EIOPA to publish guidance on sound principles for authorisation and supervision post-Brexit

EIOPA has published an interview given by Gabriel Bernardino, EIOPA Chair, which contains comments on the implications of Brexit for the insurance industry.

Mr Bernadino noted that:

• EIOPA is closely monitoring developments linked with the Brexit negotiations but is not yet able to form a firm position on the likely impact on the conduct of insurance supervision and insurance products.
• Subsidiaries established by UK insurers in the 27 remaining EU member states (the EU27) as a response to the loss of passporting right need to be subject to proper supervision. Empty shell or "letter boxes" in the EU27 are not acceptable. Sound supervision demands the appropriate location of management and key functions, including sound outsourcing and reinsurance policies
• EIOPA is closely monitoring any possible effects of Brexit on financial stability and consumers.
• In due course, it expects to publish guidance for supervisory authorities in the EU27 on sound principles for authorisation and supervision in the context of the UK's withdrawal from the EU. It will then monitor implementation of the guidance closely.