Possibility of a No-Deal Brexit Increases

Further to our previous article UK Brokers : Your Brexit Solution there have been further developments and we would like to keep you up to date regarding the implications of a ‘No Deal’ Brexit and with only 63 days to Brexit we are seeing many entities action their contingency plans.

Insurance Ireland (https://www.insuranceireland.eu/) have welcomed the announcement that the Irish Government has prepared draft legislation for a temporary run-off regime in the event of a no-deal Brexit. This will allow insurers and brokers from the UK and Gibraltar with Irish customers for a period of three years after the UK’s withdrawal from the EU. The legislation is exclusively for existing contracts that were in place prior to Brexit.

The Central Bank of Ireland are taking a more conservative view advising that the legislation does not allow firms to write new business, including renewal of existing policies (http://www.centralbank.ie/news/article/–ed-sibley16Jan19).

In any event this will mean that UK intermediaries will not be able to transact new business from 29/03/2019 and therefore would be restricted to existing renewal business. All intermediaries will want to ensure they have the ability to transact new business. The most conservative interpterion an existing book will be placed in run off with no ability to renew policies.

We are currently seeking clarity on proposed no-deal Brexit legislation in other EU territories.

As the possibility of a no-deal Brexit increases, it is critically important that insurance intermediaries have a plan in place to protect their policyholders and ensure they have a compliant solution for distribution.

For further information please do not hesitate to contact either Kristy Collins or Robert Tyrell.

Contact Kristy Collins on 00 353 (0)87 105 6747 or Email kcollins@campionins.com

Contact Robert Tyrrell on 00 353 (0)87 258 2407 or Email rtyrrell@campionins.com

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Important Assumptions

For the purpose of determining the term over which pension contributions are made, we have assumed your birthday was exactly six months ago.

If your target retirement age is lower than the age at which the Social Welfare pension commences (age 68 if you are born on/after 01/01/1961, age 67 if born before this date but on/after 01/01/1955 and age 66 if born before 01/01/1955) the calculations allow for funding for this gap, in addition to the cost of the annuity.

You are entitled to a full Social Welfare pension of €248.30 per week as at March 2019 which is assumed to increase by 2.5% per year.

You are saving for the difference between the Social Welfare pension and your target monthly income in retirement.

We have allowed for inflation of your target monthly income of 2.5% per annum between now and your retirement date.

Any other private pension provision you may have in place has not been taken into account.

Your monthly pension contribution increases by 2.5% each year up until your retirement age and is invested in a pension plan with an annual management charge of 1% and a 5% charge on each contribution, in line with the Standard PRSA fees and charges maximum limit.

A Gross Investment Return of 4.2% per annum on your savings. This is not a forecast because the value of your investment may grow at a faster or slower rate than assumed and the value of your investment may be expected to fall from time to time as well as rise.

On retirement you purchase an annuity which escalates at 1.5% each year, has a 5-year guarantee and is payable monthly in advance. The annuity rate assumes a post retirement interest rate of 2% per annum and no spouse’s pension. The actual annuity rate will depend on the selection of dependant’s pension, guaranteed period and the escalation rate, as well as interest rates prevailing when the annuity is purchased.


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