Brexit Update
The United Kingdom (the ‘UK’) left the European Union (the ‘EU’) on 31 January 2020 with a withdrawal agreement. In the final week prior to the end of the transition period (ending 31 December 2020) a trade deal was then negotiated between the UK and the EU. However, this deal didn’t extend to, or assist, the cross-border Financial Services sector. Nevertheless, HM Treasury, in its paper “Overseas Framework: Call for Evidence”, published in December 2020, and the response document published in July 2021, has stated that it is committed to reviewing the overseas regulatory framework following the UK’s departure from the EU. At the time of publishing this communication, no further updates have been released and we continue to monitor the situation.
Irrespective of these ongoing issues, we are pleased to reassure our business partners that Utmost PanEurope dac can continue to service existing UK resident policyholders as normal. In relation to new business, we can confirm that we have a compliant model in place to ensure that we can continue to accept new business from UK residents.
As a result of the UK’s departure from the EU, policyholders of Utmost PanEurope dac are no longer covered by the UK Financial Services Compensation Scheme (FSCS). Whilst policyholders are no longer able to claim under the FSCS we would like to 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 also draw attention to the fact that in December 2022, Fitch Ratings assigned Utmost Group plc an Issuer Default Rating (“IDR”) of ‘A-’with a Stable Outlook. The three rated operating entities of Utmost Group – Utmost International Isle of Man Limited, Utmost PanEurope dac and Utmost Worldwide Limited – have been assigned Insurer Financial Strength (IFS) Ratings of ‘A’ with Stable Outlooks. Issuer Default Ratings represent an issuer’s relative vulnerability to default on financial obligations. Insurer Financial Strength Ratings are an assessment of the financial strength of an insurance organisation and reflect an insurer’s ability to pay obligations to policyholders. The affirmation reflects the strong capitalisation and solvency of Utmost PanEurope dac as well as its stable leverage ratio.
The Isle of Man’s relationship with the UK has not changed post-Brexit. Therefore, the position in respect of existing and new Utmost International Isle of Man Limited policies remains unaltered.
We will keep our website updated as additional information becomes available.
This statement was last updated on 18 January 2023.