Customer communications

Brexit, as well as individual firm’s responses to the Brexit, might impact policyholders.  Firms’ contingency plans have sought to reduce the impact of the loss of passporting rights and to enable them to continue to service existing policies. As a result, insurance firms are encouraged to engage with their customers in clear and timely manner to ensure that their existing customers or any new customers arising, understand the impact that Brexit will have on their policy covers. 

EIOPA has reminded both insurers and intermediaries of their duties to inform policyholders of the effect of the UK’s withdrawal from the EU on their insurance contracts. In this guidance, EIOPA has highlighted that insurers and intermediaries should make their customers aware of the potential impacts on both existing contracts and new contracts which have been concluded prior to the exit date.

Existing customers or beneficiaries should be provided with clear and non-misleading information on any contingency measures taken or planned and on the impact of these measures on their insurance contracts. In the case where no measures have been taken, the reason for not taking measures should be communicated to the policyholders. Where a beneficiary is the claimant, the above information should be communicated at the time that the beneficiary submits a claim.

EIOPA has noted that the above disclosure and communication requirements includes cases where contracts would be terminated by the withdrawal date, but for which open claims exist or might be reported thereafter.

In terms of new or renewed contracts prior to the exit date, the potential policyholder should be provided with this information to enable them to make informed decisions. The obligation to provide this information extends to insurance intermediaries as well.

Potential impacts might include:

  • change of the contractual counterparty,
  • continuity of services and validity of insurance contracts,
  • change or loss of protection provided by any existing national compensation scheme,
  • tax implications of insurance contracts including e.g. insurance premium tax following the relocation of an entity to another jurisdiction,
  • changes to the claims management procedure or to other customer services (e.g. following a change of domicile of an insurance undertaking),
  • how customers can raise questions or inquiries,
  • jurisdiction and contact details of the regulator,
  • change of the law applicable to the insurance contract.

The FCA has also clarified its expectations on regulated firms to consider the potential impact of a no-deal Brexit on customers’ policies.  Brokers should bear in mind that different categories of customers might be affected by Brexit in different ways. The FCA expects brokers to communicate clearly and proactively to customers any changes to their policies relating to Brexit or if there might be any provisions which would invalidate or limit a claim as a result of Brexit.

In the event of a ‘no deal Brexit’, motor insurance customers wishing to drive their vehicle to the European Union (EU), European Economic Area (EEA), Andorra, Serbia or Switzerland after the UK leaves the EU, will have to obtain a Green Card. A Green Card is an international certificate of motor insurance that is accepted in countries which are part of the Green card scheme.

Motor insurers and/or their brokers should inform consumers of the necessity of green cards in relevant countries. You should ensure you communicate in enough time, being clear about the process necessary to obtain a green card, for customers to be able to receive one before exit day if required.

Green cards may be invalid if they are not in the correct colour and format. Brokers should consider consumers’ ability to obtain a green card in the correct colour and format and, where appropriate, consider proactively providing them to your customers. Brokers should assess, and if appropriate, take steps to ensure that any operational changes necessary for the production of green cards are in place.

Green Cards will be required for each individual vehicle and trailers over 750kgs or braked.  This means that customers need a separate Green Card for caravans and trailers.

Multiple green cards might be required if:

  • the haulier has fleet insurance – one green card would be required for each vehicle
  • the haulier’s vehicle is towing a trailer – one green card would be needed for the towing vehicle and one for the trailer (some countries have a separate trailer insurance)
  • the haulier has two policies covering the duration of the trip, for example if the policy renews during the journey

The Gibraltar Government website clarifies that drivers of vehicles entering Gibraltar must be in possession of a green card valid for any EU country; or UK Certificate of Motor Insurance; or Certificate of Motor Insurance issued in accordance with Gibraltar law. Current registration documents and driving licences are also a requirement. Further information can be in this public guidance document.

EIOPA has reminded both insurers and intermediaries of their duties to inform policyholders of the effect of the UK’s withdrawal from the EU on their insurance contracts. In this guidance, EIOPA has highlighted that insurers and intermediaries should make their customers aware of the potential implications on both existing contracts and new contracts which have been concluded prior to the exit date.

Existing customers or beneficiaries should be provided with clear and non-misleading information on any contingency measures taken or planned and on the impact of these measures on their insurance contracts. In the case where no measures have been taken, the reason for not taking measures should be communicated to the policyholders. Where a beneficiary is the claimant, the above information should be communicated at the time that the beneficiary submits a claim.

EIOPA has noted that the above disclosure and communication requirements includes cases where contracts would be terminated by the withdrawal date, but for which open claims exist or might be reported thereafter.

