Lloyd’s Brussels will write facultative reinsurance and non-proportional excess of loss treaty reinsurance across all markets in the European Economic Area (EEA), effective 1 January 2019.
According to Lloyd’s, regardless of any future transitional arrangements or equivalence under Brexit, it will be able to right facultative reinsurance and non-proportional excess of loss treaty, with the remainder of treaty reinsurance business written as cross-border business on syndicate paper from EEA states under WTO terms.
However, Germany and Poland are excluded from this.
In the unlikely event that the UK does not secure Solvency II reinsurance equivalence in 2019, Lloyd’s will be able to process the remaining treaty reinsurance business through Lloyd’s Brussels from 1 January 2020.
The Lloyd’s market can continue to write reinsurance in EEA states until 29 March 2019 with confidence that all valid claims will be paid, according to Lloyd’s. After this date, the market can continue to do business via syndicate paper.
Lloyd’s said it was also investigating a bespoke solution for its Brussels business to process proportional treaty reinsurance business in 2019, which could also apply to non-proportional treaty.
Vincent Vandendael, Lloyd’s CCO and Lloyd’s Brussels CEO, commented: “We expect that, following Brexit, the UK will apply for and receive Solvency II reinsurance equivalence.”
“However, we are working to ensure that our reinsurance customers can continue to access the market’s specialist policies in the event that the UK leaves the EU without a transitional agreement or equivalence.”
He added: “Along with other London Market partners, we continue to strongly make the case that an EU equivalence decision with respect to the UK’s reinsurance framework should be secured as soon as possible and by no later than the end of the transition period. It is clear from the UK Government White Paper that the UK Government aims to achieve Solvency II equivalence of UK reinsurance regime.”
“We will know before 29 March 2019 whether we have transitional arrangements. This, alongside the solutions we are working on, the market’s strong customer relationships and the commitment to pay all valid claims, will all help us maintain and grow our business partnerships across the EEA.”
