The ability of UK authorised insurers to retain EU passporting
rights and access the single market of the European Union is
The City of London is the world’s leading insurance
centre. Many of the insurers based in London write business
throughout the single market of the European Union (the
“EU”). This is a significant
market, which accounts for 32% of the global insurance market with
assets of almost €9,800 billion invested on behalf of life and
non-life insurance customers. UK authorised insurers currently
access the single market by way of the financial services passport.
This allows an insurance company authorised by one Member State of
the European Economic Area (the “EEA”)
to carry on business across all EEA Member States. The
continued ability of UK authorised insurers to access this market
is uncertain as the UK will have to renegotiate its trading
arrangements with the EU following its exit from the union.
Some of the insurance clients we are speaking to are considering
establishing an EEA subsidiary in order to retain their EU
passporting rights. Ireland, as an English-speaking common law
jurisdiction with geographical proximity and ease of access to the
UK, is an attractive jurisdiction for UK based insurers considering
their future business plans post-Brexit.
One of the key concerns for the Central Bank when considering an
application for authorisation by an insurance company is whether
the ‘heart and mind’ of the business is based in
Ireland. Irish-authorised insurers are entitled to out-source
certain activities, but applicants must demonstrate that the
insurance company will be sufficiently resourced within Ireland to
carry out its business in compliance with the applicable legal and
Ultimately, until the UK exercises its right to invoke Article
50 and leave the EU, the full implications of Brexit will remain
unclear. The UK may negotiate a favourable deal through which it
will retain access to the single market for financial services, but
there is no certainty of this. UK based insurers are,
therefore, advised to consider alternative means of ensuring
continued access to the single market in order to address the
current uncertainty surrounding their future business plans.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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