Hard Brexit may see end of some insurance products
Some insurance products may no longer be available to Irish consumers if there is a no-deal Brexit, the Central Bank has warned.
Deputy Governor Ed Sibley said yesterday that the supply of "niche" products may reduce or end altogether.
That's because policies underwritten from the UK or Gibraltar would face more regulatory friction after a hard Brexit.
Although the Bank does not comment on individual products, products with smaller markets, such as gadget insurance or pet insurance, would be more likely to be affected than bigger markets like motor or home insurance.
Mr Sibley said the Irish financial system should be able to withstand even a hard Brexit.
"I am satisfied that from a financial stability perspective that the most material and immediate risks are now manageable," he said.
"This is not to say that a hard Brexit will not be bumpy for the economy, and for the financial system.
"Indeed, some level of market disruption would be inevitable, but the system as a whole should be resilient enough to withstand these bumps."
He also said yesterday that certain existing policies underwritten from those jurisdictions will be able to continue, if legislation being drafted comes into force.
But those policies can't be renewed under the planned legislation.
"The draft legislation provides for a temporary run-off regime, which will allow certain UK/Gibraltar insurers and brokers to continue to service existing insurance contracts with Irish policyholders in the event of a 'no deal' Brexit," Mr Sibley said.
"The legislation does not allow these firms to write new business... it is exclusively for the servicing of contracts... that were in place prior to Brexit."
The planned legislation was welcomed yesterday by the insurance industry. "Ensuring customers maintain the benefits of their insurance cover in the event of a no-deal Brexit has been an industry priority since the UK's referendum," said Insurance Ireland CEO Kevin Thompson.
"It is recognised that the vast majority of UK-based insurance companies servicing the Irish market have taken appropriate action to ensure the continued servicing of contracts.
"However, given the complexities of Brexit, certain inbound providers may not have had sufficient time to implement their plans," he added.