Britain + Exit = Brexit
Ever heard of the term “Brexit”? The term is actually a combination of words (or portmanteau) of “Britain” and “Exit.” And, if you haven’t been watching the news lately, you might very well be missing out on what a hot issue this has become.
In short, a referendum — a vote in which everyone (or nearly everyone) of voting age can take part — was held on Thursday, June 23, to decide whether the United Kingdom (UK) should leave or remain in the European Union (EU). The EU is an economic and political partnership involving 28 European countries. For more information on the EU and how it works, click here.
Anyway, the end result (with nearly 30 million people voting) was that by a 52 percent to 48 percent vote, the UK leaving the EU won. And with the UK leaving, the EU will shrink by 28 percent.
A few things to keep in mind with this vote, as significant as it is:
- The UK leaving is not immediate. In fact, negotiations could last for years.
- Article 50 of the EU Treaty requires two years of a withdrawal agreement after the UK notifies the EU. The UK has not officially notified the EU, so the two year period has not yet started.
And a big one…nothing has changed for travelers.
But some questions also arise:
- Scotland voted to stay in the UK but also voted to stay in the EU. What now?
- Northern Ireland voted to stay in the EU, and the Republic of Ireland is a member state of the EU. Does this mean a possible unification of Ireland in the future?
What about insurance?
We have many clients that have UK-domiciled subsidiaries as their foray into Europe due to language commonality and similar legal theories between American Rule of Law and British Rule of Law. Will this change affect insurance policies written as Freedom of Services? A Freedom of Services Policy is an insurance provision providing coverage deemed to be written on an admitted basis in all EU Member Countries if the policy was written on admitted basis in one EU Member Country. Plain and simple — I’m not sure how this will impact Freedom of Services.
At this point, there are so many questions and simply none (or at least, not enough) answers. But you can be sure I’m keeping a close eye on this and will update you when I know more. For now, we’re going forward as “status quo.” Please, though, don’t hesitate to comment below and ask a question or send us your concerns or questions directly. We want to help in any way that we can!
In the meantime, if you know me, you know I like to lighten things up when there’s uncertainty, so I’ll leave you with this. Over the weekend, I had a chance to message a bit with Holmes Murphy’s trading partner in the UK. The conversation went a bit like this:
Me: “English tea just got a lot cheaper.”
Him: “Fitting, as you will just throw it in Boston Harbor.”
Well, some history is never forgotten.
Published on: 06.30.16