How Brexit Changes The Way We Work With Brokers

Our brokers should already be familiar with the changes we’ve made to deal with the end of the Brexit transition period. These changes have implications for the way we work with brokers in the UK and Europe. Read below to find out in more detail.

How are the ways we work with our brokers in the UK and EU changing due to Brexit?

When we first started drafting this post, we wanted to emphasise the distribution opportunities that our new corporate structure permits in a post-Brexit world. But as we continue to embed this structure, previously unexpected consequences of Brexit are coming to the fore. Some of these consequences affect the way we do business with brokers.

As you’ll know from our main blog post on how William Russell has dealt with Brexit, UK insurance intermediaries can no longer distribute insurance products to individuals or companies in the European Economic Area (EEA).

This change explains why we set up a subsidiary company in Belgium, William Russell Europe SRL. The Belgian Financial Services & Markets Authority now authorises this subsidiary to conduct insurance distribution throughout the EEA under freedom of services rights.

William Russell Europe SRL also has a UK branch, part of the Financial Conduct Authority’s Temporary Permissions Regime. This regime permits William Russell Europe SRL and hundreds of other European insurance companies to conduct insurance distribution in the UK through its UK branch.

What does that mean in practical terms?

William Russell Europe SRL is now our principal vehicle for distributing and administering all insurance products when the customer resides in:

• a country in the EEA; or
• pretty much any other country (except when the customer resides in the UK and has a health insurance product).

Most of our brokers will be dealing with William Russell Europe SRL, not William Russell Ltd. So, we’re now inviting those brokers to enter into formal intermediary agreements with William Russell Europe SRL. The terms of those intermediary agreements are more or less the same as the previous agreements with William Russell Ltd, so no worries there.

What is going to happen with the way we work with brokers in the UK?

Things get a little tricky for brokers in the UK. The regulatory challenge that prompted us to set up a subsidiary company in Belgium in the first place equally applies to insurance brokers in the UK.

But for other UK brokers, such arrangements were not economically viable given their low number of customers in the EEA. This category of UK brokers may have no compliant solution for insurance distribution in the European Economic Area after the end of the Brexit transition period.

Here’s the situation vis-à-vis working with us for that category of brokers:

• We can still work with those brokers to arrange insurance cover for their customers in the UK, using their pre-existing intermediary agreements with William Russell Ltd.
• We can still work with those brokers to arrange insurance cover for their customers in other countries outside the EEA, making use of new intermediary agreements with William Russell Europe SRL.
• We cannot work with those brokers to arrange insurance for customers in the EEA, either through William Russell Ltd, William Russell Europe SRL, or William Russell Europe SRL’s UK branch.

What does that last bullet point mean in practical terms? Well, we’ll be removing UK brokers without a compliant solution for insurance distribution in the EEA from customer accounts where the customer resides in the EEA. We’ll remove the broker from the customer’s renewal date in 2021.

Please remember that we’re not choosing this approach. Brexit has thrown up some complex regulatory challenges, and—now freedom of services no longer exists between the UK and the EU—we simply can no longer work with UK brokers when our mutual customer resides in the EEA.

FAQs

Below is a list of frequently asked questions, but please do not hesitate to contact us if you cannot find your question answered below.