Activities in Denmark from UK based insurance undertakings after Brexit

Published 04-11-2020

The UK’s exit from the EU means that the UK is no longer a part of the internal market and that EU regulation no longer applies. Consequently, UK based insurance undertakings cannot provide insurances in Denmark under the freedom to provide services or the right to establishment.

In 2020 The Danish Financial Supervisory Authority (DFSA) issued an executive order granting a limited, temporary permission for undertakings already notified in Denmark to service existing contracts until the end of 2021. As off 1 January 2022, this has been replaced by a new executive order, which continues the permit, but without time limit.

The United Kingdom (UK) formally left the EU as of 31 January 2020 and thereby became a third country in relation to the EU. During 2020 the UK was in a transition period under which EU regulation continued to apply, while the EU and the UK were negotiating the future relationship between them. 

The transitional period expired on 31 December 2020 and after that EU regulation no longer applies to the UK. This also means that the UK is no longer part of the European Single Market and with that has lost the right to freedom of establishment and free movement of services.

One of the consequences for the insurance sector was that according to Danish law insurance undertakings with their head office in the UK, who had entered insurance contracts for risks situated in Denmark, would no longer be allowed to conduct insurance business in Denmark, including servicing existing cross-border business.

UK insurance undertakings and Danish insurance holders

When the transition period expired on 31 December 2020 there were still a number of Danish insurance holders with valid policies issued by UK insurance undertakings. To ensure that they would not suddenly be left without coverage, the DFSA issued an executive order granting a temporary permission to continue servicing existing insurance contracts until the end of 2021. 

Many of the UK insurance undertakings have since transferred portfolios or moved their head quarters to countries within the EU, but the DFSA is aware that there are still UK based undertakings, who cover risks in Denmark. Therefore, the DFSA has issued a new executive order, which continue the previous permits without time limit.

The executive order applies to UK based insurance undertakings notified to pursue insurance business in Denmark before 31 December 2020, and it will grant them a permit to continue servicing insurance contract entered into before the end of 2020, provided that the undertaking meets the requirements stated in the executive order, including reporting to the DFSA. 

Insurance undertakings are not allowed to in any way extend or renew – actively or automatically – existing contracts, nor enter new ones. 

The DFSA expect that UK insurance undertakings, who cover risks in Denmark, make sure that they inform their customers about the consequences of the undertaking no longer being able to provide insurances in Denmark.

Undertakings encompassed by the executive order will also be subject to the Executive Order on Good Business Practice for Insurance Mediators, the Executive Order on Fees and Other Costs for Insurance Undertaking, and for undertakings that service life insurance agreements, the rules of in the Executive Order on Information About Life Insurance Agreements also apply. As of 1 January 2021 the insurance contracts will, however, not be covered by the Danish Guarantee Fund for Non-life Insurers. 

The draft executive order was sent into public hearing on 2 October 2021. The consultation letter is accessible at Hø, though only in Danish. 

The Executive order in Danish can be found on, An unofficial translation of the executive order is available in the blue box at the top of this page.

Insurance undertakings based in third countries, including UK and Gibraltar, who wish to provide insurances in Denmark, must fila an application to the DFSA according to the provisions in executive order no. 1168 of 31 October 2017 on branches of third country insurance undertakings. 

Last updated 15-02-2022