SAMPLE - EXTRACTS
SECTION 13 EU/EFTA INSURERS AND BROKERS WANTING TO DO BUSINESS IN UK AFTER BREXIT * The PRA has asked every insurer and bank writing EEA business to prepare a contingency plan for no deal. * Assuming that EU/EFTA firms lose passporting rights, then it is likely that EU/EFTA insurers already doing business in the UK may get a fast route to allow them to continue writing business but on a UK basis as a branch of an overseas insurer or with a fully capitalised UK subsidiary, * For existing insurers and brokers much will depend on what the FCA does or is allowed to do. * For insurers and brokers from a EU or EFTA country it is probable that they will have to set up UK branches or subsidiaries just as US and Asian insurers do now. * It is 99% certain that the FCA will retain Solvency 2 as a base. * For regulatory reporting purposes, it is likely that the UK will maintain a Solvency II based system of prudential regulation and that the UK system is likely to be assessed by the EU as an equivalent jurisdiction under Solvency II. EEA based insurers that write insurance business in the UK on a cross-border basis will need to obtain UK authorisation for UK branches or will need to set up a UK subsidiary with its own regulatory capital.
New subsidiaries New insurance subsidiaries will require operational substance to gain regulatory approval. Insurers and brokers will need to design and deliver a target operating model covering people, process, technology, governance and finance. The UK is likely to require capital to be retained locally in order to meet solvency requirements. It will take legal entity governance seriously. It will require a minimum number of people-including senior staff-to be dedicated to the subsidiary, with the infrastructure to allow them to operate the organisation and serve their clients and trading partners. All of this must be considered at an early stage, to support the application process. Given the scale of this change, it is a challenge for insurers and brokers to deliver in the timescales available.
Current passport holders