The US and the European Union have concluded their latest round of talks for a proposed bilateral agreement that would synchronise regulations for re/insurance companies.
Representatives of the economic bloc met with their US counterparts in Washington, D.C. last week to discuss a potential deal relating to prudential insurance and reinsurance measures.
“Both sides continued to discuss in good faith matters relating to group supervision, exchange of confidential information between supervisory authorities on both sides, and reinsurance supervision, including collateral,” the EU and the US said in a joint statement.
“US and EU representatives made progress on key issues, and identified next steps toward a possible completion of negotiations in the near future,” the statement read.
In November 2015, the US Department of the Treasury and the Office of the US Trade Representative announced their intention to begin negotiating a covered agreement with the EU.
A covered agreement is a deal between the US and one or more foreign governments, authorities or regulatory entities, regarding prudential measures with respect to insurance or reinsurance.
Representatives of the US and EU previously met in Brussels in February and July. They also convened in Washington, DC last May.
An agreement arising from the negotiations should lead to a “national uniform treatment” of all European re/insurers placing business in the US, according to Cristina Mihai, head of international affairs and investments at Insurance Europe.
Mihai said current US statutory collateral requirements are “highly discriminatory” and place European cross-border re/insurers at a “significant competitive disadvantage” when writing risks in the US.
“A bilateral agreement between the EU and the US should therefore seek the total elimination of statutory collateral requirements in all US states, and should apply to both in-force and new business,” said Mihai as she called for a swift conclusion of the negotiations.
The American Insurance Association (AIA) also claimed that US insurers are facing “discriminatory measures that are increasingly distorting insurance trade with the EU.”
“AIA is convinced that resolving these issues through a covered agreement is the best option for regulators and industry on both sides of the Atlantic,” said Steve Simchak, the industry body’s director of international affairs.
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