The Cyprus Government has published a draft legislation on the 15th of January 2020 whereby it tries to regulate the services offered by British Insurance Companies in Cyprus. The proposed law comes to regulate British insurance Companies as well as British re-insurance companies by amending national relevant law. For the avoidance of any doubt in this article the term Insurance Company shall also include a Re-Insurance Company.
Last year a similar law was passed whereby it tried to ease the free movement of persons residing in Cyprus continue reading
British Insurance Companies in Cyprus How Are They Affected?
The provision of insurance and re-insurance products within the European Union is currently allowed do to the free movement of goods and services between member states. In the event of a hard Brexit though British Insurance Companies will not be allowed to operate or offer any services in Cyprus since they would not be within the European Union. In simple terms they lose their passport.
In 2003 the European Commission commenced proceedings against Italy, Luxembourg, France, Spain and Germany regarding a the restriction from these countries upon insurance companies to transfer insurance portfolios between operators, continue reading . . .
How is the proposed law assisting British Insurance Companies in Cyprus?
The proposed law ensures the smooth operation and stability of the insurance market if the United Kingdom decided to withdraw from the European union without the conclusion of a deal, in accordance with Section 50, paragraph 2 and 3 of the Treaty of the European Union.
More specifically, a new section 422A is inserted into the main legislation with the proposed law. The new section grants to insurance companies and insurance agents offering insurance products from the United Kingdom to the Republic of Cyprus a two year grace period by which they may continue managing the affected portfolios.
This means that:
- Insurance products already in issued shall continue to have legal effect without requiring any amendment increasing the overall cost
- British Insurance Companies in Cyprus can settle any claims arising during the grace period
- British Insurance Companies in Cyprus can continue to collect premiums settle any undertaken liabilities in a business as usual way.
For the affected insurance companies to continue offering services after the 2 year grace period a relevant license from the Cypriot Superintendent of Insurance must be obtained.
When will the proposed law pass
The legislative process requires that the proposed law is presented to the parliament for discussion and approval. Once it is approved and passed the president of the Republic of Cyprus must sign off on it and subject to the forgoing it will be published in the official newspaper of the Republic of Cyprus.
The parliamentary committee on Finance will meet today the 20th of January to discuss the principles of the proposed law.
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For many years he has worked and devoted his skills and efforts towards building a successful career as a leading executive. From humble beginnings, his aim has always been to yield results; with a keen focus to attention to detail and client satisfaction. His experience has always been varied and not specific, at times he preferred it. With that in mind, he has dealt with CySEC on licensing and ongoing regulation, international private equity and credit fund managers, NASDAQ and NYSE listed companies occasional millionaires as well as self-made millionaires. His passion though is difficult transaction work organizing and deploying people for a common goal. Harris enjoys reading and studying the Cyprus law and sharing that information on this website.
The Cyprus government is gearing up to Brexit. The Law aims at allowing UK nationals to exit, enter, reside and permanently reside Cyprus subject to the conditions described below.
Law 121(1)/2019, titled as the Law Regulating the terms for exercising free movement and residence in the Republic from certain nationals the United Kingdom and their families was published on the 26th of July 2019.