More than 20 years of talks between the EU and the United States ended successfully Friday with a bilateral agreement set to boost transatlantic trade in insurance and re-insurance.
The agreement will apply the same requirements to both EU and U.S. reinsurers when they place business in each other's jurisdictions.
European insurers will welcome in particular the removal of the collateral requirements - if they meet the conditions laid down in the Agreement - which EU reinsurers were subject to when placing business in the US, which were seen as discriminatory.
Eliminating collateral and local presence requirements for EU and U.S. reinsurers will enhance consumer protection, say both parties.
The deal is a win-win solution, set to benefit insurers, reinsurers and policyholders on both sides of the Atlantic, says the EU's Commissioner for financial services Valdis Dombrovskis: "It shows that both EU and US regulators can reach mutually-beneficial outcomes through enhanced international cooperation," he said.
Insurance Europe, the European insurance and reinsurance federation, also welcomed the agreement, saying the recent conclusion "demonstrates the strength of the relationship between the EU and the US", and "will help support bilateral trade in (re)insurance, for the benefit of both consumers and economies. Looking ahead, Insurance Europe hopes to see a swift application of the spirit and provisions of this agreement by all relevant authorities, to ensure a successful outcome.”
The agreement covers prudential benefits which are granted on certain conditions for reinsurers and for reinsurance and insurance groups of the EU operating in the US and conversely, and exchange of information between supervisors on both sides of the Atlantic.
The agreement will make possible increased investment by reinsurers, says the Commission. EU reinsurers estimate that they have about $40 billion of collateral posted in the USA, which could be used more effectively in other investments.
The opportunity cost is estimated at around $400 million per year.
EU and US insurance and reinsurance groups active in both jurisdictions will not be subject to certain requirements with respect to group supervision for their worldwide activities, but supervisors retain the ability to request and obtain information about worldwide activities which could harm policyholders' interests or financial stability.
The agreement also contains model provisions for the exchange of information between supervisors, which supervisors on both sides of the Atlantic are encouraged to follow.
The agreement is being notified to Congress in the USA.
In the EU, it will be submitted to the EU Member States in Council in view of its formal signature. The European Parliament's consent will also be needed for conclusion of the deal.
Read more: EU-U.S. (re)insurance deal boost for transatlantic trade — EUbusiness.com | EU news, business and politics
The agreement will apply the same requirements to both EU and U.S. reinsurers when they place business in each other's jurisdictions.
European insurers will welcome in particular the removal of the collateral requirements - if they meet the conditions laid down in the Agreement - which EU reinsurers were subject to when placing business in the US, which were seen as discriminatory.
Eliminating collateral and local presence requirements for EU and U.S. reinsurers will enhance consumer protection, say both parties.
The deal is a win-win solution, set to benefit insurers, reinsurers and policyholders on both sides of the Atlantic, says the EU's Commissioner for financial services Valdis Dombrovskis: "It shows that both EU and US regulators can reach mutually-beneficial outcomes through enhanced international cooperation," he said.
Insurance Europe, the European insurance and reinsurance federation, also welcomed the agreement, saying the recent conclusion "demonstrates the strength of the relationship between the EU and the US", and "will help support bilateral trade in (re)insurance, for the benefit of both consumers and economies. Looking ahead, Insurance Europe hopes to see a swift application of the spirit and provisions of this agreement by all relevant authorities, to ensure a successful outcome.”
The agreement covers prudential benefits which are granted on certain conditions for reinsurers and for reinsurance and insurance groups of the EU operating in the US and conversely, and exchange of information between supervisors on both sides of the Atlantic.
The agreement will make possible increased investment by reinsurers, says the Commission. EU reinsurers estimate that they have about $40 billion of collateral posted in the USA, which could be used more effectively in other investments.
The opportunity cost is estimated at around $400 million per year.
EU and US insurance and reinsurance groups active in both jurisdictions will not be subject to certain requirements with respect to group supervision for their worldwide activities, but supervisors retain the ability to request and obtain information about worldwide activities which could harm policyholders' interests or financial stability.
The agreement also contains model provisions for the exchange of information between supervisors, which supervisors on both sides of the Atlantic are encouraged to follow.
The agreement is being notified to Congress in the USA.
In the EU, it will be submitted to the EU Member States in Council in view of its formal signature. The European Parliament's consent will also be needed for conclusion of the deal.
Read more: EU-U.S. (re)insurance deal boost for transatlantic trade — EUbusiness.com | EU news, business and politics
