- Briggs steps down at Aviva-other senior management changes
- Fitch says US property/casualty(P/C) industry returned to a modest statutory underwriting profit in 2018
- Willis Reinsurance Index down 10% to $335.7bn at 2018 year-end
- Hiscox Cyber Readiness Report 2019 indicates sharp increase in the number and cost of cyber attacks is the key finding in a study of more than 5,400 organisations across seven countries
- Consumer Intelligence survey highlights UK customers overwhelmed by insurance information
- FCA publishes Feedback Statement summarising the responses received to its Discussion Paper - ‘A duty of care and potential alternative approaches’
- Majesco reports its annual customer conference crushed attendance records-announces partnership with DataRobot expired
- Majesco announces wide range of ready-to-use partner apps available in the Majesco Digital1st EcoExchange marketplace expired
- S&P Global Ratings and Guidewire Software announce increased collaboration to inform cyber security factors expired
- AmeriTrust chooses Xponent Underwriting Workstation from Intellect SEEC for underwriting transformation expired
- Travelers reports strong first quarter expired
- Trust Re holds AGM and welcomes new ceo expired
7th November 2018
EIOPA closely monitoring the Brexit contingency planning of insurance undertakings, in particular of the undertakings from the UK and Gibraltar, with cross-border business in EEA30 countries
In December 2017, the European Insurance and Occupational Pensions Authority(EIOPA) issued an Opinion on service continuity in insurance linked with the withdrawal of the UK from the European Union. In the Opinion, EIOPA urged insurance undertakings to take necessary steps in good time to ensure the continuity of cross-border insurance contracts between the UK and the European Economic Area without the UK (EEA30) after the withdrawal of the UK.
EIOPA is closely monitoring the contingency planning of insurance undertakings, in particular of the undertakings from the UK and Gibraltar with cross-border business in EEA30 countries. The insurers with the largest cross-border business in the EEA30 countries have taken action and are implementing contingency measures. However, to date, 124 undertakings from the UK and Gibraltar with cross-border business in EEA30 jurisdictions have no or insufficient contingency plans in place to ensure service continuity in case of a withdrawal without an agreement between the UK and the European Union.
In case of a withdrawal without an agreement, 9.1 million EEA30 policyholders might face uncertainty and delays in receiving payments. This is significantly down from the total 38 million EEA30 policyholders with a cross-border contract, which shows the extent of action by UK insurers with large cross-border business. The residual cross-border business concerned have insurance liabilities of E7.4bn. The residual business of insurers from the UK and Gibraltar without sufficient contingency plans represents(in terms of insurance liabilities) only 0.16% of the overall insurance business in the EEA30 countries. The majority of the business (with insurance liabilities of E5.4bn) relates to a handful of insurers in the UK. The remaining business has mainly low value and short-tail liabilities. Overall, 75% of the contracts concerned belong to portfolios with average written premiums of less than E100 per year. On average, the remaining duration of liabilities of 76% of the contracts is less than two years. The majority of the contracts are with non-life insurers. Only 3 % of the potentially affected policyholders have a contract with life insurers.
EIOPA is working with the national competent authorities to address the residual risk.
By law, insurance undertakings have to ensure continuity and regularity in the performance of their activities, including the development of contingency plans. Supervisory authorities have to ensure compliance respectively. To avoid disruptions in service continuity, immediate and reinforced actions from undertakings and supervisory authorities are required. Insufficient contingency planning that may result in consumer detriment is a severe governance failure.
Policyholders of cross-border insurance contracts with undertakings from the UK and Gibraltar should be informed by their insurer about the relevant contingency measures they are taking and the impact on their contractual relationship and services. If they have further questions, customers may also wish to contact their insurance company. For general information related to the impact of the withdrawal on insurance contracts and services, the policyholders can contact their national supervisory authority or the supervisory authorities in UK or Gibraltar.
Based on the data collected through the monitoring of the contingency planning and in particular due to the nature and scale of the business concerned, EIOPA's assessment is that the service continuity issue does not give rise to financial stability risks. However, EIOPA will continue to closely monitor and assess potential financial stability risks.
EIOPA Trends(337 articles)