What does Brexit mean for our clients?
As Brexit approaches, we know our customers want to be made aware of any impact it will have on their insurance policies and how it will affect their ongoing relationship with us.
As a result of the 2016 Brexit referendum, the United Kingdom will be leaving the European Union (EU) on 29 March 2019.
Neon Underwriting Limited (Neon) currently conducts business across Europe from its registered office in the UK.
In order to continue doing so after Brexit with the least disruption to customers domiciled in the European Economic Area (EEA), we have been working with Lloyd’s of London to ensure that, whatever the outcome of the Brexit negotiations, we are ready to continue operating with our partners and customers in the EEA.
Neon’s overarching aim is to make the Brexit transition as seamless as possible for our customers, coverholders and brokers.
However, a key implication is the loss of both passporting rights (the ability of an insurer to carry out business across the EEA from a single country licence) and ‘Freedom of Services’ (FOS) access (access to the single market enjoyed by an EEA member state by virtue of their membership), which allow Neon to conduct cross-border business throughout the EEA.
To this end, Lloyd’s of London have set up a new subsidiary insurance company based in Brussels: Lloyd’s Insurance Company, S.A., known as Lloyd’s Brussels.
Neon has signed up to the new Lloyd’s subsidiary, which will ensure that our policyholders will continue to have access to the choice of expertise and coverage that you receive from us today.
Lloyd’s Brussels is authorised and regulated by the National Bank of Belgium and regulated by the Financial Services and Markets Authority, and will begin operation from 1 January 2019, enabling partners and customers to retain access to the underwriting expertise of the Lloyd’s market.
The Impact on your Policies
For all Neon policies written prior to 31 December 2018, the policy lifecycle and administration will remain with Neon for the time being, meaning you can contact us at any time.
However, Lloyd’s of London is working on transferring all EEA business written prior to 31 December 2018 to Lloyd’s Brussels before the end of 2020, via an insurance business transfer under Part VII of the Financial Services and Markets Act 2000.
Policies written or renewed after 1 January 2019 will be insured by Lloyd’s Brussels.
The security that you enjoy as a Neon customer will not change after Brexit. All our policyholders will still benefit from the same security through Lloyd’s Brussels and from the Lloyd’s Central Fund (and assigned ratings).
Neon will continue to have full claims handling and settlement authority (on behalf of Lloyd’s Brussels).
If you are unhappy with any aspect of your policy or claim, you will still have full complaint rights to Lloyd’s Brussels and escalation rights to the Financial Ombudsman Service or your EEA Member State equivalent for all complaints.
All UK policyholders will continue to have escalation rights to the Financial Ombudsman Service (FOS) and will retain these rights should they choose to renew their policy with Neon. EEA policyholders with policies issued in the UK up until 31 December 2018 will also continue to have access to the FOS.
At the time of writing, eligible complainants are:
a) Private policyholders acting outside their trade, business or profession;
b) Charities with an annual income of less than £1m; or
c) Commercial policyholders with a group annual turnover of less than €2m and fewer than 10 employees (also known as micro-enterprises).
We value our conduct commitments and are fully committed to all our customers. We are working closely with Lloyd’s Brussels to ensure a smooth transition for all of our EEA policyholders and to best serve our customers regardless of the eventualities that Brexit may bring.
In the event that the UK leaves the EU with no transition or implementation period, Neon will continue to honour contractual commitments, including the payment of valid claims.
Individual insurance requirements and coverage may in time need to be amended as the details of the exit terms become clear.