Insurance Jottings
Charles Taylor opens Belgium office, targets growth in Europe
International loss adjuster Charles Taylor Adjusting (CTA) has opened a new office in Belgium to expand its property/casualty offering in Europe.
The company said it enjoyed solid growth in the P&C arena and particularly in specialist disciplines such as construction & engineering, professional indemnity, cyber and major loss.
Charles Taylor Adjusting has appointed new directors, Ludwig Pauwels and Yves Thaens, to join the team in Belgium. The executives will report to Andy Rice, managing director, property, casualty, technical & special risks for the UK, Europe and Singapore.
Belgium adds to CTA’s presence in Europe, with existing offices in France, Greece and Italy.
What’s Next for Brexit? Options Include Disorderly, Delayed or No Brexit
Last month Britain’s parliament demanded Prime Minister Theresa May renegotiate a Brexit divorce deal which the other members of the European Union say they will not reopen.
With just six weeks until the United Kingdom is due by law to leave the EU, the options include a disorderly Brexit, a delay to Brexit or no Brexit at all.
Mrs May’s hope of presenting a united front to convince Brussels to make changes to the deal suffered a heavy blow on the 14th February when both Eurosceptic and pro-EU lawmakers in her party refused to endorse her approach, condemning her to defeat in parliament.
Below is a summary of what is due to happen next:
‘High Noon’ – 27th February
Despite the defeat on the 14th February, Mrs May has promised she will continue to try and renegotiate the deal with the EU.
If parliament has not approved a deal by the 26th February, she will make a statement updating lawmakers on her progress on that day and lawmakers will have an opportunity on the 27th February to debate and vote on the way forward.
Several lawmakers in Mrs May’s party, including some ministers, have indicated this will be the last chance they give her to find a way through the impasse.
Opposition Labour Party lawmaker Yvette Cooper plans to use that debate to seek lawmakers’ support for legislation which would force the government to decide between leaving without a deal or extending the Article 50 negotiation period if it has not had a deal approved by the 13th March.
Vote on a Revised Deal – February/March
Mrs May said the government would bring a revised deal back to parliament for a vote as soon as possible. Before the previous vote, parliament held five days of debate but it is not clear whether there would be another lengthy debate before any subsequent vote.
Mrs May is required by law to get parliamentary approval for any exit deal.
EU Summit – 21st-22nd March
EU leaders are due to meet in Brussels. This could be an opportunity for an eleventh-hour deal or it would be the last chance to agree an extension of the Article 50 negotiation period and delay Brexit to avoid no-deal disruption.
If the summit goes badly and there is still no deal in sight then Mrs May will have to decide whether to delay or go for a no-deal Brexit.
Last Weekend – 23rd-24th March
If a deal is seen as viable at the summit, officials could work through the weekend to nail down the details with a final deal – and a possible extension to the 30th June conditional on British parliamentary approval – announced on Sunday the 24th March – Monday the 25th March.
Final Week – 25th-29th March
If a deal could be clinched, then the British parliament could vote on it, possibly on the 26th March.
The European Parliament could ratify the deal that week.
Exit Day – 29th March?
If Mrs May does not get a deal approved by parliament by the 29th March, Britain faces a disorderly exit, or may be forced to seek an extension of Article 50 to give more time to reach an agreement.
It is not certain the EU would agree to this.
Some lawmakers, including Labour leader Jeremy Corbyn, have said it is now “inevitable” that the government will have to seek an extension, as there will not be enough time to pass the necessary legislation for Britain’s exit before the 29th March.
The leader of Britain’s lower house of parliament, Andrea Leadsom, has said the date might need to be pushed back by a couple of weeks.
European Parliament Elections
The bloc will vote to elect a new European Parliament on the 23rd-26th May. The new chamber would sit from the 2nd July, a date which is shaping up to be the EU’s limit for any extension of Article 50.
The EU says Britain would have to organise European Parliament elections on its soil if it were to delay Brexit beyond that as otherwise its people would be deprived of their democratic representation while still being in the EU.
The bloc fears Britain would not do that.
Some in the EU also fear that, should Britain vote, it would elect a staunchly Eurosceptic representation to the European Parliament that is already expected to have a larger contingent of EU critics influencing the bloc’s policies.
The main centre-right group, whose leaders include German Chancellor Angela Merkel, could also lose its place as the biggest in the European Parliament; UK Labour seats could help the European Socialists overtake the People’s Party, from which British Conservatives broke away to sit separately.
Delayed Brexit – 30th June
If a Brexit extension is sought, one date being talked about in Brussels is the 30th June, the Sunday before the new European Parliament sits at 10 am (08:00 GMT) on the 2nd July.
Some argue for an exit before the 23rd May, the day Britain would otherwise be due to hold an EU election.
(Article dated the 15th February)
EU Markets Regulator Seeks Rapid Response Powers for Post-Brexit Problems
The European Union’s markets regulator urged lawmakers on the 14th February to give it “rapid” response powers to deal with problems which may arise after Brexit.
The European Parliament has proposed that the European Securities and Markets Authority (ESMA) should have powers to issue “no action letters” which tell firms they will not face sanctions if they do not comply with a rule or deadline after Britain leaves the EU.
Such letters are used by US regulators, and would avoid the EU having to make time-consuming legislative changes if temporary problems with rules crop up.
