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HMRC internal manual

General Insurance Manual

Regulatory framework: the European ‘single passport’

Changes to the UK regulatory framework have reflected the completion of a European single market in insurance services. This was brought about by a number of EC Directives, notably one leading to the idea of the ‘single passport’. Companies whose head office is elsewhere in the European Economic Area (currently the EU countries together with Norway, Iceland and Liechtenstein) are permitted to conduct insurance business in the UK on the strength of an authorisation in their Home State.

Originally these arrangements excluded reinsurance, but the Council of the EU adopted the Reinsurance Directive on 17 October 2005. It came into force on 10 December 2005 and Member States had two years to implement it into national legislation. It introduced a measure of harmonisation and regulation for reinsurers across the EU. As, unlike some other States, the UK had regulated reinsurance, the main effect of the Directive was to extend the passport arrangements.

Although Switzerland is not a member of the EEA, there are Treaty provisions that lead to similar results for general insurance.