The Director General of the Association of British Insurers (ABI), Huw Evans, has said that, while the ABI are pleased to see yesterday’s commitment to assessing equivalence as soon as possible, regulatory cooperation is very important and must follow from any political agreement.
Evans’ statement follows the news that a draft political declaration has been agreed upon by the European Union and the UK.
The document offers a nebulous, vaguely positive expansion to the 585 page withdrawal agreement published last week in regards to post-Brexit equivalency for the UK financial sector.
Theresa May’s draft EU withdrawal agreement drew a mixed reaction from players in the broking and insurance sectors last week.
Christopher Croft, Chief Executive Officer of LIIBA said that while it was encouraging to see a dedicated section on financial services, “we have to hope that the fact the draft is solely built around the concept of ‘equivalence’ is for the sake of brevity and simplicity.”
According to the latest draft document leaked online the UK and EU will being assessing each other’s financial-services rules “as soon as possible” after Brexit, with the aim of completing this review by June 2020.
Currently, equivalence can be withdrawn unilaterally with only a 30-day notice period, something that has been of concern to UK firms.
The document adds that “close and structured cooperation on regulatory and supervisory matters is in [the UK and EU’s] mutual interest” and promises “appropriate consultation in the process of adoption, suspension and withdrawal of equivalence decisions,” but reveals little detail beyond that.
Evans adds that it is vital for our industry’s customers that we have an orderly withdrawal process and transition period and any progress towards that is welcome.
“The crucial longer-term test is whether our future relationship with the European Union avoids our world-leading insurance & long-term savings sector becoming a rule-taker. It remains far too early to judge whether we will be able to avoid that fate,” he said.
