24 May 2019News

UK prime minister resignation signals further Brexit uncertainty

UK prime minister Theresa May will resign as leader of the Conservative Party on June 7 and step down as PM once a replacement has been found.

In a speech given on May 24, May suggested her departure was partly due to her failure to get her Brexit deal through parliament, and that it would be up to her successor to provide an alternative.

Amid this uncertainty, Bermuda might be able to take advantage as a mid-Atlantic location for re/insurers who are worried about just how expensive or legally complicated doing business in the UK might become.

Ratings agency AM Best previously suggested that Brexit may affect the Bermuda market, but to a lesser extent, as the regulator’s experience and ability to deal with different jurisdictions potentially could make it a more attractive jurisdiction for re/insurers.

Bermuda also benefits from Solvency II equivalence, where the European Union considers its regulation standards for commercial insurers in Bermuda to be equivalent to its own.

The re/insurance industry has repeatedly called for greater clarity for what will happen as a result of Brexit, as there are concerns over the continuity of insurance contracts across EU and non-EU states.

The UK is currently set to leave the European Union (EU) on October 31, 2019. If an agreement is not reached with the EU before that date then the UK will crash out in what has been described as a ‘hard brexit’, with no agreements on trade or customs having been made and with great uncertainty as to what will happen to the Northern Irish border.