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.
Many of those brokers made arrangements similar to our own: they set up a subsidiary company somewhere in the European Economic Area (typically Belgium or Ireland) and obtained regulatory approval from the relevant financial authorities.
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.
Below is a list of frequently asked questions, but please do not hesitate to contact us if you cannot find your question answered below.
If I'm a broker in the UK, can I legally contract with William Russell Europe SRL?
Yes. You can enter into an intermediary agreement with William Russell Europe SRL. However, you cannot distribute our policies to customers who reside in the EEA under this intermediary agreement.
If I do not sign the new intermediary agreement with William Russell Europe SRL, can I continue with my previous agreement with William Russell Ltd?
Yes. Your existing intermediary agreement with William Russell Ltd remains in force. This agreement permits you to distribute our health insurance products to UK residents only.
Can I enter into intermediary agreements with both William Russell Ltd and William Russell Europe SRL?
Yes. In this event, you’ll receive separate commission payments from William Russell Ltd and William Russell Europe SRL
What are William Russell's competitors doing?
The situation differs for the various insurance providers in our market. Some have arrangements that are similar to those we have made. However, you should check with those competitors for details.
Is William Russell removing my account from our mutual customers with an address in Europe?
If our mutual customer resides in the European Economic Area (EEA), you can no longer distribute insurance products under your UK regulatory permissions. Please note the guidance from the FCA, which states: “[the FCA] expects firms to act in accordance with local laws and local regulators’ expectations, while making sure their decisions continue to be guided by obtaining appropriate outcomes for their customers”. Check out the FCA’s website for guidance for general insurers and intermediaries. We are committed to your customers even if you are no longer on the account, so we’ll offer them direct terms from their renewal date in 2021. We will contact you in advance of each case.
Does signing an intermediary agreement with William Russell Europe SRL change my existing customers' coverage with William Russell?
No. There are no changes to insurance coverage as a result of signing the new intermediary terms of business. Your customers’ insurance products will experience some legal and regulatory changes, at renewal in 2021, which we will show in your customers’ policy documentation. These include changes to the governing law and the complaints procedure.