The chair of the influential Treasury committee has called for urgent action to address the risk pension payments to expatriates from UK insurers may be blocked after Brexit.
Nicky Morgan, chair of the influential committee of MPs, has written to the chancellor, to draw attention to the issue and ask if it would be addressed in the upcoming round of talks between the UK and EU, the Guardian reports.
The problem centres around passporting rights, which allow UK and EU insurance companies to sell pensions, savings and insurance products across borders. If passporting ends the day Britain leaves the EU then providers will not legally pay pensions to expat customers.
Morgan, who supported the Remain vote in last year’s referendum, said: ‘The possibility that UK providers may not be legally able to pay out pensions or insurance contracts to citizens in the EU – including UK expats – is a stark example of the consequences of a “cliff edge” Brexit.’
Morgan said while the UK and European Commission had both published papers on goods, services had seen less attention paid, including ‘hundreds of thousands of insurance contracts sold under passporting arrangements with a duration that extends beyond 29 March 2019.’
The Association of British Insurers told the paper: ‘If nothing is fixed, insurers will be left in an impossible position and face an unacceptable choice: break their promise to customers or risk breaking the law.’
According to the Office for National Statistics 900,000 British citizens lived in EU countries in 2011.
Morgan beat fellow Conservative and staunch Leave supporter Jacob Rees-Mogg in the contest for the Treasury select committee chair this summer. She replaced previous chair Andrew Tyrie who stepped down as an MP earlier this year. Tyrie had chaired the committee since 2010 and had carved out a formidable reputation. The committee oversees the actions of the Treasury and associated bodies such as the Financial Conduct Authority.