The insurer hopes to transfer all cross-border contracts to Luxembourg by January 2019
Bermuda-based insurer Hiscox is preparing a move to transfer all of its cross-border contracts to Luxembourg, in preparation for the UK leaving the European Union.
Brexit has already prompted some major insurers to seek a move to Europe’s mainland in a bit to ensure contract continuity.
RSA, Tokio Marine, Liberty and AIG have all made progress in moving to Luxembourg, while Lloyd’s has set up a new hub in Brussels.
Now Lloyd’s underwriter, Hiscox has released an advisory note to customers, outlining what it plans to do, why it feels it needs to transfer the business, and what customers need to do.
In the note, Hiscox says it wants to “ensure continuity of cover to all our customers with European risks so that we can continue to service our policyholders and claimants in the UK and across Europe post-Brexit.”
According to the Bank of England, up to 30 million people in Europe, six million of whom are in the UK, could be affected if the UK and Brussels fail to agree on legislation preserving cross-border contracts.
In an interview with Insurance Times, ABI director general, Huw Evans said: “Insurance firms have worked very hard to try and put in place pragmatic solutions that enable them to meet their customer needs,” and this is another example of that.
While the UK has allowed European countries to continue working in the UK post-Brexit, a move Evans described as “pragmatic,” the deal has not been reciprocated the other way. Therefore, companies have felt the need to move over or set up subsidiaries in Europe.
In response to Brexit, and to ensure that continuity of cover, Hiscox is making changes to its business and to do that, it is using the legal insurance business transfer process known as Part VII.
The process is governed by the Financial Services and Markets Act 2000 and requires the approval of the High Court.
The timetable of the process indicates that Hiscox hopes to complete two directions hearings and two sanctions hearings by 17 December to allow for an effective date of transfer on 1 January 2019.