A number of EU-27 Member States have been accelerating their efforts to finalize national "emergency" Brexit legislative (NEBLs) measures in the event of a 'No Deal' or any other form of Brexit. Since our March 28, 2019, round-up of the state of play on these NEBLs1, Belgium has taken action. This Client Alert looks at the Belgian Act of April 3, 2019, on the withdrawal of the United Kingdom from the European Union (the Belgian Brexit Act) and what it means for market participants and relevant next steps.

While the majority of the provisions of this new law will only enter into force upon the occurrence of a No Deal Brexit, the law provides for contingency measures across a range of sectors including financial services, notably for the insurance industry, and enables continuity of contracts in the case of a no Deal Brexit. It includes, among other provisions, a contingency measure that further rulemaking, in the form of a Royal Decree rather than further legislation, can adopt more specific measures. 

It is to be welcomed that the Belgium Brexit Act aims to create a framework for continuity in the handling of insurance contracts currently in place that were entered into before Brexit with those British insurance intermediaries active in Belgium pursuant to EU rights on freedom to provide services and the freedom of establishment. Some of those specific measures – notably for insurance intermediaries – take immediate effect. 

Some relief but no grounds to relax

After Lloyd's of London set up its new EU hub2 in May 2018, the Belgian Brexit Act also, regardless of the Brexit date, introduced a new Anglo-Saxon type of insurance intermediary in the form of a "mandated underwriter" (gevolmachtigde onderschrijver/ souscripteur mandaté). This change was made by amending existing regulatory law and in particular Part 6 of the Act of 4 April, 2014, on Insurance (the Insurance Act). A mandated underwriter's main task is to determine the nature and size of the risk that is to be insured and to determine the insurance premium that must be paid. Such a person can act in the name and on behalf of one or more insurance undertakings and mostly underwrites highly specialized insurance policies. 

Mandated underwriters are entitled to carry out their activities under an exclusive agency agreement or other legal obligation that directly or indirectly requires them to place their insurance portfolio or a certain extent thereof with one insurance undertaking. The mandated underwriter must have an appropriate internal organization allowing it to absorb the risks associated with its activities. It must comply with the transparency and information requirement and is not allowed to combine its activities with a registration as broker, agent or sub-agent.

The Belgian regulator (FSMA) stressed in its newsletter of August 2019 the impact of Brexit on (re-) insurance intermediaries and their registration obligations in Belgium if they wish to continue doing business after a "hard" i.e. No Deal Brexit, which, at the time of writing, is scheduled to take place on October 31, 2019. A (re-)insurance or ancillary intermediary that is established outside the EEA may carry out the activities of (re-)insurance distribution in Belgium only after first having been registered in FSMA's register of (re-)insurance and ancillary insurance intermediaries. In keeping with existing EU law, a (re-)insurance or ancillary intermediary established in the EEA may carry out the activities of (re-)insurance distribution in Belgium using its European passport only after first registering with its home supervisory authority and after its home authority has sent to the FSMA a notification of its intention to carry out these activities in Belgium. 

(Re-)insurance or ancillary insurance intermediaries carrying out distribution activities that cover risks located in the EEA for policyholders based in the EEA may only call upon the services of other (re-)insurance intermediaries and (re-)insurance companies that are authorized to carry out their activities in the EEA. In case of a Brexit, such intermediaries may therefore no longer use the services of British (re-)insurance intermediaries or British (re-)insurance companies that are not authorized to underwrite risks in the EEA. 

The FSMA follows the European position that (re-)insurance distribution takes place in Belgium when a (re-)insurance or ancillary insurance intermediary carries out: 

  • Insurance (or reinsurance) distribution activities for policyholders based in Belgium and covering risks located in the EEA. Where there are several policyholders on a single insurance contract, this means that the insurance distribution is taking place in Belgium provided one of the policyholders is based in Belgium and the insurance refers to a risk located in the EEA; and
  • Insurance (or reinsurance) distribution activities that are de facto carried out in Belgium, for example by using a website or advertising that is clearly and specifically aimed at the Belgian market, even if the intermediary is physically located outside Belgium.


The Belgian Brexit Act's authorization to the Belgian Federal Government to issue further measures for financial services and other industries by way of Royal Decree is likely to lead to detailed specific measures for the wider markets and a range of participants. Market participants will need to assess how these may differ to measures implemented by other EU-27 Member States and/or any forthcoming measures issued at the EU level. In addition, firms will need to remain cognizant of the European Supervisory Authorities (EBA, ESMA, EIOPA) as well as the European Central Bank-SSM's supervisory principles on relocations (SPoRs)3, which the Belgian financial regulatory authorities are guided by. 

While there is further change on the horizon, affected firms may wish to consider that the Royal Decree also sets a timetable as to when temporary reliefs begin to apply as well as ultimately when they cease. The Belgian Brexit Act imposes a longstop date of December 31, 2020, but states that some of these reliefs may cease earlier depending on what arrangements (if any) might be concluded between the UK and the EU and/or Belgium following the UK's exit from the European Union. As a result, firms may want to consider how that fluid timetable may affect various parts of their Brexit planning. 


1. See coverage from our Eurozone Hub available here.

2. See here.

3. Please refer to dedicated coverage available here.

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