July 11, 2017 / 9:13 AM / a year ago

EU insurance watchdog condemns "empty shells" as firms prepare for Brexit

FRANKFURT, July 11 (Reuters) - EU insurance watchdog EIOPA warned national regulators on Tuesday not to undercut one another in their attempts to attract firms moving from London due to Britain’s exit from the bloc.

Regulators have been concerned about the risks of new “letter-box” companies springing up in the European Union that delegate key operations to parents in London.

They have warned that any countries offering such flexible solutions to attract business could undermine stability.

“Sound supervision demands appropriate location of management and key functions,” EIOPA Chairman Gabriel Bernardino wrote in a statement accompanying a seven-page guidance document.

“Empty shells or letter boxes are not acceptable.”

Reporting by Tom Sims; Editing by Georgina Prodhan

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