Brexit FAQ - Consumers

The Central Bank worked on Brexit since before the UK Referendum. Our regulatory approach is in line with sound European practices, which we influence and help shape.

The Irish economy is particularly exposed to risks from Brexit. There is a high degree of interconnectedness between the Irish economy and the UK economy.

Since the UK voted to leave the European Union (EU), the Central Bank has instructed firms on the need to have appropriate contingency plans in place to ensure continuity of business and to address key risks that may arise from Brexit. In cases where the potential impact could be greatest, the Central Bank asked firms to provide details of their contingency plans for assessment.

The majority of Irish authorised banks, insurers and brokers provided information on their assessment of Brexit-related risks and related contingency plans and timelines. In the majority of cases, we considered that planning was adequate.

The decision to withdraw from the EU resulted in a range of UK-based firms seeking authorisation from the Central Bank to relocate some of their activities, so that they can continue to provide services within the EU after Brexit. We increased our headcount and reallocated senior and experienced staff to effectively manage the large volume of applications that were processed over a relatively short period. In assessing these applications, we focused on ensuring that any firms authorised in Ireland meet the high standards expected of any firm authorised in the EU.

Getting Ireland Brexit Ready

UK financial services firms can no longer provide financial services across the EU / European Economic Area (EEA) by way of Freedom of Establishment (setting up a branch) or Freedom of Services (via the so-called financial services “passport”). If firms wish to continue to provide services to Irish customers they will need to seek authorisation in an EU / EEA country.

In the case of insurance, the Central Bank and the Department of Finance have worked together to establish a Temporary Run-Off Regime (TRR) for UK and Gibraltar registered insurers and insurance intermediaries. The purpose of the TRR is to protect consumers by ensuring that existing insurance policies can continue to be serviced after 31 December 2020 for a time-limited period of 15 years. 

Find out more on the TRR.

Your insurance provider should have taken steps to prepare for the UK withdrawing from the EU. They should be able to provide you with details of their contingency arrangements.

The Central Bank and the Department of Finance have worked together to establish a Temporary Run-Off Regime (TRR) for UK and Gibraltar registered insurers and insurance intermediaries. The purpose of the TRR is to protect consumers by ensuring that existing insurance policies can continue to be serviced after 31 December 2020 for a time-limited period of 15 years.

Firms that avail of the TRR will not be able to provide new insurance contracts or renew existing insurance contracts after 31 December 2020 without the appropriate authorisation.

If you have any concerns about your insurance policy, your insurance provider should be able to provide you with details of their arrangements to ensure continuity of service.

If you have any concerns about your insurance policy, your insurance provider should be able to provide you with details of their arrangements.

You should contact your insurance provider or intermediary to ensure that your policy or pension can continue to be serviced after the end of the transition period. The European Insurance and Occupational Pensions Authority (EIOPA) has recently published information for consumers with life insurance policies or pensions from the UK and living in the EU.

Since the UK voted to leave the EU, the Central Bank has actively engaged with insurers conducting business in Ireland, setting out the need for them to have adequate contingency plans in place to ensure service continuity.

Arising from our concerns about levels of preparedness, the Central Bank instructed insurers and brokers to:

• Take appropriate contingency measures to ensure the continuity of services for cross-border insurance policies between the UK and other Member States of the EU
• Inform existing and new customers and beneficiaries of the implications of these contingency measures
• Provide customers with clear information on the contingency measures taken or planned and how they might affect policies.

The Central Bank and the Department of Finance have worked together to establish a Temporary Run-Off Regime (TRR) for UK and Gibraltar registered insurers and insurance intermediaries. The purpose of the TRR is to protect consumers by ensuring that existing insurance policies can continue to be serviced after 31 December 2020 for a time-limited period of 15 years. 

Firms that avail of the TRR will not be able to provide new insurance contracts or renew existing insurance contracts after 31 December 2020 without the appropriate authorisation.

Brexit will affect banks, as it will affect other companies, particularly those banks that have exposures in the UK. The Central Bank and the European Central Bank’s Single Supervisory Mechanism have worked to ensure that banks have clear strategies and actions to address issues arising from Brexit. This includes managing:

• The potential impact on banks’ exposures to UK markets.
• The potential impact of any negative spillover to the Irish economy.
• Potential changes in regulatory constraints on transactions between EU and UK firms.

The Central Bank continues to engage with banks to make sure that they appropriately address the risks posed by Brexit and engage proactively with their customers. In addition, the Central Bank continues to monitor the resilience of banks to ensure they have sufficient financial resources and operational capacity to continue to operate effectively.

UK banks can no longer provide financial services across the European Economic Area (EEA) by way of Freedom of Establishment (setting up a branch) or Freedom of Services (via the so-called financial services “passport”). If they wish to continue to provide services to Irish customers they will need to seek authorisation in an EU / EEA country.

Your bank should have taken steps to prepare for the UK withdrawing from the EU and should have contacted you if you are impacted. If you have any concerns, you should contact your bank and seek information regarding the continuity of financial services.

Further information on maintaining existing bank accounts held with UK financial institutions can be found in the recent European Banking Authority statement to customers.

When transition arrangements end, covered deposits will no longer be covered by the Irish scheme.

 See www.depositguaranteescheme.ie.

If you have any questions we recommend you contact your firm to find out if you will be affected by Brexit.

Our assessment is that any issues that could potentially have a significant impact on the main payment systems currently serving the Irish market and / or Irish payment services users have been largely mitigated.  However, a risk remains that certain SEPA payments (direct debits and to a lesser extent credit transfers) may be rejected post the end of the current transition period on 31 December 2020 unless action is taken by creditors (direct debits), payers (credit transfers) and their payment service providers (bank).

The Single Euro Payments Areas (SEPA) means that cashless euro-denominated retail payments can be made across the EU and EEA under the same basic terms and conditions.

On 7 March 2019, the UK’s application to remain in the geographical scope of SEPA schemes was approved. This means that Euro SEPA payments to UK firms can continue to be made through existing arrangements once additional information requirements under the Regulation (EU) 2015/847 (the Wire Transfer Regulation or ‘WTR’) are adhered to.  Due to the WTR information requirements, Irish creditors with direct debits in place for UK customers need to ensure their bank can include all the additional details required with effect from 01 January 2021 to avoid payment requests being rejected. The same is true for UK creditors requesting direct debit payments from Irish customers. Furthermore, UK banks offering services to Irish customers (creditors) need to ensure they have obtained the necessary authorisations from EU competent authorities before the end of the transition period and should provide adequate information to their Irish customers regarding the availability of services after the end of the transition period. Additional requirements also exist for Irish payers initiating a credit transfer payment to a UK account.

Further information is available on the European Banking Authority website.

The Central Bank has a clear responsibility to address the implications of Brexit for the financial system. This includes taking a rigorous and efficient approach to the authorisation and supervision of firms seeking to set up or expand operations in Ireland. It also includes assessing and mitigating the financial stability risks associated with disorderly Brexit scenarios.

Financial stability risks arise from direct exposures to the UK market but there are also indirect exposures. For example, many firms in Ireland are vulnerable to interruptions in international supply chains and increased competition from UK firms in the event of a further sharp fall in Sterling.

A high degree of uncertainty remains about the future economic relationship between the UK and EU, after the expiry of the transition period. In particular the nature of the trade agreement and the degree of divergence of the UK from the single market and the Customs Union, will be critical in determining the long-impact of Brexit on the Irish Economy. However, it is clear that the economic impact on Ireland will be negative and material.