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The Actuary The magazine of the Institute & Faculty of Actuaries

Insurers urge government to stop ‘over-complicating’ Brexit transition deal

The UK government must agree a straightforward Brexit transition deal now to provide clarity on a whole range of insurance-related issues, according to the Association of British Insurers.

Brexit brings uncertainty for insurers ©iStock
Brexit brings uncertainty for insurers ©iStock

Director general, Huw Evans, will say in a speech tonight that failure to reach an early agreement will add to uncertainty surrounding travel insurance, green cards and the European Health Insurance Card.

It will also make it difficult for regulators and businesses to manage the “huge changes” involved in leaving the EU, and risk firms triggering their contingency plans before a deal is agreed.

“We seem to have gone backwards with our own government seeking to over-complicate a deal by putting extra demands on the table such as restrictions on EU citizens,” Evans will say.

“A transitional agreement only reached at the 11th hour as part of horse-trading over the final agreement will be of no value to businesses that have had to implement contingency plans by then instead.

“My message to the government and MPs tonight is simple: please, get on with it. The time for hard bargaining is surely over the terms of the final deal, not the interim period.

“We need a straightforward transitional and we need it now.”

This comes after the Bank of England warned late last year that millions of people living in the UK and EU could see their insurance policies become redundant during Brexit negotiations.

It said a political agreement would be needed during discussions, and that legislation will be required in both jurisdictions to avoid widespread financial instability.

The bank outlined how around six million British customers buy insurance from EU firms, and approximately 30 million citizens in the European Economic Area (EEA) hold policies with UK companies.

In addition, approximately £26trn of outstanding uncleared derivatives contracts between banks could be difficult to enforce without a new legal and regulatory framework in place.

“This is an issue which needs addressing urgently via a political agreement to allow these policies to run on, to give customers certainty, and to prevent financial upheaval,” Evans said.

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