Brexit: Implications for General Insurance
The UK has formally left the European Union. The withdrawal period, in which the UK is still participating in the EU single market, will end on the on the 31st December 2020. Between now and the date of withdrawal, three main possibilities are open:
- The UK and the EU agree a permanent trade deal
- There is an extension to the transition period
- The UK leaves the EU without a deal, and there is no further transition period.
Clearly, the third scenario would have the biggest implications for insurance professionals in the short term.
Although there will be many professionals that deal exclusively with UK clients who will not experience a strong direct impact from Brexit, many professionals operate on a cross-border basis between the UK and the EU. Brexit will impact the way in which their firm operates, and it will impact the way in which their professional qualifications are recognised.
In the event of a ‘no deal’, firms that are authorised in the UK will no longer be able to passport services into the EU. They will have to be authorised in the EU in order to continue trading in the EU.
For individuals, cross border recognition of professional qualifications is currently governed by the Recognition of Qualifications Directive. This will no longer apply in a no deal scenario. As a result, each individual country in the EU will have to decide which qualifications to recognise.
For example, the Central Bank of Ireland currently recognises some CII qualifications (see https://www.centralbank.ie/regulation/how-we-regulate/authorisation/minimum-competency/qualifications). We are working with regulators in the EU to explain the benefits of UK qualifications, and, where possible, secure recognition for CII qualifications; however, this process is likely to be lengthy and the current situation is not likely to change before the end of December 2020.
Authored by CII
The Chartered Insurance Institute (CII), the leading professional body for the global financial services profession, exists to promote higher standards of integrity, technical competence and business capability. With over 115,000 members in more than 150 countries, the CII is the world's largest professional body dedicated to insurance and financial services.
Our membership covers all disciplines within the insurance industry (claims, broking, underwriting), those working in the life and pensions sector, the mortgage advice market and financial advisers (under the Personal Finance Society brand).
Our Royal Charter requires us "to secure and justify the confidence of the public" in our members and in the insurance and financial services sector.
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