In this blog we consider some of the challenges facing insurers based in the UK following the Brexit vote, including the options available to UK insurers if passporting rights are not preserved following the UK’s exit from the EU. For further information on the legal, regulatory and strategic issues arising for insurers from the Brexit vote, please see our full guide, Brexit: Contingency Planning for Insurers.


The right of EEA insurers to use their home state authorisation to provide insurance services in another EEA state without being subject to additional regulation in that other EEA state is known as “passporting”. Post-Brexit there is a risk that UK insurers will lose their EEA passporting rights (and, as the rights are reciprocal, EEA insurers will lose their right to passport into the UK).

Solvency II

While it is not currently possible to determine what the specific shape of post-Brexit domestic legislation will be, the current industry view is that it is unlikely that substantive changes will be made to the Solvency II regime (although a Treasury Select Committee has now opened an inquiry on whether Solvency II is a price worth paying for the passporting of insurance services across the EEA).  

Much will depend on whether the UK is granted equivalent status under Solvency II. Current expectations are that it will but the decision is not an automatic one. Importantly “equivalence” under Solvency II does not mean that the PRA will be entitled to be treated as if it were a full EEA regulator for all purposes under the Solvency II Directive, nor will it entitle UK firms to EEA passporting rights (or entitle EEA firms to passport into the UK).

Restructuring Options

In the event that passporting rights are not preserved, UK based insurers with branches in EEA countries that wish to continue to write business through an EEA branch network will need to think about obtaining local licences for those branches or restructuring their operations to an EEA country, including by way of a Part VII portfolio transfer, an EU cross-border merger, establishing a Societas Europaea, or by intra-group agreement/novations.

Practical Considerations

There are a number of other practical considerations for firms to think about when assessing the impact of Brexit on their business, including:

  • Outsourcing arrangements;
  • Policy and contract terms;
  • Distribution networks;
  • Changes to data protection rules; and
  • Enforcement of English judgments.

For more details, please see our full guide, Brexit: Contingency Planning for Insurers.