Following the referendum result, the London Market’s attention has turned to ensuring that it maintains its position as a centre for (re)insurance. Whilst a number of (re)insurers and intermediaries were prepared for the eventuality of leaving the EU, there are still many which do not have contingency plans in place.
One of the biggest concerns for the (re)insurance industry is the whether the UK will be able to reach an agreement with the EU in respect of ‘passporting’. The LMG Report dated July 2016 stated “without these rights we expect a significant amount of business will be relocated to EU member states, taking with it investment that would have come to the UK and costing UK-based jobs”.
The timeframe for the UK’s exit from the EU is unclear. Moreover, the process is likely to be complex and challenging. Companies cannot ‘put off’ triggering their plans to restructure and/or relocate until an agreement is reached with the EU or, worse, until our exit actually takes effect.
Whilst much of the focus has been on UK businesses writing business in Europe, there will also be a fundamental impact on the many European insurance and reinsurance entities that access the UK and London markets.
Before embarking upon on a particular course of action, you should ask yourself the following simple questions:
> Do you currently do business in the UK/EU/EEA using the ‘passporting’ regime?
> Are your relationships direct, or through brokers, coverholders/managing general agents?
> What is the value/amount of that business?
> Do you wish to continue trading into the UK/EU/EEA?
Depending on your answers to these questions and on the nature of your business, there are various options available to you.
Contingency planning & implementation
As one of the leading specialist insurance and reinsurance law firms in the world, we understand the commercial and technical aspects of your business and the markets in which you operate. We can help your business navigate through this uncertain and difficult time by advising on all aspects of restructuring your organisation, including:
> Establishing an UK/EU branch or subsidiary
> Using an EU insurer as a front
> Acquiring a UK/EU insurer and joint venture arrangements
> Distribution networks
> Intellectual property
> Existing / future key commercial contracts
> Product wordings
> Solvency II and capital efficiency measures