There has been a simple response to what the UK should do post-Brexit in terms of its ‘trade deals’ on insurance – the answer has always been “we’ll just do what the Swiss do.” However, now one expert has suggested the Swiss deal is not all that it seems.
Writing in The Financial Times
, Professor David Howarth of the University of Luxembourg, took umbrage with the claim that “Switzerland’s trade deals with the EU give some sectors, such as insurance, full two-way access to the single market via a so-called passporting deal in return for keeping its regulation at an equivalent level to that in the bloc.” This claim was put forward by the British Bankers’ Association chief executive Anthony Brown.
According to Howarth, however, the Swiss deal is not so simple.
He claims that a trade deal on life insurance does not in fact exist – however, there is a sectoral agreement on non-life insurance. However, even that is not a trade deal and it does not grant “passporting” access.
He states that the non-life insurance agreement means the EU supervisor of a branch of a Swiss non-life insurer in the EU can allow the Swiss supervisor to calculate capital requirements based on Swiss rules and vice-versa.
He goes on to state that Swiss insurers have to establish a branch or subsidiary in the EU if they wish to do business in the single market – noting that Zurich
has two-thirds of its turnover in the EU with nearly all from its subsidiary in Dublin. He points out that Zurich
has branches in other EU member states and does business cross-border using its passporting rights.
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