Former Brexit secretary David Davis previously admitted not believing in Theresa May’s divorce plan, thus his resignation… now an insurance body has written to the UK Prime Minister to raise concerns as negotiations crawl on.
The London & International Insurance Brokers’ Association (LIIBA), which is worried amid the absence of equivalence provisions for intermediaries, is not only airing its apprehensions but also proposing how to proceed in the talks with the European Union. In LIIBA’s view, the British government should seek an equivalence regime similar to what investment managers enjoy under the Market in Financial Instruments Regulation.
Investment firms, as long as they are registered with the European Securities and Markets Authority, can provide services to EU-based professional clients even without setting up shop in the region.
“We have noted the proposals the government has made in its whitepaper for trade arrangements for financial services after UK leaves EU,” wrote LIIBA chair Roy White. “However, we are concerned that any agreement to an ‘enhanced equivalence’ regime will create uncertainty for insurance intermediaries.
“As you will be aware, there is no equivalence framework either under the Insurance Mediation Directive nor the Insurance Distribution Directive (IDD), which comes into force on October 01. Clearly in the absence of an existing equivalence regime, enhancements will not work.”
LIIBA chief executive Christopher Croft, meanwhile, stressed the association’s keenness to work with the government to assist in finding a workable way forward.
“Buyers of insurance must not be the unintended victims of Brexit,” said Croft. “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 whitepaper provides a measured foundation from which the right future trade agreement for financial services can be built. We understand in general why that focusses on the existing equivalence regimes but our relevant directive – IDD – has no such concept.”
