The London and International Insurance Brokers’ Association (LIIBA) has written a letter to the UK’s Prime Minister, Theresa May, to express concerns about the ‘enhanced equivalence’ regime proposed in the Government’s recent Brexit White Paper.
In the letter, LIIBA’s Chairman, Roy 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 similar to that under the Market in Financial Instruments Regulation, which would allow brokers to provide services to EU clients provided they are registered with European Securities and Markets Authority (ESMA).
Christopher Croft, Chief Executive Officer (CEO) of LIIBA, 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,” Croft continued. “We understand in general why that focusses 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.”