1. Brexit Omnibus Act: Part 8 of the Withdrawal of the United Kingdom from the European Union (Consequential Provisions) Act 2019 (the Brexit Act) applies to (re)insurance undertakings and intermediaries. Specifically, Part 8 amends the SII Regs and the European Union (Insurance Distribution) Regulations 2018 (the IDD Regs). The Brexit Act was enacted on 17 March 2019 (though Part 8 is yet to come into force) and covers a broad array of issues pertinent to the withdrawal of the UK from the EU.
   
   The Brexit Act amends the SII Regs to provide for a three year 'run-off' period for UK (and Gibraltar based) insurers. Though these entities will not be allowed to write new business during this 'run-off' period, the new provision will allow them to continue to service existing contracts.
   
   UK insurers who still wish to write new business in Ireland after the expiry of the transition period will be required to apply to the Central Bank of Ireland for a branch authorisation. This is in accordance with Part 12 of the 2015 Regulations which governs branch authorisations for third country undertakings.
   
   The above will also have implications for intermediaries. Regulation 9(9) of the European Union (Insurance Distribution) Regulations 2018 provides that intermediaries and (re)insurers must only use the (re)insurance distribution services of EEA-registered (re)insurance intermediaries or ancillary insurance intermediaries.
   
   UK registered insurance intermediaries will no longer be allowed to provide services in Ireland on the basis of their current registration. Noting that the Insurance Distribution Regulations do not accommodate third-country branches of intermediaries, such intermediaries, who were operating under a freedom of services basis, will have to apply to the Central Bank for registration as an insurance intermediary.
2. UK regulatory regime:  Due to the Great Repeal Bill the UK regulatory regime will be almost identical to that of the EU, at least in the short-term. If the UK wishes to be deemed an equivalent jurisdiction under Solvency II, they will be unable to diverge significantly from the EU regime. The UK Treasury has announced that it plans to review Solvency II rules for insurers and reinsurers ahead of the Brexit transition end on 31 December 2020. This will address areas such as the matching adjustment, the operation of internal models and reporting requirements, but it remains to be seen whether the outcome of this review will result in significant divergence from Solvency II. Equivalence is discussed further below.
3. Loss of passporting rights:  The Solvency II Directive provides that an EEA (re)insurer’s home state authorisation to carry on business is valid for the entire EEA – the process whereby an insurer uses this authorisation to provide their services in another EEA Member State is known as "passporting." Once the UK exits the EU, it is likely that UK (re)insurance undertakings operating across the EEA on the basis of passporting rights will no longer be able to do so. The same issue may equally be faced by insurance intermediaries.  It is unclear whether (re)insurance undertakings authorised in EEA Member States who currently passport into the UK will be able to continue doing so, although there has been some suggestion that the UK Government may allow this arrangement to persist regardless of the outcome of Brexit negotiations.
   
   The UK's Temporary Permissions Regime currently allows EEA-based insurers to continue to carry out authorised activities in the UK market for the period until the UK leaves the EU and for a maximum period of 3 years thereafter. Irish insurers operating in the UK market will however need to be mindful that in order to obtain continuing authorisation, they will need to demonstrate that they comply with the FCA and PRA requirements for insurance undertakings. Furthermore, those insurers who do not demonstrate compliance, will be subject to the Financial Services Contracts Regime which regulates the winding down of insurance undertakings. Any insurer subject to this will not be able to write any new business.
4. Equivalence:  The deadline of 1 July 2020 for the UK to complete equivalence assessments has now passed. (Re)Insurers now need to be prepared for a loss of their passporting rights at the end of this year. The UK has historically been critical of the Solvency II framework as being too inflexible. The UK's plan to conduct a review of Solvency II ahead of the Brexit transition deadline puts the idea of an agreement on equivalence being reached in further jeopardy as it is raises the probability that the UK will adopt an adjusted regime.
   
   While equivalence would give UK (re)insurers some access to the Single Market (particularly in the case of reinsurers), it would be far more limited than the passporting rights which they currently enjoy. There are no equivalence provisions in the Insurance  Distribution Directive (IDD).
   
   A draft of the Equivalence Determinations for Financial Services (Amendment etc) (EU Exit) Regulations 2020 has been presented to the UK Parliament. The instrument aims to allow UK regulators to establish cooperation arrangements with relevant regulatory authorities for an EEA state. The overall purpose of the instrument is to provide a framework for equivalence in the financial services market. However, as of 30 June 2020, Michel Barnier has labelled the UK's equivalence proposals as 'unacceptable'.
5. Reinsurance issues:  In the event that the UK does achieve equivalence under Solvency II rules, the reinsurance and retrocession capacity available in Lloyds, the London market and the UK as a whole would continue to be readily available to EU carriers and reinsurers. However, the UK would have to obtain the EU's agreement to arrive at this position – the mere fact that the UK regulatory landscape starts from a similar point to that of the EU does not guarantee such a determination.
   
   We are also aware that some new UK reinsurers are conducting a jurisdiction by jurisdiction analysis to determine whether it would be legal for them to continue to provide reinsurance coverage to EEA companies from the UK.  Of course, much will depend on whether EEA carriers would receive solvency relief if it places reinsurance with a UK reinsurer.
6. Increased volatility:  There has been volatility in the markets throughout the Brexit process and undoubtedly more volatility will occur in the run up to the conclusion of the negotiation period. This will continue to pose challenges for (re)insurers across Europe in terms of their capital position, investment portfolio and liquidity.
7. Restructuring considerations:  As part of Brexit planning, UK undertakings involved in regulated cross-border activities are assessing if it is necessary to separate out non-UK, EEA elements of their business. There are many options open to undertakings looking to restructure their businesses to mitigate against the impact of Brexit (and in particular the loss of passporting rights). These include Insurance Part VII transfers, EU cross-border mergers, establishment of a Societas Europaea (SE) etc. However, to the extent that such options depend on EU law, they can only be exercised for as long as the UK is part of the EU. Also, if a restructuring project is not already well underway, it is not certain that it could be concluded by the end of the transition period, assuming that is 31 December 2020.
8. Contractual issues:  Post-Brexit, many aspects of EU law will no longer form part of English law. Parties may consider renegotiating their contracts so that they are subject to Irish law if they wish for their contracts to be subject to EU law once the UK has left the EU. There are many similarities between Irish law and English law but, crucially, EU law will still form part of Irish law post-Brexit. Consequently, we are seeing an increasing number of our clients, who would have previously opted to have their contracts governed by English law, instead opt to have them governed by the laws of Ireland.
9. Other issues: Other general Brexit issues in relation to taxation, data protection, capital markets, litigation, employment, outsourcing arrangements, pensions and competition will apply equally to the European (re)insurance industry. 

As noted above, we advised a number of insurers and intermediaries on the Central Bank authorisation process so that they could establish an Irish authorised company from which they could carry out EEA business. Ireland is an ideal location in this regard. First and foremost Ireland has committed to remaining a member of the EU post-Brexit.  The country has a responsive and responsible regulatory regime, a business-friendly open economy and a track record of encouraging foreign direct investment. Ireland has many other attributes that make it a desirable location to establish an EEA base post-Brexit:

• A young, talented, well educated, and highly adaptable workforce
• Stated long-term commitment to the EEA
• Status as the only English-speaking member of the Eurozone
• A low corporate tax rate of 12.5%
• A stable legal framework
• A common law system
• High quality state supports for new investments and innovation

The close relationship between the Irish and UK insurance markets, in addition to a broad range of other economic, cultural and regulatory advantages, explains why many (re)insurers and intermediaries chose an Irish authorised company to complement existing UK activities post-Brexit.