Near-final rules for extension of SMCR to insurers and brokers published

Near-final rules for the extension of the Senior Managers & Certification Regime (SMCR) to all financial services firms, including insurers and insurance intermediaries, have been published today by the PRA and the FCA.  The FCA has also confirmed that the extension of the SMCR to insurance intermediaries will take effect from 9 December 2019.

Continue reading

Leave a Comment

Filed under Insurers, Intermediaries, Legal/Regulatory

EIOPA issues second warning about the impact of Brexit on insurance contracts

EIOPA has published an opinion and FAQs emphasising the need for insurers and insurance intermediaries to explain to policyholders how Brexit will affect their insurance cover.

At first sight, EIOPA’s comments appear to reinforce concerns that political compromise cannot be expected on policies written (or performed) on a cross-border basis before the UK’s withdrawal from the EU (so-called “legacy contracts”). The particular issue for UK insurers is whether they will have the authorisation they need, post-Brexit, to continue to meet their obligations to EEA policyholders under these contracts. Closer examination of the words used by EIOPA may, however, mean that fewer policies are caught by this issue than has been assumed to date.

Our discussion of EIOPA’s latest opinion can be found here.

Continue reading

Leave a Comment

Filed under Insurers, Intermediaries, Legal/Regulatory

AML/CFT COMPLIANCE A KEY FOCUS OF RECENT SUPERVISORY INSPECTIONS BY THE HONG KONG INSURANCE AUTHORITY

Late last week, the Hong Kong Insurance Authority (IA) published a circular setting out its key findings from anti-money laundering and counter-financing of terrorism (AML/CFT) onsite inspections of authorised insurers carrying on long term business.

The IA conducted visits of more than 20 insurers to review their AML/CFT policies, procedures and controls and their compliance with the relevant legislative and regulatory requirements. Continue reading

Leave a Comment

Filed under Insurers

BREXIT UPDATE – EEA (RE)INSURERS

EEA insurers and reinsurers doing business in the UK under the insurance passport must prepare for the UK’s withdrawal from the EU. We consider, in our latest “At a Glance” guide, the impact of Brexit on the cross-border activities of EEA (re)insurers, including how firms might respond to the European Council’s recent agreement to a transition period.

The “At a Glance” guide can be found here.

Leave a Comment

Filed under Insurers, Legal/Regulatory

PRA AND FCA CLARIFY IMPACT OF BREXIT TRANSITION FOR INSURANCE SECTOR

Recent announcements made by the PRA and FCA clarify their approach to Brexit following the European Council’s agreement to a transition period for the UK’s withdrawal from the EU. In particular, insurers, insurance intermediaries and other financial services firms have been encouraged to assume that they will continue to benefit from passporting rights until December 2020. Whilst this is a welcome development, firms cannot be complacent:

  • As “nothing is agreed until everything is agreed”, there can be no certainty about the transition period until all terms of the Withdrawal Agreement are approved, which will only come much later (if at all) in the Brexit negotiations.
  • Failing such agreement, the UK’s “temporary permission” regime will enable firms coming into the UK from other EEA jurisdictions to carry on business here while they obtain the PRA and FCA authorisations needed for those activities. UK firms with EEA operations seem unlikely, however, to benefit from a similar concession.
  • In practice, this means that UK firms with significant EEA interests are continuing to plan, for now at least, on the assumption that there will be no transition period. Otherwise, they risk disruption to their business if the UK leaves the EU without agreeing the envisaged transition period as part of the terms for its withdrawal.

We consider the latest announcements from the PRA and the FCA. We also note the PRA’s policy statement (PS4/18) and Supervisory Statement (SS2/18) on its approach to branch authorisation and supervision, which were issued at the same time. Continue reading

Leave a Comment

Filed under Insurers, Intermediaries, Legal/Regulatory

CAN A LAWYER BE AN ARBITRATOR WHERE THE REQUIREMENT IS FOR “EXPERIENCE OF INSURANCE OR REINSURANCE”?

In Allianz Insurance and Sirius International Insurance Corporation v Tonicstar Limited [2018] EWCA Civ 434, the Court of Appeal has reversed the decision of the High Court on whether a party-appointed arbitrator met the contractual requirements as to requisite experience. The dispute arose under a reinsurance contract that incorporated the “Excess Loss Clauses” of the Joint Excess Loss Committee. The arbitration clause required the arbitrators to have “experience of insurance and reinsurance”. The Court of Appeal held that that an English QC with experience of insurance and reinsurance law was sufficient to comply with this requirement.

