US to sign insurer capital equivalency agreement with EUReprints
The U.S. Treasury Department and the Office of the U.S. Trade Representative announced on Friday their intent to sign the covered agreement reached between the United States and the European Union to address the U.S. lack of equivalency related to the bloc’s Solvency II directive for the insurance industry.
The bilateral agreement between the jurisdictions was reached in the waning days of the Obama administration and has been under review by the Trump administration, which was being lobbied by the National Association of Insurance Commissioners and some federal legislators to revisit certain provisions of the agreement.
In addition to signing the agreement in the coming weeks, the Trump administration also plans to issue a U.S. policy statement on implementation, the departments said Friday in a joint statement.
“This is an important step in making U.S. companies more competitive in domestic and foreign markets and making regulations efficient, effective and appropriately tailored,” the departments said in the statement. “Furthermore, the bilateral agreement benefits the U.S. economy and consumers by affirming America’s state-based system of insurance regulation, providing regulatory certainty and increasing growth opportunities for U.S. insurers.”
The covered agreement eliminates collateral and local presence requirements for qualified reinsurers and streamlines group supervision requirements for insurers and reinsurers operating in both jurisdictions, the Washington-based Reinsurance Association of America said Friday in a statement. Without a signed agreement, U.S. companies would have been unable to renew or write new business in the European Union without first establishing a local presence in each E.U. Member State in which they intend to write business, the association said.
“The reinsurance industry applauds this agreement as it provides regulatory certainty for U.S. and E.U. companies conducting business in both jurisdictions,” Tracey Laws, the association’s senior vice president and general counsel, said in the statement.
“This agreement on prudential matters will end the discriminatory actions against U.S. insurers and reinsurers, increase U.S. competitiveness and boost the international standing of the U.S. state-based insurance regulatory system,” Stef Zielezienski, the American Insurance Association’s senior vice president and general counsel in Washington, said in a statement. “It is a win for U.S. insurers and reinsurers, their policyholders, regulators and the market as a whole.”