After Brexit, the EU will have a large, liquid and interconnected capital market next door which is no longer subject to the bloc’s rules, Steven Maijoor, chairman of the European Securities and Markets Authority, said.
“This creates the need to have tools to react rapidly to new developments,” he told an industry event in Dublin.
Lawyers said the comments signalled an arm’s length relationship with the EU for Britain’s financial sector after decades of being deeply interlinked.
“The reference to the large liquid market ‘next door’ emphasises the imminent gulf between London and the EU, with their interconnectivity a justification for enhanced regulatory vigilance, rather than an opportunity for convergence,” Simon Morris, a financial services lawyer at CMS, said.
Banks and insurers in Britain face patchy access to EU customers in future, based on a system of market access known as equivalence and used by Japan and the United States.
Mr Maijoor signalled that Brexit would mean a more hands-on approach to applying equivalence to the EU’s neighbour.
“Equivalence assessments need to be conducted more frequently to detect changes on time,” he said.
The bloc is toughening up conditions for granting access to foreign clearing houses and Mr Maijoor said it was essential that these changes be completed in time for Brexit.
London-based LCH dominates clearing of euro denominated derivatives, and its chief executive said on the 14th February there was no sign of big shifts in volumes to rivals.
(Article date the 14th February 2019)
Castel adds marine specialty solution
Castel Underwriting Agencies Limited, the club-style MGA formation platform, has included specialist marine coverages to its portfolio with the addition of Seacurus.
Led by Angus Bailey, Seacurus is a wholly-owned subsidiary of the Barbican Insurance Group. It underwrites a book focusing on revenue protection and credit default protection insurances for the shipping industry, including marine kidnap & ransom, hull war and seafarer abandonment business.
Capacity is reportedly being provided by both Lloyd’s and company market insurers.
Mr Bailey previously served as an underwriter and account manager for marine special risks at Seacurus.
Mark Birrell, chief executive of Castel, commented: “Angus operates in a dynamic market with growth potential for specialist coverages that address very specific client needs and exposures. This further expansion in our specialty division demonstrates the appetite we have to support specialist, entrepreneurial underwriters in building their own profitable books of business.”
Mr Bailey said: “Castel Specialty provides the platform and infrastructure which enables us to focus on delivering the responsive underwriting and relevant products that are imperatives in this market. Whether it is coverage in the war and piracy high risk areas or offering a dedicated seafarer abandonment product, we are able to ensure the risks are responded to effectively wherever and whenever clients operate.”
Aviva Prepares for ‘Hard Brexit’ by Transferring Assets from UK
Aviva Plc has asked a London court to approve the transfer of assets totalling nine billion euros (US$10.2 billion), saying the uncertainty from Brexit was “intensifying” as it joined other insurers and banks triggering contingency plans.
Aviva asked Judge Richard Snowden for permission to move the life-insurance policies held by non-UK policyholders to its Irish subsidiary. The insurer wants to make the move to prevent the risk that payments may be held up if the UK goes through a hard Brexit.
“The reason for proposing it, your lordship will not be surprised to know, is Brexit,” said Martin Moore, a lawyer for Aviva, who has also advised UBS Group AG on its recent transfer of assets. “The current and intensifying uncertainty render the need for certainty all the more pressing.”
“It obviously will take some time for clarity to emerge,” Mr Moore said.
Aviva won approval to move one billion pounds (US$1.29 billion) in general policies earlier this month.
British insurers are concerned they will lose the so-called “passporting rights” which enable them to make payments to policyholders outside Britain. Without a deal, insurers and pension providers could be legally barred from sending out payments, leaving policies dormant on their accounts.
Royal London, the UK’s largest mutual and pensions company, won court approval this month to transfer policies to its Irish unit.
“It is worth reiterating that this is not a scheme that Royal London has chosen to implement for its own commercial purposes. It has been forced to do so by the continued uncertainties over Brexit,” the judge said at the time.
(Article dated the 14th February 2019)
MGU Lodestar Marine and Aspen Insurance Form Agreement to Provide P&I Cover
Aspen has confirmed it has replaced RSA as the capacity provider to Lodestar, the London-based fixed premium P&I MGA. Lodestar Marine will provide protection & indemnity insurance (P&I) to the owners and managers of small and specialised ships.
London-based Lodestar provides US$50 million of Aspen-backed P&I cover, with an extra US$450 million of capacity available via an excess-of-loss policy placed with certain Lloyd’s of London syndicates and company market security. Lodestar provides claims handling services.
“We are delighted to work with Aspen, strengthening their relationship further with our parent company Ryan Specialty Group,” commented John Hearn, joint managing director of London-based Lodestar, which is a unit of RSG Underwriting Managers Europe Ltd (RSGUM), the managing general underwriting division of Ryan Specialty Group, headquartered in London.
“We share a like-minded approach to business and similar values towards those with whom we deal. Aspen provides us with a solid platform to expand our P&I offering,” he added.
Charles Dymoke, joint managing director of Lodestar, said: “In what has been a turbulent time for the fixed premium P&I market, we are pleased to have found a stable partner in Aspen. It is important that we have the support of a company who understands our industry and are committed to developing it further.”
“Aspen and Lodestar prioritise technical underwriting and focus on loss prevention services to help customers manage their risk exposures effectively,” said Jorge Pecci, RSG Marine Practice leader.