Brexit: what’s in it for you?
European captive owners need to consider the impact Brexit has on their international programmes and on the organizational set-up of their captive. At a recent European Captive Owners summit conference in Brussels, ICODA’s partner Lieve Lowet debated for a select audience of captive owners a do it yourself solution. Insurance is not a top priority in the Brexit negotiations, neither for the UK nor for the EU, or for any Member State. Insurance is not even in the list of top 10 priorities.
Quizzed by moderator Richard Cutcher, Captive Review, she replied that it is a false notion that obtaining equivalence for the UK is a formality. Not only is that never the case as there are procedures and timelines to be followed for an equivalence decision. But more importantly, the concept of equivalence in insurance, unlike in reinsurance, is essentially related to prudential equivalence, and not to market access. In addition, even if equivalence were to be granted, there will undoubtedly be a transitional period to be bridged in which the UK potentially will be a third country. In short, equivalence is for UK-based insurers, including captives, not the answer for market access to the EU27.
According to Lowet’s recent research, preparations by UK-based insurers are uneven and not all insurers are planning. The request by the FCA for contingency planning, even for a scenario where Brexit does not occur, may have been a wake-up call.
For more information on Solvency II, Brexit, equivalence: contact Lieve Lowet at email@example.com