Leaving the EU without a deal is not acceptable if insurers are to continue to meet the needs of millions of customers and remain legally compliant warns the ABI.
Huw Evans of the ABi says: “It is unacceptable not to have a Brexit deal at the point at which we leave in 2019. Brexit has to be delivered in a way that enables business to operate, and our customers not to suffer any unnecessary detriment. To meet our clients' needs and ensure full compliance with the law, the government has to deliver an orderly withdrawal, a stable transition and a sensible and mutually beneficial future trading relationship."
Evans adds; " Achieving this will take time. It is more important to get it right than to pretend things are simpler than they are and set artificial deadlines. We need cross-party parliamentary co-operation to make the legislative process work.”
Among the many issues that need to be resolved are:
- The treatment of contracts written pre-Brexit and still in force post-Brexit will need to be clarified. These include business liability insurance contracts - some of them stretching decades ahead. The risk is that, as a result of leaving the Single Market, insurers lose their licence to do insurance in the customer’s jurisdiction, and therefore cannot legally fulfil the contracts. It would also affect the ability to pay claims on many liability insurance contracts offered to businesses on a pan-EU basis. These are usually annual contracts but the claims are complicated and may take up to a decade to be completed.
- Brits take 32 million holiday trips to the EU a year, and the EHIC – which is free for any citizen - reduces the costs of providing travel insurance because it allows people to receive state funded health treatment across Europe in certain circumstances. Clarity is needed as soon as possible given insurers offering annual travel policies in April 2018 will have to prepare for the possibility of covering these treatment costs after the UK is set to leave the EU in March 2019.
- The motor insurance Green Card guarantees that motorists have third party insurance when visiting other countries. The current system also provides victims with a route to compensation in their own country (and language) when a visiting motorist causes damage. Without a deal motorists may need to buy extra cover if they plan on driving to Europe and might also need to bring a physical Green Card with them for insurance checks at borders. Those making a claim may also have to pursue claims with foreign bodies, potentially in a language with which they are unfamiliar.