In a recent interview with Bloomberg TV, Felix Hufeld, the President of Germany’s financial regulatory authority, BaFin, called for a political solution to ensure contract continuity post-Brexit, with billions of contracts, including insurance, in need of some level of security.
Reinsurance News discussed recently that it appears the UK is placing the onus on the European Union (EU) to solve passporting issues for insurers and reinsurers in the event of a no-deal Brexit, while the London and International Insurance Brokers’ Association (LIIBA) recently expressed concerns about the ‘enhanced equivalence’ regime.
Now, speaking with Bloomberg TV about contract continuity within the financial services industry post-Brexit, BaFin President, Hufeld, said: “That indeed is one of the major challenges we have around. In my view, it is almost impossible to fix that problem exclusively just by one side of the stakeholders involved, let it be the industry itself or individual supervisors. I’d rather prefer a regulatory or legislative solution to fix the problem.
“We have billions of billions worth of derivative contracts in question, insurance contracts, and indeed, to offer the necessary degree of security going forward, there should be a solution on a political level.”
While a political solution to ensure contract continuity post-Brexit sounds sensible, the likelihood of this happening remains very unclear. In response, insurers and reinsurers in the UK have accelerated their Brexit plans, establishing new subsidiaries in remaining EU member states to ensure they can serve their clients in the same manner when the UK does eventually leave the EU.