As the UK slouches towards a no-deal Brexit, some welcome news for insurers – German lawmakers have authorised the country’s insurance regulator to extend passporting rights for UK insurance entities in the event that this most catastrophic of Brexit outcomes does come to pass.
Germany will extend passporting rights for up to 21 months after Brexit; the change is part of a broader legislative package mostly related to tax issues. Passporting has been extended in order to facilitate a smoother winding up process and to remove as much uncertainty as possible for both insurers and their customers.
Underwriting of any new business will be excluded, and insurers will be required to either terminate any existing contracts, obtain fresh authorisation, or transfer the business in question to a licensed risk carrier.
“The extension of passporting rights for up to 21 months post-Brexit is a significant development,” said Henning Schaloske, a partner at Clyde & Co in Dusseldorf, “and should provide sufficient time for the resolution of outstanding contracts.” However, he said, it is important that EU regulators ‘continue to work together in a spirit of co-operation to address issues relating to cross-border insurance’.