Following its announcement earlier this week that it had chosen Luxembourg as its EU-base after the UK leaves the European Union, Britannia P&I Club has supplied further details of its plans.
Britannia said that possible restrictions on the freedom of movement of staff between the UK and EU would not currently have a material impact on the Association, although the situation would be monitored.
Although Britannia hoped that discussions between the UK and the remaining EU states would allow for a continued passporting or a transition arrangement, it will in the meantime plan for a worst-case scenario – a ‘hard Brexit’ and the loss of passporting from March 29th 2019.
The Club has taken the advice of third-party consultants and engaged with various EU regulators. As a result its Board has instructed the Managers (Tindall Riley (Britannia) Limited) to focus on Luxembourg as the preferred option. It envisaged maintaining Britannia as a UK domiciled insurer and the creation of a new EU (Luxembourg)-domiciled insurer.
Both of these insurers (Britannia UK and Britannia Europe) would be owned by a UK-domiciled parent company, thus preserving the nature of the Association as a single entity, that is to say, maintaining a common approach to risk appetite, underwriting, investment, reserving and operational procedures, the Club said.
Britannia said that the Club Managers would engage further with the Association’s consultants and legal advisers together with the UK Prudential Regulatory Authority and the Luxembourg insurance regulator CAA.
Britannia said that it envisaged that a formal application to establish Britannia Europe would be made in early 2018 to enable the insurer to be licensed and operationally ready by the end of 2018 and in good time for the 20th February 2019 renewal. At this stage the Club did not envisage that a Part VII transfer would be required.