AIG Prepares for Brexit with Authorization of UK, Luxembourg Subsidiaries

April 20, 2018

American International Group Inc. announced the authorization of new insurance companies in the United Kingdom and Luxembourg in preparation for the UK’s exit from the European Union.

The formation of the two new units provides clients certainty of uninterrupted UK and European insurance coverage as part of AIG’s planned restructure of its European business, the company said in a statement.

Business will be transferred to the new entities ahead of Brexit and the company’s existing European subsidiary – AIG Europe Ltd. – will be merged into the new European company.

The restructure is designed to ensure that AIG’s European footprint “will have the most appropriate structure from which to serve clients and partners after Brexit, regardless of the future relationship between the UK and the EU,” AIG said.

The scheduled date for Brexit is May 29, 2019, which will be followed by a transition period that will end on Dec. 31, 2020. During the tradition phase, the UK will maintain access to EU markets via so-called passporting.

The new companies are expected to begin writing business from Dec. 1, 2018.

In its effort to restructure its European operations in preparation for Brexit, AIG said it has accomplished the following key milestones:

  • Establishing and receiving authorization for new insurance companies in the UK (American International Group UK Ltd.) and Luxembourg (AIG Europe S.A.);
  • Developing a branch network for AIG Europe across the European Economic Area and Switzerland; and
  • Receiving approval from the High Court of England and Wales to start notifying policyholders and other interested parties in accordance with UK law on the transfer of insurance portfolios.

“We set a number of guiding principles from the very start as to how AIG would address Brexit. First amongst these was minimizing disruption to clients,” said Anthony Baldwin, chief executive of AIG Europe Ltd., in comments on the restructuring.

“The great advantage of the restructuring route we have chosen is that it will give clients certainty that whatever the other unknowns of Brexit for their businesses, their European insurance coverage has been Brexit-proofed,” he added.

“We have already established a platform in Europe for writing future new business and renewals, and by transferring our existing business, AIG will remove uncertainty for clients, including not being reliant on the development of a grandfathering regime for existing contracts,” Baldwin went on to say.

Source: American International Group

Related:

Topics Europe AIG Uk

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