Lloyd’s Chairman John Nelson welcomed the agreement reached by the European Union and the United States on insurance and reinsurance, saying he believed it would greatly benefit the global re/insurance industry.
The deal is expected to make the market easier for EU and U.S. industry players to navigate by removing requirements for reinsurance companies to hold more capital against risks if they do business on the other side of the Atlantic.
Nelson said Lloyd’s had long been an advocate of removing discriminatory reinsurance statutory collateral requirements and was “pleased to see that both the U.S. and EU have worked so hard to achieve this.”
Nelson commented the deal recognised “the important role that the states play in the supervision of insurance and reinsurance” and would provide “a pathway and timeframe” from which statutory collateral requirements could be abolished.
In the newly negotiated agreement EU supervisors propose to accept and affirm the U.S. insurance regulatory framework; for U.S. insurers and reinsurers this would remove the duplicative regulations that would otherwise be imposed under Solvency II, making competing in the EU cheaper and easier.
Nelson said; “Lloyd’s is also pleased that the bilateral agreement provides for greater coordination and cooperation between the supervisory authorities of the EU and the U.S. which will be good news for customers and businesses alike,” adding that he hoped the deal would soon receive full EU and U.S. legislative governmental approvals.
