UPDATED: ABI slams government's Brexit plan

The ABI has heavily criticised the Government’s White Paper on Brexit.

Published today, the White Paper is a blueprint to the UK’s future relationship with the EU.

Director general of the ABI Huw Evans has previously criticised the Government’s slow start to Brexit negotiations and has said it is vital the UK secures post-Brexit relationships.

And on the White Paper today, he said it represented what could be the “worst possible scenario” for the UK insurance industry.

Evans said: “The publication of the White Paper is an important step in the Brexit negotiations.

“Whatever the final outcome, the insurance industry is too important to be a rule taker.

“By having to comply with financial regulations we have no say over what would be the worst possible scenario for our world leading insurance sector, so we will look to the Government to negotiate a better outcome than this”.

Mixed reaction elsewhere

The ABI’s response to the White Paper was in stark contrast to how the International Underwriting Association (IUA) viewed the publication.

Dave Matcham, the IUA’s chief executive, welcomed the document and said he was pleased that it “recognises the importance of making cross border trade in financial services as efficient as possible”.

He added: “The proposed economic and regulatory partnership promises significant levels of dialogue and cooperation between EU and UK insurance supervisors.

“This will be important in establishing a secure and stable trading environment upon which companies and their clients can confidently rely.

“We hope that this proposal will allow for the continued cross-border transaction of both reinsurance and large scale wholesale risks for marine and aviation business and that it forms the basis of an enduring trading relationship.”

Disappointed

However, this positive view was not shared by the London Insurance and International Brokers Association (LIIBA).

LIIBA chief executive Christopher Croft said: “We are disappointed that the Government has not reflected the strong feedback from our industry that both EU clients and UK business would be best served by a mutual market access regime. 

“We will work with our members to understand the full implications of what is being proposed. 

“As always, central to that effort will be a focus on how we ensure that the client is the one to suffer least from the disruption Brexit will cause. 

“The issue of contract continuity must be resolved. There is some doubt as to whether UK insurers will remain licenced to pay claims in a few EU countries without an agreement in place.

“We therefore support the call by the FCA chief executive Andrew Bailey for this to be resolved at official level. The sooner the better. Transition arrangements will only postpone the issue.”