As European financial centres compete for firms seeking bases outside London after Brexit, Ireland has lodged a complaint to the European Commission that it is being undercut by its rivals.
Minister of State at the Department of Finance told the Commission earlier this month that rival centres are engaging in “regulatory arbitrage.”
“We are hearing from various sources that companies are being offered certain incentives, that they are offering a back door to the single market, without the requirement to have capital to back up their entities in the European Union,” Murphy told Reuters
. He did not name specific countries.
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He said other European cities are being “very aggressive” in trying to win business, and described this as “dangerous competition.”
The American Insurance Group (AIG
) recently announced that it will locate an insurance hub in Luxembourg to maintain its operations across the EEA when the UK leaves the European Union.
Its plans will see AIG have two subsidiary insurance companies in Europe from 2019 – one in the UK to write UK business and the other in Luxembourg to write business for the EEA and Switzerland.
A number of firms are nevertheless planning to set up shop in Ireland. Sylvia Cronin, director of insurance supervision at the Central Bank of Ireland, has revealed at least 30 insurance firms operating in the UK are looking to establish in Ireland to maintain their access to the EU market post-Brexit.
“Since November, we have received five applications for authorisation as insurance or reinsurance undertaking. A further five entities have signalled a firm intention to apply for such an authorisation,” Cronin said at a KPMG event last week.
“We have been contacted by approximately another 20 insurance entities to discuss authorisation,” she added.
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