Court sanctions business transfers to Belgium following Brexit  

An insurance company has been granted permission to transfer the management of three policies to Belgium so that they can be conducted in the European Economic Area (EEA) following Brexit. 

UK-based insurance policies are no longer able to exercise passporting rights to provide cross-border services and conduct business in the EEA following Britain’s exit from the European Union. 

For this reason, UK-based firm Mercantile Indemnity Co Ltd requested the transfer of the policies to Belgian firm Alpha so that they could be serviced within an EEA state. 

The High Court ordered that the schemes undergo a series of investigations and studies before the transfer could be granted. 

They were scrutinised by both the Prudential Regulation Authority and the Financial Conduct Authority and neither had objected. All relevant policyholders had been notified and there had been no objections. 

The schemes were also examined by an independent expert who had concluded that they would have no material adverse effect on policyholders or other interested parties.  

All the evidence suggested that the schemes were required to provide a proper level of service to policyholders. That need was dictated by external events, Brexit. 

The court was satisfied that the transfer request was a reasoned commercial decision by Mercantile Indemnity to provide a proper level of service to its policyholders and granted permission for the transfers. 

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Chancery Division
16 June 2022
[2022] 6 WLUK 162
Judge Edwin Johnson J