On 22 March 2019, the French Ministry of Economy and Finance passed a decree (the Decree) implementing the provisions of the ordinance n° 2019-75 of 6 February 2019, introducing a contingency plan for the financial institutions sector in connection with the withdrawal of the United Kingdom (UK) from the European Union (EU) (the Ordinance).
As a reminder, the Ordinance provides that in the event of no-deal, UK insurers that have lost their passporting permissions as a result of Brexit will no longer be entitled to renew, extend or modify their existing policies, or write new policies (our full analysis of the Ordinance can be found here). Consequently, the Ordinance imposes on these insurers an obligation to inform their insureds and policyholders residing in France of the situation, so as to provide them with legal certainty in respect of their cover.
The new Decree therefore aims at clarifying the content and format of this information obligation and creates a new article in the French Insurance Code (FIC) in that respect[1].
Pursuant to the new provisions, UK insurers who have entered into insurance contracts in France under the freedom of establishment or freedom of services regimes and who are losing the benefit of the European passport in the wake of Brexit will be required to:
1. provide, within 15 days of this change of situation (i.e. when Brexit is effective, in the event of a no-deal), to their insureds and policyholders residing in France, in a clear and comprehensible manner, the following information:
- the reasons why the company can no longer benefit from the European passport regime – and as the case may be temporarily, if a portfolio transfer to a company domiciled in the EU is ongoing;
- the fact that the company will not renew their insurance contract, make any (new) premium call or accept any (new) payment – save for the payment of premiums that the policyholder is contractually required to pay under its contract, if any. This information will also specify, as the case may be, the conditions under which coverage will be reduced or the end of the cover period under the contract;
- the fact that the new situation in which the company finds itself does not exempt it from honouring its commitments towards, inter alia, their insureds and policyholders;
- the name and address of the authorities responsible for supervising the insurance company and the French court having jurisdiction to hear on matters relating to the contract’s performance;
2. give notice, two months before the end of the cover period mentioned above, of the maturity of the contract and recommend that the policyholder seeks new cover from an insurance company authorised to carry out direct insurance business in France. This obligation however only applies to insurance contracts reaching maturity at least three months after the information mentioned in paragraph 1 above is provided.
This information as well as the notice must be communicated by UK insurers to their insureds and policyholders by way of registered letter or registered e-mail.
The Decree is available through this Link (in French).
- [1] New article A. 310-1 of the FIC.
