On October 13, 2020, EIOPA (European Supervisory Authority for Insurance and Occupational Pensions) called on the insurance sector on its website to refer to the End of the Brexit transition period prepare.
According to the Withdrawal Agreement, this period ends on December 31, 2020. After this date, all European primary and secondary law will no longer apply to the United Kingdom. This includes both the Solvency II Directive and the IDD (Insurance Distribution Directive).
EIOPA stresses that the insurance sector needs to prepare for British and Gibraltar insurance companies to join the group of third countries. Therefore, they no longer benefit from the Solvency II authorization to offer their services in the EU. In addition there is further legal implications in relation to insurance contracts, insurance disclosure and group supervision.
EIOPA appeals to the insurance sector to complete appropriate preparations and implement suitable, realistic emergency plans before the end of the transition period. In particular, the authority expects (re) insurance companies to take measures to prevent unauthorized insurance activities and to ensure the continuity of services in cross-border transactions, as in the 2017 EIOPA opinion set. This is intended to minimize the disadvantages for policyholders and other beneficiaries.
In addition, EIOPA reminds insurance companies and intermediaries of their duty to inform their customers about the possible effects of Brexit on their insurance contracts. EIOPA will continue to monitor the preparations of the insurance sector and in particular the development and implementation of contingency plans.
All Memoranda of Understandings (declarations of intent) agreed in advance on the cooperation and the exchange of information remain valid. These have been concluded by EIOPA and all competent authorities of the EEA with the Bank of England, in their capacity as competent supervisory authority, and the Financial Court Authority of the United Kingdom. They come into force when the European Treaties and secondary law cease to apply in the United Kingdom.