Financial Services after Brexit: The continuity of legacy insurance contracts
14/01/2021

On 1 January 2021, the UK left the EU’s Single Market and Customs Union. As a result, the UK has lost the rights and benefits it had as an EU-Member State and is no longer a party to the EU’s directives and regulations, such as IDD and Solvency II.

To safeguard the continuity of legacy insurance contracts between Belgian residents and UK insurance service providers, the Belgian government has put in place a special transitional regime.

UK insurance undertakings

Since Brexit on 1 January 2021, UK insurance companies are treated as third-country insurance companies. Thus, in the absence of any equivalence decisions, they will require a prior authorisation by the National Bank of Belgium (“NBB”) to offer insurance contracts in Belgium. The UK insurance companies that do not obtain such a Belgian licence will no longer be allowed to conclude new insurance contracts and will have to terminate their Belgian activities.

However, by a Royal decree of 22 December 2020, the Belgian government has put in place a transitional regime that allows UK insurance undertakings to continue their legacy insurance contracts without obtaining the NBB licence. To benefit from this transitional regime, UK insurance undertakings have to: 

  • notify the NBB of their intention to make use of the arrangement;
  • provide the NBB with a plan indicating how they will discharge and settle their obligations under the legacy contracts;
  • appoint a Belgian representative; and
  • inform their policyholders and beneficiaries of the continuity of insurance contracts and provide all useful information in this regard.

These requirements also apply to UK insurance undertakings that have requested authorisation as a third-country while they are awaiting the NBB’s confirmation.

Insurance intermediaries

As with UK insurance undertakings, the transitional regime provides for continuity measures for UK insurance intermediaries, including ancillary insurance and reinsurance intermediaries, that provide services in Belgium.

Since Brexit on 1 January 2021, any UK insurance intermediaries that intend to provide services in Belgium have to be registered with the Belgian Financial Services and Markets Authority (“FSMA”) under the common third-country regime. However, the Royal decree of 22 December 2020 temporarily allows such intermediaries to continue their services for insurance contracts concluded before the Brexit date, even without FSMA registration. This arrangement will apply for 18 months from 1 January 2021. It does not apply to contracts that are concluded after 1 January 2021. 

Any UK intermediaries that would like to rely on the transitional regime have to:

  • notify, within 2 months, the FSMA of their intention to make use of the arrangement; and
  • provide the FSMA with a plan indicating how they will terminate their activities in Belgium within 18 months; and
  • update the information under (i) and (ii) and provide additional information on their insurance distribution activities in Belgium as requested by the FSMA.

Again, the same requirement applies to UK intermediaries that have requested registration with the FSMA but are still awaiting official confirmation.

 

In collaboration with Elias Nys, Associate

Voir aussi : ALTIUS ( Mrs. Audrey Zegers )

[+ http://www.altius.com]


Click here to see the ad(s)
Tous les articles Droit Européen

Derniers articles Droit Européen

Brexit deal & data transfers: a temporary relief
22/01/2021

Amongst the (many) uncertainties linked to Brexit, its potential restrictive impact on data transfers between the European...

 Brexit deal & data transfers: a temporary relief Read more

Digital platforms – The gatekeepers under the EU’s new Digital Markets Act
18/01/2021

In December last year the European Commission published its much anticipated draft Digital Markets Act. 

Digital platforms – The gatekeepers under the EU’s new Digital Markets Act Read more

Belgian transitional regime for the UK insurance industry
14/01/2021

On 1 January 2021, the Brexit transition period came to an end and the United Kingdom (“UK”) officially left t...

Belgian transitional regime for the UK insurance industry Read more

Digital Services Act: The European Commission Proposes An Updated Accountability Framework For On...
13/01/2021

On December 15, 2020, the European Commission (EC) presented its long-awaited proposal for a Digital Services Ac...

Digital Services Act: The European Commission Proposes An Updated Accountability Framework For Online Services Read more

Derniers articles de Mrs. Audrey Zegers

Financial Services after Brexit: no equivalence (yet), but a transitional regime for Belgium
11/01/2021

After the Brexit, UK financial service providers no longer benefit from their previous passporting rights. The recent Trad...

Read more

LexGO Network