The UK and Swiss governments have signed an agreement which will enable insurers in both countries to continue trading freely after the UK’s withdrawal from the EU.
UK chancellor Phillip Hammond and Swiss president and finance minister Ueli Maurer signed the UK-Swiss Direct Insurance Agreement at the World Economic Forum in Davos, Switzerland, last week.
The insurance agreement will replicate the effects of the existing EU agreement with Switzerland, and will come into force when the EU-Swiss Direct Insurance Agreement ceases to apply to the UK. It provides mutual recognition of each country’s insurance and solvency regulations, but does not cover life insurance.
Insurance expert Tobin Ashby of Pinsent Masons, the law firm behind Out-Law.com, said the arrangement would be welcome for UK insurers likely to be affected by it.
“This agreement will be welcome news for continuity for insurers already operating cross-border between the UK and Switzerland and their customers and may yet become more of a focus for the UK than the current EU arrangement with Switzerland, in light of the challenges for UK insurers wishing to access EU customers post-Brexit,” Ashby said.
Ashby said it was still unclear how UK insurers will be able to operate in EU member states after Brexit due to the ongoing uncertainty over the final shape of the withdrawal agreement.
“Whilst there are encouraging signs of arrangements being made in some key EU states to permit some continuity for existing contracts for a period beyond Brexit, the longer-term picture will depend entirely on whether a suitable free trade agreement can be put in place covering financial services. There are of course still a number of obstacles to overcome before that even becomes a possibility,” Ashby said.
The UK-Swiss deal follows the agreement of a similar arrangement between the UK and US in December last year, which is also consistent with the current EU deal with the US insurance sector.
The UK government said the US and Switzerland were the biggest investors in UK finance in 2016.