PRA and FCA have written a joint letter to CEOs of insurance firms on the importance of being prepared for the end of the transition period, and FCA has also more generally updated its website.
The regulators stress the temporary measures they have been able to put in place to ensure that UK customers can continue to access products and services from EU providers, but say that there could nevertheless be some volatility and disruption. The letter notes that financial stability is not the same as market stability and stresses the need for:
- contingency planning and the need to ensure ongoing service continuity in respect of EU liabilities – including considering the availability of EU run off regimes and transfer of liabilities to EU authorised insurers. EIOPA has stressed the importance of preventing unauthorised insurance activity, and of ensuring that customers who may be affected by a reduction or cessation in service are treated fairly;
- firms using the “part VII saving provision” which will give firms up to 2 years after the end of the transition period to get a UK court order sanctioning transfer of business and will apply to any application which, at the end of the transition period has paid its regulatory fee and has an approved independent report. But the letter notes that this provision is not binding on any EEA supervisor, so firms should actively engage with any relevant supervisor as required;
- given the European Commission has not made a decision on UK data protection adequacy, standard contractual clauses in relevant contracts can be used for complying with the EU’s laws on cross-border personal data transfer;
- checking ability to make and receive payments using different bank accounts, if UK banks have to close overseas bank accounts of EEA customers; and
- firms entering the TPR to be prepared to comply with UK rules from the end of the transition period – and the importance of TPR firms submitting applications during the window they are given.