On 5 March 2019, the Polish government adopted a draft law on the conduct of business by certain financial institutions based in the United Kingdom or Gibraltar after “hard Brexit” (the “Draft Law”). The Draft Law has been sent for its first parliamentary reading.
With regard to servicing existing insurance contracts concluded before 30 March 2019, the Draft Law stipulates that the existing rules on the conduct of insurance activity by a foreign insurance companies headquartered in the EU should apply accordingly, until:
- the agreements expire,
- the insurance portfolio is transferred to a domestic insurance company or to an insurance company with its registered office in another EU Member State which may conduct insurance activity in Poland,
- a permit is obtained to conduct insurance activity in Poland and the insurance portfolio is transferred.
Importantly, life insurers domiciled in the UK or in Gibraltar will be able to rely on the provisions on the conduct of insurance activity by a foreign insurance company for 24 months from the effective date of the Draft Law (i.e. 30 March 2019), and non-life insurers for 12 months.
Some solutions envisaged in the Draft Law are similar to existing regulations on the treatment of insurance companies after the lapse of their authorisation, e.g. both life and non-life insurance companies domiciled in the UK or Gibraltar will not be able to conclude insurance agreements or renew existing ones.
The Draft Law also confers new powers to the Polish Financial Supervision Authority with respect to insurance companies domiciled in the UK or Gibraltar. In urgent cases, in order to immediately rectify or prevent any irregularities, the Polish Financial Supervision Authority will be able to exercise all the powers it is vested with regarding domestic insurance companies.
We will keep you informed about further developments.