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On Thursday, the insurance regulator of the European Union said that Insurers in the bloc must take immediate steps to make sure that policies would not be disrupted if Britain withdraws from the European Union without a trade deal in March 2019.
The European Insurance and Occupational Pensions Authority (EIOPA) said that insurers should deliver “sufficient and timely” preparation to ensure continuity of services after Brexit.
In a statement, the EIOPA said that Contingency plans should be realistic and consider all eventualities, such as a no political agreement between the European Union and Britain regarding their future relations.
Gabriel Bernardino, the EIOPA Chairperson, stated: “I call on all insurance undertakings and national supervisors to plan effectively and take the necessary steps in good time to ensure that policyholders and beneficiaries are not exposed to unnecessary uncertainty regarding the status of their contracts.
“To facilitate cooperation and the exchange of information EIOPA established a high-level cooperation platform for supervisory authorities on Brexit-related topics.”
In the absence of taking action before Brexit, insurers may be unable to pay out on policies.
Last month, the Bank of England said that EU and British legislation would be required in order to maintain the continuity of existing cross-border insurance contracts. Otherwise, 30 million European Economic Area and six million British policyholders could be affected.
O on Wednesday, the finance ministry of Britain said that the British government would legislate, if necessary, to make sure that contractual obligations, including insurance contracts, can continue to be satisfied after Brexit.
EIOPA said that steps could include transferring contracts EU hubs from Britain.
Many insurers that make use of London as a base in order to serve the European Union market have revealed plans to open hubs inside the bloc.
Aviva is turning its Irish branch into a regulated subsidiary, and Lloyd’s of the London insurance market has picked Brussels for its EU base.