While in the long term, it seems likely that a legal framework
will be put in place allowing insurers to continue conducting
cross-border business in some form after Brexit, in the meantime
both providers and policyholders will face distress due to
insecurity.
In theory, under national and EU law, Brexit should make no
difference to the payment of claims or benefits under existing
insurance contracts.
However, the apparent rejection of the location of risk
principle by the French insurance supervisor, ACPR, dissenting from
the position of the European Insurance and Occupational Pensions
Authority (EIOPA) in November 2019, is just a flavour of the kind
of confusion we can expect as we move into 2020. By questioning the
ability of insurers to pay claims under existing contracts, the
ACPR is undermining customers' and insurers' expectation
that regardless of whether the UK stays in the EU or leaves the
block, claims can be paid as they become due.
