Dublin is preparing emergency laws to protect Irish insurance customers should the UK crash out of the EU without a deal amid mounting concerns over the political turmoil in Westminster.
Ed Sibley, deputy governor of Ireland’s central bank, said that some unnamed UK- and Gibraltar-based insurers in the Irish market have not taken action to confront a no-deal Brexit. As a result, the central bank and the government are working on new laws to avert any break in insurance cover in a no-deal scenario.
Such laws would put insurers that have no contingencies in place for a no-deal exit into a temporary run-off regime to service existing contracts with Irish policyholders.
“The legislation does not allow these firms to write new business, including renewal of existing policies,” Mr Sibley said. “It is exclusively for the servicing of contracts (policies) that were in place prior to Brexit.”
Still, he said Ireland’s banking system can withstand no-deal disruption, saying cliff-edge risks are “manageable”. Although Irish banks were hit hard in the financial crash of 2008, Mr Sibley said the system was considerably more resilient than it was. Most significant companies in all sectors have prepared “and are executing” contingency plans for a hard Brexit, he said.
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