Switzerland and U.K. sign Brexit-related insurance agreement
The agreement will enable non-life insurance companies to establish & operate branches in each country.
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Switzerland’s president, Ueli Maurer, has signed an agreement on direct insurance other than life assurance with the British Chancellor of the Exchequer, Philip Hammond.
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In a statement, they said that the agreement would ensure the “seamless continuation” of the current regulations in this area even after the United Kingdom has left the EU. Depending on the exit scenario, the agreement will enter into force either at the end of March 2019 or at the end of a transitional period.
Agreement enables branch offices
In legal terms, relations between Switzerland and the United Kingdom are based on bilateral agreements between Switzerland and the EU, among other things. With Brexit, these agreements will no longer apply to the U.K. This also applies to the 1989 agreement between the European Economic Community and the Swiss Confederation on direct insurance other than life assurance.
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The insurance agreement between Switzerland and the U.K. will enable non-life insurance companies (for example, household, motor vehicle, travel, and liability insurers) to establish and operate branches in the country of the other contracting party.
Taking account of further developments between the EU and the U.K., there are two scenarios for the entry into force of the agreement between Switzerland and the U.K.:
Orderly withdrawal of the U.K. from the EU
Should there be a transitional period in U.K./EU relations, the bilateral agreements between Switzerland and the EU are likely to remain applicable to the U.K. until the end of the transitional phase. This would be the case also for the insurance agreement between Switzerland and the EU. Consequently, the insurance agreement between Switzerland and the U.K. would not come into force until the transitional period has ended.
Disorderly withdrawal of the U.K. from the EU
If the U.K. were to withdraw from the EU in a disorderly manner on March 29, 2019, the insurance agreement between Switzerland and the U.K. would enter into force on March 30, 2019, as the insurance agreement between Switzerland and the EU would no longer be applicable in the bilateral relationship between Switzerland and the U.K. from that date.
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teven A. Meyerowitz, Esq., is the director of FC&S Legal, the editor-in-chief of the Insurance Coverage Law Report, and the founder and president of Meyerowitz Communications Inc. Email him at smeyerowitz@meyerowitzcommunications.com.