Irish Region
Read the Insurance update in the Irish Agenda on Beyond Brexit – EU-UK Agreement and Ireland's Insurance Temporary Run-off Regime
Read the Insurance update in the Irish Agenda on Beyond Brexit – EU-UK Agreement and Ireland's Insurance Temporary Run-off Regime
The signing of the EU-UK Trade and Cooperation Agreement (TCA) on 30 December 2020 gives greater clarity on the new relationship between the UK and the EU27 Member States, including Ireland. The TCA means that there is now certainty on trading arrangements across a range of sectors. However, it does not contain much of significance for (re)insurance or financial services generally.
The statements in the TCA about a framework for regulatory cooperation to be agreed by March 2021 between the EU and the UK should assist the (re)insurance sector. This proposed EU-UK memorandum of understanding should also precipitate progress on Solvency II equivalence determinations. However, there is a political dimension to these determinations and a further delay cannot be ruled out.
To provide a degree of legal certainty, Ireland has enacted a new legal framework to facilitate the run-off of existing insurance business of UK (and Gibraltar) insurers and insurance intermediaries (Firms). In early 2021, the Central Bank of Ireland (CBI) published details of the registration process for Firms seeking to avail of the Temporary Run-off Regime (TRR). This is implemented through the Withdrawal of the United Kingdom from the European Union (Consequential Provisions) Act 2020.
We summarise the main elements as follows:
To avail of the TRR, the Firm must:
In the FAQ section on its website, the CBI provides some limited insight on its interpretation of how the TRR applies in given circumstances. Key points include:
Mid-term policy adjustments – in response to the question whether such adjustments are permitted under the TRR, the CBI's guidance gives some but not total clarity. It will likely be subject to some debate. The CBI states that policy adjustments which "establish, renew, extend, increase or resume insurance cover on an existing policy, may not be in accordance with the TRR. Immaterial and / or administrative adjustments to policies may be permissible, provided these adjustments in total, do not undermine the requirements of the TRR, which include permanently ceasing to carry on insurance business." Notwithstanding the CBI's attempts to clarify the point, debate on what constitutes an "immaterial" and/or "administrative" adjustment seems likely.
A Firm seeking to avail of the TRR must notify the CBI no later than 3 months after the Relevant Date.
The CBI has now published the required forms of notification on its website (see here). Firms must file these forms by the end of March. The CBI has given details of the ongoing reporting requirements which will apply to Firms relating to registrations under the TRR.
A public register of Firms that notified the CBI that they are availing of the TRR will be available on the registers section of the CBI's website.