RSA Changes Mind About Irish Branch Status – Business Insurance
One result of the Brexit referendum has been for RSA to change its mind about making the Irish operation a branch of the parent UK operation.
Until now Ireland was a separately capitalised and regulated subsidiary in Ireland. RSA had set a date on July 5th to get permission from the High Court to transfer the activities of RSA Insurance Ireland Ltd to Royal & Sun Alliance in the UK. This is a mere formality and would not have affected the rights of the customers or staff.
RSA would have been required to write to their Policyholders in Ireland about the change.
A branch office does not have to be separately capitalised or required to have its own board of directors. Prudential regulation would would be governed by the UK, but conduct of business would still have been regulated by the Central Bank of Ireland.
Change of Mind
Following injections of over € 500m from the UK parent in to the Irish operation since 2013, to cover certain scandals and to meet Solvency II requirements, the Brexit vote was the final straw. the decision was made to abandon the proposed change.
Other Business Insurers
Aviva are also looking at their 2013 decision to make their Irish operation a branch office. A reversal may be on the cards.
During a capital markets day for analysts and investors in London last week, Cheif Executive Mr Mark Wilson said:
“So let’s talk about Brexit. In structural issues, we do not expect any significant impact. So the vast majority of our businesses are locally incorporated and regulated and we have limited reliance on passporting of services across jurisdictions. Now we may have to think about how we structure Ireland, as just last year we made that a branch. So we’re going to have to go back and look at that now.”
References Irish Times Business Insurance http://bit.ly/2a5hSFc