LONDON (Reuters) – Insurers in the European Union must take speedy steps to ensure policies won’t be disrupted if Britain leaves the EU without a trade deal in March 2019, the bloc’s insurance regulator said on Thursday.
The European Insurance and Occupational Pensions Authority (EIOPA) said insurers should make “sufficient and timely” preparation to ensure continuity of service after Brexit.
Contingency plans should be realistic and consider all eventualities, including no political agreement between Britain and the EU over their future relations, EIOPA said in a statement.
“I call on all insurance undertakings and national supervisors to plan effectively and take the necessary steps in good time to ensure that policyholders and beneficiaries are not exposed to unnecessary uncertainty regarding the status of their contracts,” EIOPA Chairman Gabriel Bernardino said.
“To facilitate cooperation and the exchange of information EIOPA established a high-level cooperation platform for supervisory authorities on Brexit-related topics.”
Without taking action before Brexit, insurers may not be able to pay out on policies.
The Bank of England said last month that British and EU legislation would be needed to preserve continuity of existing cross-border insurance contracts, otherwise six million British and 30 million European Economic Area policyholders could be affected.
Britain’s finance ministry said on Wednesday the British government will legislate, if necessary, to ensure that contractual obligations, such as insurance contracts, can continue to be met after Brexit.
EIOPA said steps could include transferring contracts from Britain to EU hubs.
Many insurers that use London as a base to serve the EU market have announced plans to open hubs inside the bloc.
Aviva <AV.L> is converting its Irish branch into a regulated subsidiary, and Lloyd’s of London insurance market has chosen Brussels for its EU base.
(Reporting by Huw Jones; Editing by Greg Mahlich)