As insurers start preparing post-Brexit EU hubs, the head of Europe’s insurance watchdog has said that relocation plans need proper supervision.
European Insurance and Occupational Pensions Authority (EIOPA) Chairperson Gabriel Bernardino is particularly concerned with firms who attempt to secretly keep their main operations in the UK and establish shell companies on the continent.
“Empty shells or letter boxes are not acceptable. Sound supervision demands appropriate location of management and key functions including sound outsourcing and reinsurance policies,” he said in an interview Insurance Asset Management Europe published on the watchdog’s website.
In order to collect evidence, EIOPA’s oversight team is visiting national supervisory authorities engaged in discussions with companies in the UK, according to the official.
“EIOPA is closely monitoring the developments linked with the Brexit negotiations. As regards the possible impact on the conduct of insurance supervision and insurance products, it is too early to form any firm position,” he said.
Britain is set to leave the EU in 2019, but terms of the withdrawal have yet to be negotiated. Earlier this year, Prime Minister Theresa May, indicated that the government will not remain in the single market, as doing otherwise means “not leaving the EU at all.”
Bernardino said “insurers based in the United Kingdom would no longer benefit from an EU ‘passport’ to the European single market” once the country withdraws. The EIOPA intends to publish “in due course” guidance for national supervisory authorities on sound principles for authorisation and supervision, and will subsequently closely monitor their implementation, he added.
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