27.07.2017
Position paper

Brexit – six positions advocated by German insurers

As the Brexit negotiations between the United Kingdom and EU progress, many questions remain unanswered. The economic fallout from Brexit does look manageable for German insurers – at the same time the sector can’t afford to see the process drag out for too long. The fact is the UK will leave the European Union on 29 March 2019. The six main demands of German insurers are as follows.

I. A sustainable regulation of long-term economic relations between the EU and the UK is fundamental
The aim must be to keep the economic cost and frictions resulting from Brexit as low as possible by concluding a comprehensive economic treaty. This will be achieved through transparent and well-ordered negotiations, which will reduce uncertainty and risk.

II. Set an implementation phase and transition rules
Given the complexity and time pressure involved in the negotiations, an implementation phase will be required for the new legal regime to make the requisite changes to business operations. Transition rules are also necessary to ensure the orderly settlement of in-force contracts (particularly long-term life insurance) as per the former legal regime (grandfathering).


 
Dr. Klaus Wiener, GDV Chief Economist:
„We need to maintain reciprocal market access as far as possible between the UK and Europe“


 

III. Maintenance of reciprocal market access subject to uniform competitive conditions (level playing field)
The aim should be to keep a close working relationship with the UK in the future and maintain reciprocal market access as far as possible, which will require a level playing field. It is as important to avoid the UK gaining any regulatory advantage as it is to prevent the emergence of “letter-box companies” which lack substance. There must also be uniform standards for data protection.

IV. No twin-peak model for insurance supervision
The insurance industry supports the current review of European supervisory authorities. However, given the different types of business model in the various sectors of the financial services industry, it is vital to uphold the autonomy of insurance expertise. Insurers therefore oppose a twin-peak approach, whereby supervision of companies would be performed separately to the supervision of market conduct and consumer protection.

V. Keep labour markets open for qualified employees
Companies in the United Kingdom and EU-27 will still need reciprocal and unbureaucratic access to qualified professionals post-Brexit. It is particularly important to maintain flexibility for in-house assignments.

VI. Ensure access to high-grade financial instruments and strengthen the European capital markets
Institutional investors from mainland Europe must be guaranteed access to high-level financial services from the UK. The financial sector on the continent must be strengthened over the medium term, notably through the completion of the capital markets union.

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Position Paper

German Insurers and Brexit: Six key positions

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