Huw Evans, Director General, Association of British Insurers, said: “The Prime Minister’s speech has provided greater clarity on her Brexit aims as we head toward the triggering of Article 50. We agree there are significant trade opportunities that a more global focus on competitiveness can bring. Her commitment to a phased implementation process is welcome but providers still need as much as possible resolved at the beginning of the negotiation process to minimise uncertainty for firms most affected by loss of automatic single market access. The ABI will also continue to press for a UK regulatory regime that becomes suitable for the British market, successor arrangements for passporting, swift agreement on labour market access and a harmonised data regime.”
Ivor Edwards, corporate insurance Partner at law firm Clyde & Co, comments: "Her specific focus on maintaining freedom to provide financial services across borders and talk of a phased approach will be welcomed by insurers and other financial services firms, all of whom crave clarity, stability and a sense that their interests are being represented.
On that basis many will simply be relieved that the phoney war is nearly over.
"The insurance industry in the UK is large and robust and will survive Brexit. But it won't be unaffected or remain unchanged. Whatever the precise outcome of negotiations, insurers won't wait-and-see. Planning for Britain's exit from the EU is well underway as insurance carriers believe they need to take concrete steps for all eventualities by setting up carrier companies in EU27 countries.
"It's not only UK based companies that are affected and who are making plans. There are over 500 general insurance companies headquartered in continental Europe who passport into the UK that need to take steps too. "
Comment on 'equivalence':
"It's in everyone's interests that financial services can be carried out efficiently across the continent and there has been talk of something equivalent to passporting to aid this. It has advantages in that it may be easy to set up and follow, but the risk is that the UK might lose control of rule setting and equivalence of passporting could be withdrawn or quibbled over. A dispute resolution process would need to be agreed to deal with this."
Graham Vidler, director of external affairs, Pensions and Lifetime Savings Association, said: “A successful Brexit matters to the 20 million workers, savers and pensioners served by our pension schemes. If the economy weakens, it will make it harder for sponsoring employers to keep DB schemes open and reduce the funds individuals can afford to put into DC pensions – but these risks can be reduced if the Government addresses the points we raise.
“We welcome Theresa May’s commitment to set up transitional arrangements to reduce any economic disruption due to leaving the Single Market. While it is not yet clear whether EU regulation, as a result of establishing equivalent rules for financial services, will encompass pension funds, we will be arguing strongly that EU rules on solvency requirements for DB pension funds should not apply to pension funds that only operate within the UK.”
From a pension scheme perspective a successful outcome from the Brexit negotiations would include the following:
1. A robust economy: as good pensions depend on strong employer sponsors and an economic environment where employers and employees are able to make savings provision for the future, pension funds need a Brexit deal which minimises disruption to the economy. We welcome the intention of setting up a transitional regime as this should help avoid an economic cliff-edge.
2. The right regulation: if, as a result of setting up an equivalence regime, Brexit results in UK pension funds remaining subject to EU regulation, it is important that UK-only pension schemes, which do not operate on a cross-border basis, are exempted from any future EU regulation regarding a solvency-based regime.
3. A strong financial services sector: to invest efficiently, pension funds benefit from access to the UK’s successful financial services sector. It is important that such companies are able to continue using their “passports” to do business in the EU Single Market.
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