The rules will govern UK insurers with French risks in the event of a no deal Brexit
The French Government has published a new set of emergency insurance measures for if the UK leaves the EU without a deal.
It clarifies the rules applicable to insurance contracts entered into before Brexit on the basis of the European Economic Area (EEA) insurance passport.
It means insurance contracts covering French risks will generally prohibit mid-term adjustments if it generates an increase in premiums.
All renewals, including automatic ones, will also be prohibited.
However, payment of claims will not constitute a breach.
Breach of the requirements will render the insurance contract null and void. However, the ability to enforce the nullity of the contract will be limited to the policyholders, insureds and beneficiaries.
Commenting on the measures, Yannis Samothrakis, partner at Clyde & Co in Paris, said: “This ordinance shows quite how real the threat of a no deal Brexit is in the mind of the French authorities but ultimately provides some very welcome clarification.
“Claims can be paid by UK insurers in the EEA in the event of a no deal Brexit but the ability of those carriers to renew policies will be restricted unless they have an EEA entity.
“Luckily the majority of insurers are ahead of the game but this is a stark reminder to others that the end of passporting is coming soon.”
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