As the U.K. and E.U. continue to negotiate their relationship in the context of the U.K.’s impending withdrawal from the E.U. (“Brexit”) and as U.K. insurers with clients in the E.U. begin to plan for the possibility that no deal is struck, it has become clear that the uncertainties in respect of the establishment of an insurer in an E.U. Member State will persist.
The FMLC published a paper examining the distinction in the freedom of establishment and the freedom to provide services, with particular regard to the differences in the formalities for establishment as set out in the European Commission’s Interpretive Communication, published in 2000, and the Solvency II Directive. The Committee highlighted the impact of these uncertainties on (re)insurers planning for Brexit and recommended that HM Government request guidance on the conditions for establishment in the course of their negotiations with the E.U.
The paper was sent to the Department for Exiting the European Union along with a letter which emphasised the importance of this issue to U.K. (re)insurers which are applying under Part VII of FSMA 2000 to transfer certain contracts to entities established in E.U. Member States. The FMLC requested that HM Government raises the need for further guidance on this issue with the European Commission and provides similar guidance to foreign firms which might want to access the U.K. market after Brexit.