Most of the European Union’s (EU) legislation influencing the UK’s insurance industry would still remain even if the nation votes to exit the regional trading bloc next month.
This is the forecast of Charles Portsmouth, director at insurance adviser Moore Stephens, who suggested that the UK industry would possibly want to retain access to the EU market with a new trade deal following a possible “Brexit.”
“There are no simple answers to predicting what the world would look like on 24 June if the UK votes to leave the European Union,” media reports quoted Portsmouth as saying.
“However, much EU legislation affecting the insurance industry is likely to be here to stay, whatever the referendum outcome,” he added.
Portsmouth believes that UK insurers will still need to follow EU laws since they will continue to rely on the regional market.
“The UK insurance sector owes its world-leading status partly to its strength on the European stage and a major part of the UK industry’s revenues comes from Europe,” he said.
“To preserve these lucrative ties and be able to sell cross-border, UK-based insurers are likely to find they still have to comply with EU regulation.”
A wholesale rollback of regulatory pressures originating from the EU after the UK’s exit is unlikely, Portsmouth also said.
“Major European-level initiatives such as Solvency II have already been incorporated into UK law; they are an integral part of the system in this country,” he said.