Following the proposed transatlantic reinsurance agreement between the EU and the U.S. announced earlier this year, members of the U.S. Financial Services Housing and Insurance Subcommittee recently met to discuss the deal, stating that the agreement would establish a level playing field.
Announced in January 2017 the agreement aims to boost and modernise the $3 billion transatlantic reinsurance industry, and during a Subcommittee hearing held Thursday February 16th, 2017, members highlighted the benefits such a deal would bring to U.S. insurers and reinsurers that operate in the EU.
President and Chief Executive Officer (CEO) of the American Insurance Association (AIA), Leigh Ann Pusey, in a statement testifying in favour of the agreement, said; “The agreement provides U.S. insurers and reinsurers operating in the European Union with the badly needed certainty that they will no longer face discriminatory regulatory measures, and assures strong consumer protection.”
Adding that it’s not only a win for the U.S. insurance industry but also global affirmation of its state-based regulatory system for the insurance and reinsurance industry.
Also commenting on the agreement Sean Duffy, Subcommittee Chairman, said; “I believe this committee should seriously consider improvements to international insurance negotiations more generally to enhance the role of state insurance regulators.”
Pusey argued that following the implementation of Solvency II regulation across Europe on January 1st, 2016, U.S. domiciled insurers and reinsurers that operate in the EU have faced increasingly challenging discriminatory regulations, from the governments of a number of EU member states.
As a result, Pusey explained that U.S. players experienced market barriers as U.S. reinsurance companies were unable to offer reinsurance cover to the EU, and insurance comapnies were faced with daunting, duplicative regulatory guidelines.
“By affirming the U.S. system of insurance supervision, the covered agreement will reintroduce a level playing field for U.S. insurers and reinsurers competing in the EU, requiring that regulatory treatment of U.S. groups in the EU will be no less favorable than the treatment received by European insurers.
“The Covered Agreement is a crucial step forward in addressing the modern issues that face global insurance markets. With continued support, its benefits can continue to grow,” continued Pusey.
The agreement still requires approval from both the European Parliament and U.S. Congress and, a number of industry experts have highlighted uncertainty regarding the agreement’s implementation in light of the Trump administration.