In terms of new or renewed contracts prior to the exit date, the potential policyholder should be provided with this information to enable them to make informed decisions. The obligation to provide this information extends to insurance intermediaries as well.

The FCA has also clarified its expectations on regulated firms to consider the potential impact of a no-deal Brexit on customers’ policies.  Brokers should bear in mind that different categories of customers might be affected by Brexit in different ways. The FCA expects brokers to communicate clearly and proactively to customers any changes to their policies relating to Brexit or if there might be any provisions which would invalidate or limit a claim as a result of Brexit.

Where an intermediary can longer provide insurance distribution activities to their capacity providers post Brexit, the intermediary should notify the insurer of this fact prior to Brexit. This will allow the insurer to understand the impact on their distribution channels as well as to perform contingency planning for the renewal of policies which were placed by the intermediary. These contingency plans will also need to be communicated to policyholders prior to Brexit.

EIOPA has reminded both insurers and intermediaries of their duties to inform policyholders of the effect of the UK’s withdrawal from the EU on their insurance contracts. In this guidance, EIOPA has highlighted that insurers and intermediaries should make their customers aware of the potential impacts on both existing contracts and new contracts which have been concluded prior to the exit date.

Existing customers or beneficiaries should be provided with clear and non-misleading information on any contingency measures taken or planned and on the impact of these measures on their insurance contracts. In the case where no measures have been taken, the reason for not taking measures should be communicated to the policyholders. Where a beneficiary is the claimant, the above information should be communicated at the time that the beneficiary submits a claim.

EIOPA has noted that the above disclosure and communication requirements includes cases where contracts would be terminated by the withdrawal date, but for which open claims exist or might be reported thereafter.

In terms of new or renewed contracts prior to the exit date, the potential policyholder should be provided with this information to enable them to make informed decisions. The obligation to provide this information extends to insurance intermediaries as well.

Potential impacts might include:

  • change of the contractual counterparty,
  • continuity of services and validity of insurance contracts,
  • change or loss of protection provided by any existing national compensation scheme,
  • tax implications of insurance contracts including e.g. insurance premium tax following the relocation of an entity to another jurisdiction,
  • changes to the claims management procedure or to other customer services (e.g. following a change of domicile of an insurance undertaking),
  • how customers can raise questions or inquiries,
  • jurisdiction and contact details of the regulator,
  • change of the law applicable to the insurance contract.

The FCA has also clarified its expectations on regulated firms to consider the potential impact of a no-deal Brexit on customers’ policies.  Brokers should bear in mind that different categories of customers might be affected by Brexit in different ways. The FCA expects brokers to communicate clearly and proactively to customers any changes to their policies relating to Brexit or if there might be any provisions which would invalidate or limit a claim as a result of Brexit.

Insurers and intermediaries will need to determine whether policy wordings and other contractual arrangements (including terms of business agreements, TOBAs) need to be updated to reflect any changes required as a result of Brexit.  The European regulations relating to applicable law and jurisdiction might not operate in the same way as they do now which might allow courts in other member states to claim jurisdiction to hear disputes. This is a complex area which might require legal advice to ensure ongoing enforceability of the contracts and to ensure that the regulatory framework is reflected appropriately.

There might be a number of considerations that customers might want to discuss with their brokers around their coverage, including whether they are covered for disruption caused as a result of Brexit.  They might also want to reassess matters such as levels of coverage in light of potential stockpiling inventory to avoid disruption to supply changes. They might also want to consider other potential vulnerabilities in their supply chain to ensure that they are adequately reflected in the policy.

It depends on the coverage of their insurance travel policy.  The FCA expects brokers and capacity providers to consider the potential impact of a non-deal Brexit on customers’ travel insurance.  The FCA also expects firms to notify customers proactively and clearly of any changes to their contracts relating to Brexit as well as any policies which contain provisions that would invalidate or limit a claim as a result of Brexit.

Brokers must treat customers fairly and not unreasonably reject claims for travel disruption.

The European Health Insurance Cards (EHIC) entitles individuals to state-provided medical treatment in EU countries as well as Switzerland, Norway, Iceland and Liechtenstein.  The EHIC is not a substitute to travel insurance as it does not cover all medical costs, or the cost of emergency repatriation. The EHIC might not be valid in the event of a no-deal Brexit.

The loss of EHIC could have an impact on a customer’s insurance policy and where this is the case insurers/intermediaries should communicate this to policyholders in a clear and timely manner to allow the travellers to opt for appropriate travel insurance.

The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.