd’s said.
Lloyd’s received licence approval in May 2018 from the National Bank of Belgium to set up a European insurance company in Brussels to secure access to the EU market after Brexit.
“We expect that, following Brexit, the UK will apply for and receive Solvency II reinsurance equivalence,” said Vincent Vandendael, Lloyd’s chief commercial officer and Lloyd’s Brussels CEO. “However, we are working to ensure that our reinsurance customers can continue to access the market’s specialist policies in the event that the UK leaves the EU without a transitional agreement or equivalence.”
Lloyd's said the market can continue to write reinsurance in the EEA states until March 29, 2019 with the confidence that all valid claims will be paid. After this date, if transitional arrangements or equivalence are in place, the market can continue to do business via syndicate paper as it does today.
Even without transitional arrangements or equivalence, Lloyd’s Brussels will be able to write facultative reinsurance and non-proportional excess of loss treaty reinsurance from 1/1/2019 across all markets in the EEA. The remainder of the treaty reinsurance business can be written as cross-border business on syndicate paper from EEA States under World Trade Organisation (WTO) terms, with the exception of Germany and Poland.
Lloyd’s Brussels is also exploring a bespoke solution to process proportional treaty reinsurance business in 2019, which could also apply to non-proportional treaty.
Vandendael added: “Along with other London Market partners, we continue to strongly make the case that an EU equivalence decision with respect to the UK’s reinsurance framework should be secured as soon as possible and by no later than the end of the transition period. It is clear from the UK Government White Paper that the UK Government aims to achieve Solvency II equivalence of UK reinsurance regime.
“We will know before 29 March 2019 whether we have transitional arrangements. This, alongside the solutions we are working on, the market’s strong customer relationships and the commitment to pay all valid claims, will all help us maintain and grow our business partnerships across the EEA.”
Lloyd's Brussels, Reinsurance, Solvency II, UK, Europe