Please note that this communication is not the latest update from Utmost regarding Brexit. Please use the search function on our News page to find more recent updates.
The United Kingdom (the ‘UK’) left the European Union (the ‘EU’) on 31 January 2020 with a withdrawal agreement. The UK and the EU are currently in a transition period as they negotiate their future relationship and try to reach a trade deal. The UK must abide by EU rules during this transition period. This transition period is scheduled to end on 31 December 2020. During the transition period there will be no change in how Utmost PanEurope dac carries out its business, as it will still be able to operate on a freedom of services basis in the UK. Existing product features, including claims payments, will continue to function as normal.
Based on our current understanding, life assurance policies issued by Utmost PanEurope dac to individuals habitually (permanently) UK resident at the time of policy commencement will continue to be entitled to compensation under the Financial Services Compensation Scheme (the ‘FSCS’) during the transition period. However, after the transition period ends on 31 December 2020, UK policyholders’ ability to make a claim on the FSCS will depend on the terms of the deal struck between the UK and the EU. If no deal is reached, we expect that, from 1 January 2021, UK policyholders will not be able to make a claim on the FSCS.
Whilst policyholders will no longer be able to claim under the FSCS we would remind you of the strong regulatory environment that exists in Ireland, which is designed to protect policyholders. The Irish rules implementing Solvency II provide robust protection for policyholders and beneficiaries of a life insurance company as their claims take absolute priority over any other claims of the life insurance company with respect to assets representing technical reserves. The Central Bank of Ireland (CBI) regulates the activities of Utmost PanEurope dac and takes a rigorous approach to prudential supervision. The CBI has continuous oversight over the governance, risk management and controls of Utmost PanEurope dac through reviews and inspections. The CBI also puts in place approval processes for key individuals making sure they have the necessary skills to perform key functions.
We would draw attention to the fact that in July 2020 Fitch, one of the top rating agencies, awarded the companies operating under the Utmost Wealth Solutions Brand (which includes Utmost Pan Europe dac) with Financial Strength (IFS) ratings of Utmost PanEurope dac, at ‘A’ (Strong) with a Stable Outlook. Fitch’s assessment included a post-Covid stress test. The affirmation reflects the strong capitalisation and solvency of Utmost PanEurope dac as well as its stable leverage ratio.
The Prudential Regulation Authority and the Bank of England are working together with other European regulators to ensure that there is minimal disruption to policyholders. Based on our current understanding, we will continue to service you and all our policyholders and claimants as normal in the event of a ‘no-trade deal’ Brexit.
The Isle of Man has signed an agreement with the UK that preserves free trade between the UK and the British Crown Dependencies and thus the position in respect of existing and new Utmost Limited policies will remain unaltered.
We will keep our website updated and will outline any contingency measures that we feel are appropriate to protect our policyholders as soon as additional information becomes available.
This statement was last updated on 23 October 2020.