From a US insurance regulatory perspective, the UK Brexit vote has little immediate impact for re/insurers domiciled in both the UK and in EU member states.
That’s the view of Thomas Dawson, a New York-based partner in Transatlantic law firm Drinker Biddle.
Dawson explained that insurers already listed by US regulatory bodies to write insurance on a surplus lines basis are unaffected by the Brexit vote.
He commented: "The ability to write reinsurance in the US market has always been open to reinsurers worldwide – subject to collateral requirements.
"Relaxation of those collateral requirements — the still-evolving "certified reinsurer" status — is open to reinsurers domiciled in approved jurisdictions (the UK, France, Germany, Ireland and Switzerland among them) — and so is unaffected by the Brexit vote."
‘Remains to be seem’
Dawson said the future impact of the Brexit vote remains to be seen, but many in the industry will be monitoring progress of ongoing US-EU "covered agreement" negotiations with the expectation that the UK Government will seek to begin bilateral "covered agreement" US-UK talks, either standalone or as part of a wider trade agreement.
He added that the: "Industry will also be watching with great interest as commercial innovation in the London Market — with respect to traditional products, ILS/capital markets developments, use of blockchain technology, etc– may now proceed without having to conform to EU-wide norms."
Brexit impact on Solvency II
Michael R. Halsband, counsel in the insurance, transactional and regulatory team at Drinker Biddle, said Solvency II will, as before, continue to be an important driver promoting ILS activity.
Halsband said: "In any future scenario, the UK will certainly achieve equivalence under Solvency II. The opportunity for the UK therefor: be bold nevertheless.
"Already a centre of excellence and innovation from an underwriting, administrative and operational perspective, now more than ever London and the UK should leverage this expertise to capture a share of the ILS activities that may well grow post Brexit, consider lowering regulatory and tax hurdles, and develop an express regulatory construct to ensure speed and access to market. "