Brexit – 15 Year Run-Off Period Proposed for Insurance Undertakings and Insurance Intermediaries

The Irish Government is proposing to allow a UK insurance undertaking and/or insurance intermediary (each a “Firm”) that has passported into Ireland a 15 year run-off period to fulfil its contractual obligations to its Irish customers, following the end of the transition period on 31 December 2020.

This is a significantly more extensive run-off period than the 3 year period set out in the Withdrawal of the United Kingdom from the European Union (Consequential Provisions) Act 2019 (the "Brexit Omnibus Act") on 17 March 2019, which would have applied had the UK and EU failed to enter into the Withdrawal Agreement. As such, it is likely to be warmly welcomed by Firms, as well as by their Irish customers.

Significantly, the Irish Government has not made any similar legislative proposals in respect of other financial service providers, including credit institutions, investment firms or payment firms.


Following the conclusion of negotiations on a Withdrawal Agreement, including a Protocol on Ireland/Northern Ireland, the UK left the EU on 31 January 2020. However, EU rules and regulations continue to apply to the UK and will continue to do so until the end of the transition period on 31 December 2020, including, in particular, rules permitting authorised UK financial service providers to exercise a “passporting” right to carry on regulated business in other EEA Member States.

In the period following the UK’s notification of its decision to withdraw from the EU, it was for some time unclear whether or not the EU and the UK would succeed in concluding a Withdrawal Agreement, prompting the then Irish Government to prepare for a “No-deal Brexit”. This included the enactment of the Brexit Omnibus Act, Part 8 of which provides for a temporary run-off regime which, subject to a number of conditions, would have enabled a Firm authorised in the UK and/or Gibraltar to continue to fulfil its then-existing contractual obligations to its Ireland-based customers for a period of three years post-Brexit.  Part 8 has not been commenced as it was premised on the EU and the UK failing to conclude a Withdrawal Agreement.

The 15 Year Run-Off Period

On 9 September 2020, the Government published the General Scheme of the Withdrawal of the United Kingdom from the European Union (Consequential Provisions) Bill 2020 (the “General Scheme”), as part of its preparations for the end of the transition period (here).

Part 10 of the General Scheme amends the European Union (Insurance and Reinsurance) Regulations 2015, which transpose the EU’s Solvency II Directive into Irish law, and the European Union (Insurance Distribution) Regulations 2018, which transpose the EU’s Insurance Distribution Directive into Irish law. The relevant amendments mean that a Firm that is authorised in the UK and/or Gibraltar, which has passported into Ireland will be deemed to be authorised for specific and limited purposes in Ireland for a 15 year period following the end of the transition period, subject to the fulfillment of certain conditions. In particular, during the 15 year period the relevant Firm must:

  • comply with general good requirements; and
  • exclusively administer its existing portfolio of Irish policies/business “in order to terminate its activity in the State”.

In addition, it must notify the Central Bank of Ireland (the “Central Bank”) not later than 3 months from the start of the 15 year period that the relevant provisions apply to that Firm and that the Firm will rely upon them.

In certain circumstances, the Central Bank may issue a withdrawal notification terminating the right of a Firm to continue to carry on business in such manner in Ireland during the 15 year period, including for breach of either of the conditions mentioned above, or where the relevant Firm “fails to make sufficient progress" towards permanently ceasing to carry on insurance and/or insurance distribution business in Ireland by the end of the 15 year period.

Part 10 of the General Scheme also contains a review provision requiring the Central Bank to make a report to the Minister for Finance at the end of year 12 of the 15 year period setting out its view on the run-off regime covering both insurance undertakings and persons carrying on insurance distribution business. This report should consider a number of principles and policies, including the need to protect policyholders, the number of firms remaining in run-off, and the nature of the policies in question.

This document has been prepared by McCann FitzGerald LLP for general guidance only and should not be regarded as a substitute for professional advice. Such advice should always be taken before acting on any of the matters discussed.