Recent announcements made by the Prudential Regulation Authority and the Financial Conduct Authority have clarified their approach to Brexit following the European Council's agreement to a transition period for the United Kingdom's withdrawal from the European Union. Insurers, insurance intermediaries and other financial services firms have been encouraged to assume that they will continue to benefit from passporting rights until December 2020. While this is welcome, firms cannot be complacent.
The English Court of Appeal has reversed the High Court's decision on whether a party-appointed arbitrator met the contractual requirements as to requisite experience. The English Court of Appeal held that that an English queen's counsel with experience of insurance and reinsurance law was sufficient to comply with a contractual clause requiring arbitrators to have "experience of insurance and reinsurance". The decision highlights once again the importance of drafting arbitration clauses clearly.
The Treasury, Prudential Regulation Authority (PRA) and Financial Conduct Authority recently clarified their approach to EEA-headquartered financial services firms wishing to carry on business in the United Kingdom post-Brexit. More recent evidence to the House of Commons Treasury Committee sheds further light on the PRA's thinking. It also highlights the difficulty for the PRA of giving guidance to firms while so much uncertainty surrounds the United Kingdom's future relationship with the European Union.
A recent opinion published by the European Insurance and Occupational Pensions Authority warns that UK insurers are unlikely to be able to meet obligations to European Economic Area (EEA) policyholders post-Brexit unless they mitigate the anticipated loss of passporting rights that will come with leaving the single market. The opinion raises concerns for UK insurers which have policyholders in EEA states other than the United Kingdom.
The Court of Appeal recently ordered two companies in liquidation to provide security to the defendants despite an after-the-event (ATE) policy. The decision confirms that the court can take account of a claimant's ATE insurance policy when considering whether to make an order for security for costs. However, the court stressed that the outcome of any security for costs application involving an ATE policy will depend on the terms of the particular policy.