Solvency 2 will remain but passporting is in doubt, PwC warns today.
Jonathan Howe, UK insurance leader at PwC, said: “To answer the first question insurance companies will be asking - Solvency II will almost certainly remain - too much time, money and effort has been invested and the regulation is enshrined in UK Law.
“Additionally, the insurance industry should not expect significant dissolution of ‘cumbersome’ EU regulation, given the perception that the UK has a history of ‘gold plating’ insurance regulation.
“The Lloyd’s & london market and general insurance market make extensive use of passporting. The loss of these rights could see insurers being forced to restructure and facing large operational, regulatory and tax costs as they adapt to such a change.
“Many non UK insurance companies from areas such as the USA and Asia currently use the UK as their European headquarters and as a ‘gateway’ into Europe through EU/EEA passporting.
“There is a real risk that these rights could be eliminated and insurers will be thinking about the best location for their bases in the future.”
Ian Powell, chairman and senior partner of PwC regarding the UK’s decision to leave the EU.
“The UK’s decision to leave the EU will have significant implications for businesses and we are already working with our clients and people to support them as those implications are understood.
“History has taught us that UK business is adaptable and innovative when confronted with new challenges and opportunities. There will be significant uncertainty over the coming months as the detailed political and legal issues are worked out, and business confidence may be impacted.”