1. 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 European Single Market – the process whereby an insurer uses this authorisation to provide their services in another EEA Member State is known as "passporting." Since 31 December 2020, UK (re)insurance undertakings and insurance intermediaries that had operated across the EEA on the basis of passporting rights are now longer able to do so.
   
   The UK's Temporary Permissions Regime currently allows EEA-based insurers to continue to carry out authorised activities in the UK market for a maximum period of 3 years from the end of the UK's transition period. 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 the Financial Services Contracts Regime is not able to write any new business as of 1 January 2021.
2. Irish Run-Off Regime: Part 10 of the Withdrawal of the United Kingdom from the European Union (Consequential Provisions) Act 2020 (the Brexit Act) applies to (re)insurance undertakings and intermediaries. Specifically, Part 10 amends the European Union (Insurance and Reinsurance) Regulations 2015 (the SII Regs) and the European Union (Insurance Distribution) Regulations 2018 (the IDD Regs).
   
   The Brexit Act amends the SII Regs to provide for a fifteen year 'run-off' period for UK (and Gibraltar) authorised 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.  See our update here on Ireland's Temporary Run-Off Regime here. 
   
   UK (and Gibraltar) insurers who still wish to write new business in Ireland must either apply to the Central Bank for a third country branch authorisation (in accordance with Part 12 of the SII Regs) or use an EEA authorised affiliate insurer to passport into Ireland. If neither of these options is viable then the insurer will need to establish an Irish head office in accordance with the SII Regs.
   
   The above will also have implications for intermediaries. Regulation 9(9) of the IDD Regs 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 (and Gibraltar) registered insurance intermediaries will no longer be allowed to provide services in Ireland on the basis of their current registration. Noting that the IDD Regs, unlike the SII Regs, do not make provision for the registration of 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.
3. UK regulatory regime:  Due to the Great Repeal Bill the UK regulatory regime is 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, it will be unable to diverge significantly from the Solvency II regime. The UK HM Treasury had announced that it planned to review Solvency II rules for insurers and reinsurers ahead of the Brexit transition end on 31 December 2020, however the results of this review have not been published yet. It is expected that the review 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.
4. Equivalence:  The European Commission's decision on equivalence for the UK in the areas of reinsurance, group solvency and group supervision under Solvency II is expected in the coming months. While equivalence would give UK (re)insurers some access to the European 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).
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 have conducted 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 an EEA carrier would receive solvency relief if it places reinsurance with a UK reinsurer.
6. Contractual issues:  Parties may consider renegotiating their contracts so that they are subject to Irish law if they want their contracts to be subject to the law of an EU jurisdiction 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 previously opted to have their contracts governed by English law, instead opt to have them governed by the laws of Ireland.
7. 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 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.