Portugal - Brexit for the Insurance Sector
- Policies underwritten before the end of the UK Brexit transition period by UK insurers passported into Portugal remain valid and effective.
- Those policies may not be amended or renewed, unless this is for the benefit of the policyholder or following a legal determination.
- UK insurers must report to the Portuguese Insurance Authority on their portfolio of policies where Portugal is the member state the risk or commitment by 1 March 2021 and thereafter annually by 31 March each year.
With the end of the Brexit transition period, insurance undertakings registered in the UK no longer benefit from the EU passporting scheme.
In order to carry any insurance activities in Portugal, insurance undertakings are required to create a branch in Portugal, as determined under the existing Portuguese legal framework applicable to third countries.
With effect from 1 January 2021, Decree-Law 106/2020 apply to the following insurance agreements:
- those which cover risks located in Portuguese territory or in which Portugal is the Member State of the commitment;
- those where the insurer is an insurance undertaking registered in the UK;
- those executed under an authorization valid for Portugal;
- those dated before the Brexit transition period; and
- those not transferred to an insurance company authorized in the EU or a branch of a third-country authorized in Portugal.
Subject to the above, the following transitional rules apply:
- insurance agreements or operations remain valid and effective until the date of their relevant term;
- the above may not be (i) amended or (ii) renewed, unless this is for the benefit of the policyholder or arises from a legal determination.
Insurance undertakings are required to make a report to the Portuguese Insurance Authority (ASF) of their insurance portfolio which is in force as of 1 January 2021 which covers risks located in Portuguese territory or in which Portugal is the Member State of the commitment. The following information should be noted:
- The initial reporting deadline date is 1 March 2021.
- The subsequent reporting deadline is 31 March of each year.
- The reporting forms include:
- Planned or ongoing measures to transfer insurance to an EU-authorized insurance undertaking;
- Description and current status of the above measures;
- Maximum deadline for full run-off of the portfolio;
- Number of policyholders; and
- Amount in EUR of the gross technical provisions.
- The reports are to be submitted by email to ASF.