The London and International Insurance Brokers’ Association (LIIBA) has proposed that the UK Government seek a workable equivalence regime for insurers in Brexit negotiations.
In a letter sent today (22 August) to UK prime minister Theresa May, LIIBA chairman Roy White said the association was concerned that any agreement by the government to an enhanced equivalence regime will create uncertainty for insurance intermediaries.
White wrote: “We have noted the proposals the government has made in its White Paper for trade arrangements for financial services after UK leaves EU.”
“As you will be aware, there is no equivalence framework either under Insurance Mediation Directive nor Insurance Distribution Directive (IDD), which comes into force on 1 October.”
“Clearly in the absence of an existing equivalence regime, enhancements will not work.”
The letter explained that the government should seek an equivalence regime similar to the regime enjoyed by investment managers under the Market in Financial Instruments Regulation, which allows firms to provide services to professional clients in the EU provided they are registered with European Securities and Markets Authority.
Investment firms do not need to have an establishment in the EU under this regime.
According to LIIBA CEO Christopher Croft, the buyers of insurance must not be the unintended victims of Brexit.
Croft explained: “Major EU corporations could be faced with profound consequences post Brexit without access to London insurance.”
“We need to find a way of maintaining client access to the specialty expertise in London that allows us to provide the cover that simply could not be sourced anywhere else.”
“The government’s White Paper provides a measured foundation from which the right future trade agreement for financial services can be built.”
“We understand in general why that focuses on the existing equivalence regimes but our relevant directive—IDD—has no such concept.”
He concluded: “We are keen to work with the government to help find a pragmatic way forward.”
