As mentioned in our previous post published in April 2019, the French Ministry of Economy and Finance passed a decree dated 22 March 2019 (the March 2019 Decree) implementing the provisions of the ordinance n°2019-75 of 6 February 2019, introducing a contingency plan for the financial services sector in connection with the withdrawal of the United Kingdom (UK) from the European Union (EU) (the 6 February Ordinance).

As a reminder, the 6 February Ordinance provided that in the event of no-deal, UK insurers which lost their passporting permissions as a result of Brexit would no longer be entitled to renew, extend or modify their existing policies, or enter into new policies. The 6 February Ordinance required insurers to inform policyholders and insureds residing in France of the change within fifteen days of the end of the transition period in the event of no-deal.

The March 2019 Decree was aimed at clarifying the content and format of this information requirement and created a new article in the French Insurance Code (FIC)[1].

As a result of the UK-EU Trade and Co-operation Agreement, the 6 February Ordinance has been repealed by a new ordinance n°2020-1595 of 16 December 2020, effective as of 1 January 2021 (the 16 December Ordinance).

In accordance with the 16 December Ordinance, the French Ministry of Economy and Finance passed a new decree (the Decree) implementing the provisions of the 16 December Ordinance. The Decree replaces the March 2019 Decree, which would have been applicable in the event of no-deal.

There are no material changes between the March 2019 Decree and the Decree. The latter provides some clarifications, without however changing the substance of the March 2019 Decree.

Pursuant to the new provisions, UK insurers that have entered into insurance contracts in France under the freedom of establishment or freedom of services regimes and have lost the benefit of the European passport in the wake of Brexit are required:

1. To provide, within fifteen days of this change (i.e. by 15 January 2021), to their insureds, policyholders or members residing in France the following information in a clear and comprehensible manner:

  • the reasons why the company can no longer benefit from the European passport regime and, as the case may be temporarily, whether a portfolio transfer to a company domiciled in the EU is ongoing;
  • the fact that the company will not renew or extend their insurance contract, make any (new) requests for premium or accept any (new) payment – save for payment of premiums provided for in the existing insurance contract and when the company has action to request for such payment. This information will also specify, as the case may be, the conditions under which coverage will be reduced or the date of the end of the period of cover 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, the entity in charge of the settlement of disputes and the French court with jurisdiction to hear on matters relating to the contract’s performance.

2. To give notice, two months before the end of the period of cover referred to in paragraph 1 above, of the maturity of the contract and recommend that the insured, policyholder or member seeks new cover from an insurance company authorised to carry out insurance or reinsurance business in France. This obligation, however, only applies to 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, policyholders and members by way of registered letter or registered e-mail.

The Decree is available through this link (in French).

[1]               Article A. 310-1 of the FIC.