Can I rely on capacity provider or wholesale intermediary for new policies?
Intermediaries need to check whether their regulatory permissions allow them to place any given risk. It might be the case that following Brexit a UK insurer is no longer permitted to accept risks located in an EEA territory and it might be that a UK intermediary’s EEA intermediary partners are no longer able to use UK intermediary to place business in the UK market.
In recommendation 9, of its ‘Recommendations for the insurance sector in light of the United Kingdom withdrawing from the European Union’, the European Insurance and Occupational Pensions Authority (EIOPA) has recommended that UK intermediaries and entities which intend to continue or commence distribution activities to EU27 policyholders and for EU27 risks after the UK’s withdrawal are established and registered in the EU27 in line with the relevant provisions of the IDD. It also stated that all intermediaries carrying out distribution activities which target EU27 policyholders and EU27 risks fall under the scope of the IDD. This would appear to prevent UK intermediaries from conducting insurance distribution activities in relation to such insurance policies.
It is therefore important that intermediaries and insurers clarify what is required by local law and the expectations of relevant national regulators.