The UK has reportedly struck a deal with the European Union to allow British financial services companies access to European markets post-Brexit.
The financial services deal would be based on the EU's existing equivalence system.
The UK's Times newspaper reported that negotiators have secured an initial agreement on all aspects of a future partnership on services, including the exchange of data.
However, a source told the BBC reports of a deal were a "rather rose-tinted interpretation of where we have got to".
The latest twist in the Brexit saga comes as a letter from UK Brexit secretary Dominic Rabb to the chair for Exiting the EU Committee, published yesterday, said the two parties "were not far from an agreement" and "the end is in sight".
"While obstacles remain, it cannot be beyond us to navigate them," said the letter.
InsuranceERM understands the reported arrangement is speculation but negotiations over a post-Brexit deal are currently "in a good place."
"Reports that the UK is closing in on a Brexit deal for services are very welcome," said Jennette Newman, partner, Clyde & Co and president of the London Forum of Insurance Lawyers.
"However, the devil will be in the detail and at this point we still have very little information to work with."
Newman added a deal based on the equivalence concept "will not cut it" and said such a arrangement would be "disappointing for the industry and a real set back in terms of our ability to play a leading role on the global stage."
A spokesperson for the Association of British Insurers (ABI) said "reaching an agreement which allows our world-leading sector to maintain its position after Brexit is crucial. We continue to contribute to the Government’s work on reaching a deal where we can and await firm news.”
Speaking at a press conference today, Mark Carney, governor of the Bank of England (BoE), refused to comment on the report noting the BoE is "not part of negotiations" but said he believed financial services firms had enough capital, liquidity and a contingency plan to make him confident in preparations.
However, Carney added there were areas still to be resolved, including cross-border issues.
Last week, the Prudential Regulatory Authority (PRA) provided more detail on cross-border rules for insurance and financial firms into the UK from the EU via passporting, in relation to Brexit.
The PRA specifically stated European Economic Area (EEA) firms currently passporting into the UK that wish to continue doing business post-withdrawal will require authorisation from the PRA.
At the beginning of the month Lloyd's also revealed plans to transfer all EEA business to its Brussels subsidiary to mitigate the effects of a hard Brexit, while chief executive Inga Beale urged clarity on insurance contracts in a post-Brexit environment.
People:Dominic Rabb
