Germany has adopted preliminary provisions to authorise the temporary extension of UK financial institutions’ passporting rights, including insurers, in the event of a no-deal Brexit, Clyde & Co analysts have reported.
These measures are reportedly part of a wider set of legislation concerning primarily tax matters and allows the extension of passporting rights post-Brexit for up to 21 months.
The period is identical to the transition period that is foreseen under the Withdrawal Agreement.
Underwriting new business is explicitly excluded and the insurers will be required to terminate existing contracts, obtain a new authorisation, or transfer the business to a licensed risk carrier.
Commenting on the measures, Henning Schaloske, Partner at Clyde & Co in Dusseldorf, said, “This is a welcome move by the German legislator to remove some of the uncertainty for both insurers and policyholders in the event of a no-deal Brexit, which is increasingly being seen as a very real possibility.”
“The extension of passporting rights for up to 21 months post-Brexit is a significant development and should provide sufficient time for the resolution of outstanding contracts but it is important that regulators across the EU continue to work together in a spirit of cooperation to address issues relating to cross-border insurance.”