“We know that an immediate wholesale rollback of regulatory pressures originating from the EU is still unlikely. Major European-level initiatives such as Solvency II have already been incorporated into UK law; they are an integral part of the system in this country.
“Moreover, the UK as a whole and the insurance industry in particular will want to retain access to EU market. We are still part of a global economy and in order to preserve lucrative ties and be able to sell cross-border, UK-based insurers are likely to find they still have to comply with EU regulation. The future of our current EU passporting rights and their use by non-EU companies, through their London based European HQs, to access the EU market will be of prime concern to the insurance industry.
“In short, there are no simple answers to predicting what will happen. However, much EU legislation affecting the insurance industry is likely to be here to stay.”
Tom Reed, Partner at Moore Stephens, adds: “A myriad of questions still remain but as the dust begins to settle, holding your nerve can be as important as responding swiftly for businesses. In other words, don’t panic and rush into things.
“It is important to remember that Britain is still an EU member; it will remain one for many months yet and will likely retain access to the EU market with a new trade deal in the longer term. Hours after being appointed, Chancellor Philip Hammond already demonstrated he is sensitive to the concerns of business, stating that "we need to ensure access to the single market for our financial services industry".
“The line highlights a wider and more fundamental truth. Yes, there is huge uncertainty for the UK as a whole and the insurance industry is not immune to it. However, the UK is still a major global economy, there is a new Government in place and although it is too early to draw any conclusions, the Chancellor’s rhetoric has been reassuring.
“To sum up, there is no need to panic at this stage. In fact, jumping into things can prove costly and not necessarily helpful, if not downright harmful. Industry leaders should think carefully and take professional advice before making major decisions.”
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