This decision is of particular interest as such challenges to arbitrators rarely come before the courts. It highlights the importance of drafting arbitration clauses clearly, particularly where parties require their arbitrators to possess certain qualifications or experience. If insurance parties want a tribunal convened of one or more market practitioners, as opposed to lawyers with sector experience, this should be clearly expressed.

For more on this decision, see our arbitration team’s blog post here.

Leave a Comment

Filed under Case law, Insurers, Policyholders

INSURANCE AND REINSURANCE DISPUTES ANNUAL REVIEW 2017 PUBLISHED

We are pleased to share with you our Insurance and Reinsurance Disputes Annual Review of 2017, published today, which provides an overview and analysis of the key cases and developments affecting those engaged in or with contentious matters in the insurance and reinsurance market.

Please click here, or on the picture below, to access the 2017 Review.

Paul Lewis
Paul Lewis
Partner, dispute resolution
Email | Profile
+44 20 7466 2138
David Reston
David Reston
Partner, dispute resolution
Email | Profile
+44 20 7466 2244
Anthony Dempster
Anthony Dempster
Partner, dispute resolution
Email | Profile
+44 20 7466 2340
Alexander Oddy
Alexander Oddy
Partner, dispute resolution
Email | Profile
+44 20 7466 2407
Sarah McNally
Sarah McNally
Partner, dispute resolution
Email | Profile
+44 20 7466 2872
Greig Anderson
Greig Anderson
Partner, dispute resolution
Email | Profile
+44 20 7466 2229

Leave a Comment

Filed under Case law, Insurers, Intermediaries, Policyholders

Brexit – PRA consults on approach to UK branches of incoming insurers

On 20 December 2017, the Treasury, PRA and FCA clarified their approach to EEA-headquartered financial services firms wishing to carry on business in the UK post-Brexit. More recent evidence to the House of Commons Treasury Committee (“TC”) sheds further light on the PRA’s thinking. It also highlights the difficulty for the PRA of giving guidance to firms while so much uncertainty surrounds the UK’s future relationship with the EU.

The PRA’s consultation (CP30/17) on its approach to third country insurers, a separate “Dear CEO letter” and comments made to the TC on 16 January merit further comment.

To read the full article, click hereContinue reading

Leave a Comment

Filed under Insurers, Legal/Regulatory

Further PRA reform of Solvency II implementation – internal models and reporting

This article was first published on Thomson Reuters Regulatory Intelligence on 17th January 2018.

On 12 December 2017, the PRA published the second in a series of three consultation papers on reforms to the Solvency II regime (CP27/17).  The PRA’s proposals are intended to reduce how often an insurer must apply for approval of changes to its internal model, specifically where approval is needed for an accumulation of minor changes. A process for quarterly model change reporting is also proposed.

The third, and final, consultation paper in the series (CP2/18) was published on 12 January 2018 and proposed some changes to reporting requirements.

CP21/17, the PRA’s first consultation paper in this series, concerns the matching adjustment and is open for comments until 31 January 2018 (see our blog entry of 17 November 2017).

Other aspects of Solvency II that the PRA has confirmed it is looking at are:

  • recalculation of the Transitional Measure on Technical Provisions – the PRA is looking at further simplification of the recalculation process; and
  • external audit of Solvency and Financial Condition Report – the PRA is gathering evidence on whether its approach remains proportionate, particularly for smaller firms.

Responses to CP27/17 and CP2/18 are required by 20 March 2018 and 13 April 2018 respectively. This article looks, in particular, at changes proposed by CP27/17[1].

Continue reading

Leave a Comment

Filed under Insurers, Legal/Regulatory

Brexit – EIOPA publishes opinion on cross-border legacy business

An opinion published by EIOPA on 21 December 2017 raises concerns for UK insurers who have policyholders in EEA states other than the UK. This will include, for example, every life company with annuitants living in an EEA state*, perhaps because they moved from the UK on retirement.

Insurers have been aware of issues raised by Brexit for legacy contracts written (or performed) cross-border since the UK referendum on EU membership (see, for example, our client briefing issued in July 2016). However, it has been widely hoped, to now at least, that a sensible compromise would be reached by the UK government and EU authorities to ensure that firms do not need to embark on expensive and time-consuming processes to avoid detriment to policyholders once the UK finally leaves the EU. Such a compromise currently appears less likely. Continue reading

Leave a Comment

Filed under Insurers, Legal/Regulatory, Miscellaneous