On 13 January 2017, the EU and the U.S. reached a bilateral agreement on prudential measures regarding insurance and reinsurance (the “Agreement”). The text is now to be formally adopted by the U.S. Congress as well as by the EU co-legislators (Council of the EU and the EP) before it enters into force. The Agreement successfully concludes a negotiation process conducted jointly by the Commission and the U.S. Department of Treasury since February 2016. It aims at reducing legal and prudential barriers to transatlantic provision of insurance or reinsurance services.
On reinsurance, the Agreement states that neither the U.S. nor the EU supervisor can impose local presence requirements or collateral requirements.
The Agreement provides for a simplified oversight regime for EU and U.S. insurance groups, which will be subject to prudential oversight by their own supervisor. The limitations set by the Agreement to worldwide oversight by relevant supervisors cover in particular solvency and capital matters, as well as reporting and governance. Importantly, the Agreement foresees that supervisors retain their ability to request and obtain information about global activities which could impact financial stability in their territory.
Finally, the Agreement also encourages insurance supervisory authorities in the U.S. and the EU to continue exchanging supervisory information on insurers and reinsurers that operate in their markets. To support such information exchange, the Agreement includes model memorandum of understanding provisions.