Richard Walsh discusses what Brexit legislation might look like and how the insurance industry will need to keep a close eye on how EU Law is converted into UK Law.
Whichever way the election goes it looks certain that Brexit will go ahead so it is worth looking at what might happen during the run up to leaving.
An important aspect of this will be the so called Great Repeal Bill.
I say so called because although one part of the Bill will be the Repeal of the European Communities Act 1972 the vast proportion of legislation will instead be about converting EU law into UK law.
We won't see the details until after the election but the Government have published a White Paper "Legislating for the UK's withdrawal from the EU" which sets out how this will happen.
The UK remains a full member of the EU and all the rights and obligations of EU membership remain in force until exit. Article 50 gives effect to the UK's withdrawal as a matter of EU law.
However, new legislation is needed to ensure that the domestic statute book reflects the UK's withdrawal from the EU, and to ensure an orderly transition from EU membership.
In order to achieve a stable and smooth transition, the Government's overall approach is to convert existing EU law into domestic law, after which Parliament will be able to decide which elements of that law to keep, amend or repeal once we have left the EU.
This ensures that, as a general rule, the same rules and laws will apply after we leave the EU as they did before but that changes can then be made afterwards. This will be done by secondary legislation.
There is no single figure for how much EU law already forms part of UK law.
According to EUR-Lex, the EU's legal database, there are currently over 12,000 EU regulations in force (this includes amending regulations as well as delegated and implementing regulations).
In terms of domestic legislation which implements EU law such as directives, research from the House of Commons Library indicates that there have been around 7,900 statutory instruments which have implemented EU legislation.
The secondary legislation required will have negative (no debate) and affirmative (with debate) statutory instruments. The affirmative procedure is likely to be used for the more substantive changes.
We will need to keep a close eye on how EU Law is converted into UK law to ensure that the Government's intention of "no change until after Exit" is actually applied.
Let me give an example under EU data protection legislation, its interpretation and its application to the use of family history in insurance underwriting.
In the UK family history is often used as a proxy for genetic information (which cannot be used here because of the genetics moratorium) for underwriting critical illness insurance.
There are restrictions which the ABI agreed with the BMA whereby only family history which is known to the applicant can be passed onto insurers by doctors.
So if, for example, the applicant had a relative who had died of cancer but that relative wished to keep it confidential then the doctor would need to redact information about the cause of death of the relative from the applicant's medical records before passing them to the insurer.
In practice this is probably a pretty rare situation so in most cases insurers have access to and the right to use family history information.
Other EU countries interpret EU data protection law differently in that they take the view that the law requires the permission of the third party to pass on information before it can be used.
Obviously this is not possible if the relative is dead. And if they are still alive then the insurer would have to approach the third party too through the doctor.
In practice this would pretty well rule out this form of underwriting.
The wording of any EU legislation carried over into UK law in financial services will therefore need to be closely examined to ensure that it reflects what happens now and is not gold plated.
Richard Walsh is a fellow at SAMI Consulting
Will introduce a cap on cost of care
Plans to make greater use of 'deferred payments' to claw back social care costs from the value of the sale of a family home could fail unless the existing 'deferred payments' system is improve, Royal London has warned.
Defaqto has added pre-paid funeral plans to its Star Ratings
Q1 2017 saw a 12.9% increase in calls to the Employee Assistance Programme (EAP) for Canada Life's Group Income Protection (GIP) customers compared with Q1 2016.