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Insurers on the move as Brexit deadline looms

Most British insurers likely to be affected by Brexit have moved or started moving their European business to the Continent, ratings agency AM Best says.

UK companies will be able to underwrite reinsurance business on a cross-border basis, but the regulatory treatment of those contracts depends on the EU granting the UK reinsurance equivalence. Equivalence assessments will start after the withdrawal.

It is expected that once the UK withdraws from the European Union, insurers will lose their passporting rights to conduct cross-border business in the EU and will no longer be able to issue insurance contracts.

Most insurers have been establishing new subsidiaries in Europe.

However, that does not address the problem of servicing existing EU contracts, AM Best says. The insurance industry is exploring its legal and operational ability to settle claims in individual jurisdictions while it awaits a political solution to the problem.

The ratings agency says a number of insurers will not have completed the transfer of their EU business from Britain by the Brexit deadline in March.