The momentous decision for the UK to leave the European Union has been cause for uncertainty across many industries – and insurance is no exception.
Though there are many differing opinions on the subject, with Article 50 officially triggered, and at least a handful of insurers set to move their bases to the continent, there’s no doubt the industry is already reacting.
The Insurance Distribution Directive (IDD), as well as Solvency II, are areas that will be impacted by the UK’s withdrawal from the union – but there seems to be little clarity yet on how.
Ashley Prebble, partner at Clifford Chance, where he specialises in corporate and regulatory insurance, told Insurance Business
that the government will likely have to consider which parts of the IDD, if any, it wants to repeal in the wake of the withdrawal from the union.
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The government will need to look at whether the directive goes beyond what the UK would choose to do itself, and whether there are areas with which people are unhappy and would rather not comply, he commented.
Prebble will be leading a session on insurance regulation and the impact of Brexit at the Insurance Law Masterclass
in June, where he will unpack the full extent of the move and what it means for insurance.
For now, the view is that the effect of Brexit, on insurance regulation at least, will not be immediate.
“Really, I think it’s going to be over time,” Prebble said, explaining that the potential timetabling and ‘next steps’ of the exit from the union will be a major factor.
“Whether that’s a withdrawal agreement and then a transition – and during that transition period, the expectation is it’s unlikely that we will change many of the EU laws,” he added.
When the government does come to re-assessing laws, it’s likely to focus on tackling the most unpopular regulations first – and the IDD is unlikely to be high on the list, Prebble said.
As for Solvency II, and which parts may be amended from a UK perspective, the areas reviewed by The Treasury Committee may be a good indication as to where the government and regulator will look first.
You can hear more in-depth analysis on these issues at the Insurance Law Masterclass
, taking place on June 08 at The Grange City Hotel in London.
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