Hopes for the UK government to lay out clear grounds for businesses during the transition period appear to have been dashed after the government’s response to the Treasury Select Committee’s report on transitional arrangements for exiting the EU leaves re/insurers in an “unacceptable position” according to Steve White, Chief Executive Officer (CEO) of the British Insurance Brokers’ Association (BIBA).
The BIBA cited concerns over the government’s lack of detail and progress on the transition period and again highlighted the precarious uncertainty facing re/insurers as the UK prepares to leave the EU.
White said; “unlike most sectors of the economy, our sector needs certainty of transition right now as insurance renewals are being prepared which span the date we leave the EU.
“We receive £8 billion in revenues from the EU and whilst we are pleased that the Government agrees they want a transition period, the lack of both detail and progress in this area concerns us greatly.
“In the absence of a transition, we’re faced with the prospect of breaking an agreement with the customer or breaking the law by honouring it. This is an unacceptable position to be in.
“It is important that when we transition, we know what we’re transitioning to. Not knowing what the landscape will be like post-March 2019 means businesses cannot plan and some are already planning for the worst.”
The need for certainty in the UK’s business environment as the country transitions out of the EU has been high on the radar of priorities for London-based re/insurers, with prominent industry experts reiterating concerns over the impact on business of the uncertain operating environment.
Speaking at the World Economic Forum, Beale cited hopes that by the end of the first quarter of 2018, the U.K. government would offer more clarity on whether there would be any implementation period and transitional arrangement once the U.K. leaves the bloc in March 2019, however, the much awaited clarity is yet to materialise.
Nevertheless, progress has been made regarding the inward-passporting temporary permission regime mentioned in the Government’s response, which allows EEA firms to continue to pay insurance claims, although this too needs “further detail and confirmation that it will definitely be in place for March 2019,” said White, adding that “the 6 million UK policyholders who use an EU passported insurer need the certainty that they will be able to have a claim paid.”
The BIBA 2018 manifesto calls for the UK and EU to agree a suitable transition period until a new free-trade agreement is agreed and for both entities to agree that any insurance policy that straddles the exit date will remain fully legal until its end date to reassure clients and provide contract certainty.
Such an agreement would ease re/insurers’ fears that policies issued after 30 March 2018 would run into a post-Brexit period in which there is uncertainty over the legitimacy of the policy that’s in force after the EU exit date.











