The European Union and the United States have today signed their pending Bilateral Agreement on Prudential Insurance and Reinsurance Measures. In the US, the Agreement is the Covered Agreement under the Dodd-Frank Act; in the EU, it is an Agreement under Article 218 of The Treaty on the Functioning of the European Union. The language of the Agreement was finalized and submitted to the United States Congress in January 2017.
The Agreement addresses three areas: (1) group prudential supervision by domiciliary regulators; (2) reinsurer collateral and local presence requirements when operating outside their respective US and EU markets; and (3) ongoing information exchange between US and EU supervisory authorities.
The US also issued today a three-page Policy Statement highlighting key elements of the Covered Agreement. The Statement emphasizes repeatedly the importance of the US state insurance regulatory system. The introduction of the Policy Statement says that:
The agreement affirms the US system of insurance regulation, including the role of state insurance regulators as the primary supervisors of the business of insurance.
Similarly, the section of the Policy Statement on the Joint Committee (which will review administration and implementation of the Bilateral Agreement) notes that US state insurance regulators will largely be responsible for implementing the Agreement and states that:
The Joint Committee will serve as a forum for consultation and to exchange information on the administration and implementation of the Agreement. The Joint Committee will not have the ability to regulate the business of insurance and reinsurance in the United States or in the EU. . . [T]he United States will establish a robust consultative process to ensure that that discussions in the Joint Committee will be well-informed of the views and interests of state insurance regulators.
Here are several documents of interest regarding the announcement:
- Full text of the Agreement
- Joint Statement of the European Union and the United States re the Bilateral Agreement on Prudential Measures Regarding Insurance and reinsurance
- Policy Statement of the United States re Bilateral Agreement
- EU Fact Sheet re Bilateral Agreement
- EU press release on signing of the “landmark bilateral agreement on insurance and reinsurance”