The Trade and Cooperation Agreement (TCA) signed by the UK Government and the EU on 24th December 2020 ensures tariff-free trade for goods will continue as before. The agreement stipulates how the two economies will interact on a vast range of issues but it does not currently provide access for UK insurers or brokers to the EU’s single market from 1 January 2021. This will impact the arrangement of insurance for businesses, people or property situate in the EU. It does not however impact the insurance of businesses that simply sells their goods into the EU.
Both sides agreed during the negotiations to discuss financial services separately. In a document published on 24th December, the UK. government said the agreement includes provisions to support trade in services, including financial services and legal services.
From 1st January 2021, UK financial services firms (including insurance companies and brokers) no longer have automatic passporting rights. Passporting previously allowed firms to sell their services into the EU from their UK base without the need for additional regulatory clearances.
In order to continue to access the single market without passporting, UK based financial services firms will have to rely on ‘equivalence’ decisions, currently being negotiated between The Treasury and their EU counterparts.
The UK has implemented a Temporary Permissions Regime to support EU based firms operating in the UK with passporting rights but currently, there is no equivalent EU wide scheme for UK firms operating in the EU. We are hopeful an agreement will be reached during the first quarter of 2021. As Britain’s Services sector accounts for 80% of our economy and employs over 1.1 million people, this has now become a priority.
We have been taking proactive steps to provide our clients with compliant insurance solutions in a post-Brexit trading world. Over the last year we have been engaging regularly with insurance companies and our EU broking partners, preparing for this eventuality and to identify and mitigate any potential risks to our clients and their businesses.
Hamilton Leigh is committed to ensuring we continue to provide our clients with EU cover solutions, with continuity of service for their risk and insurance needs in the EU and has formed an alliance with an associated partner brokerage; Crotty Insurance Brokers Ltd, based in Dublin and regulated by the Central Bank or Ireland. This alliance enables us to continue supporting our client relationships and to provide a practical solution for those clients with businesses, people or property situate in the EU.
With regards to existing insurance contracts, EU coverage remains in force up until your renewal, at which time we shall agree a strategy for the year ahead. Please rest assured we will do all we can to ensure any changes are as seamless as possible.
We shall be in touch with you over the next few weeks to discuss your EU cover requirements in more detail but should you require more information in the meantime, please contact your Hamilton Leigh Client Service Executive.