4.14.2 Brexit

The UK has become a third country (non-EU) from 31 December 2020. Passporting rights will not apply;

- Irish registered financial services providers are no longer allowed to provide services in the UK on the basis of their registration/authorisation with the Central Bank of Ireland; and

- UK registered financial service providers are no longer allowed to provide services in Ireland on the basis of their registration with the Financial Conduct Authority (FCA).

Many UK financial service providers have established separate legal entities within the EU so that they can continue to underwrite EU risks. Many have set up in Ireland and are authorised with the Central Bank of Ireland.

For UK providers/intermediaries that had clients in the ROI (passported into ROI) and who did not establish an office in the ROI and seek authorisation from the Central Bank of Ireland to continue to conduct financial services in the ROI, the Irish Government has allowed a Temporary Run-Off Regime (TRR) for a period of 15 years, to allow these providers, subject to a number of conditions, to administer whatever contracts were in place as at 31 December 2020. No new business or renewals
can be written under this run-off regime. The UK providers have until 31 March 2021 to notify the Central Bank of Ireland if the run-off regime applies to them.

For Irish providers/intermediaries that had clients in the UK (passporting into the UK) as at 31 December 2020, that are not seeking to be authorised by the FCA (i.e. did not avail of the UK Temporary Permissions Regime), they will automatically default to the Financial Services Contracts Regime (FSCR) which was introduced by the UK Government to ensure existing contractual obligations not covered by the TPR can continue to be met. The FSCR will permit UK contracts entered into pre-31 December to continue to be administered, so that contracts can be wound down / run–off in an orderly fashion. No new business or renewals can be written under the FSCR. The FSCR will apply for a period of 15 years for insurance contracts.

Intermediaries should always ensure that all insurance undertakings or distributors, with which they engage, have the appropriate licensing/authorisations (or passporting rights) to underwrite/place EU risks for EU policyholders.