Dáil Éireann Debate, Wednesday - 9 December 2020
59. Deputy Sean Sherlock asked the Minister for Finance the arrangements being put in place to ensure that all sectors of society which are insured by UK and Gibraltar insurance providers will continue to offer cover beyond their current period of insurance, particularly as it relates to the bloodstock industry, leisure, hospitality and professional indemnity sectors in view of Brexit negotiations. [42281/20]
View answerAt the outset, it is important to note that neither I, nor the Central Bank of Ireland, can intervene in the provision or pricing of insurance products or have the power to direct insurance companies to provide cover to specific individuals or businesses, including in the bloodstock industry, leisure, hospitality and professional indemnity sectors. This position is reinforced by the EU framework for insurance (the Solvency II Directive) which expressly prohibits Member States from doing so. Consequently, I am not in a position to direct companies as to how they price their policies or what terms and conditions apply.
With regard to the points made in relation to the withdrawal of the UK from the EU, as the Deputy will be aware, at the end of the ‘transition period’, the UK (including Gibraltar) will be a third country and will no longer be part of the EU Single Market, including for financial services. UK/Gibraltar insurance undertakings will therefore lose their right to conduct business in Ireland by way of Freedom of Establishment (FoE) and Freedom to provide Services (FoS) under the EU regulatory framework, also known as ‘passporting’ rights. This is a consequence of the withdrawal of the UK from the EU.
As part of the extensive preparations for the end of the transition period, European and domestic regulatory authorities, including the Central Bank of Ireland, have instructed relevant UK/Gibraltar firms to make and implement contingency plans to ensure that they can continue to provide services to their EU customers post-Brexit. I understand from the Central Bank that a significant majority of these undertakings have implemented such contingency plans in advance of the end of the transition period. Therefore, these insurers should be able to continue to offer insurance business to Irish customers following the end of the transition period.
Furthermore, notwithstanding the level of contingency planning, there has been a concern that a small number of insurance undertakings and distributors will either not have completed such measures by the end of the transition period, or have made a decision not to implement them at all due to the administration and cost involved. Accordingly, the Government has dealt with this through the Withdrawal of the United Kingdom from the European Union (Consequential Provisions) Bill 2020, which is currently being considered by the Oireachtas. Part 10 of this legislation will allow any UK/Gibraltar-authorised insurance entity to continue the administration of both life and non-life insurance policies written before the end of the transition period. This ‘run-off’ regime will apply for a period of fifteen years from the date of the end of the transition period, and be subject to a review by the Central Bank in year twelve. It should be noted that, under this regime, no new policies or renewals are allowed to be written by UK/Gibraltar-authorised insurers unless they receive authorisation from an EU/EEA member state.
Finally, with less than four weeks left until the end of the transition period, I would urge all insurance providers who provide services to Irish consumers to finalise their readiness and contingency plans and take necessary actions in accordance with the relevant European Commission guidance. I would also urge any consumer who have concerns about their insurance policy to contact their insurance provider, who should be able to provide them with details of arrangements to ensure continuity of service. This includes whether the consumer can amend policies, or how the company will pay claims associated with policies, written prior to the end of the transition period.
