The recently appointed chair of the Treasury Select Committee, Nicky Morgan, has asked Prudential Regulation Authority (PRA) chief Sam Woods to brief her on insurers' preparedness for Brexit.
In April, the authority conducted a survey of firms' trading relationships with the EU and their Brexit plans, including banks and insurers, asking them to respond by 14 July.
Morgan's concerns focused on the 'cliff edge' that firms will face if no transitional arrangement is agreed with the EU before the UK leaves the bloc in March 2019.
"I have also asked Mr Woods for his views on the desirability and design of a transitional arrangement with the EU, to provide more time to negotiate and prepare for a new UK-EU economic relationship," Morgan added.
"Getting these arrangements right will be crucial for ensuring that the City retains its pre-eminence as a global financial centre, and to protect the economy and jobs as the UK leaves the EU."
Morgan wants to know if firms' 'no deal' contingency plans pose a material risk to the PRA's objectives and financial stability, as well as if they are they waiting for competitors to act first before going through with their own contingency plans.
She also asked if the PRA "has the capacity" to directly supervise all firms providing services in the UK under passporting arrangements.
Yesterday (31 July) there were signs of a split in the UK Cabinet on the issue of temporary freedom of movement by EU citizens after Brexit – seen as a key element in securing a transitional arrangement on trade.
A spokesperson for Downing Street attempted to clarify the issue, however, and said "it would be wrong to suggest [free movement] will continue as it is now."
The request from Morgan may mark a shift in stance from the Treasury Select Committee since she replaced fellow Conservative MP Andrew Tyrie in early July. When it came to insurers and Brexit the TSC was then focused on how regulation, especially Solvency II, could be changed post-Brexit.
Morgan has requested a response from Woods by 2 August.