London market favors a long good-bye
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It’s still not known exactly how long it will be before the United Kingdom leaves the European Union, but insurers and brokers in London are pushing for a long transition period to allow them to adjust to what could be huge changes to the way they operate.
The London Market Group says it is vital that a transition period — of as much as five years — be put into place to help businesses make necessary changes once the U.K. formally begins the process of leaving the European Union.
The LMG, which represents insurers and brokers in the London insurance market, will lobby for passporting rights and regulatory equivalence to be retained, said Ben Reid, interim CEO of the group.
“And some form of access to talent is essential,” added Mr. Reid. One of the key issues in the debate prior to Brexit was the so-called “freedom of movement” principle, which allows citizens in one E.U. to country to live and work in any other country in the trading and political bloc.
While the LMG is aware of the political sensitivities involved, Mr. Reid said greater clarity from the U.K. government on its negotiating position with the E.U. is “critical” to “stop capital and people moving overseas.”
Mr. Reid noted, however, that the U.K. decision to leave the E.U. might also provide legislators with the opportunity to “reinvigorate the regulatory regime” and improve the market’s competitive position.
Last month, the U.K. Treasury Committee said it had agreed upon terms of reference for an enquiry into Solvency II, the risk-based capital regime for insurers and reinsurers in the E.U. that came into force in January.
“Brexit provides an opportunity for the U.K. to assume greater control of insurance regulation,” Andrew Tyrie, chairman of the Treasury Committee, said in a statement.
