This briefing note is intended to provide an answer to the question that has been raised within the industry – "what could Brexit mean for Gibraltar insurers exercising passporting rights?" Whilst this is impossible to predict for certain, below is my own personal view and does not constitute legal advice.

Both the UK and Gibraltar go to the polls on 23 June 2016 to decide if the UK remains or exits the EU. Gibraltar has the same entitlement to vote in this Referendum as British citizens resident in the UK. The referendum in Gibraltar is therefore part of the UK vote.


Gibraltar joined the EU together with the UK in 1973. It did so as part of the UK, not as a separate member state. This resulted in the rather anomalous situation that although EU rights apply as between Gibraltar and the rest of the EU (i.e. France, Germany, Italy etc.) since Gibraltar is part of the EU by virtue of UK membership, the same EU rights did not apply between Gibraltar and the UK (i.e. they are not separate member states). It will be recalled that the EU rights of freedom of services and establishment relate to cross border business between two (or more) separate member states and not between parts of the UK, say, Manchester and London.

I was originally involved in advising on the practical implementation of the EU passport in Gibraltar around 1997 (when the current arrangements were put in place) and it was clear that for Gibraltar companies to enjoy equivalent EU passporting rights into the UK it required the UK to agree bilaterally with Gibraltar that for the purposes of EU rights in insurance, banking and financial services, Gibraltar would be 'treated as if it was a separate member state to the UK'. The UK therefore legislated for this (the Gibraltar Order) and Gibraltar insurance companies were allowed to sell insurance into the UK in the manner that they do today.


If the UK exits the EU it would leave Gibraltar in the unfortunate position of also having to exit (not by choice but by compulsion as Gibraltar is part of the EU by virtue of UK membership) in the same way as say Manchester or London. If the UK therefore leaves the EU (subject to the 2 year transitional arrangements currently prescribed by the Treaty), EU rights would cease to apply between the UK (together with Gibraltar which is part of the UK for EU purposes) and the rest of the EU. This would impact on those Gibraltar and UK insurance companies that do EU (non-UK) business (say, a Gibraltar or UK insurer or captive writing German and French risks).

The potential impact is considerably less, however, with regards to Gibraltar UK facing businesses given that the current arrangements in place between the UK and Gibraltar are bilateral and not strictly reliant on EU law. In other words, the UK currently confers equivalent EU rights to Gibraltar notwithstanding Gibraltar is not a separate member state. Given that the UK has agreed to the special arrangements currently in place and that Gibraltar's exit from the EU would have been caused by the UK (as the member state responsible for Gibraltar), the prevailing view is that the UK would continue with the existing bilateral trading relationship with Gibraltar. For local insurers this would be recognised by extending the current rights of Gibraltar insurers to continue to write UK business under the Gibraltar Order but outside the existing EU framework.

The UK will then have to negotiate a replacement treaty of some sort with the EU (admittedly less favourable than the current EU Treaty, and from a considerably weaker negotiating position). This is likely to take more than the 2 year transition period. Most informed commentators believe it could take 3-4 years, thereby permitting existing businesses to continue to trade in the interim and should include Gibraltar. The default scenario (if it came to that) for Gibraltar insurers writing EU (non-UK) business would be to relocate to Luxembourg, Dublin or Malta and continue within the EU. But for Gibraltar insurers writing UK risks, I do not foresee any change to the current status for the reasons I have explained. Since approximately 90% of all insurance premiums from Gibraltar insurance companies exercising passporting rights is probably derived from the UK, the risk of a Brexit is significantly mitigated as a result.

But regardless, and as a British citizen entitled to vote in the Gibraltar Referendum, I will be casting my vote to remain in the EU. There can be no doubt that the UK's interests are best served by remaining in the EU. The arguments are not even finely balanced. They are very clear-cut in favour of continued UK membership of the EU and Prime Minister David Cameron deserves overwhelming support.

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.