Interest among UK insurers in Malta as an option to access the European Union via freedom of services post Brexit is rising steadily, based on attendance at a briefing on the market held recently in London.
Over 100 representatives of UK-based insurance firms attended a Q&A session with the Malta Financial Services Authority (MFSA) to learn how applications are dealt with, how the market is regulated and what infrastructure and support services are on offer on the island.
Latest political developments and the rising chance of a “hard” Brexit suggest that UK-based insurers will be very keen to find out what Malta and other EU territories can offer as they seek to maintain and protect their access to key European markets.
Many in the financial industry, including insurance, hope that the sector would somehow be ring-fenced from the overall negotiations and freedom of services retained. [...]
If such a free trade agreement is reached, it would potentially mean that UK insurers would not have to relocate their headquarters or set up another legal entity in any other EU country to maintain access to the wider European market post Brexit.
The Institute of International Finance summed it up neatly as it stated: “May's ambition for ‘the greatest possible’ financial access was decidedly vague today. The discussion about regulatory equivalence is back. She indicated a desire to find new forms of financial association, to the mutual benefit of the EU and the UK, but the lack of details and the insistence on ending adjudication by the European Court of Justice (and contributions of ‘huge sums’ to the EU) will not make this easy to achieve. Brexit is set to be harder and perhaps happen faster than many have expected, increasing the risk of more disruption to the British economy and to financial flows to the EU.”
Experts agree that the latest developments mean UK-based insurers need to seriously consider their options. Malta is clearly one on the table.
Speaking at the UK Treasury Select Committee on European Insurance Regulation, Phil Smart, head of insurance at KPMG UK, said: “However the Brexit negotiations turn out, UK insurers need to retain an ability to operate in Europe and maintain regulatory equivalence.”
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