Following the 23 June 2016 referendum and the UK’s triggering of Article 50 on 29 March 2017, Britannia’s Board has been considering plans to preserve the ability of the Association to write non-UK EU business post Brexit (i.e. to preserve the current benefits of passporting). Possible restrictions on the freedom of movement of staff between the UK and EU would not currently have a material impact on the Association, although this will be monitored.
It is hoped that discussions between the UK and the remaining EU states will allow for continued passporting or a transition arrangement. In the meantime, Britannia’s plans assume a worst-case of a “hard Brexit” and the loss of passporting from 29 March 2019.
With the advice of third party consultants and having engaged with various EU regulators, Britannia’s Board has now instructed the Managers (Tindall Riley (Britannia) Limited) to focus on Luxembourg as the preferred option. The structure envisaged is the maintenance of Britannia as a UK domiciled insurer and the creation of a new EU (Luxembourg) domiciled insurer. Both insurers (Britannia UK and Britannia Europe) would be owned by a UK domiciled parent company. This will preserve the nature of the Association as a single entity i.e. to maintain a common approach to risk appetite, underwriting, investment, reserving and operational procedures.
The Managers will engage further with the Association’s consultants and legal advisers together with the PRA (UK’s insurance regulator) and CAA (Luxembourg’s insurance regulator). It is envisaged that a formal application to establish Britannia Europe will be made in early 2018 to enable the insurer to be licenced and operationally ready by the end of 2018 and in good time for the 20 February 2019 renewal.
At this stage it is not envisaged that a Part VII transfer will be required.