The Prudential Regulation Authority (PRA), Financial Conduct Authority (FCA) and European Insurance and Occupational Pensions Authority (EIOPA) have agreed Memoranda of Understanding (MoUs) to cooperate in case of no-deal Brexit.
Image: UK and European insurance regulators sign MOUs on Brexit. Photo: Courtesy of Tumisu/Pixabay.
The insurance regulators have agreed on supervisory cooperation and exchange of information between UK authorities and EU insurance supervisors if the UK leaves the EU/EEA without a withdrawal agreement and implementation period.
The agreements include a multilateral MoU with EU and EEA National Competent Authorities (NCAs) covering supervisory cooperation, enforcement and information exchange between UK and EU/EEA national supervisors.
It also includes a MOU with EIOPA covering information exchange and mutual assistance between the UK authorities and EIOPA in insurance regulation and supervision.
PRA deputy governor and CEO Sam Woods said: “We have agreed MOUs with EIOPA and EU member states which will ensure our continued cooperation in carrying out our supervisory responsibilities. We have enjoyed a strong working relationship with our European partners for many years and I am confident that this will continue.”
EIOPA stated that the MOUs can ensure cooperation in insurance prudential and conduct supervision for mutual assistance and regular exchange of information to maintain sound prudential and to supervise (re)insurance undertakings and groups based either in the UK or in an EEA member state, with cross-border business activities in the EEA or the UK respectively. And to maintain stability of the financial markets within the EEA and/or the UK.
The MOUs will come into effect only when there is a ‘no deal’ Brexit and will allow for mutual exchange of ‘appropriate and reliable information’ needed for effective regulation of cross-border (re)insurance establishments either in the UK or in EEA member states, cross-border groups , or special purpose vehicles established in the UK or in EEA member states.
EIOPA chairman Gabriel Bernardino said: “These MoUs contribute to meet our primary objective of protecting policyholders and beneficiaries in the EEA member states and the UK, in case of “No-deal” Brexit scenario. They will ensure a continuous strong and close cooperation with our UK colleagues in any scenario.”
Last month, EIOPA published a set of guidelines for national EU insurance regulators, to be followed in case of a no-deal Brexit. The guidelines include allowing insurance holders their right to exercise an option in existing insurance to realize benefits. But, the insurance regulators should prevent UK insurers from issuing new and/ or extending or renewing, or establishing new insurance contracts, as long as they are not authorized under the European law.